TMI Blog2017 (4) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... siting 15% of the tax in dispute, an assessee will receive an order of stay of recovery proceeding. This cannot be said to be hardship let alone undue hardship. Requirement of a pre-deposit is not a hardship. They, however, contend that, so far as the appeal is concerned, they should be guided by the provisions applicable prior to the amendments introduced to the second proviso on Section 84(1). The petitioners seek to have, by such contention best of both worlds. They seek to take the advantage of the amendments being introduced to the various provisions of the Act of 2003 permitting a more transparent and a beneficial method of assessment so far as an assessment is concerned, and on the other hand, not accept the appeal provision which is founded upon the amendments introduced to the other provisions of the Act of 2003 and the Rules framed thereunder. The right of appeal altered with effect from April1, 2015 is in consonance with the amendments introduced to the assessment procedure. The petitioners have accepted the assessment procedure. They are, therefore, bound to accept the appeal provisions also. The right to prefer the appeal is sought to be made conditional. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... W) of 2017 M/s. Delta Ltd. Versus Appellate Forum, CD-01 Ors. ,Asansol Alloys Pvt. Ltd. Versus Deputy Commissioner of Sales Tax, Asansol Charge Ors. ,Island Trading Co. Pvt. Ltd. Versus Commercial Tax Officer, Park Street Charge Ors. ,Gyan Chand Construction Co. Anr. Versus Deputy Commissioner, Commercial Taxes, Taltala Charge Ors. ,Pawan Kumar Agarwal Versus Deputy Commissioner Commercial Taxes, Salkia Charge Ors. ,M/s. R. Hiralal Shah Co. (Calcutta) Versus The Sr. Jt. Commissioner Commercial Tax Ors. ,Delta Enterprises Anr. Versus Sales Tax Officer, Central Audit Unit-I Ors. ,Vikram Kamalia Versus Deputy Commissioner Commercial Taxes, Salkia Charge Ors. ,Lal Murti Singh Versus Deputy Commissioner Commercial Taxes, Salkia Charge Ors. ,I B Eng. Pvt. Ltd. Versus The Deputy Commissioner Commercial Taxes, Ultadanga Charge Ors. ,Dankuni Steels Ltd. Versus The Deputy Commissioner Commercial Taxes, Lalbazar Charge Ors. ,Mascot Petrochem Pvt. Ltd. Versus The Joint Commissioner, Commercial Taxes, Burra Bazar Circle Ors. ,Technico (India) Pvt. Ltd. Versus The Senior Joint Commissioner, Commercial Taxes, Central Audit Unit-I Ors. ,Murlidhar Ratanlal Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner, Durgapore Charge Ors. ,Pradeep Structural Development Versus Sales Tax Officer, Shibpur Charge Ors. ,Anand Carbo Pvt. Ltd. Anr. Versus Joint Commissioner, Commercial Taxes Ors. ,Jagadamba Industries Ltd. Anr. Versus Joint Commissioner, Commercial Taxes, Durgapur Charge Ors. ,Jagadamba Industries Ltd. Anr. Versus Joint Commissioner, Commercial Taxes, Durgapur Charge Ors. ,Shanta Chandrakant Modi Versus Joint Commissioner of Sales Tax, Behala Charge Ors. ,Rangan Tradecom Pvt. Ltd. Versus Sales Tax Officer, Chadni Chawk Charge Ors. ,Anurab Vanijya Pvt. Ltd. Versus Sales Tax Officer, Chadni Chawk Charge Ors. ,M/s. Plano Vyapar Pvt. Ltd. Versus Sales Tax Officer, Salkia Charge Ors. ,Bhim Sain Agarwal Versus Sales Tax Officer, Salkia Charge Ors. ,Kusum Patodia, Proprietress of M/s. Venus Engineering Works Versus Sales Tax Officer, Salkia Charge Ors. ,M./s. Universal Machines Ltd. Anr. Versus Senior Joint Commissioner Ors. ,Piyush Doshi Versus The State of W.B. Ors. ,M/s. Purbanchal Udyog Versus Deputy Commissioner, Commercial Taxes, Central Audit Unit-II, Salt Lake Ors. ,Parsvanath Vanijya Pvt. Ltd. Versus Deputy Commissioner, Sales Taxes, Esplan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, the appeal is required to be made with a payment of tax and not a deposit or a pre-deposit. An appellant cannot be taxed for preferring an appeal from an order of adjudication. When tax is not defined, it is to be understood to cover any levy. Reliance in this regard is placed on 2001 Volume 6 Supreme Court Cases 697 (Commissioner of Central Excise, Meerut v. Kisan Sahkari Chinni Mills Ltd.). The authorities can at best seek a deposit or a pre-deposit to secure the tax due and adjudicated to be found due. The words deposit or pre-deposit are not used. What is used is payment. The words used in the second proviso to Section 84(1) do not embrace in its fold the concept of refund. The Act does not provide for refund in the payment made under the impugned provisions. In a given scenario, the appellant may succeed in the appeal. The order of adjudication may be set aside in its entirety. In such scenario, the impugned provision does not provide for refund of the 15% payment. In all fairness, the appellant is entitled to refund of the 15% payment along with interest. Relying upon Judgments Today 1997 Volume 4 Supreme Court page 4 (India Carbon Ltd. v. State of Assam) it is subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng right of appeal cannot be taken away by a subsequent amendment. Reliance is placed on All India Reporter 1953 Supreme Court page 221 (Hoosein Kasam Dada v. State of Madhya Pradesh Ors.), All India Reporter 1957 Supreme Court 540 (Garikapati Veeraya v. N. Subbiah Choudhry Ors.) and 2015 Volume 3 TMI page 634 (Kerala) (M/s. Muthoot Finance Ltd. v. Union of India Ors.) for such proposition. It is contended that, at the time when the assessees had filed their application for assessment, the amendment to the second proviso of Section 84(1) of the Act of 2003 was not there. On the date when the application for assessment was made, Section 84 had a different provision. Subsequent to the filing of the application, the right to appeal cannot be affected. An assessee, therefore, should be permitted to prefer an appeal in respect of assessment year prior to April 1, 2015 on the basis of the provisions of Section 84 existing at the time of presentation of the application for assessment. Applications for assessment which were filed prior to April 1, 2015 should be guided by the unamended provision of Section 84 of the Act of 2003. Section 84(1) second proviso as it stands does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 84) Excise Law Times page 347 (I.T.C. Ltd. v. Commissioner (Appeals), Cus. C. Ex., Meerut-I), 2010 (250) Excise Law Times page 200 (Ceat Ltd. v. Union of India), 1994 Volume 69 Excise Law Times page 193 (Cal) (Bongaigaon Refinery v. Collr. of C. Ex.), 1991 (51) Excise Law Times page 185 (SC) (Priyanka Overseas Ltd. v. Union of India), 2001 Volume 10 Supreme Court Cases page 740 (State of Tripura v. Manoranjan Chakraborty Ors.), All India Reporter 1967 Supreme Court page 1616 (Bhawani Cotton Mills Ltd. v. State of Punjab Anr.) and an unreported decision of this Hon ble Court rendered in W.P. No. 6088(W) of 2012 (M/s. Shyam Sel and Power Ltd. v. Union of India Ors.) dated May 15, 2014 in this regard. The impugned provisions are such that, it infringes upon the fundamental right guaranteed under Article 19(1)(g) of the Constitution of India. The right to carry on business is fettered due to imposition of a harsh and onerous condition to prefer an appeal. The right to prefer an appeal is rendered illusory by the impugned provisions. A writ petition challenging the vires of an Act is maintainable. The petitioners rely upon All India Reporter 1985 Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Garikapati Veeraya (supra) in support of his contentions. Reliance is placed on 2012 Volume 54 VST 1 (Orissa) (Jindal Stainless Ltd. v. State of Orissa Ors.), 2001 Volume 10 Supreme Court Cases page 740 (State of Tripura v. Manoranjan Chakraborty Ors.), 2000 Volume 119 STC page 138 (D.V.C. Bukaru Co-operative Stores Ltd. v. State of Bihar Ors.), 2009 Volume 19 VST page 589 (Karnataka) (Prakrith Builders Pvt. Ltd. v. State of Karnataka Ors.), 2011 Volume 14 Supreme Court Cases page 160 (Har Devi Asani v. State of Rajasthan Ors.) in support of the proposition that, identical provisions in different statutes were upheld to be intra vires the Constitution. Relying upon 2003 Volume 11 Supreme Court Cases page 40 (Harinagar Sugar Mills Ltd. v. State of Bihar Ors.) it is submitted that, the expression payment and deposit for the purpose of entertaining of an appeal can be used interchangeably. The following issues arise for consideration in these writ petitions:- (1) Is the second proviso to Section 84(1) of the West Bengal Value Added Tax, 2003 ultra vires the Constitution of India? (2) To what relief or reliefs, if any, are the parties entitled to? Mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Bengal Value Added Tax Rules, 2005 are also relevant. The vires of the second proviso of Section 84(1) is in question in these writ petitions. The parties cite a number of authorities to establish the parameters on which a challenge to the constitutional validity of a statute is required to be considered by a Court. C. B. Gautam (supra) is of the view that, in order to save a statute or a part thereof from being struck down it can be suitably read down. However, such reading down is not permissible where it is negatived by the express language of the statute. Arun Kumar Ors. (supra) is of the view that, in considering the validity of a statute the presumption is always in favour of constitutionality and the burden is upon a person who attacks it to show that there has been transgression of constitutional principles. A Court may take into consideration of matters of common knowledge, reports, preamble, history of times, object of the legislation and all other facts which are relevant for sustaining the constitutionality. Bhim Singhji Ors. (supra) notes Lord Denning as saying that, a Judge should not be the servant of the words used. He should not be a mere mechanic