Pre-deposit for first appeal follows the lower threshold where reopened assessment carried no penalty and returns were timely filed.

Where an assessment was reopened under section 19(1) of the Madhya Pradesh General Sales Tax Act, 1958, but no penalty was imposed, an assessee who had filed returns within time and paid tax accordingly was governed by the lower pre-deposit requirement for first appeal. The court held that the higher deposit condition under section 38(3)(e) was not attracted on those facts, and that section 38(3)(a) applied instead, requiring deposit of only 10 per cent of the balance demand. The reduced pre-deposit requirement was therefore applied in favour of the assessee.

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Issues: Whether, on reopening of an assessment under section 19(1) of the Madhya Pradesh General Sales Tax Act, 1958, and in the absence of any penalty, an assessee who had furnished returns and paid tax during the assessment period was required to make a pre-deposit under section 38(3)(a) or section 38(3)(e) while filing the first appeal.

Analysis: The assessee had filed all returns within time and had deposited tax in accordance with those returns during the assessment period. When the assessment was reopened under section 19(1), no penalty was imposed. On those facts, the condition attracting the higher deposit requirement under section 38(3)(e) was not attracted. The applicable provision was section 38(3)(a), which required deposit of only 10 per cent of the balance demand for filing the first appeal.

Conclusion: The case fell under section 38(3)(a) and not under section 38(3)(e); the assessee was required to deposit only 10 per cent of the balance demand. The answer was therefore in favour of the assessee and against the department.

Final Conclusion: The reference was answered by holding that the reduced pre-deposit requirement applied on the facts found, and the department's contrary position was rejected.

Ratio Decidendi: Where an assessment is reopened under section 19(1) and no penalty is imposed, an assessee who has filed returns in time and paid tax accordingly is governed by the lower pre-deposit provision for appeal and not by the higher deposit requirement.

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