Pre-deposit waiver requires genuine hardship review; cursory refusal without examining financial evidence is unsustainable.

Waiver of pre-deposit under the appellate regime must be decided on demonstrated hardship and the assessee's financial condition, not by a cursory insistence on payment. Where the record showed sick-industry status and substantial accumulated losses, the appellate authority was required to examine the material and make an informed enquiry into assets, liabilities, and the claimed hardship before exercising discretion. A refusal made without such consideration was an improper exercise of discretion and could not stand. The refusal to waive pre-deposit was therefore set aside, and the appeal was to be heard on merits without insisting on the deposit.

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Issues: Whether the appellate authority was justified in refusing dispensation of pre-deposit and insisting on deposit of the penalty amount despite the petitioner's plea of sickness and financial hardship.

Analysis: The request for waiver of pre-deposit had to be considered on the basis of hardship and the financial condition shown by the record. The petitioner had placed material indicating sick-industry status and substantial accumulated losses, but the authority rejected the request in a cursory manner without examining the annexed material or making any enquiry into assets, liabilities, or the alleged hardship. Such refusal was not a proper exercise of discretion under the pre-deposit regime.

Conclusion: The refusal to grant waiver of pre-deposit was unsustainable and was set aside. The appeal was directed to be heard on merits without insisting on pre-deposit, in favour of the assessee.

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