Appellate Court Reduces Pre-Deposit Requirement for Granite Company in High Pitched Assessment

The appellate authority imposed a pre-condition of paying 15% of the demand before further proceedings in high pitched assessment proceedings against a granite trading company. The company alleged victimization due to a CBI complaint and sought relief from the pre-condition. The judge recognized the legality of the pre-deposit but reduced it to 5% per assessment year considering the perceived victimization and need to restore confidence in the assessment process. The appellate authority was instructed to proceed with the appeals on merits after the reduced pre-deposit was made.

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Issues:
- High pitched assessment proceedings and conditional order to pay 15% of the demand before further proceedings stayed.
- Allegations of illegal gratification, CBI complaints, and subsequent scrutiny against the company.
- Dispute over the legality and necessity of the pre-condition imposed by the appellate authority.
- Argument regarding victimization of the company and lack of impartiality in the assessment process.
- Jurisdiction of the appellate authority to impose pre-conditions and the reasonableness of the 15% deposit requirement.
- Legal principle of non-interference with judicial discretion unless suffering from perversity or gross illegality.
- Exceptional circumstances warranting a reduction in the pre-deposit amount due to perceived victimization.

Analysis:
The petitioner, a company trading in Granite, challenged high pitched assessment proceedings for the years 2011-2012, 2013-2014, and 2014-2015, where the appellate authority imposed a pre-condition of paying 15% of the demand before further proceedings. The petitioner argued that the scrutiny and assessments were influenced by a complaint to the CBI regarding demands for illegal gratification by Income Tax officials. The company claimed victimization and sought relief from the pre-condition, emphasizing the need to encourage reporting of graft in public life.

The Standing Counsel for the Income Tax Department countered, stating that the scrutiny was not linked to the CBI complaints and was a routine random selection process. He defended the pre-condition as reasonable, citing departmental circulars allowing up to 20% pre-deposit. The judge acknowledged the legality of the 15% pre-deposit but noted the peculiar circumstances surrounding the case, including the perception of victimization and repeated assessments post the CBI complaints.

The judge highlighted the need for judicial discretion without interference unless there is perversity or gross illegality. Acknowledging the exceptional nature of the case, the judge set aside the previous orders requiring a 15% deposit and reduced it to 5% per assessment year. This reduction aimed to address the company's concerns of victimization and restore confidence in the assessment process. The appellate authority was directed to proceed with hearing the appeals on merits after the reduced pre-deposit was made, without any coercive actions until adjudication completion.

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