Pre-deposit waiver under sales tax law requires proof of financial inability; writ relief is limited to exceptional cases.

Exemption from the pre-deposit requirement under the proviso to section 39(5) of the Haryana General Sales Tax Act, 1973 is available only on proof of financial inability or lack of paying capacity, supported by recorded reasons. A plea based on legal complexity, administrative difficulty, or challenge to the assessment does not satisfy that condition, because the appellate authority is not to examine the merits of the appeal at that stage. Writ relief under article 226 to bypass the statutory pre-deposit condition is available only in rare and exceptional circumstances; absent extraordinary grounds, the legislative mandate remains enforceable.

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Issues: (i) Whether exemption from pre-deposit under the proviso to section 39(5) of the Haryana General Sales Tax Act, 1973 could be denied where the appellant relied on legal complications and not financial inability; (ii) Whether the High Court should grant relief under article 226 of the Constitution of India by directing entertainment of the appeal without insisting on statutory pre-deposit.

Issue (i): Whether exemption from pre-deposit under the proviso to section 39(5) of the Haryana General Sales Tax Act, 1973 could be denied where the appellant relied on legal complications and not financial inability.

Analysis: The proviso permits relaxation of the pre-deposit requirement only when the appellate authority is satisfied, for recorded reasons, that the appellant is unable to pay the assessed tax, penalty or interest. The expression of inability was construed to mean financial incapacity or lack of paying capacity, not a challenge to the legality of the assessment or a plea based on administrative or legal difficulties in releasing funds. At that stage, the appellate authority is not to examine the merits of the appeal.

Conclusion: Exemption could be granted only on proof of financial inability, and the denial of exemption on the facts was in law and against the appellant.

Issue (ii): Whether the High Court should grant relief under article 226 of the Constitution of India by directing entertainment of the appeal without insisting on statutory pre-deposit.

Analysis: Although writ jurisdiction is not barred in principle, interference to waive a statutory pre-deposit condition is justified only in rare and exceptional circumstances. No extraordinary ground was shown to displace the legislative mandate, and the petitioner could not claim special treatment merely because it was a government department.

Conclusion: No writ relief was warranted, and the request to bypass the statutory condition was rejected.

Final Conclusion: The statutory requirement of pre-deposit remained enforceable, the petitioner failed to establish financial inability, and the challenge to the refusal of exemption was not accepted.

Ratio Decidendi: Under the proviso to section 39(5) of the Haryana General Sales Tax Act, 1973, pre-deposit can be waived only on proof of financial inability, and the appellate authority cannot assess the merits of the appeal while deciding such an application; writ relief against that condition is available only in exceptional cases.

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