High Court allows personal bond instead of bank guarantee for tax appeal

The Madras High Court allowed the petitioner to furnish a personal bond instead of a bank guarantee for the remaining tax and penalty amount, with a stay on the balance until the appeal was decided by the first appellate authority. The court modified the earlier order to this extent, emphasizing the limited scope of the change and not awarding any costs in the case.

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Issues:
1. Writ petition for issuance of writ of Certiorarified Mandamus to quash the direction to furnish bank guarantee and request to furnish personal bond instead.

Analysis:
The writ petition before the Madras High Court involved a prayer for the issuance of a writ of Certiorarified Mandamus to challenge the direction given by the second respondent in an order dated 22.03.2021. The petitioner had already paid a portion of the disputed tax, and the second respondent directed the petitioner to pay the remaining amount and furnish a bank guarantee for the balance of tax and penalty. The petitioner sought to modify this condition and requested to furnish a personal bond instead of a bank guarantee, similar to what was directed by the first appellate authority.

The petitioner's counsel argued that the direction to pay a portion of the disputed tax had been complied with, and the petitioner was aggrieved by the requirement to furnish a bank guarantee. The counsel requested the court to allow the petitioner to provide a personal bond instead. The court noted that similar requests had been favorably considered in the past and referred to a previous order dated 31.08.2018 in a different case where such a modification was allowed.

The Government Advocate representing the respondents did not contest the petitioner's request and accepted the position presented by the petitioner's counsel. Considering that the petitioner had already paid 50% of the disputed tax, the court permitted the petitioner to furnish a personal bond for the remaining tax and penalty amount within four weeks. Upon furnishing the personal bond, there would be a stay on the balance of the disputed tax and penalty until the appeal was disposed of by the first appellate authority. The court clarified that the impugned order dated 22.03.2021 was modified only to this limited extent.

In conclusion, the Madras High Court disposed of the writ petition by allowing the petitioner to furnish a personal bond instead of a bank guarantee for the balance of tax and penalty, subject to certain conditions. The court emphasized that the modified order was limited to this specific aspect, and no costs were awarded in the matter.

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