Ambiguous tax appeal proviso construed to protect the right of filing; payment required before hearing, not presentation.

Ambiguous language in the first proviso to section 30(1) of the Income-tax Act, 1922 was construed as not making prior payment of tax a condition precedent to filing an appeal. The expression "no appeal shall lie" was read in the context of the statutory right of appeal, and the separate use of "presented" suggested that Parliament would have said so expressly if filing itself were barred. On that reading, tax payment was required before the appeal could be heard and finally disposed of, but non-payment at the time of filing did not destroy the right of appeal.

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Issues: Whether the first proviso to section 30(1) of the Income-tax Act, 1922, requiring that no appeal shall lie against an order under section 46(1) unless the tax has been paid, makes payment of tax a condition precedent to the presentation of the appeal or only to its hearing and disposal.

Analysis: The expression "no appeal shall lie" was construed in the context of income-tax law and the right of appeal was treated as an important statutory right that should not be denied unless the language clearly compels that result. The use of the separate expression "presented" in section 30(2) indicated that, had the Legislature intended to bar presentation itself, it could have said so expressly. The competing views of the High Courts showed that the proviso was not free from doubt. In that situation, the construction more favourable to the assessee was preferred, namely that the tax must be paid before the appeal is heard and disposed of, not necessarily before it is filed.

Conclusion: The proviso does not make prior payment of tax a condition precedent to the presentation of the appeal; it operates as a bar to hearing and final disposal until the tax is paid. The question was answered in the affirmative in favour of the assessee.

Final Conclusion: The assessee's right of appeal was held to subsist despite non-payment at the time of filing, and the appeal could proceed once the tax was paid before hearing and disposal.

Ratio Decidendi: Where the language of a proviso barring an appeal is ambiguous, it should be construed so as not to destroy the right of appeal unless the statute clearly says that payment is a condition precedent to filing itself.

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