Statutory pre-deposit rule means financial incapacity, not disputed legality of tax demand, justifies waiver of appeal deposit.

The proviso to section 39(5) of the Haryana General Sales Tax Act requires pre-deposit of assessed tax, penalty and interest before an appeal can be entertained, unless the appellant shows financial inability to pay the whole amount. The expression "unable to pay" was construed as referring to the assessee's paying capacity and financial means, not to the alleged illegality of the demand or the merits of the assessment. A writ court should not use article 226 to bypass this statutory condition except in exceptional circumstances. The High Court's direction to entertain the appeal on bank guarantee was therefore held unsustainable.

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Issues: Whether the expression "unable to pay the whole of the amount of tax assessed" in the proviso to section 39(5) of the Haryana General Sales Tax Act, 1973 refers only to the assessee's financial incapacity, and whether the High Court was justified in directing entertainment of the appeal on furnishing of bank guarantee instead of insisting on statutory pre-deposit.

Analysis: The right of appeal is statutory and its exercise is controlled by the conditions imposed by the enactment. Under section 39(5), the appellate authority cannot entertain the appeal unless the assessed tax, penalty and interest are paid, save where the authority is satisfied that the appellant is unable to pay the whole amount. The expression "unable to pay" was construed as referring to the appellant's paying capacity and financial means, not to the legal validity of the demand or the merits of the assessment. A plea that the additional tax demand is illegal does not satisfy the proviso, because entertaining such a plea at the threshold would require adjudication on the merits of the appeal. The High Court's interference under article 226, on the facts, was therefore unwarranted.

Conclusion: The proviso applies only where the assessee establishes financial inability to pay, and the High Court's direction dispensing with statutory pre-deposit was unsustainable.

Final Conclusion: The order allowing the writ petition was set aside, and the statutory pre-deposit requirement under section 39(5) was restored, subject to the limited liberty granted to raise any permissible plea before the appellate authority after making the required deposit.

Ratio Decidendi: The words "unable to pay" in a statutory pre-deposit proviso denote financial incapacity to make payment, not the asserted illegality of the demand, and writ interference cannot be used to bypass the statutory condition except in exceptional circumstances.

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