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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 ..... covery proceedings initiated by respondent Authorities. The appeal is accompanied by Civil Application No. 26/2018 for interim reliefs. 3) Admittedly, appeal against order passed by the Tribunal can be filed before this Court by virtue of provisions of Section 27 of the Act of 2002. The relevant provision of Section 27 of the Act of 2002 is reproduced below : "27. Appeal to High Court (1) An appeal shall lie to the High Court from every order passed by the Tribunal including a judgment by way of advance ruling, if the High Court is satisfied that the case involves a substantial question of law. (2) ..... (3) ..... (4) ..... (5) ..... (6) ..... (7) ..... (8) ..... (9) ..... As such, we find that appeal can be filed before this Court only if it involves substantial question of law. 4) This Court vide order dated 12/4/2018, on hearing learned 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 introd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retrospective, dismissed the appeal. Hence, this appeal. In support of his submissions, learned Senior Counsel has relied upon the judgments in the case of Messrs Hoosein Kasam Dada (India) Ltd. vs. The State of Madhya Pradesh and others (AIR 1953 Sup. Court 221), Garikapatti Veeraya vs. N. Subbiah Choudhury (1957 AIR SC 540) and National Traders and others vs. State of Karnataka (Civil Appeal No. 4579/2007) and prayed that appeal be allowed. 6) On the question of recovery proceedings initiated by respondent no.5 pending appeal, it is submitted that such action is directly in violation of settled legal principles as has been laid down in the case of UTI Mutual Fund vs. Income Tax Officer and others {(2012) 345 ITR 71(Bom)}. It is, therefore, submitted that such action of recovery proceedings initiated against appellant is illegal and needs to be stayed. 7) Shri Deopujari, learned Government Pleader for respondents, by referring to the affidavitinreply 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17, which was challenged by way of appeal before Tribunal on 25/9/2017, which appeal came to be dismissed by the impugned order dated 22/2/2018 and before order of review was passed on 27/7/2017, Section 26(6B) of the Act of 2002 came to be inserted by amendment with effect from 15/4/2017. 11) The impugned order reveals that appeal came to be dismissed by the Tribunal observing that first 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 precondition 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. 12) In view of facts involved in the appeal and submissions advanced as aforesaid, amended provisions of Section 26(6B) 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 acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h by a revision application against the order of the Sales Tax Commissioner contending that his appeal was not governed by the proviso to Section 22(1) of the Act as amended on 25/11/1949 by the Central Provinces and Berar Sales Tax (Second Amendment) Act (Act 57 of 1949), but was governed by the proviso to Section 22(1) of the Act as it stood when the assessment proceedings were started, i.e. before the said amendment. The Board of Revenue took the view that as the order of assessment was made after the amendment of the Section and the appeal was filed thereafter, such appeal must be governed by the provisions of law as it existed at the time the appeal was actually filed and that the law as it existed before the filing of the appeal could not apply to the case. The assessee thereupon moved the High Court of Madhya Pradesh under Articles 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the Commissioner was bound to admit its appeal and had no jurisdiction or power to reject it on the ground that it had not been accompanied by any proof of payment of the tax assessed against the appellant as required under the amended proviso and the Board of Revenue and the High Court were in error in not directing the Commissioner to admit the appeal. 14) In the background of above facts, Hon'ble Apex Court, after considering various judgments, took a view that preexisting right of appeal is not destroyed by the amendment, if the amendment is not made retrospective by express words or necessary intendment. The fact that the preexisting right of appeal continues to exist must, in its turns, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the preexisting 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Section 26(6B) of the Act of 2002 came into force with effect from 15/4/2017. In that view of the matter and on relying on the law laid down as above, we find that 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. 16) In the case of Garikapatti Veeraya vs. N. Subbiah Choudhury (1957 AIR SC 540), once again issue of right of appeal came to be considered by the Hon'ble Apex Court wherein apart from the case of Messrs Hoosein Kasam Dada (India) Ltd., cited supra, various other judgments are considered and following principles are laid down : (i) The legal pursuit of a remedy, suit, appeal and second appealare 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 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 rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions 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 Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filing. 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 57CC of Central Excise Rules,1944; (iv) amount 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." 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 subsection (1) of Section 35, unless the appellant has deposited seven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (2) of this Section and subsection (2) of Section 85 passed under this Act or rules or notifications, shall lie, if the order is made by a Joint Commissioner or Additional Commissioner, Advance Ruling Authority or the Commissioner, to the Tribunal. As such, under Section 26(6) the appellate Authority or the Tribunal, as the case may be, may, while admitting the appeal, pending the disposal of the appeal, stay the order appealed against in full or part, subject to such conditions or restrictions as it may deem necessary including a direction for depositing of a part or whole of the disputed amount by the appellant. Thus, for filing appeal, there was no requirement to deposit any amount under subsection (6) of Section 26 as it then 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) ..... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trative directions for fulfilling recovery targets for the collection of revenue should not be at the expense of foreclosing remedies, which are available to assessees for challenging the correctness of a demand. The sanctity of the rule of law must be preserved. The remedies which are legitimately open in law to an assessee to challenge a demand cannot be allowed to be foreclosed by a hasty recourse to coercive powers. These are, we may say so with respect, sage observations, which must be borne in mind by the assessing authorities. Consistent with the parameters which were laid down by the Division Bench in KEC International and the observations in the judgment in Coca Cola India, we direct that the following guidelines should be borne 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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