Pre-deposit for stay of recovery can be moderated where facts justify deviation from the 15% guideline.

Circulars governing stay of recovery pending appeal treated a 15% pre-deposit as a guideline, not an inflexible rule, and permitted departure where facts justified a lower or higher amount. The High Court found that the discretion had to be exercised uniformly and reasonably, and that the Tribunal's stay condition needed moderation in light of the high disputed demand and the stage of proceedings. Exercising writ jurisdiction, the Court reduced the pre-deposit requirement to 5% and modified the stay order in favour of the assessee.

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Issues: Whether the pre-deposit condition imposed for stay of recovery pending appeal should be reduced from 15% of the disputed tax demand to a lower percentage.

Analysis: The circulars governing stay of demand contemplated a general pre-deposit of 15% but did not make that figure inflexible. They allowed deviation where the facts justified a higher or lower percentage, and the exercise of discretion had to be uniform and reasonable. Considering the very high tax demand and the stage of the proceedings, the condition imposed by the Tribunal was treated as requiring moderation. The Court therefore exercised writ jurisdiction to adjust the stay condition rather than interfere with the appeal process itself.

Conclusion: The pre-deposit requirement was reduced to 5%, and the impugned order was modified accordingly in favour of the assessee.

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