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TMI Blog2015 (11) TMI 959X X X X Extracts X X X X X X X X Extracts X X X X ..... ece of procedural legislation and does not fall within the realm of substantive law. Thus, Sections 35 and 35B do not confer an absolute right to file an appeal, but are subscribed or controlled by Section 35F of the Act. Hence, in the instant case, the right to file an appeal under Section 35 or 35B as the case may be is not an absolute right, but a conditional one. Right to file an appeal under Sections 35 and 35B of the Act is in no way affected by the amendment made to Section 35F of the Act requiring pre-deposit to be made at the time of preferring the appeal. Such a condition regarding pre-deposit is made with a view to regulate the exercise of the right of appeal so as to enforce the order appealed against in case the appeal is ultimately dismissed. - Section 35F of the Act has retrospective operation and is not restricted to only prospective cases. It applies to all lis which have commenced prior to or after the enforcement of the amendment, except to cases covered under the second proviso thereof. In view of the insertion of second proviso to amended Section 35F of the Act, it is held that the same is in the nature of a saving clause, keeping intact the earlier provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he pre-deposit is in violation of Articles 14, 19(1)(g) and 265 of the Constitution of India. Therefore, they have sought a declaration that Circular No.984/08/2014-CX issued by the Government of India, Ministry of Finance, Department of Revenue (Central Board of Excise and Customs) New Delhi, dated 16/9/2014 is ultra vires the Constitution of India and a similar Circular F.No.15/CESTAT/General/2013-14 dated 4/10/2014, is also assailed. A direction is also sought to enable the petitioners to file their appeals without monetary pre-deposit of 7.5%, as the lis in so far as petitioners are concerned commenced prior to 6/8/2014, which is the date on which the amendment has been enforced. Background facts: 4. Briefly stated, the facts in W.P.Nos.10559-560/2015, are that petitioner No.1 is a Government of India Company, registered with the Central Excise Department, engaged in the business of refining crude oil and marketing various petroleum products. Petitioners procure Motor Spirit, High Speed Diesel and Superior Kerosene Oil as well as Aviation Turbine Fuel. Petitioners have a terminal at Mangalore, which is a coordinator for requirements of the other companies such as, M/ s.Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such as maintenance, repairs of systems and also commissioning, installation of the same, as and when required by the customer and is registered with the Service Tax Department for payment of Service Tax in the categories of 'Management, Maintenance and Repair', Commercial Training or Coaching, Business Auxiliary Service, Business Support Service, Information Technology, Software Service, Transport of Goods by GTA with STC No.AAACC9862FST002. Petitioner has opted for registration as a Large Taxpayers Unit (LTU), in the year 2008. The audit of the accounts of the petitioner-company was conducted by the Commissioner of Large Taxpayers Unit, Bengaluru for the period from December 2006 to September 2009. Petitioner was asked to reverse certain Cenvat credits availed by it. Subsequently, a show-cause notice was issued on 30/9/2011 and a demand was made which was confirmed by the order-in-original bearing No.37/2013-ST (Commissioner), dated 26.2.2013/ 6.3.2013. Being aggrieved by that order, petitioner filed an appeal before CESTAT, Bengaluru. That authority after hearing the submissions of the petitioner has passed an order on 9/6/2014 in Order No.21335/2014. In the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made on behalf of the petitioners are as follows: a) Sri. Arun Kumar, along with Sri. Shivadass, learned counsel appearing for the petitioners, contended that amendment to Section 35F of the Act effected from 6/8/2014 adversely affects a substantive and vital right of appeal of the petitioners. Elaborating the said contention, it was submitted that Section 35F of the said Act as it stood prior to the amendment, had stipulated that, where an appeal was filed in respect of the demand made under the Act the appellant had to deposit with the appellate authority the duty demanded or the penalty levied. The proviso stipulated that the Commissioner (Appeals) or the Appellate Tribunal, as the case may be, could dispense with such deposit, subject to such conditions as the authority may deem fit to impose, so as to safeguard the interests of the revenue. Provided that, where such an application was filed for dispensing with the deposit of the duty demanded or penalty levied the same was to be decided within thirty days from the date of filing of the appeal. Therefore, discretion was given to the Appellate authority to dispense with the deposit of the duty demanded or penalty levied in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing right of appeal, which was vested with the petitioners has not destroyed by the amendment made to Section 35F of the Act. It was contended that the right of appeal from the decision of an inferior authority to a superior authority or Tribunal becomes vested in a party when proceedings are first initiated in, and before a decision is given by the inferior authority. c) With reference to Garikapati Veerayya v. N.Subbaiah Choudhry and others (AIR 1957 SC 540) (Garikapati Veerayya), it was submitted that the right of appeal is a vested right and such a right to enter the superior court or tribunal 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. That 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 on the date of its decision or on the date of filing of the appeal. d) Reliance was placed on State of Bombay v. Supreme General Films Exchange Ltd. (AIR 1960 SC 980) to contend that an impairment of the right of appeal by putting a new restriction thereon or imposing