2016 (7) TMI 1307 - JHARKHAND HIGH COURT

Maintainability of petition - Pre-deposit - Section 35F of the CEA, 1944 - section has been amended with effect from 6th August, 2014 by section 105 of the Finance ( No.2) Act, 2014 - it is submitted by the counsels for the Union of India that the newly substituted section 35F has diluted earlier provisions, so far as the amount to be deposited is concerned. Originally 100% was to be deposited whereas now, only 7.5% or 10% is to be deposited. Thus, 92.5% or 90% of the duty demanded or the penalty levied is already waived by the new section 35F, in each and every case, without any order of Tribunal or without any order of the Commissioner (Appeals) and without any application for waiver of deposit - It is also submitted by the counsels for the Union of India that in a statute relating to taxation, the government should be allowed greater latitude with respect to classification for imposing tax.

Held that: - the substituted Section 35 F of the Act, 1944 is not applicable to the stay applications and appeals already preferred or pending before any appellate authority, prior to commencement of the Finance (No.2) Act, 2014, which shows the clear intention on the part of Legislature, meaning thereby Finance (No.2) Act, 2014 shall be applicable to all the stay applications and appeals which are being preferred on or after 6th August, 2014. Thus, effect of Section 6 of the General Clauses Act, 1897 is being taken away by 2 nd proviso to Section 35F of the Act, 1944, which is the “different intention” of the Legislature.

The legislature, in its wisdom, has thought it fit to extend the benefit of the Scheme to such of those assessees whose tax arrears are outstanding as on 31-3-1998, or who are issued with the demand or show-cause notice on or before the 31st day of March, 1998, though the time to file declaration for claiming the benefit is extended till 31-1-1999.

In extreme cases always the assessees can take recourse to the writ jurisdiction under Article 226 of the Constitution of India. Few extreme cases will not make the substituted Section 35F of the Act, 1944 unconstitutional. All care can be taken with respect to such types of cases under Article 226 of the Constitution of India. “Ubi jus, ibi remidum” - where there is wrong, there is remedy.

How the cut off date has to be fixed and the nature of the cut off date etc. is to be left at the discretion of the legislature. The court should be slow to interfere or in altering a cut off date. The cut off date in question is 6th August, 2014 and looking to the second proviso to Section 35F if any stay application or appeal is already preferred and pending before the appellate authority before 6th August, 2014, those will not be governed by the newly substituted Section 35F. This is the intention of the legislation, in no uncertain terms, meaning thereby that with respect to appeals preferred on or after 6 th August, 2014, the newly substituted Section 35F shall be applicable.

Substituted Section 35F, is not at all confiscatory in nature. On the contrary it is more than reasonable and leaning more towards the assessee rather than the revenue.

The petitioner would not be justified in urging that the amended provisions of Section 35F(1) of the Act would not apply merely on the ground that the notice to show-cause was issued prior to the enforcement of Finance (No. 2) Act, 2014 - endless litigations, arising out of waiver applications, have been brought to an end and looking to the very meager percentage of the amount to be deposited, Section 35F- as amened cannot be said to be violative of Article 14 of the Constitution of India much less of Article 19(1)(g) of the Constitution of India.

Petition dismissed - decided against petitioner.