Yes the 1st phrase is the best!

The first one is fine. The second one doesn't work. BY THE TIME somehow only works with a positive, or a request to do something (not a request NOT to do something). Finish your homeword by the time I get back. If you don't finish your homework by the time I get back, you can't watch TV. BUT: Don't eat dinner by the time I get back. doesn't really make sense.

The first one is more natural and correct.

Mainly the first one. The second one is subject to the situation.