a more onerous con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to file an appeal, either before the Commissioner (Appeals) or before the Tribunal, as the case may be. Section 35B has not been amended. The right of appeal has remained intact and it has not been taken away by the impugned amendment. Section 35F only deals with the conditions to be complied with by an appellant in order that his appeal is entertained by the appellate authority. It is only those conditions which have been altered by the amendment. The conditions required to be complied with, by filing an appeal are not part and parcel of the right to file an appeal by an aggrieved party. It only regulates the filing of an appeal by an aggrieved party. The right to file an appeal is no doubt a substantive right, which has not been affected in the instant case. But the conditions to be complied with, in order that an appeal is entertained is a matter of procedure and there is no vested right in matters of procedure, was the submission. b) According to the Addl. Solicitor General, all that has been done by the impugned amendment is that discretion vested with the appellate authority to reduce or waive the mandatory deposit of entire duty demanded or penalty levied has been ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the second proviso of the amended section. It was also contended that the second proviso is declaratory in nature. That the presumption against retrospective operation is not applicable to declaratory statutes. That declaratory statutes or provisions are inacted for the purpose of removal of doubts. Also, the presumption against retrospectivity may be overcome not only by express words in the provision, but also by circumstances sufficiently strong to displace it. But for the second proviso, the amended Section 35F would not have applied to the appeals pending before the appellate authority, though filed prior to the date of amendment. e) Referring to Hoosein Kasam Dada, it was contended, that the said decision turned on its own facts and the amendment of the relevant provision considered in that case. The said judgment is not applicable to the present case as the provisions in the present case and that case are not in pari materia. It was submitted that reference made to other decisions of various High Courts by placing reliance on Hoosein Kasam Dada by petitioners' counsel was unnecessary and not binding and that this Court could come to an independent decision. It was, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the communication to him of such decision or order: Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days. (1A) The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal. (2) Every appeal under this section shall be in the prescribed form and shall be verified in the prescribed manner. b) Section 35B of the Act speaks about the circumstances under which an appeal is maintainable before an appellate tribunal, which reads as under: 35B. Appeals to the Appellate Tribunal.- (1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order- (a) a decision or order passed by the Commissioner of Central Excise as an ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmediately before the commencement of Section 47 of the Finance Act, 1984 (21 of 1984), before the Appellate Tribunal and any matter arising out of, or connected with, such appeal and which is so pending shall stand transferred on such commencement to the Central Government, and the Central Government shall deal with such appeal or matter under Section 35EE as if such appeal or matter were an application or a matter arising out of an application made to it under that section. (1B) (i) The Central Board of Excise and Customs constituted under the Central Boards, of Revenue Act, 1963 (54 of 1963) may by notification in the Official Gazette, constitute such Committees as may be necessary for the purposes of this Act. (ii) Every Committee constituted under clause (i) shall consist of two Chief Commissioners of Central Excise or two Commissioners of Central Excise, as the case may be. c) Section 35F deals with the deposit of duty demanded or duty and penalty levied at the time of filing an appeal and during the pendency of the appeal as it stood prior to the amendment. It reads as under: SECTION 35F. Deposit, pending appeal, of duty demanded or penalty levied. - W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the decision or order appealed against; (iii) against the decision or other referred to in clause (b) of subsection (1) of Section 35B, unless the appellant has deposited ten 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 or order appealed against: Provided that the amount required to be deposited under this section shall not exceed rupees ten crores: Provided further that the provisions of this section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No.2) Act, 2014. Explanation.- For the purposes of this section duty demanded shall include.- (i) amount determined under section 11D; (ii) amount of erroneous Cenvat credit taken; (iii) amount payable under rule 6 of the Cenvat Credit Rules, 2001 or the Cenvat Credit Rules, 2002 or the Cenvat Credit Rules, 2004. e) Subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tay application had been filed and was pending before the concerned Appellate Authority, then the amendment would not apply. That means, where, in respect of a lis, which has commenced prior to 6/8/2014, an appeal had been filed or a stay application was filed prior to the said date and pending before the appellate authority on 6/8/2014 the earlier provision would apply and the Appellate Authority would continue to have the discretion to deal with the application filed under the first proviso to Section 35F as it stood prior to 6/8/2014. But in respect of those cases, where the lis though commenced prior to 6/8/2014 and where the appeals had not been filed prior to that date, the amendment does not expressly say anything in that regard and is silent. Thus, the proviso declares that