Pre-deposit in sales tax appeals must be applied reasonably, with a fair chance to arrange funds before dismissal or restoration.

A pre-deposit requirement under section 20(5) of the Punjab General Sales Tax Act must be applied reasonably, with a distinction between inability to pay and temporary difficulty in arranging funds. The Court found that the petitioner had not been given a fair opportunity to comply and that the appeal should, where possible, be decided on merits. The Tribunal and lower appellate orders were therefore set aside, three months were granted to deposit the assessed amount, and the appeal was to be restored on such deposit, with recovery stayed during that period.

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Issues: Whether the orders requiring immediate deposit of the entire assessed tax as a condition for the appeal to be heard were justified under section 20(5) of the Punjab General Sales Tax Act, 1948, and whether the petitioner should be granted time to make arrangements for payment and have the appeal restored on deposit.

Analysis: The Court held that a distinction had to be drawn between temporary difficulty in arranging funds and an inability to pay the tax. It found that, even if the amount was not readily available with the branch office, the petitioner could make arrangements through its head office. The Court also found merit in the grievance that reasonable time had not been granted for compliance and emphasised that matters should, as far as possible, be decided on merits in the interests of justice. On that basis, the orders of the Tribunal and the lower appellate authority were set aside, and the petitioner was given three months to deposit the amount claimed by the Assessing Authority, with the appeal to stand restored upon such deposit.

Conclusion: The challenge succeeded in part. The impugned orders were set aside, the appeal was directed to be restored on deposit within three months, and recovery was stayed for that period.

Ratio Decidendi: While considering pre-deposit under the sales tax appellate framework, the authority must distinguish between inability to pay and mere difficulty in arranging funds and must exercise discretion reasonably so that, where justice requires, a reasonable opportunity to comply is afforded and the appeal is heard on merits.

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