Pre-deposit exemption cannot be refused arbitrarily when earlier appellate conditions and financial capacity remain unchanged.

Refusal to grant exemption from pre-deposit under the proviso to section 39(5) of the Haryana General Sales Tax Act was arbitrary where the Tribunal ignored an earlier order permitting the appeal on deposit of 25 per cent with surety for the balance. The Tribunal also gave no tangible reason for rejecting the later exemption request and did not show any change in the petitioner's financial position or status. On that basis, the refusal was found legally unsustainable, the order was quashed, and the appeal was directed to be heard on merits.

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Issues: Whether the Tribunal was justified in refusing exemption from pre-deposit under the proviso to section 39(5) of the Haryana General Sales Tax Act, 1973 and directing deposit of the disputed tax demand.

Analysis: The petitioner's earlier appeal had been entertained subject to deposit of 25 per cent of the tax demand and furnishing of surety for the balance. In the later appeal, the Tribunal refused to grant exemption without noticing the earlier order and without recording any tangible reason to show why the petitioner had failed to establish financial incapacity. The record also did not show any change in the petitioner's status between the two orders. The refusal to entertain the exemption request was, therefore, held to be arbitrary and legally unsustainable.

Conclusion: The Tribunal's order refusing exemption from pre-deposit was illegal and was quashed, and the appeal was directed to be heard on merits.

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