Pre-deposit bar cannot apply where exemption leaves no tax liability on returned turnover and all assessed tax is disputed.

Where the statutory exemption or turnover threshold means no tax liability arises on the returned turnover, there is no legally supportable component of "tax not disputed in appeal" for purposes of a pre-deposit bar. The Karnataka High Court's reasoning was that, on the facts, the entire tax determined by the assessing authority remained in dispute and the appellate authorities erred in treating the appeal as barred for non-payment of alleged undisputed tax. The result is that the maintainability bar under section 20(3) of the Karnataka Sales Tax Act did not apply, and the appeal should have been entertained without insisting on pre-deposit.

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Issues: Whether any concept of "tax not disputed in the appeal" arose on the facts of the case so as to attract the bar to entertainability under section 20(3) of the Karnataka Sales Tax Act, 1957.

Analysis: The assessee's returned turnover was well below the monetary limit under section 5(5) of the Karnataka Sales Tax Act, 1957, under which no liability to tax arose. In that situation, there could be no legally admissible component of "tax not disputed" on the returned turnover. The memorandum of appeal and the surrounding facts showed that the entire tax determined by the assessing authority was in dispute. The appellate authorities therefore proceeded on an erroneous understanding of both the facts and the legal position when they treated the appeal as barred for want of proof of payment of tax not disputed in appeal.

Conclusion: The bar under section 20(3) did not apply, and the appeal ought to have been entertained without insisting on pre-deposit of any alleged undisputed tax.

Ratio Decidendi: Where the statutory exemption negates any tax liability on the returned turnover, no "tax not disputed in appeal" can be said to exist for the purpose of a pre-deposit bar to the maintainability of the appeal.

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