1953 (2) TMI 35 - SC - VAT and Sales Tax

CHANGE OF LAW RIGHT TO APPEAL ON PAYMENT OF TAX ADMITTED TO BE DUE - INITIATION OF ASSESSMENT PROCEEDINGS BEFORE AMENDMENT BUT COMPLETION OF ASSESSMENT AFTER AMENDMENT

Summary

Issues Involved:
1. Applicability of the amended Section 22(1) of the Central Provinces and Berar Sales Tax Act, 1947.
2. Retrospective application of legislative amendments.
3. Vested right of appeal and its alteration by subsequent amendments.

Detailed Analysis:

1. Applicability of the amended Section 22(1) of the Central Provinces and Berar Sales Tax Act, 1947:
The primary issue in this case was whether the amended proviso to Section 22(1) of the Act, which required an appeal to be accompanied by satisfactory proof of payment of the assessed tax, applied to appeals from assessment orders made before the amendment. The original Section 22(1) allowed an aggrieved assessee to appeal without such a requirement, provided they admitted the due amount. The appellant contended that since the amendment was not retrospective, their right to appeal under the original section remained unaffected.

2. Retrospective application of legislative amendments:
The Court examined whether the amendment to Section 22(1) could be applied retrospectively to affect the appellant's right of appeal. The judgment referenced the principle established in Colonial Sugar Refining Co., Ltd. v. Irving, which held that a right of appeal is a substantive right vested in a party from the commencement of the action in the Court of first instance. This right cannot be taken away unless explicitly stated by the amendment or implied necessarily.

3. Vested right of appeal and its alteration by subsequent amendments:
The judgment emphasized that the right of appeal is not merely procedural but a substantive right. The Court cited several precedents, including Nana bin Aba v. Sheku bin Andu and Delhi Cloth and General Mills Co. Ltd. v. Income Tax Commissioner, Delhi, to support the view that an existing right of appeal cannot be impaired by subsequent amendments unless clearly intended by the legislature. The Court concluded that the amended Section 22(1) imposed a substantial restriction on the appellant's right of appeal, which was not permissible without express retrospective effect.

Conclusion:
The Court held that the appellant's appeal should not have been rejected for lack of proof of payment of the assessed tax, as the right of appeal under the original Section 22(1) was vested and unaffected by the subsequent amendment. The appeal was allowed, and the Sales Tax Commissioner was directed to admit the appeal and decide it in accordance with the law. The appellant was awarded the costs of the appeal.