Pre-deposit condition in tax appeal modified after prima facie case was balanced against Revenue's interest.

The Court interfered with a Tribunal order requiring deposit of the entire disputed amount as a condition for entertaining the appeal. It noted that the petitioner had not established financial difficulty, but for the limited purpose of pre-deposit a prima facie case was made out, and that consideration had to be balanced against the Revenue's interest. The pre-deposit condition was therefore modified: the petitioner was directed to deposit 50% of the disputed amount, and the balance was stayed until disposal of the appeal.

---

---

Issues: Whether the Tribunal's order insisting on deposit of the entire demanded amount as a pre-condition for entertaining the appeal was liable to be interfered with and modified.

Analysis: The petitioner did not establish financial difficulty, and the Tribunal had exercised its discretion on the basis that service tax had been collected on the gross value but only part of it had been remitted. At the same time, for the limited purpose of pre-deposit, the petitioner had made out a prima facie case, and the Court balanced that consideration against the interest of the Revenue. In such circumstances, the Court found it appropriate to interfere with the pre-deposit condition and reduce the burden while preserving the appeal process.

Conclusion: The pre-deposit condition was modified, and the petitioner was directed to deposit 50% of the disputed amount, with the balance stayed till disposal of the appeal; the relief was therefore partly in favour of the petitioner.

---