JUDGMENT K. M. AGARWAL, J. - By this reference under section 44(1) of the Madhya Pradesh General Sales Tax Act, 1958 (in short, "the Act"), at the instance of the department, the Tribunal has referred the following question of law for the opinion of this Court : "Whether, in the facts and circumstances of the case, the Tribunal was justified in holding that appeal before the Appellate Deputy Commissioner could not be rejected on account of non-payment of 50 per cent of the total demand of tax and penalty and it be heard on merits on payment of 10 per cent of additional demand and 50 per cent of the penalty." 2. After rejecting the account books for the assessment period November 4, 1975 to October 23, 1976, the assessee was subjected to best judgment assessment, which resulted in increasing the tax demand to the tune of Rs. 1,01,840 and imposition of penalty of Rs. 50,000 under section 43(1) of the Act, read with section 9 of the Central Sales Tax Act, 1956, besides imposition of further penalty of Rs. 2,355 under other provisions of the Act. The assessee preferred an appeal before the Appellate Deputy Commissioner of Sales Tax after depositing 10 per cent of the extra tax demand and 50 per cent of the amount of penalty. The appellate authority found that the deposit was not in accordance with section 38(3) of the Act and served the assessee with a notice dated August 27, 1979 to show cause why the appeal be not rejected summarily. The Tribunal's order dated February 12, 1982, forming part of the statement of case, shows that after service of the show cause notice, the assessee deposited further amount of Rs. 83,500 to make up the deficiency towards 50 per cent of the extra tax demand, which was said to be required to be deposited before filing the appeal, besides contending that "he had deposited 10 per cent of the additional tax in terms of section 38(3)(a) of State Act as he had filed all the returns and paid tax in accordance with them and 50 per cent of penalty under section 43(1) of the State Act in accordance with section 38(3)(c) of the State Act". The plea was rejected and the appeal was summarily rejected by holding that the assessee ought to have deposited 50 per cent of the additional tax demand at the time of filing the appeal. Being aggrieved, the assessee preferred second appeal, which was allowed by holding that there was confusion in the wordings of section 38(3)(a) and 38(3)(c) of the Act and that they did create an impression that a party was obliged to deposit 10 per cent of the tax demand and 50 per cent of the penalty while preferring an appeal under section 38 of the Act. Accordingly the case was remitted back to the Appellate Deputy Commissioner of Sales Tax for deciding the appeal on merits. Being aggrieved the department applied for a reference. The application was allowed and the aforesaid question of law was referred to us by the Tribunal. 3. In Commissioner of Sales Tax v. Balaji Cotton Co. reported in [1990] 76 STC 53; (1988) 21 VKN 327, a similar question of law was decided by this Court in favour of the department and against the assessee. We see no reason to take a contrary view. However, the facts in the present case are a bit distinguishable. The assessee had, no doubt, preferred an appeal before the Appellate Deputy Commissioner of Sales Tax after depositing 10 per cent of the extra tax demand and 50 per cent of the amount of penalty, but it made up the deficiency towards 50 per cent of the extra tax demand by depositing a further amount of Rs. 83,500 after receipt of show cause notice dated August 27, 1979. Under these circumstances and in view of the finding recorded by the Tribunal that there was a confusion in the wordings of clauses (a) and (c) of sub-section (3) of section 38 of the Act, the question referred to us requires reformulation as follows : "Whether, in the facts and circumstances of the case, the Tribunal was justified in holding that the appeal before the Appellate Deputy Commissioner could not be rejected on account of non-payment of 50 per cent of the total demand of tax and penalty at the time of filing the appeal and that the appeal required to be heard on merits as the further amount of Rs. 83,500 was paid by the assessee after service of the show cause notice dated August 27, 1979 to make up the deficiency towards 50 per cent of the extra tax demand ?" 4. Sub-section (3) of section 38 of the Act provides that : "No first or second appeal against an order of assessment, with or without penalty or against an order imposing penalty shall be admitted by the appellate authority unless out of the total balance due from the dealer", requisite percentage of tax and penalty as per clauses (a) to (e) of section 38(3) has been paid. It would, thus, appear that there is no bar to the filing of an appeal under section 38 of the Act without making a deposit as per requirement of sub-section (3) thereof. The bar is against admission of the appeal for hearing. Accordingly if an assessee does not deposit the requisite amount on or before the date of filing the appeal, but subsequently deposits the amount before the appeal is being taken up for admission, the appeal cannot be dismissed summarily on account of non-compliance with the provisions of sub-section (3) of section 38 of the Act. In the present case, the assessee had initially deposited 10 per cent of the extra tax demand and 50 per cent of the amount of penalty. By making further deposit of Rs. 83,500 after the date of service of show cause notice dated August 27, 1979, it had made up the deficiency towards 50 per cent of the extra tax demand required to be deposited by it in accordance with the provisions of section 38(3) of the Act. Under these circumstances and in view of the fact that there was confusion in the words employed in clauses (a) and (c) of sub-section (3) of section 38 of the Act, the Appellate Deputy Commissioner of Sales Tax could not have summarily dismissed the appeal on the ground of non-compliance of section 38(3)(c) of the Act. We are, therefore, of the view that the Tribunal was justified in holding that the appeal before the Appellate Deputy Commissioner of Sales Tax could not be rejected on account of non-payment of 50 per cent of the total demand of tax and penalty at the time of filing the appeal and that the appeal required to be heard on merits as the further amount of Rs. 83,500 was paid by the assessee after service of the show cause notice dated August 27, 1979 to make up the deficiency towards 50 per cent of the extra tax demand. The reformulated question of law, therefore, deserves to be decided in favour of the assessee and against the department. 5. It may be mentioned that section 38(1) of the Act requires an appeal to be preferred in the prescribed manner and rule 57 of the Madhya Pradesh General Sales Tax Rules, 1959, while prescribing the manner speaks of the memorandum of appeal being accompanied by a copy of the challan in proof of payment of the tax with penalty, if any, in accordance with the provisions of sub-section (3) of section 38, besides being accompanied by an authenticated copy of the impugned order. In the light of these provisions, it may be argued that the payment of the amount of tax with penalty in accordance with section 38(3) of the Act was required to be made at the time of filing the appeal. However, as the rules cannot have an overriding effect over the statutory provisions of section 38(3) of the Act and as a copy of the challan in proof of the payment of the amount of tax with penalty in accordance with the provisions of section 38(3) of the Act, as understood by the assessee, was admittedly filed by the assessee along with its memo of appeal, the view we are taking in this case does not appear illogical or unreasonable. 6. For the foregoing reasons, the reformulated question of law is answered as follows : In the facts and circumstances of the case, the Tribunal was justified in holding that the appeal before the Appellate Deputy Commissioner could not be rejected on account of non-payment of 50 per cent of the total demand of tax and penalty at the time of filing the appeal and that the appeal required to be heard on merits at the further amount of Rs. 83,500 was paid by the assessee after service of the show cause notice dated August 27, 1979 to make up the deficiency towards 50 per cent of the extra tax demand. 7. In the circumstances of the case, we leave the parties to bear their costs as incurred. Reference answered in the affirmative.