Prima facie case for waiver of pre-deposit and stay of recovery supported by accounting evidence and retrospective amendment

A prima facie case for complete waiver of pre-deposit was found where a Chartered Accountant's certificate showed that depreciation had not been claimed and the amount had not been treated as revenue expenditure during the relevant period. The certificate, though filed before the adjudicating authority, had not been considered. The Tribunal also noted that the relevant revenue-expenditure wording had been retrospectively substituted by the Finance Act, 2003, which supported the appellant's case. On these materials, stay of recovery was granted pending the appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery of the adjudged dues.

Analysis: The applicant produced a Chartered Accountant's certificate stating that depreciation had not been claimed under section 32 of the Income-tax Act, 1961, nor had the amount been treated as revenue expenditure during the relevant period. The certificate, though filed before the adjudicating authority, had not been considered. The Tribunal also noted that the expression relating to revenue expenditure had been retrospectively substituted by the Finance Act, 2003. On these materials, the appellant established a prima facie case for complete waiver.

Conclusion: The appellant was entitled to waiver of pre-deposit and stay of recovery during the pendency of the appeal.

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