2023 (3) TMI 227 - HC - VAT and Sales Tax

Demand of additional demand - tax disputes relating to the period before amendment in Section 33 of the HVAT Act - right of appeal - vested right or not - HELD THAT - Learned counsel for the State has referred to a Division Bench judgment of this Court in KHAZAN CHAND NATHI RAM VERSUS STATE OF HARYANA AND OTHERS (AND OTHER CASES) 2004 (3) TMI 720 - PUNJAB AND HARYANA HIGH COURT wherein it has been held that the right of appeal is a vested right and it will exist on the date of commencement of lis - The lis can be said to commence under the Haryana General Sales Tax Act (HGST) on the date when return is filed or is required to be filed. Therefore the provisions of Section 39(5) of the HGST Act would continue to govern the right of appeal vested in the petitioners which is saved in terms of Section 4 of the Punjab General Clauses Act (As applicable to State of Haryana). A perusal of the judgment of Khazan Chand Nathi Ram's case further shows that this Court had examined Section 61(2) of the Haryana Vat Act 2003 and concluded that Section 61(2) of the Haryana Vat Act does not give any retrospective effect to the provisions of the aforesaid Act either expressly or by necessary implication. Section 61(2) of the HVAT Act contemplates transfer of pending proceedings pertaining to application, appeal, revision or other proceedings to the authorities constituted under the HVAT Act and it is to be disposed of by the authorities so constituted. Appeal dismissed.

Issues:
1. Appeal against assessment orders for the assessment year 2001-02.
2. Rejection of applications for stay of recovery proceedings.
3. Ex-parte orders by the Haryana Tax Tribunal.
4. Dismissal of review petitions.
5. Interpretation of Section 33 of the Haryana Vat Act.
6. Right of appeal as a vested right.
7. Commencement of lis under the Haryana General Sales Tax Act.
8. Applicability of previous judgments on tax disputes.

1. Appeal against assessment orders for the assessment year 2001-02:
The appellant, a company engaged in manufacturing and trading, appealed against assessment orders dated 30.03.2006, creating additional demands under the Haryana General Sales Tax Act, 1973, and the Central Sales Tax Act, 1956. The appellate authority rejected applications for stay of recovery proceedings and directed the appellant to pay the additional demand. Subsequent appeals and review petitions were filed against these orders.

2. Rejection of applications for stay of recovery proceedings:
The appellate authority rejected the appellant's applications for stay of recovery proceedings and directed payment of the additional demand in installments. This decision led to further appeals and review petitions by the appellant.

3. Ex-parte orders by the Haryana Tax Tribunal:
The Haryana Tax Tribunal passed ex-parte orders directing the appellant to make payments within a specified period. Review petitions were filed against these orders, leading to a series of dismissals and subsequent re-admissions by the Tribunal.

4. Dismissal of review petitions:
Despite multiple attempts by the appellant to challenge the Tribunal's orders through review petitions, these petitions were eventually dismissed, leading to the filing of the present appeal.

5. Interpretation of Section 33 of the Haryana Vat Act:
The appellant cited precedents to argue that tax disputes before the amendment in Section 33 of the Haryana Vat Act did not require pre-payment of the disputed demand for appeal consideration. However, the State referred to a Division Bench judgment emphasizing the vested right of appeal and the commencement of lis under the Haryana General Sales Tax Act.

6. Right of appeal as a vested right:
The court emphasized the vested right of appeal, stating that it accrues to the litigant from the date the lis commences. The right of appeal is governed by the law prevailing at the institution of the suit or proceeding, not at the time of the decision or appeal filing.

7. Commencement of lis under the Haryana General Sales Tax Act:
The court analyzed when the lis commences under taxation laws, highlighting the duty of an assessee to file returns and deposit tax. The cause of action arises when returns are required to be filed or when an assessee fails to furnish returns, as per the provisions of the old Act.

8. Applicability of previous judgments on tax disputes:
The court dismissed the applicability of judgments cited by the appellant, emphasizing a Division Bench judgment that held the right of appeal as a vested right and the commencement of lis under the Haryana General Sales Tax Act. Consequently, the appeal was dismissed based on this interpretation.

In conclusion, the judgment addressed various issues related to appeal against assessment orders, rejection of stay applications, ex-parte orders by the Tribunal, dismissal of review petitions, interpretation of relevant legal provisions, and the right of appeal as a vested right under the taxation laws. The court's analysis focused on the commencement of lis, the requirement of pre-payment for appeal consideration, and the applicability of previous judgments in tax disputes, ultimately leading to the dismissal of the appeal based on the Division Bench judgment's interpretation.

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