Full pre-deposit requirement held excessive in a long-pending sales tax dispute; appeal remitted for merits without further deposit.

The High Court found that insisting on full pre-deposit as a condition for hearing the second appeal was excessive in the circumstances of a long-pending inter-State sales assessment. Earlier proceedings had already involved a pre-deposit of Rs. 25 lakh and a remand by the Tribunal, and the first appellate authority had not required any further pre-deposit after remand. The Court therefore restored the matter to the first appellate authority for decision on merits without any additional pre-deposit and directed that no coercive recovery be taken until the first appeal is decided.

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Issues: Whether the Tribunal was justified in insisting on full pre-deposit as a condition for hearing the second appeal, and whether the first appellate authority should be directed to hear the matter on merits without any further pre-deposit.

Analysis: The dispute arose from a long-pending assessment relating to inter-State sales, in which an earlier round had already involved a pre-deposit of Rs. 25 lakh and a remand by the Tribunal. The impugned insistence on depositing the entire disputed amount was held to be excessive in the circumstances, particularly because the appeal had already been entertained earlier, the first appellate authority had not insisted on pre-deposit after remand, and the matter had remained unresolved for years. The Court therefore found it appropriate to restore the matter to the first appellate authority for adjudication on merits. It also directed that no coercive recovery be undertaken until the first appeal was decided.

Conclusion: The insistence on full pre-deposit was set aside and the matter was remitted for disposal of the first appeal on merits without insisting on any further pre-deposit. The assessee obtained protection against coercive recovery until the first appeal is decided.

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