Personal bond accepted in place of bank guarantee for balance demand pending appeal, where stay conditions were substantially complied with.

Where an assessee had already complied with the stay conditions by paying the prescribed part of the disputed tax, the remaining dispute was limited to the requirement of furnishing a bank guarantee for the balance tax and penalty pending appeal. The Court followed its earlier consistent approach and accepted a personal bond as sufficient security in place of a bank guarantee. The stay in the appeals was therefore allowed to continue on the substituted security, and the writ petitions were disposed of accordingly.

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Issues: Whether the condition insisting on furnishing a bank guarantee for the balance tax and penalty during pendency of the appeals could be modified by directing execution of a personal bond instead.

Analysis: The petitioner had already complied with the monetary conditions imposed in the stay proceedings by paying 25% of the disputed tax at the time of filing the appeals and a further 25% thereafter. The only surviving grievance was the insistence on a bank guarantee for the remaining tax and penalty. In view of the consistent approach adopted in earlier decisions, the Court treated a personal bond as sufficient security in place of bank guarantee.

Conclusion: The condition requiring a bank guarantee was substituted by a direction to execute a personal bond for the balance tax amount and penalty, which is in favour of the assessee.

Final Conclusion: The stay granted in the appeals was allowed to continue on the substituted security of a personal bond, and the writ petitions were disposed of accordingly.

Ratio Decidendi: Where the assessee has substantially complied with the stay conditions, a personal bond may be accepted in lieu of a bank guarantee as security for the balance demand pending appeal.

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