2016 (9) TMI 316 - HC - Customs

Maintainability of the writ petition - waiver of pre-deposit - Held that - the Court will not be justified in conducting an enquiry regarding the maintainability of the writ petition at this stage, especially when the writ petition has been admitted as early as on 19.1.2015 and an interim direction had been issued by the Court, not to reject the appeal during the pendency of this writ petition - writ petition maintainable. Reduction of pre-deposit amount - maintainability - principles of natural justice - Held that - predeposit is a statutory restriction imposed on the petitioner. The amount of pre-deposit too high for the petitioner to make payment - amount of pre-deposit reduced - appeal to be considered on grounds of merits after compliance of payment of pre-deposit - petition disposed off - decided partly in favor of petitioner.

Summary

Issues:
1. Challenge to the order directing deposit of ?50 lakhs for entertaining an appeal.
2. Consideration of petitioner's financial difficulty in depositing the amount.
3. Maintainability of the writ petition.
4. Justification for the appellate authority's direction to deposit ?50 lakhs.

Analysis:
1. The petitioner challenged an order (Ext.P10) requiring a deposit of ?50 lakhs within twelve weeks to entertain an appeal regarding customs duty and penalty. The appellate authority found a strong case for the demand, specifically ?86 lakhs, and directed the deposit based on principles of natural justice.
2. The petitioner, a small trader facing financial difficulties, argued that the appellate authority did not consider their contentions in detail. The respondent contended that the appellate remedy against the deposit order was available, emphasizing the leniency shown by the authority.
3. The court decided not to inquire into the maintainability of the writ petition, considering its admission and the interim direction issued earlier to not reject the appeal during the petition's pendency.
4. After hearing both sides, the court found no infirmity in the appellate authority's order and considered whether the ?50 lakhs deposit was justified. The petitioner's inability to pay the amount was taken into account, leading to a reduction in the required deposit to ?30 lakhs within two months for the appeal to proceed on merits.

This judgment highlights the balance between statutory requirements for predeposit and the petitioner's financial constraints, ultimately resulting in a reduced deposit amount for the appeal to be considered on its merits.