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TMI Blog2012 (11) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating authority, the petitioners preferred appeal before the Tribunal. Along with the appeal, the petitioners prayed for waiving of pre-deposit. Tribunal passed an order on 14-1-2004 and granted stay and waived rest of the amount by way of pre-deposit on condition that the petitioners deposit sum of Rs. 3 crores. The Directors were however, required to deposit Rs. 20 lakh and Rs. 10 lakh respectively. 4. The petitioners challenged the said order of the Tribunal by filing Special Civil Application No. 5523/2004 before this Court. In the said petition on behalf of the petitioners, it was suggested that since the order of the Tribunal grants conditional stay in favour of the petitioners and since the petitioners do not want any interim stay as such, they would approach the Tribunal for hearing the appeals on merits. The Court disposed of the petition by order dated 3-5-2004 observing that as and when such application is moved, Tribunal shall consider the same in accordance with law. 5. The petitioners thereupon approached the Tribunal making stand clear that the petitioners are not interested in stay pending appeal but that the entire requirement of pre-deposit be waive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt wherein it was held : "9. Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasijudicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant. 11. These observations cannot be applied to the facts of this case. Here we are concerned with the right given under Section 129A of the Act as controlled by Section 129E of the Act, and that right is with a condition and thus a conditional right. The petitioner in this case has no absolute right of stay. He could obtain stay of realisation of tax levied or penalty imposed in an appeal subject to the limitations of Section 129E. The proviso gives a discretion to the authority to dispense with the obligation to deposit in case of "undue hardships". That discretion must be exercised on relevant materials, honestly, bona fide and objectively. Once that position is established it cannot be contended that there was any improper exercise of the jurisdiction by the Appellate Authority. In this case it is manifest that the order of the Tribunal was passed honestly, bona fide and ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Secondly, it is submitted that, it would not be possible for a borrower to raise funds to make deposit of the huge amount of 75% of the demand, once he is deprived of the possession/management of the property namely, the secured assets. Therefore, the condition of deposit is a condition of impossibility which renders the remedy made available before the DRT as nugatop and illusory. The learned Attorney General refutes the aforesaid contention. It is further submitted that such a condition of pre-deposit has been held to be valid by this Court earlier and a reference has been made to SCC at p. 202 in Anant Mills Co. Ltd. v. State of Gujarat to submit that such a provision is made to regulate the exercise of the right of an appeal conferred upon a person. The purpose is that right of appeal may not be abused by any recalcitrant party and there may not be any difficulty in enforcing the order appealed against if ultimately it is dismissed and there may be speedy recovery of the amount of tax due to the corporation. 64. The condition of pre-deposit in the present case is bad rendering the remedy illusory on the grounds that (i) it is imposed while approaching the adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing observations : "9. On the above basis, proceedings were initiated against them which resulted in passing of the impugned order by the Commissioner. 10. On going through the order of the Commissioner, we find that he has relied upon the fact of shortage of imported fabrics at the time of visit of the officers, report from Mumbai Customs indicating that the garments claimed to have been exported by unit in fulfilment of its export obligations, could not have manufactured out of duty free raw material imported by them or indigenous fabrics without any duty payment procured from the 100% EOU; statements of the Directors were recorded at various points of time were inculpatory; that the statements of the buyers of the fabrics in question corroborated the statements of the buyers. He also observed that the appellants could not explain the shortages detected at the time of search and as to what happened to the duty free procured imported material. He also observed that the appellants could not explain the difference in the quality of the fabrics procured by them and said to have been used in the manufacture of exported goods. As such, he confirmed the demand of duty and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to which the pre-deposit of balance amount of duty and penalty imposed upon the appellant shall stand waived and its recovery stayed during the pendency of the appeal. The said pre-deposit is required to be made within twelve weeks from the date of passing of the order." 9. Before us, counsel for the petitioners submitted that conveying to the Apex Court that goods are still in custody of the Revenue was a pure error. In fact both the sides had made such a suggestion. There was no intention on part of the petitioners to mislead the Court. In any case, Revenue has not approached the Apex Court for any modification of this order. Counsel further submitted that Tribunal erred in clearly ignoring the petitioners financial condition and total inability to weigh the burden of pre-deposit of Rs. 1.7 crore. For our perusal, at our request, counsel placed on record balance sheet of the company of the recent past. Counsel for the petitioners reiterated the stand that the petitioners do not press for stay against recovery. 10. On the other hand, counsel for the Department vehemently contended that the Tribunal has applied its mind and insisted on pre-deposit of only of fraction o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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