JUDGMENT : J.B.PARDIWALA, J. 1. Since the issues raised in all the captioned writ applications are the same and the challenge is also to the selfsame common order passed by the Gujarat Value Added Tax Tribunal, those were heard analogously and are being disposed of by this common judgment and order. 2. Rule returnable forthwith. Mr. Chintan Dave, the learned AGP, waives service of notice of rule for and on behalf of the respondent. 3. For the sake of convenience, the Special Civil Application No.4610 of 2020 is treated as the lead matter. 4. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs; “(A) This Hon'ble Court may be pleased to issue a Writ of certiorari or as writ in nature of certiorari or any other appropriate writ or order quashing and setting aside impugned order dated 27.1.2020 (annexed at Annexure-A) passed by the learned Gujarat Value Added Tax Tribunal as well as order dated 13.6.2019 passed by the first appellate authority; (B) This Hon'ble Court may be pleased to remand the matter to the first appellate authority for hearing on merits without insisting for any pre-deposit or security and stay against coercive recovery may also be ordered to be granted without insisting for any pre-deposit or security; (C) Pending notice, admission and final hearing of this petition, this Hon'ble Court may be pleased to stay coercive recovery of dues raised by the reassessment order dated 30.3.2019 for the year 2013-14; (D) Ex parte ad interim relief in terms of prayer C may kindly be granted; (E) Such further relief’s as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioner shall forever pray.” 5. The facts, giving rise to this writ application, may be summarized as under; 5.1 The writ applicant is a Private Limited Company engaged in the business of manufacturing and selling of Polyurethane Footwear (for short “PU Footwear”). It is the case of the writ applicant that Polyurethane is a plastic. The writ applicant has been registered under the Gujarat Value Added Tax Act, 2003 (for short “the VAT Act”). It holds a registration certificate under the Central Sales Tax Act, 1956. It is the case of the writ applicant that Polyurethane is a plastic. The writ applicant has been registered under the Gujarat Value Added Tax Act, 2003 (for short “the VAT Act”). It holds a registration certificate under the Central Sales Tax Act, 1956. 5.2 According to the writ applicant, it discharged its tax liability under the VAT Act at the rate of 4% plus 1% additional tax by classifying PU Footwear sold by it as plastic footwear under Entry 59 of Schedule II to the VAT Act, which reads as under; Sr. No. Description of Goods Rate of tax 59 Plastic Footwear Four paise in the rupee 5.3 The writ applicant was assessed by the Assistant Commissioner of Commercial Tax under Section 34(2) of the VAT Act up to the year 2013-14. The assessment was conducted after complete scrutiny of the records. The classification of footwear sold by the writ applicant was also accepted. No dues were outstanding in accordance with the assessment order. 5.4 It appears that the officials of the Commercial Tax Department visited the business premises of the writ applicant on 14th June, 2017. The officials raised an issue with regard to the classification of the footwear sold by the writ applicant. The issue raised is to the effect that as the footwear manufactured by the writ applicant contains certain accessories not made of plastic, the footwear, as a whole, will fall within the ambit of residuary entry. It appears, prima facie, that the authorities are seeking to rely on a decision of the Bombay High Court in the case of The Commissioner of Sales Tax vs. M/s. Dev Enterprises Limited, reported in 2011 42 VST 504 (Bom.). 5.5 In such circumstances, referred to above, the Assessing Authority issued notices, inter alia, for the reassessment for the year 2013-14 and Audit Assessment for the year 2014-15 under the VAT Act/Central Act. A show-cause notice was also issued calling upon the writ applicant to show-cause with regard to the classification of PU Footwear. It appears that, thereafter, the Assessing Authority proceeded to pass the reassessment order under Section 35 of the VAT Act for the year 2013-14 and Assessment Order under Section 34(2) of the VAT Act for the year 2014-15, wherein demand was raised by classifying the footwear sold by the writ applicant under the Residuary Entry No.87 of the Schedule II to the VAT Act. 5.6 It appears that the officers also imposed penalty at the maximum rate of 150% under Section 34(2) of the VAT Act as well as interest on the dues on the premise that those were illegally raised by the writ applicant. Thus, the dues, as under, have been raised against the writ applicant. Particulars 2013-14 2014-15 Vat Act Central Act Vat Act Central Act Tax 1,66,01,052 70256 2,18,11,889 4272 Interest 1,49,48,914 83559 1,57,24,529 3076 Penalty 2,49,07,868 - 3,27,35,249 - Total 5,64,57,834 1,53,815 7.02,71,667 7348 5.7 The writ applicant preferred first appeals challenging such assessment/reassessment orders. The First Appellate Authority insisted for pre-deposit for admission of the first appeal and stay against the recovery of the dues. As the writ applicant was not able to make the pre-deposit, all the first appeals came to be summarily dismissed. 5.8 The writ applicant, thereafter, preferred second appeals before the Tribunal and challenged the orders passed in the first appeals. Before the Tribunal, the principal argument of the writ applicant was that the footwear is predominantly made of plastic and it has been correctly classified, so far, as “plastic footwear”. 