Pre-deposit default should not block merits hearing where partial deposit was made and tax liability was disputed

Dismissal of an appeal solely for non-compliance with the pre-deposit requirement was set aside where the appellant had already deposited 10% of the duty confirmed and the dispute arose during a period of conflicting views on a sub-contractor's tax liability when the main contractor had paid tax. The matter was remitted to the Commissioner (Appeals) so the appeal could be decided on merits rather than rejected only on the procedural default.

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Issues: Whether the dismissal of the appeal for non-compliance with the pre-deposit requirement was sustainable, and whether the matter should be remitted for decision on merits.

Analysis: The appeal before the Commissioner (Appeals) had been dismissed solely for want of deposit under the pre-deposit requirement. The appellant had already deposited 10% of the duty confirmed while filing the appeal, and the record also reflected confusion at the relevant time regarding the liability of a sub-contractor where the main contractor had paid the tax. In these circumstances, and since the controversy arose in a period when contrary views existed, it was considered appropriate that the appeal be heard on merits rather than being rejected on the procedural default alone.

Conclusion: The dismissal for non-deposit was set aside and the matter was remitted to the Commissioner (Appeals) for adjudication on merits. This is in favour of the appellant to the extent of securing a merits-based hearing.

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