Stay conditions for tax demand may be relaxed by accepting a personal bond instead of security or bank guarantee.

A stay condition requiring a security bond or bank guarantee for the balance tax and entire penalty was modified to allow execution of a personal bond instead. The writ petition succeeded only on this limited issue, as the court accepted that the stay arrangement could be suitably relaxed in line with a similar earlier matter. On furnishing the personal bond, the impugned order stood modified and interim stay of collection pending disposal of the appeal was granted.

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Issues: Whether the condition requiring a security bond or bank guarantee for the balance of tax and the entire penalty, while considering stay of collection pending appeal, should be modified to permit execution of a personal bond.

Analysis: The writ petition challenged the stay order only to the extent it insisted on furnishing a security bond or bank guarantee. The Court noted that in a similar matter a personal bond had been accepted in place of security, and followed that course for the present case. It therefore held that the condition imposed for stay was capable of being suitably modified.

Conclusion: The condition was modified and the petitioner was permitted to execute a personal bond for the balance tax and entire penalty, upon which the impugned order would stand modified to grant interim stay pending disposal of the appeal.

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