5.9 It appears that the principal argument canvassed by the writ applicant did not find favour with the Tribunal. The Tribunal, in its impugned order. while directing the writ applicant to make a pre-deposit at the rate of 15% of tax, observed as under; “27. Considering the rival submissions, facts and circumstances of the case, the First Appeals have been summarily dismissed for non-payment towards pre-deposit amount by the First Appellate Authority, therefore, this Tribunal cannot dwell upon the merits of the case. At this juncture appellant is praying to cover its polyurethane footwear into the Entry of the plastic footwear by quoting the reference of HSN code of 6402 of Tariff Act. At this juncture appellant is praying to cover its polyurethane footwear into the Entry of the plastic footwear by quoting the reference of HSN code of 6402 of Tariff Act. This is a case of classification rate of tax which involves the legal and technical issue of the ingredient material of the plastic and polyurethane and if it is discussed and decided at this time then it will be as goods as to enter into merits of the case, which will be against the spirit of the judgment of the Hon'ble High Court of Gujarat in the case of Tudor India Ltd. We find the substance in submission of learned Government Representative about the difference between the polyurethane footwear and plastic footwear, since both the product carries different material ingredients, technical/commercial identity and nomenclature of product. Considering the rival submission and facts of the case, it appears from the submission of learned Government Representative that the products sold by the appellant as per the catalog is a polyurethane footwear, but not plastic footwear. According to submission of learned Government Representative such polyurethane footwear is not covered by the Entry 6402 of Central Excise Tariff Act as well as Entry 59 of Schedule II of VAT Act. It also appears from the submission of learned Government Representative that Entry 6402 covers the only rubber and plastic footwear but never the polyurethane footwear, therefore, this Tribunal has a prima facie case for direction of pre-deposit. Considering the prima facie merits and facts of the case all the present Second Appeals are admitted and stay against recovery is granted on condition of appellant depositing 15% of tax amount towards pre-deposit within one month. On payment of aforementioned amount the stay against recovery shall come into operation.” 5.10 Being dissatisfied with the order passed by the Tribunal, referred to above, the writ applicant is here before this Court with the present writ application. 6. Mr. Uchit N. Sheth, the learned counsel appearing for the writ applicant vehemently submitted that he has a strong case on merits. The issue is with regard to classification of the footwear. According to Mr. Sheth, although he has a very goods case on merits, yet because of financial crunch, his appeals will not be heard on merits. 6. Mr. Uchit N. Sheth, the learned counsel appearing for the writ applicant vehemently submitted that he has a strong case on merits. The issue is with regard to classification of the footwear. According to Mr. Sheth, although he has a very goods case on merits, yet because of financial crunch, his appeals will not be heard on merits. In other words, due to financial crunch, his client is unable to comply with the order passed by the Tribunal of making a pre-deposit of 15% of the demanded tax. According to Mr. Sheth, this will cause a serious prejudice to his client. Even otherwise, the business has been affected because of the current market conditions. Mr. Sheth would urge that in such circumstances, his client may not be asked to make a pre-deposit for the purpose of hearing the appeals on merits. 7. On the other hand, Mr. Chintan Dave, the learned AGP appearing for the respondent has vehemently opposed this writ application. 8. According to Mr. Dave, no error, not to speak of any error of law, could be said to have been committed by the Tribunal in passing the impugned order. 9. Mr. Dave would submit that no interference is warranted in the facts of the present case. According to Mr. Dave, the order of pre-deposit is discretionary in nature and it cannot be said that the discretion has been exercised arbitrarily. In such circumstances, according to Mr. Dave, no interference is called for and the writ application deserves to be rejected. 10. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the Tribunal committed any error in passing the impugned order. 11. The issue of granting stay pending appeal is governed principally by the two circulars issued by the CBDT. The first circular was issued way back on 2nd February 1993 being instructions no.1914. The circular contained guidelines for staying the demand pending appeal. It was stated that the demand would be stayed if there are valid reasons for doing so and mere filing of appeal against the order of assessment would not be sufficient reason to stay the recovery of demand. The circular contained guidelines for staying the demand pending appeal. It was stated that the demand would be stayed if there are valid reasons for doing so and mere filing of appeal against the order of assessment would not be sufficient reason to stay the recovery of demand. The instructions issued under the office memorandum dated 29th February 2016 are not in super-session of the instructions no.1914 dated 2nd February 1993 but are in partial modification thereof. The preamble of these instructions provide that in order to streamline the process of grant of stay of standardization of quantum of lump-sum