1999 (11) TMI 834 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the Tamil Nadu General Sales Tax (Fourth Amendment) Act, 1999 (Act 14 of 1999).
2. Exigibility to tax under section 3A of the Tamil Nadu General Sales Tax Act, 1959.
3. Validity of the second proviso to section 31 of the Tamil Nadu General Sales Tax Act.
4. Requirement of 25% of admitted tax before entertaining an appeal under section 31 of the Tamil Nadu General Sales Tax Act.
5. Retrospective operation of Tamil Nadu Act 14 of 1999.

Detailed Analysis:

1. Validity of the Tamil Nadu General Sales Tax (Fourth Amendment) Act, 1999 (Act 14 of 1999):
The primary issue in these petitions is the challenge to the validity of the Tamil Nadu General Sales Tax (Fourth Amendment) Act, 1999 (Act 14 of 1999). The petitioners, comprising outdoor advertising agencies and others, sought to declare the Act as unconstitutional and ultra vires. However, the Tribunal noted that no serious attempts were made to invalidate the amendment during arguments, as numerous decisions have upheld the imposition of conditions for entertaining appeals.

2. Exigibility to Tax under Section 3A of the Tamil Nadu General Sales Tax Act, 1959:
The petitions also contained averments regarding the exigibility to tax under section 3A of the Tamil Nadu General Sales Tax Act, 1959. The Tribunal mentioned that the correctness of section 3A had already been decided in favor of the Revenue in previous decisions, and no new arguments were advanced in this regard.

3. Validity of the Second Proviso to Section 31 of the Tamil Nadu General Sales Tax Act:
The petitioners questioned the second proviso to section 31, which requires satisfactory proof of payment of the tax admitted by the appellant before filing an appeal. However, no arguments were advanced on this issue during the proceedings.

4. Requirement of 25% of Admitted Tax Before Entertaining an Appeal under Section 31 of the Tamil Nadu General Sales Tax Act:
Petitioners sought to quash orders that refused to waive the payment of 25% of admitted tax before entertaining appeals. The Tribunal noted that the Tamil Nadu Act 14 of 1999 introduced amendments requiring 25% of the difference of the tax assessed and the tax admitted by the appellant to be paid before an appeal is entertained. The Tribunal upheld the validity of this requirement, noting that such conditions for entertaining appeals have been upheld in numerous decisions.

5. Retrospective Operation of Tamil Nadu Act 14 of 1999:
The main contention during arguments was the retrospective operation of the Act. The Tribunal noted that the enactment was prospective and did not have retrospective effect. The Tribunal discussed the well-established principle that the right to appeal is a substantive right that becomes vested when the lis commences. The Tribunal reviewed several decisions to determine when the right of appeal vests in a party, concluding that the right vests on the date of filing the return or the date on which the return is due, whichever is earlier.

Conclusion:
The Tribunal upheld the validity of Tamil Nadu Act 14 of 1999 but provided specific directions regarding its prospective nature. The Act cannot apply to assessment proceedings relating to returns filed or due before the enactment date. Appeals concerning such assessments must follow the law as it existed before June 14, 1999. The original petitions were disposed of in accordance with these directions.