the amended provision would not apply to stay applications or appeals pending before the appellate authority, prior to commencement of the amendment. The intention of insertion of the second proviso has to be discerned. Is it the intention of the Parliament that Section 35F, as it stood prior to the amendment, would apply to only those cases where the stay applications and appeals filed prior to 6/8/2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a lis. b) But in Ganga Bai v. Vijay Kumar [(1974) 2 SCC 393] (Ganga Bai), it has been held as under:- There is a basic distinction between the right of suit and the right of appeal. There is an inherent right in every person to bring a suit of civil nature and unless the suit is barred by statute one may, at one's peril, bring a suit of one's choice. It is no answer to a suit, howsoever frivolous to claim, that the law confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite the opposite. The right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute. c) In this context, reference could also be made to a later judgment of the Hon'ble Supreme Court in James Joseph Vs. State of Kerala [(2010) 9 SCC 642], wherein the Hon'ble Supreme Court has formulated the following principles with reference to appeals. (i) An appeal is a proceeding where an higher forum reconsiders the decision of a l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 35F of the Act, with which we are concerned in this case. e) However, the contention of the learned counsel for the petitioners was that any change with regard to the conditions for filing of an appeal, which would adversely affect a potential appellant, in substance, affects the vested right to file an appeal. This contention was countered by learned Addl. Solicitor General by contending that conditions stipulated for filing an appeal have no nexus to the right to file an appeal. That in the instant case, all that has been done is to mandatorily deposit 7.5% of duty demanded or penalty levied at the time of filing an appeal and the discretion vested with the Tribunal or appellate authority with regard to pre-deposit has been taken away. Re: Hoosein Kasam Dada: 19. Learned counsel for the petitioners placed reliance on Hoosein Kasam Dada to buttress the submission that the pre-existent right to file an appeal under the earlier provision has not been destroyed by the amendment as the right of appeal from the decision of an inferior Tribunal to the superior Tribunal becomes vested in a party when proceedings are first initiated in, and before a decision is given by the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in not directing the Commissioner to admit the appeal, was the contention of the appellant therein, before the Hon'ble Supreme Court. b) In order to understand that contention, it would be necessary to narrate the relevant facts of the said case. The appellant therein had submitted sales tax return on 28/11/1947. Notice was issued to the assessee to produce evidence in support of the said return. Not being satisfied by the inspection of the account books as per the correctness of the return, the Sales Tax Officer was of the opinion that the taxable turnover exceeded ₹ 2.00 lakh and submitted the case to the Assistant Commissioner of Sales Tax for assessment. The Assistant Commissioner heard the matter from 9/6/1949 and on 8/4/1950 made a best judgment assessment. Being aggrieved by the order of assessment, the assessee on 10/5/1950 perferred an appeal to the Sales Tax Commissioner, Madhya Pradesh, under sub-section (1) of Section 22 of the aforesaid 1947 Act. The appeal, not having been accompanied by any proof of tax in respect of which the appeal had been preferred, the authorities declined to admit the appeal. The assessee moved the Board of Revenue, Madhya Pradesh, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. The fact that the pre-existing right of appeal continued to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continued 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 be no question of the amended provision preventing the exercise of that right. e) According to the Hon'ble Supreme Court, the argument that the authority had 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 sub-section (1) of Section 22 of the 1947 Act, overlooked the fact of existence of the old law for the purpose of supporting the pre-existing right and really amounted to begging the question. According to the apex Court, the amended proviso was wholly inapplicable in such a situation and the jurisdiction of the authority had to be exercised under the old law which continued to exist. It was held that the appeal should not have been rejected on the ground that it was not accompa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommenced prior to the amendment, the dictum in Hoosein Kasam Dada would not apply, was the view of the Hon'ble Supreme Court. 20. In light of the submissions made by the respective parties and keeping in mind the amendment in question, the applicability of the principle stated in Hoosein Kasam Dada to the present case shall be considered. But before that, it is necessary to consider and answer point No.1. Re: Point No.1: Distinction between substantive law and procedural law: 21. At this stage, it would be useful to distinguish between substantive law from the law of procedure as it has been persistently contended by the learned counsel for petitioners that the right to file an appeal is a substantive right and that right cannot be altered with retrospective effect when it has already vested with the parties on the date the lis commenced. Also when conditions with regard to filing an appeal are altered, it would affect the right to file an appeal, which is a substantive right. The aforesaid distinction has been enunciated by the Hon'ble Supreme Court in its later judgments and have a bearing on point No.1. a) The meanings of substantive law and procedural law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble Supreme Court in the context of substantive