Proportionality of stay conditions in penalty appeals: one-third remittance was reduced to one-fourth before recovery was stayed.

At the stay stage, the appellate authority's condition requiring payment of one-third of the penalty was examined only for prima facie case and proportionality, while challenges based on natural justice and alleged non-compliance with earlier directions were left to the pending appeals. Because the authority had already found a prima facie case, the remaining issue was whether the recovery condition was unduly onerous. The condition was found excessive in light of the total penalty liability across the relevant years and was modified to one-fourth of the amount payable, subject to which stay of recovery was granted.

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Issues: Whether the appellate authority's condition requiring remittance of one-third of the penalty amount while granting stay of recovery was unduly onerous and liable to be modified.

Analysis: The challenge to the penalty orders on grounds of natural justice and non-compliance with earlier directions was left to be considered in the pending appeals. At the stage of the stay applications, the relevant enquiry was confined to the existence of a prima facie case and the nature of the condition to be imposed. The appellate authority having found a prima facie case, the only question was whether the condition imposed was proportionate. In view of the total penalty liability across the three years, remittance of one-third was considered excessive and the condition was suitably modified.

Conclusion: The condition of remitting one-third of the penalty was modified to remittance of one-fourth of the amount payable, and the petitioner obtained stay of recovery on compliance with the modified condition.

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