Admission of tax liability governs appeal maintainability; later deposit during pendency can still trigger condonation review.

Under the unamended proviso to section 9(1) of the U.P. Sales Tax Act, an appeal against assessment could not be rejected merely because tax was legally payable if that liability had not been admitted before the assessing authority; the relevant test was factual admission of tax due, not bare legal liability. The appeal was therefore not non-maintainable on the ground of non-payment of undisputed tax. The Court also held that if the required tax is deposited while the appeal is still pending, the statutory condition can be satisfied on that date, and the appellate authority must then consider delay and condonation under section 9(6) read with the Limitation Act. Belated deposit was not treated as ineffective in law.

---

---

Issues: (i) Whether, under the unamended proviso to section 9(1) of the U.P. Sales Tax Act, an appeal against assessment could be rejected for non-payment of tax that was legally due but had not been admitted as due before the assessing authority. (ii) Whether deposit of the required tax during pendency of the appeal could satisfy the statutory condition and justify consideration of delay under section 9(6).

Issue (i): Whether, under the unamended proviso to section 9(1) of the U.P. Sales Tax Act, an appeal against assessment could be rejected for non-payment of tax that was legally due but had not been admitted as due before the assessing authority.

Analysis: The proviso then in force required proof of payment of the amount of tax admitted by the appellant to be due, or of such instalments as had become payable. The Court applied the settled principle that the right of appeal is a vested substantive right and must be governed by the law in force when proceedings commenced. It further held that the material inquiry under the unamended provision is whether tax liability was factually admitted before the assessing authority, not whether tax was in law payable. Since no tax liability on the relevant turnover had been admitted before the assessing officer, non-payment of tax that was merely legally due did not attract the proviso.

Conclusion: The appeal could not be held non-maintainable on the ground that no admitted tax had been deposited, and the assessee succeeded on this issue.

Issue (ii): Whether deposit of the required tax during pendency of the appeal could satisfy the statutory condition and justify consideration of delay under section 9(6).

Analysis: The Court held that where proof of payment is furnished while the appeal is still pending, the appeal becomes entertainable on that date, and the appellate authority must then consider whether delay in filing or perfecting the appeal should be condoned under section 9(6) read with section 5 of the Indian Limitation Act, 1908. The view that belated deposit could never cure the defect was rejected. The matter therefore required reconsideration because the Tribunal had not approached the question on the correct legal footing.

Conclusion: The belated deposit could not be ignored as ineffective in law, and the assessee was entitled to seek consideration of delay and maintainability accordingly.

Final Conclusion: The revision was allowed, the Tribunal's view on maintainability was set aside, and the matter required consequential disposal in accordance with law.

Ratio Decidendi: Under the unamended proviso to section 9(1), maintainability of the appeal depended on factual admission of tax liability before the assessing authority, and later deposit during the pendency of the appeal could engage the limitation and condonation mechanism under section 9(6).

---