Interim bank guarantee relief granted during pendency of special leave petition, modifying the earlier tax arrears condition.

An interim order requiring furnishing of a bank guarantee for 50% of accrued tax arrears was modified during the pendency of the special leave petition. The petitioners sought continuation of the existing interim arrangement and relief from the guarantee requirement, and the respondents accepted that the earlier High Court protection had operated for a substantial period. In light of that position, the Supreme Court dispensed with the bank guarantee condition for the pendency of the special leave petition.

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Issues: Whether the interim order requiring furnishing of bank guarantee for 50% of the accrued tax liability arrears should be modified during the pendency of the special leave petition.

Analysis: The application sought modification of the earlier interim arrangement so that the petitioners could continue to enjoy the benefit of the existing circular and be relieved from furnishing bank guarantee. The respondents accepted that the petitioners had enjoyed an interim order from the High Court for a substantial period and requested continuation of that position until disposal of the special leave petition. In view of that stand, the interim order was modified to the limited extent of dispensing with the requirement to furnish bank guarantee during the pendency of the special leave petition.

Conclusion: The modification was granted and the petitioners were relieved from furnishing the bank guarantee during the pendency of the special leave petition.

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