TaxTMI 
TaxTMI 
1970 (7) TMI 74
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and 1966-67 by three separate assessment orders dated 17th September, 1969, made by the Commercial Tax Officer, Puttur, South Kanara. By the said assessment orders, a total sum of Rs. 65,101.75 was levied as tax and penalty for the said three years. The assessee preferred three separate appeals before the Deputy Commissioner of Commercial Taxes, Mangalore Division, Mangalore, under section 20 of the Act. In the said appeals, he made applications for entertaining the appeals without payment of the tax and penalty. He also prayed for stay of the recovery of the said amounts. In the applications for stay, the assessee stated that the tax and penalty levied is heavy and he has no liquid resources to pay the huge amount and that he is prepared ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the assessee on the view that the question as to the form of security is a matter of discretion vesting in the Deputy Commissioner and that in the matter of exercise of discretion the Tribunal will not interfere. Aggrieved by the said order of the Tribunal, the assessee has preferred the above revision petitions. Sri P. V. Aithala, the learned counsel for the assessee, before us urged that the Deputy Commissioner in the instant cases has not given reasons for rejecting the offer of security of immovable properties and that his insistence on furnishing security of a bank guarantee is an arbitrary exercise of discretion and, therefore, we should direct the Deputy Commissioner to consider as to whether the security offered by the assessee ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... thinks fit in regard to the payment of tax or other amount payable under clause (b), if the appellant furnishes sufficient security to its satisfaction in such form and in such manner as may be prescribed." Rule 30-B of the Rules which prescribes the form of security that may be directed to be furnished reads: "Where it is provided in the Act that an appellant (or an applicant in revision proceedings) shall furnish security in regard to the payment of tax, or fee or other amount, the appellant (or applicant) or any person on his behalf shall furnish personal or property security or bank guarantee as the authority before which the appeal or application is preferred may in its discretion direct. The security bond shall be in form 35 wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....th the bank Government securities and the like. Petty traders may not be in a position to obtain bank guarantees. In the instant case, the assessee in his application for stay had submitted that he had no cash resources, that the amount involved in the three appeals was large and that he was offering security of immovable properties situated in two villages of Sullia Taluk in South Kanara District. The order made under the proviso to sub-section (3) being an appealable order, the appellate authority ought to give reasons for the rejection of the offer of security made by the assessee. The order of the Deputy Commissioner does not make any reference to the offer of security of immovable properties made by the assessee. When the rule state....
X X X X Extracts X X X X
X X X X Extracts X X X X
....furnished should be in any one of the forms prescribed in rule 30-B. In exercise of the discretion of granting stay of recovery of disputed tax or penalty pending the appeal, the appellate authority should exercise the discretion in accordance with settled judicial principles. The question which the appellate authority should consider is whether the security offered by the assessee is sufficient. Where the assessee offers security of immovable property, the appellate authority should consider whether that property is unencumbered; whether its title is clear and it is adequate to fully secure the payment. In the application for stay, the assessee should ordinarily furnish the form of security that he is offering. He should also mention, wher....