Procedural dismissal for non-renewal of bank guarantee was unsustainable where the appeal had to be decided on merits.

The Tribunal should not dismiss an assessee's appeal solely because an interim bank guarantee was not renewed where the writ court had also directed expeditious disposal and the appeal remained pending for years. In those circumstances, the lapse in maintaining the guarantee did not justify terminating the appellate process without deciding the dispute on merits. The procedural dismissal was therefore unsustainable, and the appellate and cross-appellate proceedings were restored for fresh consideration in accordance with law.

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Issues: Whether the Tribunal was justified in dismissing the assessee's appeal solely for non-renewal of the bank guarantee, instead of deciding the appeal and cross-appeal on merits.

Analysis: The interim protection granted by the writ court required the bank guarantee to be kept alive, but it also directed expeditious disposal of the appeal. That direction was not complied with and the appeal remained pending for years. In those circumstances, the Tribunal could not treat the lapse in renewal of the guarantee as a ground to terminate the appellate proceedings without adjudicating the dispute on merits.

Conclusion: The dismissal on the procedural ground was unsustainable and the appeal ought to have been heard and decided on merits.

Final Conclusion: The appeal succeeded, the impugned order was set aside, and the appeal and cross-appeal were restored for fresh consideration in accordance with law.

Ratio Decidendi: An appeal should not be dismissed for breach of an interim protective condition where the proceeding itself was not disposed of within the time directed and the controversy remained required to be adjudicated on merits.

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