TMI Blog2019 (11) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... PETITION NO. 2883 OF 2018 AND A.S. WRIT PETITION NO. 13754 OF 2018 - - - Dated:- 14-10-2019 - M.S. SANKLECHA AND NITIN JAMDAR, JJ. Vikram Nankani, Senior Advocate with Sandeep Ghaterao and Sachine Shintre i/b. N.V.Tapre for the Petitioner in WP No.2883/2018. Prakash Shah with Jas Sanghvi i/b. PDS Legal for the Petitioner in A.S.WP No.13754/2018. Ashutosh Kumbhakoni, Advocate General with S.B.Lolge, A Panel counsel, V.A. Sonpal, Special Counsel, Akshay Shinde, B Panel counsel, Jyoti Chavan, AGP and Shruti Vyas, AGP for the Respondents. P.C. : The petitioners are aggrieved by the refusal of registration of their appeals filed under the Maharashtra Value Added Tax Act since they have not deposited the ten per cent of the disputed amount now mandated under the amended provision of Section 26 of the Act. They have challenged the validity of the amended provisions and the legislative competence of the State. 2. The MVAT Act was brought into force with effect from 1 April 2005. The Act was to consolidate and amend the laws regarding levy and collection of tax on sale and purchase of certain goods in the State of Mahar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmendations of the Goods and Services Tax Council. Changes were carried out to the Lists in the Seventh Schedule to the Constitution, more particularly to entry 54 in the list II, which dealt with the right of the State government to levy a tax on goods. Earlier under the Entry No 54, the State Government could collect tax on sale or purchase of goods other than the newspaper. After the amendment, the entry relates only to the taxes on the sale of petroleum crude, high-speed petrol, natural gas and aviation turbine fuel and alcoholic liquor for human consumption. 4. Meanwhile, Section 26 of MVAT Act was amended by the State Legislature on 15 April 2017. Sub-section (6A), (6B) and (6C) of section 26 were added, which read as under: 26. Appeals:- .. .. .. .. .. .. .. .. (6A)No appeal against an order, passed on or after the commencement of the Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2017, shall be filed before the appellate authority in first appeal, unless it is accompanied by the proof of payment of an aggregate of the following amounts, as applicable,- (a) in case of an appeal against an order, in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the amount required to be deposited under clause (b) or, as the case may be, clause (c), shall not exceed rupees fifteen crores. Explanation .- For the purposes of clause (b) or clause (c) of sub-section (6B), the expression, balance amount of disputed tax shall mean an amount of disputed tax, which remains outstanding, after considering the amount paid, as directed by the appellate authority in first appeal under clause (b) or, as the case may be, clause (c), respectively of sub-section (6A). (6C) The appellate authority or, as the case may be, Tribunal shall stay the recovery of the remaining disputed dues, in the prescribed manner, on filing of an appeal under sub-section (6A) or, as the case may be, sub-section (6B). Thus a precondition for the deposit of the part amount was stipulated for filing an appeal. 5. The stipulation of deposit under the amended MVAT Act came up for consideration of the Division Bench of this court. The Maharashtra Sales Tax Tribunal, Nagpur had dismissed the appeal filed by one Anshul Impex Private Limited for not depositing ten percent of the disputed tax as required under the provision of section 26(6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders passed refusing to permit the filing of the appeals. By consent of the learned counsel appearing for the parties, we have taken up the present two petitions and have permitted the counsel for the petitioners in the other petitions to address us on the questions of law. The facts in the present petitions are that the Petitioners filed an appeal along with an application for a stay to the Appellate Authority. A communication was addressed by the Appellate Authority to the Petitioners referring to the amended section 26(6A) of the MVAT Act that unless payment, as specified under this section, is made, the appeal will not be entertained. Aggrieved, the Petitioners have approached this Court by way of the present petitions. 9. We have heard Mr. Vikram Nankani, Senior Advocate, Mr. Prakash Shah learned Advocate for the Petitioners and Mr. Ashutosh Kumbhakoni, learned Advocate General for the State, The learned counsel also submitted a compilation of documents and written submissions. 10. Broadly three issues have emerged from the submissions : (a) Whether the State of Maharashtra, after the 101st constitutional amendment dated 16 September 2016, has legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ints out that at least on twenty four occasions, after coming into force of the 101 constitutional amendment, the MVAT Act has been amended to cover all goods and most of the amendments are beneficial to the assessees and huge benefits have been taken. In short, the legislative competence of the State Legislature to make the impugned amendments can be referred to Article 246, 246A, and also to Article 323B of the Constitution which deals with tribunals. 