Surety bond condition for tax appeal set aside for a sick industrial unit; appeal must be heard on merits.

A sick industrial unit was not required to furnish a surety bond as a precondition for its tax appeal to be heard on merits, because the appellate proceeding was already pending for disposal. The High Court found the bond condition unjustified in the circumstances and removed it, directing that the appeal be heard and decided on merits without insisting on security. The ruling reflects that an appellate authority should not impose a surety bond condition where it has the effect of obstructing consideration of a statutory appeal that is already listed for adjudication.

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Issues: Whether the appellate authority could insist on furnishing of a surety bond by a sick industrial unit as a condition for hearing the tax appeal on merits.

Analysis: The petitioner had been declared a sick industrial unit under the Sick Industrial Companies (Special Provisions) Act, 1985. The Tribunal had entertained the appeal against the revisional demand order but made it subject to furnishing a surety bond. In the circumstances, the condition was found unjustified, since the appeal itself was already fixed for hearing and disposal on merits.

Conclusion: The condition requiring furnishing of a surety bond was set aside, and the appeal was directed to be heard and decided on merits without insisting on such bond.

Final Conclusion: Relief was granted in writ jurisdiction by removing the bond condition and enabling consideration of the statutory appeal on merits.

Ratio Decidendi: A sick industrial unit should not be compelled to furnish a surety bond as a precondition for hearing of its appeal on merits when the appellate proceeding is already pending for disposal.

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