Pre-deposit in tax appeal must reflect prima facie case and reasoned discretion, with remand ordered for fresh consideration.

Under Section 73 of the Gujarat Value Added Tax Act, an appellate authority has discretion to entertain an appeal on payment of tax or a lesser sum, but that discretion must be exercised judicially with reference to the appellant's prima facie case and supported by reasons. The Gujarat HC noted that the Tribunal's order fixing a substantial pre-deposit did not record cogent reasons showing how the prima facie case was assessed. The pre-deposit condition was therefore reduced, and the appeals were remanded to the first appellate authority for fresh consideration after hearing the appellants.

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Issues: Whether the Tribunal was justified in fixing and insisting upon the pre-deposit amount while entertaining the second appeals under Section 73 of the Gujarat Value Added Tax Act, and whether the appeals should be remanded to the first appellate authority after modification of the pre-deposit condition.

Analysis: Section 73 of the Gujarat Value Added Tax Act confers discretion on the appellate authority to entertain an appeal on proof of payment of tax or on payment of a smaller sum, and the exercise of that discretion must be informed by the prima facie case and supported by reasons. The impugned order of the Tribunal did not record cogent reasons as to how the appellant's prima facie case was assessed while directing a substantial pre-deposit. In the circumstances, the pre-deposit amount required interference and the matters warranted remand for fresh consideration in accordance with law.

Conclusion: The pre-deposit condition was reduced, and the appeals were remanded to the first appellate authority for fresh decision after hearing the appellants.

Ratio Decidendi: While deciding whether to entertain a tax appeal subject to pre-deposit, the appellate authority must exercise statutory discretion judiciously, consider the appellant's prima facie case, and record reasons for the amount demanded as a condition of appeal.

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