Natural justice governs discretionary tax appeal relief; appellant must be heard and reasons recorded before rejection.

The proviso to section 38(3) confers a quasi-judicial discretion on the appellate authority to entertain an appeal on payment of a lesser tax amount, and that discretion must be exercised consistently with natural justice. Where an appellant seeks the benefit of that proviso and asks to be allowed to appeal on payment of a smaller amount, the authority must afford a fair hearing so the request can be supported. No elaborate inquiry is required, but the appellant must be heard, and any rejection of the request must be accompanied by recorded reasons.

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Issues: Whether, before summarily rejecting an appeal for non-payment of the full tax assessed despite a prayer for permission to appeal on payment of a smaller amount, the appellate authority must give the appellant an opportunity of being heard and record reasons for rejecting the prayer.

Analysis: The proviso to section 38(3) conferred a discretion on the appellate authority to entertain an appeal on payment of a lesser amount of tax, but the exercise of that discretion was held to be quasi-judicial. The authority was therefore required to act in conformity with the rules of natural justice. When an appellant sought the benefit of the proviso and asked to be permitted to file the appeal on payment of a smaller amount, a fair hearing had to be afforded so that the appellant could support the request. The authority was not required to conduct an elaborate enquiry, but it had to hear the appellant and, if the request was rejected, record reasons for the decision.

Conclusion: The appellate authority was bound to give the appellant an opportunity of being heard and to record reasons before rejecting the request to entertain the appeal on payment of a smaller amount.

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