2022 (3) TMI 1315 - CALCUTTA HIGH COURT

Mandatory pre-deposit - Vires of the second proviso to Section 84 (1) of West Bengal Value Added Tax Act, 2003 - right to appeal - fundamental rights guaranteed under Article 19(1)(g) - insistence of protection of payment of 15% of the disputed tax as stipulated in the second proviso to Section 84(1) of the Act infringes/abrogates the vested right of appeal under Section 84(1), when such right accrues to a dealer on the date of filing the return - compulsory extraction of “tax” before the same becomes due and payable - second proviso to Section 84(1) infringes Article 14 of the Constitution of India - right of appeal conferred under Section 84(1) can be construed as an absolute right - effect of substitution of second proviso to Section 84(1) of the West Bengal Finance Act, 2015 - alleged hardship of a dealer would be a relevant consideration while considering the vires of a statutory provision or not.

HELD THAT:- Section 84(1) of the Act provides for an appellate remedy to an aggrieved dealer. The said provision is a substantive law, which confers a right on an aggrieved dealer. The provisos contained in sub-section (1) of Section 84 regulate the procedure for exercising such right of appeal. The first proviso to Section 84(1) deals with procedural aspects in respect of an appeal in which the dispute is in excess of rupees twenty lakh and the authority, which will be disposing of such appeal as may be constituted by the Commissioner. The second proviso deals with the procedure to be adopted by the aggrieved dealer in cases where appeals are preferred on or after the 1st day of April, 2015 - if the right of appeal as provided under Section 84(1) could be entertained upon compliance of certain conditions by the aggrieved dealer at the time of preferring an appeal, which would be a provision in the realm of procedural law. It can be further clarified by observing that Section 84(1) of the Act provides for the authority before whom the appeal can be preferred and the circumstances under which the dealer could exercise such right and the conditions to be followed by the dealer for availing such right are stipulated in the proviso, which are procedural in nature. Thus, the appellants cannot be heard to say that they have a vested right in a procedural law.

For entertaining an appeal under Section 84(1), the dealer is required to produce proof of payment of 15% of the disputed tax in terms of the procedure prescribed in Clause (b) of second proviso to Section 84(1). It cannot be disputed by the appellants that on and after the order of assessment is passed and the tax is quantified the liability accrues. Mere filing of an appeal does not suspend the liability so determined. The liability would subsist until it is set aside or modified. Therefore, to state that the 15% is a compulsory extraction, is incorrect, as it is only a measure or quantification for the appeal being entertained - the second proviso to Section 84(1) is neither discriminatory nor violative of Article 14 of the Constitution of India and accordingly.

The tests which are to be applied to test the constitutional validity of a substantive law is not required to be applied to the cases on hand as we have conclusively held that the provisos to Section 84(1) are procedural.

The constitutional validity of the second proviso to Section 84(1) is upheld. In cases where the appellants have prayed for consequential relief in the writ petitions by challenging show-cause notices or assessment orders, liberty is granted to such of those appellants to file the reply to the show-cause notices within 30 days from the date of receipt of the server copy of this judgment and order after which the concerned assessing authority shall proceed with the matter in accordance with law - Appeal dismissed.