Pre-deposit in pending appeal may be dispensed with when a stay application is already before the appellate authority.

Where an appeal against a demand and a stay application are already pending, insistence on pre-deposit as a condition for hearing the appeal may be inappropriate if coercive recovery would prejudice the appellant. The Court found substantial grounds for stay and held that the appellate authority should hear the appeal on its merits without requiring deposit of the disputed amount. The demand to deposit the amount was set aside, and the pending appeal was directed to be heard expeditiously without pre-deposit.

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Issues: Whether the appellate authority could insist upon deposit of the impugned demand as a pre-condition for hearing the pending appeal when a stay application was already pending.

Analysis: The appeal against the demand had already been filed before the Collector (Appeals), and the stay application remained pending. In these circumstances, threatening coercive recovery despite the pendency of the appeal and stay request was unwarranted. The Court found that the petitioner had made out substantial grounds for stay and that the appeal should be heard on merits without insisting on pre-deposit.

Conclusion: The pre-deposit condition could not be insisted upon, and the appellate authority was required to decide the appeal on its own merits without such deposit.

Final Conclusion: The writ petition succeeded, the demand to deposit the disputed amount was set aside, and the pending appeal was directed to be heard expeditiously without pre-deposit.

Ratio Decidendi: Where an appeal and a stay application are already pending before the appellate authority, insistence on pre-deposit as a condition for hearing may be dispensed with when the circumstances justify stay and coercive recovery would be inappropriate.

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