and procedural law has laid down the ambit and scope of an amending Act and its retrospective operation in the following terms: (i) A statute which affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application, should not be given an extended meaning and should be strictly confined to its clearly-defined limits. (ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal even though remedial is substantive in nature. (iii) Every litigant has a vested right in substantive law but no such right exists in procedural law. (iv) A procedural statute should not generally speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished. (v) A statute which not only changes the procedure but also creat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration. Chapter VIA of the Act deals with appeals. The right to file an appeal to the Commissioner (Appeals) or to the Appellate Tribunal against any order of a lower authority is prescribed in Sections 35 and 35B, respectively. The procedure to be followed by the Appellate Tribunal is stipulated in Sections 35C and 35D. Section 35EE provides for revision by the Central Government in certain cases. The provisions dealing with the right to file an appeal i.e., Sections 35 and 35B and the right to file a revision under Section 35EE are, though dealing with the right to seeking redressal of an impugned decision or order from the superior authority or forum, is in fact, a piece of substantive law. Thus, the right to file an appeal and the forum prescribed to lay an appeal are substantive rights given to an aggrieved person. 24. However, the right to file an appeal must be distinguished from the procedure necessarily to be followed while exercising the right to file an appeal. Sections 35A, 35C and 35D of the Act deal with the procedures to be followed by the Commissioner (Appeals) or the Appellate Tribunal while considering an appeal filed by an aggrieved party. But the condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Supreme Court held that the requirement about the deposit of the amount claimed as a condition precedent to the entertainment of the appeal which seeks to challenge the imposition or the quantum of tax, did not have the effect of nullifying the right of appeal, especially keeping in view the fact that discretion was vested in the appellate judge to dispense with compliance of the above requirement. All that the statutory provision sought to do was to regulate the exercise of the right of appeal. The object being, to balance the right of appeal, which is conferred upon all persons who are aggrieved against the determination of tax or rateable value and the right of the corporation to speedy recovery of the tax. Hence, it was held that such a provision was not offensive to Article 14 of the Constitution. It was held that the right of appeal being creature of a statute without a statutory provision creating such a right, an aggrieved person is not entitled to file an appeal. It was also observed that the legislature while granting the right of appeal could impose conditions for the exercise of such right. For example, it was permissible to prescribe a condition in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the appeal, failing which, the Appellate Tribunal was competent to reject the appeal. The proviso to Section 129-E of Customs Act, 1962 as it stood prior to its amendment made under 2014 Act, gave power to the Appellate Authority to dispense with such deposit unconditionally or subject to such conditions, in case of undue hardship as was the proviso prior to the amendment in the instant case. The Hon'ble Supreme Court held that the observations made in Hossen Kasam Dada and Vittal Bhai Narang Bhai Patel, had no application as the right to file an appeal was granted with a condition in Section 129-E of the Customs Act, 1962 and the Parliament in its wisdom had imposed the condition. The Hon'ble Supreme Court also held that the right to file an appeal is a statutory right and it can be circumscribed by the conditions in the grant. It was also held that the right to file an appeal under Section 129-A of the Customs Act, 1962 was circumscribed or controlled by Section 129-E of the Act and that right was with a condition and thus, a conditional right and not an absolute right. The aforesaid provisions are in pari materia with the provisions under consideration. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed of on merits after hearing both sides. f) The expression shall not entertain an appeal as inserted Section 35F of the Act is of significance. In Lakshmi Ratan Engineering works Limited vs. CST (AIR 1968 SC 488), while interpreting the word entertain under Section 39(5) of the Haryana General Sales Tax Act, 1953, it was held that the dictionary meaning of the word entertain was to deal with or admit to consideration . Then the question arose as to at what stage could the appeal be said to be entertained for the purpose of the application of Section 39(5) of the aforesaid Act. Is it entertained when it is filed or it is 'entertained' when it is admitted and the date is fixed for hearing or is it finally 'entertained' when it is heard and disposed of? After distinguishing the word entertain from the words file or receive , it was held that the correct view of the word entertain , was admit to consideration. This would be when the case is taken up by the court for the first time also or the first occasion on which the court takes up the matter for consideration. It may be at the admission stage or if by the rules of the Tribunal the appeals ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight of judgments of the Hon'ble Supreme Court subsequent to Hoosein Kasam Dada, it is held that Section 35F of the Act is not in the realm of right to file an appeal and thus, not a piece of substantive law. It is a condition to be complied with by an aggrieved party while instituting an appeal, which is in the realm of procedure. As held by the Hon'ble Supreme Court in subsequent decisions, a party does not have a vested right in procedural matters. 