TMI Blog2007 (4) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxation Special Tribunal challenging the above said provision and on abolition of the Tribunal those OPs were transferred and are numbered as writ petitions and taken up for disposal. Before stating the facts, a small prelude as stated in the affidavit, having a bearing on the case has to be stated. It is averred in the affidavit that the Tamil Nadu Taxation Special Tribunal heard original petitions challenging the validity of the provisions of the TNGST (Fourth Amendment) Act, 1999, (Act 14 of 1999) providing for pre-deposit of 25 per cent in the case of first appeal and for pre-deposit of the entire 75 per cent of the remaining disputed amount, in the case of second appeal and upheld the validity of the provisions in the decision reported in Hugs Advertising Industries v. Commercial Tax Officer, Vadapalani Assessment Circle, Chennai [2000] 119 STC 591 (TNTST). Inspite of that the petitioners ventured to file the above OPs before the same Tribunal seeking to declare the above said provision as unconstitutional on the ground that when the Hugs case [2000] 119 STC 591 (TNTST) was argued no argument was advanced as to the constitutional validity, but argument was confined to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sense that it infringes the fundamental right of the petitioners to carry on business and trade. On that ground the Act has to be struck down as unconstitutional. For that purpose he relied on the decision of the Supreme Court in the case of Nand Lal v. State of Haryana AIR 1980 SC 2097; [1980] SCC 574. The second point on which the impugned piece of amendment has been assailed is that the amendment is bad in law as it interferes with the exercise of judicial function of the authorities concerned. To support the above contention he relied on the Division Bench judgment of this court in the case of Rajasheriff v. Government of Tamil Nadu [2001] 4 CTC 577 and thirdly despite the restriction imposed by the amendment, the appellate authorities under the Act are having an ancillary and incidental power to waive the payment of tax as incorporated by way of amendment in order to maintain the appeals. To sustain this point counsel relied on the following judgments: (i) Income-tax Officer v. M.K. Mohammed Kunhi AIR 1969 SC 430 (ii) Commissioner of Customs and Central Excise v. Kumar Cotton Mills Pvt. Ltd. [2005] 180 ELT 434 (SC) (iii) Collector of Customs v. Madras Electro Cast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companied by satisfactory proof of the payment of the tax admitted by the appellant to be due or of such instalments thereof as might have become payable, as the case may be, and twenty-five per cent of the difference of the tax ordered by the Deputy Commissioner under section 32 and the tax admitted by the appellant. The Supreme Court in the case of Nand Lal AIR 1980 SC 2097; [1980] Supp SCC 574 considered similar provision of the Haryana Ceiling of Land Holdings Act, 1972 (Act 26 of 1972). Section 18(7) of the Act was challenged as unconstitutional on the ground that the said provision imposes a condition of making a deposit of a sum equal to 30 times of the land holding tax payable in respect of the disputed area before any appeal or revision is entertained by the appellate or revisional authority. It was contended that section 18(1) of the originally enacted Act in 1972 gave an unconditional right of appeal, but by sub-section (7), which was inserted by Act 40 of 1976 a fetter was put on the unrestricted right which was unconstitutional inasmuch as the condition of pre-deposit of tax was so onerous and rendered the appeal remedy illusory. Rejecting the contention the Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second appeal is so onerous and render the appeal remedy illusory. But in the later part of the said judgment, the Supreme Court has pointedly rejected the said contention by holding the fetter imposed on the right of appeal/revision even in the absence of a provision conferring discretion on the authority to relax or waive the condition cannot be regarded as onerous or unreasonable. Further the issue has been subsequently settled in the cases of Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the City of Ahmedabad [1999] 4 SCC 468, in which after referring to all the earlier decisions, on this point such as Shyam Kishore v. Municipal Corporation of Delhi [1993] 1 SCC 22, Vijay Prakash D. Mehta v. Collector of Customs (Preventive) [1988] 4 SCC 402, Chatter Singh Baid v. Corpn. Of Calcutta AIR 1984 Cal 283; [1983] 2 Cal HN 330, Elora Construction Co. v. Municipal Corporation of Greater Bombay AIR 1980 Bom 162, Anant Mills Co. Ltd. v. State of Gujarat [1975] 2 SCC 175, and Ganga Bai v. Vijay Kumar [1974] 2 SCC 393 at paragraphs 8 to 10 held as follows: 8. By the amending Act 1 of 1979 discretion of the court in granting interim relief has now been limited