Statutory pre-deposit waiver must rest on relevant and bona fide considerations; refusal based on irrelevant factors was quashed.

Discretion to waive or relax a statutory pre-deposit must be exercised judicially, bona fide and on relevant material, including the assessee's ability to pay and other germane factors. The HC held that the appellate authority and Tribunal misdirected themselves by relying on irrelevant considerations, such as the perceived merits of the assessment and the assessee's later business activity, while failing to examine serious claims of business closure and inability to deposit. An order based on irrelevant factors is vitiated, and the refusal to grant waiver or relaxation was therefore unsustainable and liable to be quashed.

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Issues: Whether the appellate authority and the Tribunal properly exercised discretion under the proviso to sub-section (1-B) of section 9 of the U.P. Sales Tax Act, 1948, while refusing waiver or relaxation of the statutory pre-deposit requirement.

Analysis: The power to waive or relax the deposit condition is discretionary, but the discretion must be exercised judicially, honestly, bona fide, and on relevant material. It is intended to mitigate the rigour of the pre-deposit requirement in appropriate cases, and the authority must consider the assessee's ability to pay and other relevant factors. The Tribunal relied on matters that were not germane to the enquiry, including the perceived merits of the assessment and the fact that the assessee carried on business in later years, while failing to examine the serious assertions regarding closure of business and inability to make the deposit. A decision resting on irrelevant considerations is vitiated.

Conclusion: The refusal to grant waiver or relaxation was unsustainable and the impugned order was liable to be quashed.

Ratio Decidendi: Discretion to waive a statutory pre-deposit must be exercised on relevant, objective, and bona fide considerations, and an order founded on irrelevant factors is vitiated.

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