Reasonable pre-deposit under VAT appeal power cannot be excessive when revenue is already secured by deposit and attached assets.

A pre-deposit condition under the Gujarat Value Added Tax Act, 2003 must be reasonable and proportionate to the facts. Where the assessee had already complied with an earlier deposit, the property stood attached, and the revenue was otherwise secured, insisting on an additional pre-deposit of Rs. 7.12 crore at the second appeal stage was excessive and unnecessary. The impugned direction was therefore set aside, and the second appeal was to proceed on merits with the earlier deposit retained for adjustment against the eventual tax liability.

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Issues: Whether the Tribunal was justified in insisting on a pre-deposit of Rs. 7.12 crore at the second appeal stage when the first appellate authority had already fixed and accepted a much smaller deposit and the attached property sufficiently protected the revenue.

Analysis: Section 73(4) of the Gujarat Value Added Tax Act, 2003 permits the appellate authority to insist on payment of tax or to accept a smaller sum or security as a condition for entertaining the appeal. The existing deposit made pursuant to the first appellate order had already been complied with, the petitioner's property was attached, and the asset value was far in excess of the disputed demand. In these circumstances, requiring an additional pre-deposit of Rs. 7.12 crore at the appellate stage was found to be excessive and unnecessary, especially when the underlying assessment had proceeded ex parte and the appeal on merits was still pending.

Conclusion: The condition of further pre-deposit was not sustainable, and the petitioner was entitled to relief against the Tribunal's order.

Final Conclusion: The impugned pre-deposit direction was set aside and the second appeal was directed to proceed on merits, with the earlier deposit retained for adjustment against the eventual tax liability.

Ratio Decidendi: While exercising appellate powers under Section 73(4) of the Gujarat Value Added Tax Act, 2003, a pre-deposit condition must be reasonable and proportionate to the facts, and it cannot be insisted upon in an excessive manner where the revenue's interest is already adequately secured by an existing deposit and attached assets.

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