in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdom, the justice or injustice of the law as Parliament and State Legislatures are supposed to be alive to the needs of the people whom they represent and they are the best judge of the community by whose suffrage they come to existence, (iv) Hardship is not relevant in pronouncing on the constitutional validity of a fiscal statute or economic law, and (v) In the field of taxation, the legislature enjoys greater latitude for classification. Section 84 of the Act of 2003 deals with appeal against provisional or other order of assessment. It recognizes the right of an assessee to prefer an appeal against a provisional or other order of assessment. Apart from the requirement of filing requisite documents to establish the claims, there are three parts to the second proviso of Section 84(1) of the Act of 2003. The first part is that any appeal presented on or after April 1, 2015 must fulfil the rigors specified in that proviso. The second part is clause (a) of the second proviso which requires an appellant to deposit the entirety of the amount of tax, interest, penalty or late fee as the appellant admits to be due and payable. The third ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In such context it says, if the expression tax is to be understood in the absence of any definition, it would certainly cover any levy. Harinagar Sugar Mills Ltd. (supra) has to be read in the context of a prior decision of the Hon ble Supreme Court reported 1999 Volume 9 Supreme Court Cases page 620 (Belsund Sugar Co. Ltd. v. State of Bihar). It cannot be said that the words payment and deposit can be used interchangeably as suggested on behalf of the State. When one is making a deposit or a pre-deposit of money, as is required to prefer an appeal under Section 84 of the Act of 2003, one is called upon to pay a sum of money. Such payment would obviously await the disposal of the appeal. On the assessee succeeding in the appeal, such money is required to be either refunded with accrued interest or allowed to adjust against any liability of the assessee, as the case may be. Viewed from such perspective, the word payment is a genus in which deposit or the pre-deposit is a specie. The word payment used in the second proviso guides both clauses (a) and (b). Clause (a) requires a payment and there is no dispute with regard thereto. So far as the clause (b) is concerned, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ul completion of an appeal in favour of the assessee, it would be entitled to refund of the deposit made under the second proviso to Section 84(1) of the Act of 2003. Moreover, Section 36 of the Act of 2003 contemplates grant of interest by the department for the period of delay in making refund. Therefore, reading Section 84(1) together with Sections 62 and 36 thereof, an assessee on successful completion of an appeal will receive the refund along with interest, interest being payable if there is a delay in making refund. In such circumstances, no assessee stands prejudiced by depositing 15% along with the appeal. It will receive the amount deposited in excess of the tax due along with interest in terms of Section 36 in the event of successful completion of its appeal in its favour. India Carbon Ltd. (supra) is a case where the question was whether interest can be levied and charged on delayed payment of tax. It holds that, there is no substantive provision in the Central Excise Act which obliges the assessee to pay interest on delayed payment of Sales Tax. The authority is not relevant to the issues under consideration in these writ petitions. It is contended on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es over a draft assessment order to the assessee for comments, if any. The assessing officer, thereafter, proceeds to pass the final order of assessment after taking into consideration the objections raised by the assessee. An assessee may find itself aggrieved by such final order. It is then required to make a 15% deposit of the tax in dispute to prefer the appeal. Such deposit would obviously abide by the result of the appeal. In the event of the assessee succeeding in the appeal, the deposit would be refunded. This mechanism of adjudication cannot be said to cause any hardship, let alone, undue hardship unless an assessee contends that, the requirement to pay Value Added Tax under the Act of 2003 itself is hardship. Such is not the contention of the petitioners. In the present case, if an assessee complies with the requirements under the second proviso of Section 84(1) of the Act of 2003, then the revenue would not be proceeding to realize the balance of the sum due. Therefore, effectively by depositing 15% of the tax in dispute, an assessee will receive an order of stay of recovery proceeding. This cannot be said to be hardship let alone undue hardship. Requirement of a pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ency