Pre-deposit waiver can't be denied mechanically when no prima facie complicity and deposit reasons are unexplained.

Complete waiver of pre-deposit was said to be warranted where the assessee's regular returns showed a small-scale business, the large demand arose from a revised return filed by a retired partner, and the record showed no prima facie complicity in the alleged fraud. The Tribunal was expected to assess the appellant's capacity to pre-deposit and the effect of the alleged revised return, but its reduction of the deposit without reasons was characterised as mechanical and unreasonable. On that basis, refusal of full waiver was treated as unjustified, with stay against recovery also indicated.

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Issues: Whether the Tribunal was justified in refusing complete waiver of pre-deposit for admission of the second appeals and stay against recovery of the assessed dues.

Analysis: The appellant's regular returns showed a small-scale business with comparatively low turnover, whereas the huge demand had been raised on the basis of a revised return filed by the retired partner. The record disclosed no prima facie complicity of the appellant in the alleged fraud; rather, the charge-sheet treated the proprietor and his son as witnesses. In these circumstances, the Tribunal was required to consider the appellant's capacity to make pre-deposit and the effect of the alleged fraudulent revised return, but it reduced the amount without assigning reasons why such deposit was necessary. The refusal to grant full waiver was therefore found to be mechanical and unreasonable in the facts of the case.

Conclusion: The refusal to grant complete waiver of pre-deposit was unjustified and unsustainable; the appellant was entitled to complete waiver for admission of the appeals and stay against recovery.

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