Tax appeal stay conditions may be moderated to keep the appellate remedy effective while imposing reasonable pre-deposit safeguards.

Writ jurisdiction over tax appeal stay conditions can be used to make pre-deposit and security requirements reasonable without undermining the appellate remedy. The High Court modified the appellate authority's direction requiring a further 25% pre-deposit and security or bank guarantee, taking into account the partial payment already made and the alleged clerical nature of the dispute. It substituted less onerous conditions by directing payment of Rs. 50 lakhs and a personal bond for the balance within four weeks, after which the statutory appeal was to be heard and decided on merits.

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Issues: Whether the stay order imposing a further pre-deposit and security conditions called for interference, and what conditions should govern the hearing of the statutory appeal.

Analysis: The writ petition challenged the appellate authority's direction requiring payment of 25% of the balance disputed tax and furnishing of security or bank guarantee. The Court noted that the petitioner had already made part payment and that the controversy arose from alleged clerical mistakes in the return. In the circumstances, the Court found it appropriate to modify the conditions for continuance of the appeal, while ensuring that the appellate authority could proceed to decide the appeal on merits after compliance with the revised condition.

Conclusion: The impugned stay conditions were modified, and the petitioner was directed to pay Rs. 50 lakhs and furnish a personal bond for the balance within four weeks, after which the appeal was to be heard and decided on merits.

Final Conclusion: The writ petition succeeded to the extent of substitution of the pre-deposit and security requirements with a less onerous condition, enabling the statutory appeal to be heard on merits.

Ratio Decidendi: In exercising writ jurisdiction over stay orders in tax appeals, the Court may modify pre-deposit conditions to make them reasonable while preserving the effectiveness of the appellate remedy.

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