JUDGMENT
G.S. Singhvi, J.
1. Whether the Sales Tax Tribunal, Haryana (for short, “the Tribunal”) constituted under the Haryana General Sales Tax Act, 1973 (for short, “the State Act”) could prescribe the requirement of filing of surety bond as a condition precedent to the hearing of appeal filed by the petitioners against the order passed by the Deputy Excise and Taxation Commissioner (I)-cum-Revisional Authority, Gurgaon, is the main issue which arises for consideration in this petition filed under Article 226 of the Constitution of India.
2. The facts relevant to the decision of this petition are that by an order dated June 10, 1994, the Assessing Authority held the petitioners liable to pay tax amounting to Rs. 153.87 under the State Act in relation to the assessment year 1991-92. By another order dated September 27, 1994, the Assessing Authority held the petitioners liable to pay tax amounting to Rs. 476.07 under the State Act and penalty amounting to Rs. 100 under Section 9(2) of the Central Sales Tax Act, 1956 read with Section 48 of the State Act in relation to the assessment year 1990-91. The latter order was revised by the Deputy Excise and Taxation Commissioner (I)-cum-Revisional Authority, Gurgaon (respondent No. 3) who held that the petitioners are liable to pay tax amounting to Rs, 56,553.20 with interest amounting to Rs. 47,261. The petitioners challenged the order dated December 21, 1995 passed by respondent No. 3 by filing an appeal under Section 39 of the State Act read with Rule 55 of the Haryana General Sales Tax Rules, 1975. Along with the appeal, an application under proviso to Section 39(5) was filed for entertaining the appeal without prior payment of the tax and interest. That application has been disposed of by the Tribunal with the direction that the appeal will be entertained subject to the filing of surety bond within one month.
3. Shri K.L. Goyal invited our attention to the order dated July 5, 2000 passed in C.W.P. No. 16396 of 1999–S.R. Udyog, Jagadhari v. State of HaryanaReported in [2001] 121 STC 541 (P&H). and submitted that in view of that decision, the direction given by the Tribunal for filing the surety bond may be declared illegal and the case may be remanded for fresh adjudication of the application filed by the petitioners under Section 39(5) of the Act. The learned Deputy Advocate-General agreed that to this extent, the case of the petitioners is similar to that of S.R. Udyog.
4. We have gone through the order passed by this Court in the case of S.R. Udyog and are of the opinion that this case deserves to be allowed in terms of that order. In that case, the court had, while examining the legality of an order passed by the Tribunal requiring the petitioner to furnish surety bond as a condition precedent to the hearing of appeal held as under :
“In our opinion, the appellate authority can exercise power under first part of the proviso to Section 39(5) only if it is satisfied that the appellant is unable to pay the whole amount of tax, etc., and this satisfaction must be reflected in the form of reasons to be recorded in writing. The argument of Shri Goyal that the condition of furnishing adequate surety cannot be imposed, in an order passed under the first part of the proviso is based on a misconceived assumption that the language of that part of the proviso is restrictive in nature. However, on a consideration of the plain language of proviso to Section 39(5), we are convinced that even though it does not expressly provide for imposition of condition of furnishing surety bond, there is nothing in it from which it can be inferred that the appellate authority cannot impose appropriate condition while entertaining the appeal without insisting on pre-deposit of tax, etc. The contrast in the language used in the two parts of the proviso to which Shri Goyal has drawn our attention does not, in our opinion, dilute the inherent nature of the power vested in the appellate authority to impose appropriate condition while granting exemption to the appellant from depositing the amount of tax assessed by the competent authority.
De hors the above conclusion, we are inclined to agree with Shri Goyal that the view taken by the Tribunal about the requirement of furnishing bank guarantee or adequate security is not borne out from the language of first proviso to Section 39(5) of the Act. It is one thing to say that the appellate authority can impose appropriate condition for entertaining an appeal without insisting on deposit of tax, etc.. and it is altogether different thing to say that the appellate authority must insist on furnishing bank guarantee, etc., in all cases. In our view, the appellate authority has to apply its judicious discretion keeping in view the facts of each cage and no straight-jacket formula can be laid down on the issue of furnishing surety bond.
Faced with this, Shri Goyal submitted that before imposing the condition of furnishing surety bond, the appellate authority should have given an opportunity to the petitioner to satisfy that it is not in a position to do that. He submitted that if the petitioner had been pre-informed about the proposed imposition of condition embodied in the order passed by the appellate authority, its representative could have produced evidence to establish its inability even to furnish the surety bond. We find some substance in the argument of the learned counsel that before imposing the condition of furnishing surety bond, the appellate authority should have given an opportunity to the petitioner to adduce evidence about its inability to comply with this condition and its failure to do so has resulted in violation of the principles of natural justice.”
5. In view of the above, we allow the writ petition and quash the order dated May 6, 1999 passed by the Tribunal with the direction that the application filed by the petitioner under proviso to Section 39(5) of the Act be decided afresh after giving opportunity of hearing to them.
6. Copy of the order be given dasti on payment of the fee prescribed for urgent application.
