Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

M/s. Ganesh Yadav Versus Union of India And 3 Others

2015 (7) TMI 304 - ALLAHABAD HIGH COURT

Waiver of pre-deposit - Effective date of amendment to Section 35F - mandatory pre-deposit - Recovery of demand u/s 73 - penalty under Sections 70, 76, 77 and 78 - Section 35F - Held that:- right of appeal is a vested right and the right to enter a superior Court or Tribunal accrues to a litigant as on and from the date on which the lis commences although it may actually be exercised when the adverse judgment is pronounced. Such a right is governed by the law which prevails on the date of instit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

iso is a clear indicator that Parliament has exempted the requirement of complying with the pre-deposit as mandated by Section 35F (1) of the Act as amended only in the case of those stay applications and appeals which were pending before any appellate authority prior to the commencement of Finance (No.2) Act 2014. Consequently, both by virtue of the opening words of Section 35F(1) of the Act as well as by the second proviso to the provision, it is clear that appeals which are filed on and after .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the ground that the notice to show cause was issued prior to the enforcement of Finance (No.2) Act, 2014. We find no merit in the constitutional challenge - Decided against assessee. - WRIT - C No. - 33950 of 2015 - Dated:- 29-5-2015 - Hon'ble Dr. Dhananjaya Yeshwant Chandrachud, CJ And Hon'ble Manoj Kumar Gupta,JJ. For the Petitioner : Vanashri Dubey For the Respondent : B.K.S.Raghuvanshi,Sr.S.C. ORDER The petitioner claims to have provided between 2007-08 and 2011-12 the service of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oviso to Section 73(1) of the Finance Act, 1994 together with interest and penalty. In the course of the adjudication proceedings, an order was passed on 31 March 2015 by the Additional Commissioner, Central Excise, Customs and Service Tax, Allahabad, confirming the demand of service tax in the amount of ₹ 34.02 lacs. This was accompanied by a penalty under Sections 70, 76, 77 and 78 of the Finance Act, 1994. Section 35F of the Central Excise Act, 19441 has been made applicable by virtue o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y, 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 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 percent 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) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ations and appeals pending before any appellate authority prior to the commencement of the Finance (No.2) Act, 2014. Explanation.- For the purposes of this section "duty demanded" shall include,- (i) amount determined under section 11D; (ii) amount of erroneous Cenvat credit taken; (iii) amount payable under rule 6 of the Cenvat Credit Rules, 2001 or the Cenvat Credit Rules, 2002 or the Cenvat Credit Rules, 2004." Prior to the amendment of Section 35F of the Act, the provision as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y levied: Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue: Provided further that where an application is filed before the Commissi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

payable under rule 6 of CENVAT Credit Rules, 2001 or CENVAT Credit Rules, 2002 or CENVAT Credit Rules, 2004; (v) interest payable under the provisions of this Act or the rules made thereunder." The petitioner has sought in these proceedings a writ restraining the respondents from enforcing the mandatory requirement of a pre-deposit of 7.5% of the duty demanded in pursuance of the order of adjudication dated 31 March 2015. The second relief is for a declaration that Section 35F of the Act, a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

legislation can stipulate a requirement of pre-deposit as a condition precedent to an appeal to be entertained. The restraint on the power of the legislature to do so, is that the condition which is prescribed should not be so onerous so as to restrict or abrogate the right of appeal altogether. A condition which is unduly onerous will render the right of appeal illusory and would hence run the risk of being held to be arbitrary and of being violative of the fundamental right conferred by Artic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ate of Gujarat (1975) 2 SCC 175, the Supreme Court held that the right of appeal is a creature of the statute and it is for the legislature to determine whether that right should be given unconditionally to an aggrieved individual or should be allowed subject to condition. In Vijay Prakash D. Mehta vs. Collector of Customs (1988) 4 SCC 402, the Supreme Court held that the right of appeal is neither an absolute right nor an ingredient of natural justice, the principles of which must be followed i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

equent decision in Shyam Kishore vs. Municipal Corporation of Delhi (1993) 1 SCC 22. The judgment in Gujarat Agro Industries (supra) involved a challenge to Section 406(e) of the Bombay Municipal Corporation Act as applicable in Gujarat which requires the deposit of tax as a pre-condition for entertaining an appeal. A limited waiver of tax was contemplated which was held not to be violative of Article 14 of the Constitution. Subsequently, in Government of Andhra Pradesh vs. P. Laxmi Devi (2008) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in case the duty and penalty are in dispute or the penalty where such penalty is in dispute. In the case of an appeal to the Tribunal against an order passed by the Commissioner (Appeals), the requirement of deposit is 10% of the duty or as the case may be, the duty or penalty or of the penalty where the penalty is in dispute. The first proviso restricts the amount to be deposited to a maximum of ₹ 10 crores. Prior to the amendment, the Commissioner (Appeals) or the Appellate Tribunal wer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he case may be, of the Commissioner (Appeals). Parliament has stepped in by providing a requirement of a deposit of 7.5% in the case of a First Appellate remedy before the Commissioner (Appeals) or to the Tribunal. The requirement of a deposit of 10% is in the case of an appeal to the Tribunal against an order of the Commissioner (Appeals). This requirement cannot be regarded or held as being arbitrary or as violative of Article 14. Above all, as the Supreme Court held in Shyam Kishore (supra), .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

