Statutory right of appeal may be conditioned by pre-deposit requirements, and fiscal hardship alone does not invalidate them.

Section 48(4) of the Chhattisgarh VAT Act, 2005, requiring pre-deposit of a specified portion of tax or penalty as a condition for appeal, was upheld as constitutionally valid. The SC applied earlier authority on materially similar fiscal pre-deposit provisions and held that the statutory right of appeal may be conditioned by the legislature. The Court found that such a pre-deposit requirement does not, by itself, violate equality, the freedom to carry on business, or the constitutional levy of tax, and that hardship in taxation is not a ground to invalidate a clear statutory condition. It also noted that a writ remedy remains available against arbitrary or exorbitant demands made on an erroneous basis.

---

---

Issues: Whether Section 48(4) of the Chhattisgarh VAT Act, 2005, which requires pre-deposit of a specified portion of the tax or penalty as a condition for entertainment of appeal, is unconstitutional and violative of Articles 14, 19(1)(g) and 265 of the Constitution of India.

Analysis: The challenge was held to be covered by earlier authority upholding a materially similar pre-deposit requirement in fiscal legislation. The right of appeal is a statutory right and may be conditioned by the legislature. A pre-deposit condition imposed for maintaining an appeal does not, by itself, violate equality or the freedom to carry on business, and hardship in taxation is not a ground to invalidate a clear statutory condition. The Court also noted that where an arbitrary or exorbitant demand is made on an erroneous basis, a writ remedy remains available against such arbitrary action.

Conclusion: Section 48(4) of the Chhattisgarh VAT Act, 2005 was upheld as constitutionally valid and the challenge failed, being against the petitioner.

---