Pre-deposit reduced in statutory appeals where goods formed a substantial part of the contract and tax had already been paid.

The Delhi High Court reduced the Tribunal's interim pre-deposit requirement in the pending statutory appeals after considering the nature of the contract, the substantial value attributable to goods, and the tax already paid on part of the value. The Court noted that the Tribunal itself had accepted some substance in the plea that goods formed an important component of the contract, and held that the original pre-deposit of Rs. 1 crore was excessive. To meet the ends of justice, the pre-deposit was reduced to Rs. 50 lakhs, payable within four weeks.

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Issues: Whether the pre-deposit ordered by the Tribunal should be reduced in view of the nature of the contract, the substantial value attributable to goods and the amount already paid towards tax liability.

Analysis: The petition concerned only the interim requirement of pre-deposit pending the statutory appeals. The material on record indicated that a substantial part of the work value related to goods, that the petitioners had already been paying tax on a portion of the value, and that the Tribunal had itself noticed some substance in the plea that goods formed an important component of the contract. In these circumstances, and to meet the ends of justice, the Court found the Tribunal's direction for pre-deposit of Rs. 1 crore excessive and considered reduction appropriate.

Conclusion: The pre-deposit was reduced to Rs. 50 lakhs, which was directed to be paid within four weeks.

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