payment to be made as a pre-condition for stay of demand of dispute before the Commissioner of Income Tax (Appeals), such modified guidelines were being issued. The relevant portion of these instructions read as under : “4. In order to streamline the process of grant of stay and standardize the quantum of lump sum payment required to be made by the assessee as a pre-condition for stay of demand disputed before CIT(A), the following modified guidelines are being issued in partial modification of Instruction No.1914: (A) In a case where the outstanding demand is disputed before CIT (A), the assessing officer shall grant stay of demand till disposal of first appeal on payment of 15% of the disputed demand, unless the case falls in the category discussed in para (B) hereunder. (B) In a situation where, (a) the assessing officer is of the view that the nature of addition resulting in the disputed demand is such that payment of a lump sum amount higher than 15% is warranted (e.g. in a case where addition on the same issue has been confirmed by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of Revenue or addition is based on credible evidence collected in a search or survey operation, etc.), or (b) the assessing officer is of the view that the nature of addition resulting in the disputed demand is such that payment of a lump sum amount lower than 15% is warranted (e.g. in a case where addition on the same issue has been deleted by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of the assessee, etc.), the assessing officer shall refer the matter to the administrative Pr. CIT/CIT, who after considering all relevant facts shall decide the quantum/proportion of demand to be paid by the assessee as lump sum payment for granting a stay of the balance demand. (C) In a case where stay of demand is granted by the assessing officer on payment of 15% of the disputed demand and the assessee is still aggrieved, he may approach the jurisdictional administrative Pr. CIT/CIT for a review of the decision of the assessing officer. (D) The assessing officer shall dispose of a stay petition within 2 weeks of filing of the petition. If a reference has been made to Pr. CIT/CIT under para 4 (B) above or a review petition has been filed by the assessee under para 4 A© above, the same shall also be disposed of by the Pr. CIT/CIT within 2 weeks of the assessing officer making such reference or the assessee filing such review, as the case may be. (E) In granting stay, the Assessing Officer may impose such conditions as he may think fit. He may, inter alia - (i) require an undertaking from the assessee that he will cooperate in the early disposal of appeal failing which the stay order will be cancelled; (ii) reserve the right to review the order passed after expiry of reasonable period (say 6 months) or if the assessee has not co-operated in the early disposal of appeal, or where a subsequent pronouncement by a higher appellate authority or court alters the above situations; (iii) reserve the right to adjust refunds arising, if any, against the demand, to the extent of the amount required for granting stay and subject to the provisions of section 245.” 12. This circular thus lays down 15% of the disputed demand to be deposited for stay, by way of a general condition. The circular does not prohibit or envisage that there can be no deviation from this standard formula. In other words, it is inbuilt in the circular itself to either decrease or even increase the percentage of the disputed tax demand to be deposited for an assessee to enjoy stay pending appeal. The circular provides the guidelines to enable the Assessing Officers and Commissioners to exercise such discretionary powers more uniformly. 13. Ordinarily, the writ Court would be slow in interfering with such discretionary exercise of powers by the authority concerned. The circular provides the guidelines to enable the Assessing Officers and Commissioners to exercise such discretionary powers more uniformly. 13. Ordinarily, the writ Court would be slow in interfering with such discretionary exercise of powers by the authority concerned. However, in the present case, the total tax demand is quite on higher side. The issues are at the first appeal stage. Even 15% of the disputed tax dues comes to around Rs.60 Lakh. 14. In the overall view of the matter, we deem fit to reduce the requirement of depositing the disputed tax dues to enable the writ applicant to avail the benefit of the stay pending the appeal before the Appellate Authority to 5%. 15. We are informed that the order passed by the VAT Tribunal, which has been impugned in the present writ application, has to be complied within one month from the date of the order, and the period of one month expires tomorrow. The matter will now be notified before the Tribunal one month from tomorrow for the purpose of reporting of compliance. 16. In view of the order passed today, the writ applicant shall deposit 5% of the tax amount towards pre-deposit with the authority concerned within a period of 15 days. Once the amount is deposited, the writ applicant shall produce the Challan before the Tribunal and with the production of such Challan evidencing deposit of the amount, the Tribunal shall, thereafter, proceed to pass appropriate order in accordance with law. To the aforesaid extent, we modify the impugned order passed by the VAT Tribunal. It is needless to clarify that once the amount is deposited, as directed by this Court, the stay from the recovery of the tax would start operating. 17. In view of the above, all the writ applications stand disposed of. Rule is made absolute to the aforesaid extent.