Pre-deposit for sales tax appeals includes tax and penalty when challenging a composite assessment order.

Section 38(3)(c) of the M.P. General Sales Tax Act, 1968 was interpreted to require deposit of one-half of the total balance due, including both tax and penalty, before a first or second appeal could be admitted. The Court read the phrase "such balance" as referring back to the full balance due from the dealer under section 38(3), and applied that requirement where the appeal challenged a composite assessment order carrying penalty under section 43. On that footing, the appeal was not maintainable without payment of one-half of the combined tax and penalty demand, and the Tribunal's contrary view was rejected.

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Issues: Whether, in an appeal against a composite order of assessment with penalty, the requirement under section 38(3)(c) of the M.P. General Sales Tax Act, 1968, obliged the appellant to deposit one-half of the total balance due comprising both tax and penalty, so that the appeal could be admitted.

Analysis: Section 38(3) conditioned admission of a first or second appeal upon payment of the prescribed fraction out of the total balance due. The expression "such balance" in clause (c) was held to refer back to the total balance due from the dealer as mentioned in section 38(3). Since the appeal was directed against an assessment order in which penalty under section 43 had also been imposed, clause (c) applied. The Court held that the appellant was required to pay one-half of the total balance due, including both the tax and the penalty component, before the appeal could be admitted.

Conclusion: The question was answered in the negative. The appeal could not be admitted without payment of one-half of the total demand of tax and penalty, and the Tribunal was not justified in holding otherwise.

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