Pre-deposit condition in penalty appeals upheld where no undue hardship or natural justice breach was shown.

Where the governing foreign exchange framework makes appeal against penalty conditional on pre-deposit, the appellate forum may insist on deposit or grant only partial waiver on proof of undue hardship. The High Court held that a direction requiring deposit of 5% of the penalty, after substantial waiver, was an exercise of discretion and did not by itself raise a question of law warranting interference. It further held that the appellant had not established undue hardship or a legally cognizable breach of natural justice, since notice was issued and the reply was considered. The challenge to the pre-deposit order therefore failed and the dismissal for non-compliance was confirmed.

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Issues: (i) Whether the High Court could interfere with the Appellate Tribunal's order directing deposit of 5% of the penalty and dismissing the appeal for non-compliance. (ii) Whether the appellant had shown undue hardship or violation of natural justice so as to warrant complete waiver of pre-deposit.

Issue (i): Whether the High Court could interfere with the Appellate Tribunal's order directing deposit of 5% of the penalty and dismissing the appeal for non-compliance.

Analysis: The statutory scheme under the foreign exchange enactments made pre-deposit a condition for entertaining an appeal against penalty, while conferring limited discretion on the appellate forum to dispense with the deposit where undue hardship is shown. The High Court's appellate jurisdiction was confined to questions of law arising from the Tribunal's order. A direction fixing pre-deposit at 5% after granting substantial waiver was an exercise of discretion under the governing provisions and did not, by itself, raise any question of law warranting interference.

Conclusion: The challenge to the Tribunal's discretionary order was not maintainable on the facts and no interference was warranted.

Issue (ii): Whether the appellant had shown undue hardship or violation of natural justice so as to warrant complete waiver of pre-deposit.

Analysis: The expression "undue hardship" requires proof of hardship beyond a mere assertion and must be balanced against the need to safeguard realisation of the penalty. On the materials, the authority had issued notice, considered the reply, and the subsequent complaint of lack of hearing did not establish such prejudice as to invalidate the pre-deposit direction. The plea of violation of natural justice was held to be a matter for the appellate forum and, in any event, the facts did not justify total waiver.

Conclusion: No undue hardship or legally cognizable violation of natural justice was established, and the direction to deposit 5% of the penalty was upheld.

Final Conclusion: The appeal failed and the order dismissing the challenge to the pre-deposit direction stood confirmed.

Ratio Decidendi: An appellate forum may insist on pre-deposit or grant only partial waiver where the statute makes appeal conditional, and interference is unwarranted unless the appellant demonstrates undue hardship and a legal error in the exercise of discretion.

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