Pre-deposit waiver and stay granted where long-term land lease raised prima facie taxability questions.

A CESTAT Delhi ruling on pre-deposit and stay treated the appellant's factual position as prima facie correct where the record did not establish the actual transfer conditions or whether all disputed sums arose from the same type of transaction. It observed that a long-term 90-year lease with rights of transfer, assignment and mortgage appeared closer to a transfer of property than ordinary renting, and that township development and municipal functions by a statutory authority raised substantial questions on the character of the activity and taxability of the consideration. On that basis, waiver of pre-deposit was granted and recovery was stayed during the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery pending appeal on the strength of a prima facie case and pleaded hardship.

Analysis: The adjudication record did not bring on record the actual conditions under which the land was transferred, and it was not clear whether the amounts sought to be taxed all arose from the same type of transaction. On the material before it, the Court treated the appellant's factual position as prima facie correct. It also noted that long-term transfer of land on 90-year lease basis, with rights such as transfer, assignment and mortgage, appeared closer to a transfer of property than ordinary renting. The activity of a statutory authority developing a township and maintaining municipal functions was further regarded as raising substantial questions on the character of the activity and the taxability of the consideration.

Conclusion: Waiver of pre-deposit was granted and recovery of the disputed dues was stayed during pendency of the appeal.

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