of refund at a later stage will not make the original levy valid. It is not the case of the petitioners that they are not liable to pay any tax at all. Therefore, the ratio of Bhawani Cotton Mills Ltd. (supra) is not attracted. The second proviso to Section 84(1) of the Act of 2003 cannot, therefore, be struck down on the ground of causing undue hardship to an assessee. It is contended on behalf of the petitioners that, the introduction of the cut-off date of April 1, 2015 in the second proviso to Section 84(1) of the Act of 2003 is arbitrary. It seeks to discriminate amongst similarly situated and circumstanced assessees. With respect, such is not the case. April 1, 2015 has been introduced in order to keep it sync with the introduction of various other amendments to the various other provisions to the Act of 2003. Significantly, the manner of adjudication leading to the assessment order for an assessment year stands altered with effect from April 1, 2015 irrespective of the year of assessment involved. The relevant sections of the Act of 2003 and the Rules framed thereunder have been amended so as to facilitate an assessee to have a draft order of assessment so that su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, disadvantage to an assessee has not been substantiated. Moreover, as held in Nitdip Textile Processors (supra), prescription of April 1, 2015 causing any disadvantage to an individual assessee is no ground to say that such prescription is ultra vires Article 14. M/s. Muthoot Finance Ltd. (supra) is of the view that, the right of appeal that is vested to an assessee is to be governed by the law prevailing at the date of institution of the proceedings and not by the law that prevails at the date of its decision or at the date of filing of the appeal. This authority is not applicable to the present petitions as the method of adjudication stands altered and the petitioners have not challenged such altered method of adjudication. Rather they are the beneficiaries of such altered method now seeking to contend that the resultant appeal provisions consequent to the altered adjudicating procedure is allegedly affecting their rights. The right to prefer appeal has not been taken away. The respondent cites few authorities for the proposition that, similar provisions as that of the second proviso to Section 84(1) of the Act of 2003 were upheld. Har Devi Asani ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and finds it to be intra vires. In the special reference being the Special Courts Bill (supra) the constitutionality of the Special Courts Bill, 1978 was considered. Jan Mohd. Usmanbhai (supra) considers the reasonableness of restriction or prohibition imposed in relation to closure of Municipal slaughter houses. A right of appeal is a substantive right. It accrues on the date when the application is filed. Such right being recognized by statute gets vested to the applicant on the filing of the application. Hoosein Kasam Dada (India) Ltd. (supra) is of the view that, an intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention is clearly manifested by express words or necessary implication. The majority view in Garikapati Veeraya (supra) is that, a right of appeal is a vested right. Such right accrues to a litigant and exists as on and from the date the lis commences. Such right is to be governed by the law prevailing at the date of the institution of the suit or proceedings and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. This vested right of appeal can be taken awa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition till its disposal. The time limit prescribed for preferring an appeal has elapsed. In order not to prejudice any of the parties to the lis, it would be appropriate to direct that the petitioners would be at liberty to prefer an appeal from the order of assessment within a period of 4 weeks from date, subject to the petitioners complying with all other provisions required for the purpose of preferring an appeal. In the event, an appeal is preferred within the time period stipulated herein, the appellate authority will treat such appeal to be within the period of limitation. The department will not take the point of limitation in such an eventuality. W.P. No. 1211(W) of 2016, W.P. No. 1212(W) of 2016, W.P. No. 1213(W) of 2016, W.P. No. 5612(W) of 2016, W.P. No. 5614(W) of 2016, W.P. No. 1634(W) of 2016, W.P. No. 2098(W) of 2016, W.P. No. 12179(W) of 2016, W.P. No. 7078(W) of 2017, W.P. No. 6007(W) of 2017, W.P. No. 6986(W) of 2017, W.P. No. 6994(W) of 2017, W.P. No. 7077(W) of 2017, W.P. No. 25141(W) of 2016, W.P. No. 26466 (W) of 2016, W.P. No. 26746(W) of 2016, W.P. No. 26741(W) of 2016, W.P. No. 27131(W) of 2016, W.P. No. 26905(W) of 2016, W.P. No. 26750(W) of 2016, W. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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