Pre-deposit hardship in tax appeals may justify writ relief where refusal would cause grave private injury

In taxing matters, a pre-deposit condition may be stayed in writ jurisdiction where the applicant shows undue hardship, the balance of convenience favours relief, and refusal would cause grave private injury. The Court noted unrebutted material showing lack of liquid assets and inability to furnish a bank guarantee or cash deposit, and found that the Tribunal had not assessed the practical hardship the condition would create. Interim relief was therefore granted against the deposit-and-guarantee requirement, while the appellate proceedings were left to continue expeditiously.

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Issues: Whether the Tribunal's order directing deposit of 25 per cent of the duty demanded and a bank guarantee for the balance, for entertaining the appeal under the pre-deposit provision, should be stayed in writ jurisdiction on the ground of undue hardship and balance of convenience.

Analysis: The pre-deposit provision empowers the appellate authority to dispense with deposit where it would cause undue hardship, subject to conditions safeguarding revenue. The record showed that the petitioner had placed unrebutted material indicating lack of liquid assets and inability to furnish a bank guarantee or cash deposit. The Tribunal had not recorded a finding on the practical hardship that would result if the condition remained operative, and had treated the request as if sympathy alone were sought. In taxing matters, interim relief is not confined to a prima facie case alone; the court must also consider balance of convenience and the risk of grave private injury if relief is refused. The case was distinguishable from a large industrial concern and involved a small-scale unit whose business would be brought to a standstill by the pre-deposit condition.

Conclusion: The order directing cash deposit and bank guarantee was stayed, and interim relief was granted in favour of the assessee.

Final Conclusion: The writ court intervened to protect the assessee from undue hardship arising from the pre-deposit condition, while leaving the appellate proceedings to be decided expeditiously.

Ratio Decidendi: In taxing matters, a pre-deposit condition may be stayed in writ jurisdiction where the applicant shows prima facie hardship, the balance of convenience favours relief, and refusal would cause grave private injury.

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