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TMI Blog2018 (12) TMI 1279X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate order was passed on 27/7/2017 and before that date, amended provisions came into effect from 15/4/2017, which required appellant to deposit 10% of the disputed tax along with appeal as a pre condition of admission of appeal, however, appellant has not complied with said mandatory provisions of Section 26(6B) of the Act of 2002 and since said amount was not deposited, appeal came to be dismissed. Admittedly review proceedings in respect of assessment order passed on 30/10/2014 for the financial year 2010 11 were initiated on 13/4/2017, which came to be decided on 27/7/2017 while the amended provisions of Section 26(6B) of the Act of 2002 came into force with effect from 15/4/2017 - the relevant date to hold applicability of amended provisions or otherwise shall be the date on which proceedings were initiated and not the date of decision. Thus, the Tribunal has committed an error in dismissing the appeal as not maintainable for non payment of amount aforesaid, i.e. 10% of the amount assessed. Whether recovery proceedings initiated by respondent no.5 during the pendency of appeal are legal or otherwise? - Held that:- In the case in hand, though appellant has submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Counsel for the parties, formulated following substantial questions of law and directed the parties to maintain status quo : (1) Whether the Tribunal has committed an error in dismissing the appeal as not maintainable for want of deposit of 10% of the amount assessed, so as to give retrospective effect to the amendment introduced on 15.04.2017 to Section 26 of the Maharashtra Value Added Tax Act, 2002 ? (2) Whether in the facts and circumstances of the case the respondent was competent to initiate action of coercive recovery under Section 33 of the Act even before expiry of the period prescribed to prefer an appeal ? 5) Shri Anand Jaiswal, learned Senior Counsel for appellant, submitted that assessment order involved in the present appeal, is of the financial year 2010 11, passed on 30/10/2014, of which review was filed on 13/4/2017, which is reviewed by respondent no.4 under the provisions of Section 25 of the Act of 2002 vide its order dated 27/7/2017 and demand of ₹ 25,55,07,626/ inclusive of tax, interest and penalty was raised. The said review order was challenged before the Tribunal by filing appeal on 25/9/2017. The limitation for filing appeal wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d needs to be stayed. 7) Shri Deopujari, learned Government Pleader for respondents, by referring to the affidavit in reply of respondent no.4, has submitted that as per amended provision of Section 26(6B) of the Act of 2002, which has come into effect from 15/4/2017, it was obligatory on the part of appellant to deposit amount to the extent of 10% of the disputed tax before filing appeal before Tribunal, more particularly when the amendment came into effect before passing of review order on 27/7/2017. Learned Government Pleader in support of his submissions, relied upon judgment of the Hon'ble Apex Court in the case of Satya Nand Jha vs. Union of India and others (Petition for Special Leave to Appeal (C) No.31297/2016), which has upheld the mandatory provision of Section 35F of the Central Excise Act, 1944, which prescribed that 7.5% or 10% of the duty demanded or penalty levied is to be deposited in case appeal is preferred before the Commissioner (Appeals) or the Tribunal. It is submitted that provisions of Section 26(6 B) of the Act of 2002 are pari materia with the provisions of Section 35 F of the Central Excise Act, 1944 and thus submitted that in view of ratio laid d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions advanced as aforesaid, amended provisions of Section 26(6 B) of the Act of 2002 when perused, read as under : No appeal shall be filed before the Tribunal against an order, which is passed on or after the commencement of the Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2017 (Mah. XXXI of 2017), unless it is accompanied by the proof of payment of an aggregate of following amounts, as applicable a) in case of an appeal against an order, in which claim against declaration of certificate has been disallowed on the grounds of non production of such declarations or as the case may be, certificates then amount of tax, as provided in the proviso to sub section (6). b) in case of an appeal against an order, which involves disallowance of claims as stated in clause (a) above and also tax liability on other grounds, then, an amount equal to 10 per cent of the balance amount of disputed tax, so far as such tax liability pertains to tax on grounds, other than those mentioned in clause (a), c) in case of an appeal against an order, other than an order described in clauses (a) and (b) above, an amount equal to 10 per cent of the balance amount of disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les 226 and 227 of the Constitution of India praying, amongst other things, for a writ of mandamus or an appropriate order directing the Sales Tax Commissioner to admit and hear the appeal without demanding payment of the amount of Sales Tax assessed by the Assistant Commissioner of Sales Tax. The High Court dismissed the application on 2/8/1951. The assessee applied to the High Court for leave to appeal to this Court, which was also dismissed by the High Court on 14/3/1952. The assessee thereupon applied to Supreme Court for special leave to appeal on 12/5/1952. The Supreme Court granted special leave to appeal, but such leave was limited to the question of the effect