Pre-deposit relaxation requires fair discretion: surety conditions must be reasoned and imposed only after hearing the appellant.

The proviso to section 39(5) of the Haryana General Sales Tax Act, 1973 allows an appellate authority to entertain an appeal without full pre-deposit where the appellant cannot pay the assessed tax, penalty or interest and reasons are recorded in writing. The authority may impose reasonable conditions, including security or surety, when granting such relaxation, but the discretion is not mandatory or mechanical and must be exercised on relevant material. Fair procedure requires the appellant to be given an opportunity to meet any proposed condition. A cryptic, unreasoned order imposing surety without such opportunity reflects non-application of mind and breaches natural justice.

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Issues: Whether, while entertaining an appeal under section 39(1) read with the proviso to section 39(5) of the Haryana General Sales Tax Act, 1973, the appellate authority could impose a condition of furnishing surety bond and whether the petitioner was entitled to an opportunity before such condition was imposed.

Analysis: The proviso to section 39(5) permits entertainment of an appeal without full pre-deposit where the appellant is unable to pay the assessed tax, penalty or interest and the admitted amount has been paid, with reasons recorded in writing. The Court held that the appellate authority is not barred from imposing an appropriate condition while granting exemption from pre-deposit, but such power is discretionary and cannot be exercised on a rigid or mechanical basis. The requirement of surety or security is not mandatory in every case. The authority was also required to act fairly and give the appellant an opportunity to show inability to comply with the proposed condition. The cryptic order, lacking reasons and passed without such opportunity, amounted to non-application of mind and offended principles of natural justice.

Conclusion: The condition imposed by the appellate authority could not be sustained in the manner adopted, and the matter had to be reconsidered after giving the petitioner an opportunity and recording proper reasons.

Ratio Decidendi: The appellate authority under the proviso to section 39(5) may impose reasonable conditions while relaxing pre-deposit, but such discretion must be exercised fairly, on relevant material, and after giving the appellant an opportunity to meet the proposed condition.

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