Court modifies orders, directs PS Company to furnish bonds for penalties. Failure to comply may restore orders.

The Court allowed the writ petitions and modified the impugned orders, directing the petitioner, a Public Sector Company, to furnish personal bonds for the disputed penalties within a specified period to the satisfaction of the Assessing Officer. Failure to comply would result in the restoration of the second respondent's orders.

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Issues:
Challenge to conditional interim order directing bank guarantee for disputed penalty.

Analysis:
The petitioner, a Public Sector Company, challenged a conditional interim order by the second respondent, directing the furnishing of a bank guarantee for the disputed penalty for each assessment year. The petitioner, an assessee before the first respondent, had assessment orders passed for different years. Appeals were made to the Joint Commissioner and then to the Tribunal. During the pendency of the appeals, the tax demand was paid, and there were no tax arrears. The petitioner sought a stay against the recovery of penalty, which was denied by the second respondent.

The petitioner argued that as a Public Sector Company, it should not be burdened with such conditions for the stay of penalty. Citing a Supreme Court decision and a previous High Court decision, the petitioner contended that a personal bond should suffice instead of a bank guarantee, as was granted in a similar case involving the same petitioner. The Additional Government Pleader for the respondents did not dispute the applicability of the cited decisions.

The Court observed that similar Oil Corporations in previous cases were allowed to provide personal bonds instead of bank guarantees under comparable circumstances. Taking into account the precedents set by the Apex Court and the High Court, the Court allowed the writ petitions and modified the impugned orders. The petitioner was directed to furnish personal bonds for the disputed penalties within a specified period to the satisfaction of the Assessing Officer. Failure to comply would result in the restoration of the second respondent's orders. No costs were awarded, and connected miscellaneous petitions were closed.

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