Pre-deposit for appeal admission is curable before hearing; an appeal cannot be rejected solely for initial short payment.

A statutory pre-deposit requirement that conditions admission of an appeal, but not its filing, is satisfied if the deficiency is cured before the appeal is taken up for admission. Section 38(3) of the Madhya Pradesh General Sales Tax Act, 1958 was read as barring admission without the requisite deposit, not the presentation of the appeal itself. Because the assessee later made good the shortfall before admission, the defect stood cured and the appeal could not be summarily rejected for initial non-payment. The appeal therefore had to be heard on merits.

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Issues: Whether an appeal could be summarily rejected for non-payment of the full statutory pre-deposit at the time of filing, when the assessee had initially made partial payment and later made good the deficiency before the appeal was taken up for admission.

Analysis: Section 38(3) of the Madhya Pradesh General Sales Tax Act, 1958 bars admission of an appeal unless the requisite percentage of tax and penalty has been paid, but it does not bar the filing of the appeal itself. The requirement is directed to admission for hearing. Where the assessee later deposits the balance amount before the appeal is considered for admission, the defect stands cured. The wording of clauses (a) and (c) of section 38(3) created confusion, and the statutory rules could not override the substantive provision. Since the assessee had thereafter made up the deficiency, the appeal ought not to have been rejected summarily.

Conclusion: The appeal could not be rejected on the ground of non-payment of 50 per cent of the total demand at the time of filing, and it had to be heard on merits; the answer was in favour of the assessee.

Ratio Decidendi: A statutory pre-deposit requirement that conditions admission of an appeal, but not its filing, is satisfied if the deficiency is cured before the appeal is taken up for admission, and the appeal cannot be summarily dismissed on the ground of initial non-compliance.

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