Bank guarantee condition for tax appeal stay modified to personal bond after partial deposit and similar relief in comparable matters.

A bank guarantee imposed as a condition for interim stay of the disputed tax demand during pendency of a statutory appeal may be treated as onerous where the assessee has already complied with the direction to deposit 25% of the disputed tax. In similar matters, such a condition had been substituted by personal bonds undertaking payment if the appeal failed, and the same relief was extended here because the petitioner was similarly placed. The bank guarantee requirement was therefore set aside, personal bonds were permitted in its place, and the stay in the appeal continued upon such compliance.

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Issues: Whether the condition requiring the petitioner to furnish a bank guarantee for the balance disputed tax during pendency of the statutory appeal should be modified by permitting execution of a personal bond instead.

Analysis: The writ petitions were confined to the challenge to the additional condition insisting on bank guarantee after the petitioner had already complied with the direction to deposit 25% of the disputed tax. The Court noted that in earlier matters similar bank guarantee conditions had been substituted by personal bonds undertaking payment of the amount if the appeal failed. As the petitioner stood on the same footing, the Court found that insistence on a bank guarantee was onerous and that the same relief could be granted consistently with the earlier orders.

Conclusion: The bank guarantee condition was set aside and the petitioner was permitted to execute personal bonds undertaking to pay the balance disputed tax; the stay granted in the appeal would continue upon such compliance.

Final Conclusion: The writ petitions succeeded to the extent of modifying the appellate stay conditions in favour of the petitioner.

Ratio Decidendi: Where an appellate stay condition requiring a bank guarantee is found to be onerous and similarly placed parties have been granted relief, the condition may be substituted by a personal bond undertaking payment of the disputed amount.

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