Security condition for admitted tax appeal cannot defeat merits hearing when modified compliance is permitted.

Under the Goa, Daman and Diu Sales Tax Act, an appeal may be entertained without prior payment of tax or penalty if reasons are recorded and security is furnished as directed. Where the appeal had already been admitted and a writ order had modified the original security requirement, dismissal for non-furnishing of the earlier security was not sustained. The appellant was given an opportunity to comply with the modified security terms so the appeal could be heard on merits.

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Issues: Whether a second appeal, once admitted subject to furnishing security, could be dismissed for non-compliance without consideration on merits, and whether the security condition could be modified to enable the appeal to be heard.

Analysis: Section 27 of the Goa, Daman and Diu Sales Tax Act, 1964 permits the appellate authority or Tribunal to entertain an appeal without prior payment of tax or penalty if reasons are recorded in writing and the appellant furnishes such security as may be directed. The appeal had already been admitted earlier, and the earlier writ order had modified the original security requirement. In that situation, the admitted appeal could not be frustrated by dismissal for want of full compliance with the earlier condition, especially when the merits of the challenge still required adjudication.

Conclusion: The dismissal of the appeal for non-furnishing of the earlier directed security was not sustained, and the petitioner was granted an opportunity to comply with the modified security terms so that the appeal could be heard on merits.

Ratio Decidendi: Where an appeal has already been admitted and the statute permits entertainment on security, a procedural default in complying with the original security direction should not prevent adjudication on merits if the condition is suitably modified.

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