Refund of pre-deposit after penalty order is set aside and remanded for fresh adjudication.

When a penalty order is set aside in appeal and remanded for fresh adjudication, a pre-deposit made against that penalty becomes refundable unless there is a continuing legal basis to retain it. The appellate authority had treated the penalty order as ex parte and non-speaking and directed reconsideration after giving the petitioner an opportunity to produce evidence. Because the penalty order no longer survived after being set aside, the deposited amount could not be retained merely due to pendency of the remanded proceedings. Refund was therefore due.

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Issues: Whether the petitioner was entitled to refund of the pre-deposit made towards penalty after the appellate authority remanded the matter and set aside the penalty order.

Analysis: The appellate order treated the penalty order as ex parte and non-speaking and remanded the matter for fresh consideration after granting opportunity to produce evidence. Once the penalty order stood set aside in appeal, the amount deposited during the appeal could not be retained merely because the remand proceedings were still pending. The pendency of the remanded matter did not preserve the respondent's right to keep the deposited sum.

Conclusion: The petitioner was entitled to refund of the amount deposited towards penalty.

Ratio Decidendi: When a penalty order is set aside in appeal and the matter is remanded for fresh adjudication, a pre-deposit made against that penalty becomes refundable unless there is a subsisting legal basis to retain it.

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