Pre-deposit for municipal tax appeals is limited to disputed tax and does not extend to interest or penalty.

Under the Bombay Provincial Municipal Corporations Act, the pre-deposit condition for an appeal against levy of cess was confined to the disputed tax amount and did not extend to interest or penalty. The Court treated cess under Chapter XI-A as tax in lieu of octroi, but held that interest is compensatory and penalty stands on a separate footing. It also noted that a later amendment to Section 406(2)(c) expressly covered interest and penalty, while no corresponding change was made in Clause (e), confirming that Clause (e) required deposit only of the disputed tax.

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Issues: Whether, in an appeal against levy of cess under the Bombay Provincial Municipal Corporations Act, 1949, the pre-deposit condition under Section 406(2)(e) extends to interest and penalty in addition to the disputed tax.

Analysis: The appeal provision required deposit, in cases of appeal against tax, of the amount of disputed tax claimed from the appellant. The Court treated cess levied under Chapter XI-A as tax in lieu of octroi, but distinguished tax from interest and penalty as separate legal concepts. It noted that interest is compensatory and penalty is attracted on a different footing. The subsequent amendment to Section 406(2)(c) expressly included interest and penalty, but the corresponding amendment was not made in Clause (e). On that construction, the pre-deposit requirement in Clause (e) was confined to disputed tax only.

Conclusion: The appellant was not required to pre-deposit interest and penalty, and the pre-deposit obligation was limited to the disputed tax amount.

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