Statutory appeal and pre-deposit waiver: coercive recovery may be halted when prior recovery already satisfies interim compliance.

When a statutory appeal and waiver-of-pre-deposit application are already pending, continued coercive recovery may justify interim writ protection. The Gujarat HC noted that alternative remedy did not bar limited intervention where aggressive recovery steps were pursued before reasonable consideration of the appeal. Applying the discretionary waiver power under Section 73(4) of the Gujarat VAT Act, it treated the amount already recovered as sufficient compliance with the pre-deposit requirement, waived any further deposit, and held that bank attachment, stock security and recovery communications could not continue as interim measures. The amount recovered from the bank account was directed to be refunded.

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Issues: (i) Whether the writ petition could be entertained notwithstanding the pendency of the statutory appeal and application for waiver of pre-deposit; (ii) whether the amount already recovered and the surrounding recovery measures justified waiver of further pre-deposit and release of coercive recovery steps.

Issue (i): Whether the writ petition could be entertained notwithstanding the pendency of the statutory appeal and application for waiver of pre-deposit.

Analysis: The appeal was already pending before the Appellate Authority along with a request for waiver of pre-deposit, yet recovery proceedings were continued in a coercive manner without waiting for a reasonable period. In those circumstances, the existence of an alternative remedy and the filing of an appeal did not justify rejection of the petition at the threshold, particularly when interim protection was sought against aggressive recovery action.

Conclusion: The petition was maintainable for the limited purpose of securing interim protection pending disposal of the appeal.

Issue (ii): Whether the amount already recovered and the surrounding recovery measures justified waiver of further pre-deposit and release of coercive recovery steps.

Analysis: The demand was based on provisional assessment, part of which had already been recovered, and the respondents themselves treated only a portion of the demand as relating to the disputed fuel-credit issue. The statutory scheme under Section 73(4) of the Gujarat Value Added Tax Act permits the Appellate Authority to waive the pre-deposit wholly or partly and to impose reasonable conditions. On the facts, the amount already recovered was considered sufficient to satisfy the pre-deposit requirement, and no further deposit was warranted. Consequently, the remaining recovery measures, including bank attachment, stock security, and customer recovery communications, could not be sustained as interim measures.

Conclusion: Further pre-deposit was waived, and the coercive recovery steps were directed to be lifted, with refund of the amount recovered from the bank account.

Final Conclusion: The petition succeeded to the extent of interim relief, the existing recovery was treated as sufficient pre-deposit, and the appeal was left to be decided independently by the Appellate Authority.

Ratio Decidendi: Where a statutory appeal is pending and coercive recovery is continued during consideration of waiver of pre-deposit, the writ court may grant interim protection and treat substantial prior recovery as sufficient compliance with the pre-deposit requirement, using the discretionary power under the appellate waiver provision.

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