Pre-deposit waiver requires prima facie merits review before directing payment; matter remitted for fresh consideration.

While considering a stay or waiver of pre-deposit, the Tribunal must apply its mind to the appellant's prima facie case and the facts of the dispute; a mechanical direction to deposit 5% without examining merits was inconsistent with that approach. The High Court found the impugned pre-deposit direction unsustainable because the stay application had not been considered on the correct legal footing, particularly where the appeal was to be heard by a Division Bench. The matter was remitted to the Tribunal for fresh consideration of the appeal and stay application on merits, and the waiver application was to be decided again in light of the proper legal position.

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Issues: Whether the Tribunal's direction requiring deposit of 5% of the disputed tax amount without considering the merits of the appeal required interference and whether the matter should be remitted for fresh consideration of the stay and waiver application.

Analysis: The Tribunal had proceeded on the premise that merits need not be examined while deciding the waiver application. The Court held that this approach was not in accordance with the earlier binding view that, while considering stay or waiver of pre-deposit, the authority must apply its mind to the appellant's prima facie case and the facts of the matter. Since the appeal was to be heard by a Division Bench and the stay application had not been considered on that footing, the impugned direction could not stand. The Court also noted that the petitioner had a prima facie case and that the waiver application required reconsideration by the Tribunal in the light of the correct legal position.

Conclusion: The order directing pre-deposit of 5% was stayed, the petitioner's appeal and stay application were directed to be considered on merits by the Tribunal, and the matter was remitted for fresh decision on the waiver application.

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