Judicial discretion in security for stay cannot be arbitrary; alternative immovable property security must be fairly considered and reasons recorded.

Where the proviso to section 20(3) and Rule 30-B permitted security in multiple forms, the appellate authority had to exercise its discretion judicially and on relevant facts when deciding whether to accept security for stay of tax and penalty. An assessee's offer of immovable property security could not be rejected merely by insisting on bank guarantee alone without examining title, encumbrance, adequacy, or recording reasons. The authority's failure to consider the alternative security and to justify its refusal made the insistence on bank guarantee arbitrary. The impugned orders were set aside and the stay/security applications were directed to be reconsidered in accordance with law.

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Issues: Whether the appellate authority could insist on bank guarantee alone and reject the assessee's offer of immovable property security without reasons while exercising power under section 20(3) of the Mysore Sales Tax Act, 1957 read with Rule 30-B of the Rules.

Analysis: The proviso to section 20(3), as it then stood, permitted the appellate authority to entertain an appeal without payment of tax and penalty on furnishing security to its satisfaction, and Rule 30-B recognised personal security, property security, and bank guarantee as permissible forms. The discretion conferred by the provision and the rule had to be exercised judicially, on relevant facts and circumstances, and not capriciously or arbitrarily. Where the assessee specifically offered immovable property as security and indicated inability to furnish bank guarantee, the authority was required to consider whether the offered property was unencumbered, had clear title, and was adequate security. The order rejecting the offer did not address these matters or give reasons for insisting on bank guarantee alone.

Conclusion: The insistence on bank guarantee alone, without considering the offered immovable property security and without recorded reasons, was arbitrary. The orders were liable to be interfered with and the applications required fresh consideration.

Final Conclusion: The revision petitions succeeded, the impugned orders were set aside, and the applications for stay/security were directed to be reconsidered in accordance with law.

Ratio Decidendi: Where a statute authorises acceptance of security in different forms, the appellate authority must exercise its discretion judicially and give reasons for rejecting a reasonable alternative security; an arbitrary insistence on one form of security alone is unsustainable.

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