Modified duty demand and payment under the revised demand satisfied the pre-deposit condition for appealing a penalty order.

The proviso to section 62(1) of the Estate Duty Act, 1953 bars an appeal against a penalty order unless the duty is paid before the appeal is filed. Where the original duty demand is later modified by the authority itself, the maintainability condition must be assessed against the revised demand. Here, the reduced duty had been acted upon and the first instalment under the revised demand had been paid and realised before disposal of the appeals. On those facts, the duty could not be treated as wholly unpaid, so the statutory precondition for appeal was satisfied and the appeals were competent.

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Issues: Whether the appeals against penalty were competent having regard to the proviso to section 62(1) of the Estate Duty Act, 1953, when the duty demand had been modified and the first instalment under the revised demand had been paid before disposal of the appeals.

Analysis: The proviso to section 62(1) bars an appeal against an order imposing penalty unless the duty has been paid before the appeal is filed. On the facts, the original demand of duty was later modified by the Assistant Controller himself, who reduced the duty payable and kept the balance in abeyance pending the appeal. The appellate authority had also before it the later position that the revised demand had been acted upon and the first instalment had been tendered and realised. In these circumstances, the demand on which the penalty had proceeded could not be treated as remaining wholly unpaid, and the statutory precondition for maintainability had to be tested against the modified demand.

Conclusion: The appeals were competent and could not be dismissed for non-compliance with the proviso to section 62(1); the finding was in favour of the accountable person.

Ratio Decidendi: Where the duty demand is modified by the authority before disposal of the appeal and the duty payable under the revised demand has been paid in the manner required, the pre-deposit condition for an appeal against penalty is satisfied.

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