Personal bond accepted in place of bank guarantee for conditional stay in tax recovery proceedings.

In a conditional stay of recovery proceedings arising from tax and penalty assessment orders, the High Court treated a personal bond as an adequate substitute for a bank guarantee where insistence on bank security was said to cause financial hardship. The security condition for continuance of stay was modified accordingly, and the appellate authority was directed to decide the statutory appeals on merits after receipt of the personal bond.

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Issues: Whether, in the circumstances of the case, the petitioner could be directed to furnish a personal bond instead of a bank guarantee as a condition for stay pending disposal of the statutory appeals.

Analysis: The petitioner sought stay of recovery of tax and penalty arising from the assessment orders and contended that insistence on a bank guarantee would cause financial hardship. The challenge was limited to the nature of security to be furnished for continuance of stay, and the Court followed its earlier approach in similar matters by treating a personal bond as an adequate substitute for bank guarantee for the purpose of conditional stay. The appellate authority was also directed to decide the appeals on merits after receipt of the personal bond.

Conclusion: The condition requiring bank guarantee was modified, and the petitioner was permitted to execute a personal bond instead.

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