of the amendment to Section 22 of the Act on the petitioner's appeal to the Sales Tax Commissioner, Madhya Pradesh and took the view that the other questions sought to be raised by the assessee would have to be decided by the Sales Tax Commissioner in case the appeal succeeded, as the Hon'ble Supreme Court in that appeal was concerned only with the limited question of effect of the amendment to Section 22 of the Act. Section 22(1) of the Act was originally expressed in the following terms : 22(1) Any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that right. As the old law continues to exist for the purpose of supporting the pre existing right of appeal, that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right. It is further observed that the finding of the appellate Authority that it has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to Section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the Authority has to be exercised under the old law, which so continues to exist. The Hon'ble Apex Court also observed that whenever there is a proposition by one party and an opposition to that proposition by another, a `lis' arises. It may be conceded, though not deciding it, that when the assessee files his return a `lis' may not immediately arise, for under Section 11(1), the Authority may accept the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be regarded as one legal proceeding. (ii) The right of appeal is not a mere matter of procedure, but is asubstantive right. (iii) The institution of the suit carries with it the implication that allrights of appeal, then in force are preserved, to the parties thereto till the rest of the career of the suit. (iv) The right of appeal is a vested right and such a right to enter the superior Court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of filing of the appeal. (v) This vested right of appeal can be taken away only by asubsequent enactment, if it so provides expressly or by necessary intendment and not otherwise. In view of above stated legal pronouncements and as appellant has admittedly filed his return sometime in the year 2011, he is having right of appeal, which does not speak of pre deposit of 10% of the disputed tax. 17) Similar issue is once again considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) interest payable under the provisions of this Act or the Rules made thereunder. After amendment, Section 35F, which came into effect is as under : 35F Deposit of certain percentage of duty demanded or penalty imposed before filing appeal : The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal : (i) under sub section (1) of Section 35, unless the appellant has deposited seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an Officer of Central Excise lower in rank than the Principal Commissioner of Central Excise or Commissioner of Central Excise; (ii) against the decision or order referred to in clause (a) of sub section (1) of Section 35B, unless the appellant has deposited seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against; (iii) against the decision or order referred to in clause (b) of sub section (1) of Section 35B, unless the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n stood and for grant of stay to disputed amount, orders were required to be passed by the Tribunal, while according to amended provisions of Section 26(6B), no appeal shall be filed before the Tribunal against an order, which is passed on or after the commencement of the Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2017, unless it is accompanied by the proof of payment of an aggregate of following amounts as applicable (a) .. (b) . (c) in case of an appeal against an order, other than an order, described in clauses (a) and (b) above, an amount equal to 10 per cent of the balance amount of disputed tax. (d) .. As such, we find that before amendment, there was no requirement to deposit any amount at the time of filing appeal, but it is only if stay was to be granted, some amount was to be deposited as per orders of the appellate Authority or as the case may be. Thus, to answer the first question formulated as aforesaid, we are required to consider if the amended provisions of Section 26(6B) of the Act of 2002 directing deposit of 10% of the disputed tax as a pre condition for filing of appeal before Tribunal are applicable to appellant. 20) Perus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in mind for effecting recovery : 1) No recovery of tax should be made pending a) Expiry of time limit for filing an appeal. b) Disposal of a stay application, if any, moved by the assessee and for a reasonable period thereafter to enable the assessee to move a higher forum, if so advised. Coercive steps may, however, be adopted where the authority has reason to believe that the assessee may defeat the demand, in which case brief reasons may be indicated. 2) The stay application, if any, moved by the assessee should be disposed of after hearing the assessee and bearing in mind the guidelines of KEC International. 3) If the assessing Officer has taken a view contrary to what has been held in the preceding years without there being a material change in facts or law, that is a relevant consideration in deciding the application for stay; 4) When a bank account has been attached, before withdrawing the amount, reasonable prior notice should be furnished to the assessee to enable the assessee to make a representation or seek recourse to a remedy in law. 5) In exercising the powers of stay, the Income Tax Officer should not act as a mere tax gatherer, but as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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