to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . There it was sub-section (3-A) of section 183 of the Calcutta Municipal Act, 1951 which provided: 'No appeal under this section shall be entertained unless the consolidated rate payable up to the date of presentation of the appeal on the valuation determined (a) by an order under section 182, in the case of an appeal to the court of Small Causes, (b) by the decision of the court of Small Causes, in the case of an appeal to the High Court, has been deposited in the municipal office and such consolidated rate is continued to be deposited until the appeal is finally decided.' Similar provisions existed in the Delhi Municipal Corporation Act, 1957. There it is section 170 which is as under: '170. Conditions of right to appeal. No appeal shall be heard or determined under section 169 unless (a) the appeal is, in the case of a property tax, brought within thirty days next after the date of authentication of the assessment list under section 124 (exclusive of the time requisite for obtaining a copy of the relevant entries therein) or, as the case may be, within thirty days of the date on which an amendment is finally made under section 126, and, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed tax before admission of appeal in the case of Tata Iron Steel Company Ltd. v. State of Bihar [1999] 114 STC 434. The said provision was challenged. One of the grounds taken was that the condition so imposed is so onerous as to amount to unreasonable restriction rendering the right of appeal almost illusory infringing the petitioner's right guaranteed under article 19(1)(g). The court rejected the said ground as it had no force, as the right of appeal is a creature of a statute with legal sanctity inasmuch as a citizen has been conferred with a right to carry on a trade of his choice. But to carry on a trade of his choice does not extend any immunity from taxation. Therefore, the right of appeal being a creature of the statute without which the aggrieved trader cannot be entitled to vindicate his grievances, so when conferring or granting this right to the aggrieved trader to file an appeal, a condition as enumerated under sub-section (3) of section 45 of the Act can be imposed while regulating the appeal. The Patna High Court also followed the judgments of Shyam Kishore v. Municipal Corporation of Delhi AIR 1992 SC 2279; Elora Construction Co. v. Municipal Corporation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not be possible for him to raise any funds to make deposit of 75 per cent of the undetermined demand. As observed by the Supreme Court, the SERFASI Act cannot be compared to the TNGST Act. It is also needless to state that assessment of tax cannot be regarded as adversarial in nature, but only assessing the correct amount of tax as returned by the assessee in their returns as per the statutory provisions of the Act. The State Legislature has given statement of objects and reasons for the above said amendment to the following effect: Huge amount of sales tax levied have been disputed by the assessees under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959) and are locked up in litigations before various appellate forums under the said Act. 2.. In order to avoid accumulation of huge amount from being locked up in such litigations, the Government have decided to amend sections 31, 31-A, and 36 of the said Act so as to make the appellants to pay in addition to the admitted tax, 25 per cent of the difference of tax assessed by the authority concerned and the tax admitted by the appellant at the first stage of appeal and payment of tax as ordered by the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that if the court considered that it is absolutely necessary to allow the person to withdraw the amount of compensation, the court may allow him to withdraw only the amount awarded by the Collector. That provision came to be considered by the Division Bench. The said provision has been struck down by the Division Bench following the Supreme Court decision in the case of State of Tamil Nadu v. Ananthi Ammal [1995] 1 CTC 465 wherein the court stressed the need for providing timely compensation in the words of the Supreme Court: The owner of the land or other person interested therein is required to be paid compensation in lieu of land forthwith to reestablish himself whether in a new residence or another piece of agricultural land or otherwise. In that case the Supreme Court struck down the Tamil Nadu Acquisition of Land for Harijan Welfare Schemes Act, 1978, which provide for payment of tax in equal annual instalment not exceeding five where the amount of compensation exceeded Rs. 2,000. The court further found on facts In the vast majority of cases referred to the reference court it is found that the compensation awarded by the Collector is inadequate, and does not r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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