scipline which has been laid down under Section 35F of the Act, is a separate matter altogether but it is important to note that the power under Section 226 has not been, as it cannot be, abridged. That leads the Court to the next aspect of the matter as to whether the requirement of pre-deposit would apply in a situation such as the present. The notice to show cause was issued on 19 September 2013. The case of the petitioner is that the amendment to Section 35F of the Act was brought into force .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

onsidering the law on the subject from the decision of the Privy Council in Colonial Sugar Refining Company Ltd. vs. Irving (1905) AC 369 upto Sawaldas Madhavdas vs. Arti Cotton Mills Ltd. AIR 1955 Bom. 332 deduced the following principles of law: "(i) That the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. (ii) The right of appeal is not a mere matt .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rned by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. (v)This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise." (emphasis supplied) This principle was also laid down in an earlier decision in Hoosein Kasam Dada (India) Ltd. Vs. State of Madhya Pradesh AIR 1953 S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

inuation of 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." (emphasis supplied) In Jose Da Costa and another vs. Bascora Sadasiva Sinai Narcornim and others (1976) 2 SCC 917, the Supreme Court held as under: "31. Before ascertaining the effect of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tment or necessary intendment (see Delhi Cloth and General Mills Co. Ltd. v. Income-tax Commissioner 54 IA 421 : AIR 1927 PC 242 ). The second is that a right of appeal being a substantive right the institution of a suit carries with it the implication that all successive appeals available under the law then in force would be preserved to the parties to the suit throughout the rest of the career of the suit. There are two exceptions to the application of this rule, viz. (1) when by competent ena .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat unless the New Act expressly or by necessary implication makes the provision applicable retrospectively, the right to appeal will crystalize in the appellant on the institution of the application in the Tribunal of first instance and that vested right of appeal would not be dislodged by the enactment of the new Act..." (emphasis supplied) The Supreme Court in Mohd. Saud and another vs. Dr. (Maj.) Shaikh Mahfooz and others (2010) 13 SCC 517 upheld the power of the legislature to curtail .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d by the decision of this Court in Salem Advocate Bar Assn. v. Union of India.17 The Full Benches of the Andhra Pradesh High Court vide Gandla Pannala Bhulaxmi v. A.P. SRTC AIR 2003 AP 458, the Madhya Pradesh High Court in Laxminarayan v. Shivlal Gujar AIR 2003 MP 49, and of the Kerala High Court in Kesava Pillai Sreedharan Pillai v. State of Kerala AIR 2004 Ker 111 have held that after the amendment of Section 100-A in 2002 no litigant can have a substantive right for a further appeal against t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

applications stood decided or appeals were pending on the date of commencement of the Civil Procedure Code (Amendment) Act, 1976, in view of the saving clause. It was held that even in cases where execution applications were pending on the date the Amending Act came, the right to appeal was not saved. It is held as under: "24. In the instant case, admittedly, the appeal had not been filed before the Amending Act came into force. Hence, out of the two categories made by the learned counsel, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion applications the right to appeal is preserved even in respect of a pending application on the date of enforcement of the said Act. The language of S. 97 (2) (a) does not permit such an interpretation. Under this clause, the amendment made in S. 2(2) of the principal Act does not affect any appeal against the determination of any question as is referred to in S. 47. The expression "shall not affect any appeal", in our opinion, does not take within its sweep even the cases where exec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ich accrued on the date of filing of the execution application was taken away. True it is as said in Hough v. Windus (supra), the statutes should be interpreted if possible, so as to respect vested rights. It is also correct at the same time that the golden rule of construction is that, in the absence of anything in the enactment to show that law should have retrospective operation, an Act should be construed so as to apply prospectively. These propositions are, however, subject to the control b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

but there is no right of appeal unless conferred. For filing a suit right is not required to be conferred by any statute whereas since the right of appeal is the right from the statutory provision by which it is created, such a right has got to be conferred. It does not inhere in a litigant. The right of appeal conferred or acquired has to be exercised only in the manner prescribed. 19. As already pointed out above, the legislature has authority to abridge a right to appeal at its discretion. Th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ls at the date of the decision or on the date of the filing of an appeal. Moreover, the vested right of an appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise. Justice G.P. Singh in his treatise on Statutory Interpretation23 has succintly elucidated the principles to be applied in determining whether a statute is retrospective or not, in the following words: "(ii) Statutes dealing with substantive rights.- It is a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

stitutio futuris formam imponere debet non praeteritis [2 c. Int. 392]". In the words of LORD BLANESBURG, "provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment." "Every statute, it has been said", observed LOPES, L.J., "which takes away or impairs vested rights acquired under existing laws, or creates a new obligation or imposes a new duty, or attac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

other words close attention must be paid to the language of the statutory provision for determining the scope of the retrospectivity intended by Parliament." (emphasis supplied) Parliament while substituting the provisions of Section 35F of the Central Excise Act, 1944 by Finance Act (No.2) of 2014, has laid down that the Tribunal or the Commissioner (Appeals) "shall not entertain any appeal" unless the appellant has deposited the duty or, as the case may be, a penalty to the stip .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the Act is further clarified by the second proviso which stipulates that the provisions of the section shall not apply to stay applications and appeals which were pending before any appellate authority prior to the commencement of Finance (No.2) Act 2014. The second proviso is a clear indicator that Parliament has exempted the requirement of complying with the pre-deposit as mandated by Section 35F (1) of the Act as amended only in the case of those stay applications and appeals which were p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version