Pre-deposit condition in tax stay matters set aside where prima facie case and inability to pay cash were not properly considered.

The Tribunal's direction requiring a 15% pre-deposit of the disputed tax liability as a condition for considering stay was held unsustainable because it had not properly weighed the prima facie case, the taxpayer's asserted inability to make any cash deposit, and the earlier interim protection. As the Revenue did not dispute the lack of capacity to deposit and accepted continued protection if the appeal was decided within a fixed time, the High Court set aside the deposit condition. Recovery was kept stayed for the stipulated period, and the Tribunal was directed to dispose of the appeal expeditiously.

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Issues: Whether the Tribunal was justified in directing deposit of 15% of the disputed tax liability as a condition for considering the stay application, and whether the impugned order required interference.

Analysis: The petitioner challenged the deposit condition on the ground that the Tribunal had not properly considered the strength of the prima facie case, the asserted financial incapacity to make any cash deposit, and the earlier protection granted during proceedings. The Revenue did not dispute the petitioner's inability to deposit any amount in cash and fairly accepted that interim protection could continue if the appeal was directed to be decided within a fixed time. In these circumstances, the impugned order was found unsustainable.

Conclusion: The deposit condition was set aside, the writ petition was allowed, and the Tribunal was directed to decide the appeal expeditiously while recovery remained stayed for the stipulated period.

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