12. On the Explanation, the petitioners contend there is no amendment to sub-sections 6A to 6C of Section 26, nor is subsection of Section 26 deleted or amended, and the explanation is only a case of legislative overruling. It is contended that legislative overruling is permissible only for curing any defect pointed out in a judicial decision. If the decision is not based on any defect but on a legal interpretation, there cannot be any legislative overruling. It is contended that the decision in Anshul Impex was not based on any defect or construction of the language of the 2017 amending provision. Thus the 2019 amendment, i.e. explanation, is invalid because it encroaches upon the powers of the judiciary seeking to overrul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Explanation. If it is held that the Explanation takes away the basis of the decision of the Anshul Impex retrospectively and clarifies that sub-sections 6A, 6B and 6C to section 26 will apply even for the assessment years before the amendment i.e. 15 April 2017, then the petitions will have to be dismissed. However, if it is held that the Explanation does not take away the basis of Anshul Impex, then the law laid down in Anshul Impex will have to be followed, and the Petitioners would be entitled to succeed. After hearing the parties for some time, a peculiar position has arisen because we are in prima facie agreement with the learned Advocate General on the issue of legislative competence and with the argument of the petitioner that the Explanation encroaches upon the powers of the judiciary as it seeks to overrule a decision with no legal basis. We are also in respectful disagreement with the view expressed in Anshul Impex. A question has arisen as to the position of the findings given on the above two issues if the matter is referred to the larger bench. The Counsel for the parties agree that even if findings are given regarding the two issues and the third issue is referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 disputed tax, d) in case of an appeal aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 12 stxa2.18 following terms : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal must also exist to support the continuation 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. 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 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eps 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 a substantive right. (iii) The institution of the suit carries with it the implication that all rights 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 a subsequent 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions 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 sub-section (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) ..... (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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in Nimbus Communications Ltd v. Commissioner of Sales Tax 2016 SCC OnLine Bom 6792; Division Bench of Allahabad High Court in the case of Ganesh Yadav v. Union of India 1 (All 2015 (320) ELT 71) Division Bench of this Court in Anant Mills Co. Ltd. v. State of Gujarat and Others 4(1975)2 SCC175, Constitution Bench in Seth Nand Lal and Another vs. State of Haryana and Others 1980 (Supp) SCC 574, Supreme court in Videocon International Limited v. Securities and Exchange Board of India (2015) 4 SCC 33. The law laid down in the above decisions is as follows. The right of appeal is a creature of the statute. Without a statutory provision creating such a right, the person aggrieved is not entitled to file an appeal. An appellate remedy is available in different packages. The right of appeal is a vested right, and the right of appeal accrues to a litigant as on and from the date on which the lis commences. Such a right is governed by the law which prevails on the date of institution of the suit or proceeding and not by the law that prevails at the date of the decision or on the date of filing an appeal. The legislature, while granting the right of appeal can impose conditions for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amendment and Validation) Act, 2017, shall be filed before the appellate authority in first appeal, unless it is accompanied by the proof of payment of an aggregate of the following amounts, as applicable. The words used in section 26(6A), in particular to the words on or after the commencement of the Maharashtra Tax Laws are important. The words on or after shall be filed unless it is accompanied can be treated as the express intention of the legislature to make the right of appeal conditional. The learned Advocate General has also argued that the condition imposed is not oppressive as upon deposit of ten percent of the amount a stay is automatically granted for the remaining ninety percent of the amount. According to the learned Advocate General, a balance is achieved by the compulsory deposit of ten per cent and automatic stay of ninety per cent of the amount disputed between the right of appeal and the interest of the State to raise revenue. Therefore though a vested right of appeal has accrued, the right is expressly made conditional and is not so oppressive that it takes nullifies the right of appeal. 21. The Learned counsel for the Petitioners could not disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the following questions of law for the opinion of the Larger Bench of this Court: (a) Whether the State of Maharashtra has legislative competence to enact the Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2017 and the Maharashtra Tax Laws (Amendment and Validation) Act, 2019 to amend the provisions of the Maharashtra Value Added Tax Act, 2002 to incorporate mandatory pre-deposit for filing appeals against the assessment orders pertaining to all the goods after 16 September 2016 that is post 101 Constitutional Amendment Act, 2016? (b) Whether Explanation to section 26 of the MVAT Act introduced with effect from 15 April 2017 by the Maharashtra Tax Laws (Amendment and Validation) Act, 2019 takes away the right of the assessee to file an appeal without statutory deposit in respect of orders passed for the assessment years prior to 15 April 2017 and whether the Explanation nullifies the decision of the Division Bench of this Court (Nagpur Bench) in the case of Anshul Impex Pvt. Ltd. v. State of Maharashtra in Sales Tax Appeal No.2/2018? (c) Whether the decision of the Division Bench in the case of Anshul Impex Pvt. Ltd. v. State of Maha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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