27. Thus, what emerges from the aforesaid judicial dicta is the fact that a requirement regarding deposit of amount as a condition precedent to the entertainment of appeal is a means of regulating the exercise of right of appeal. The Parliament while granting the right of appeal could also impose conditions to exercise such a right so long as the conditions are reasonable. In the instant case, Section 35F also uses the expression shall not entertain any appeal .. unless the appellant has deposited 7.5% of duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute . . It is held that the requirement of deposit of 7.5% as stated supra, is not an onerous condition precedent for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw with respect to subjects enumerated in the three lists of VII Schedule of the Constitution carries with it the power to amend or repeal a law on those subjects. An Act or a provision in an Act may be repealed by a later, distinct and repealing enactment or provision as the case may be, which could be inconsistent with the existing Act or provision. A repeal of a provision may be by express words in a later enactment made by way of an amendment or, may be implied on considerations of inconsistency or irreconcilability of an earlier provision with those of a later provision. Normally, there is no real distinction between repeal and amendment. The legislative practice in India is that when a provision is omitted from the statute book, it is a case of repeal. But there can be a repeal by way of an amendment of the existing provision and the said provision being replaced by enactment of a new provision. Substitution of a provision results in repeal of the earlier provision by a new provision. Substitution combines both repeal and fresh enactment. Thus, when an existing provision is substituted by a fresh enactment, it is a case of express repeal. c) In Government of India v. India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mending Act at all. f) 'Commencement', used with reference to an Act, means the day on which an Act comes into force. Unless provided otherwise, a Central Act comes into operation on the day it receives the Presidential assent and is construed as coming into operation immediately on the expiration of the day preceding its commencement - Section 5 of General Clauses Act, 1897. In Zile Singh the Hon'ble Supreme Court has at paragraphs 13 and 15 opined as under: 13. It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have a retrospective operation. But the rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair existing obligations. Unless there are words in the statute sufficient to show the intention of the Legislature to affect existing rights, it is deemed to be prospective only 'nova constitutio futuris formam imponere debet non praeteritis ' - a new law ought to regulate what is to follow not the past. (See :Principles of Statutory Interpretation by Justice G.P.Singh, Ninth Edition, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner prescribed for the time being by or for the Court in which the case is pending, and if, by an Act of Parliament the mode of procedure is altered, he has no other right than to proceed according to the altered mode . h) Thus, in deciding the question of applicability of a particular statute to past events, the language used is a crucial factor to be taken into account; but it cannot be stated as an inflexible rule. The real issue in each case is as to the dominant intention of the Legislature to be gathered from the language used, the object indicated, the nature of rights affected, and the circumstances under which the statute is passed. i) In view of the aforesaid principles regarding statutory interpretation, the amended Section 35F would have to be interpreted in light of the submissions made by learned counsel for the respective parties. In the earlier part of this order, the changes brought about by the amendment to Section 35F have been noted. The contention of learned counsel for the petitioners is that the said amendment does not have a retrospective operation and therefore, cannot be applied to a lis, which has commenced prior to the date on which the amendment c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... normally, a proviso does not travel beyond the provision to which it is a proviso. A proviso carves out an exception to the main provision to which it has been enacted as a proviso and to no other. However, if a proviso in a statute does not form part of a section but is itself enacted as a separate section, then it becomes necessary to determine as to which section the proviso is enacted as an exception or qualification. Sometimes, a proviso is used as a guide to construction of the main section. Thirdly, when there are two possible construction of words to be found in the section, the proviso could be looked into to interpret the main section. However, when the main provision is clear, it cannot be watered down by the proviso. Thus, where the main section is not clear, the proviso can be looked into to ascertain the meaning and scope of the main provision. c) The proviso should not be so construed as to make it redundant. In certain cases, the legislative device of the exclusion is adopted only to exclude a part from the whole, which, but for the exclusion, continues to be a part of it , and words of exclusion are presumed to have some meaning and are not readily recognized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dattatraya Govind Mahajan and Others v. The State of Maharashtra and another [AIR 1977 SC 915], a Constitution Bench of the Apex Court, while considering the amendment made to Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961, in the context of Article 31B of the Constitution and the second proviso thereto, reiterated what was stated in Ishverlal's case, supra. (e) In S.Sundaram Pillai, etc, v. V.R.Pattabiraman [AIR 1985 SC 582], while dealing with the scope of a proviso and explanation to sub-section (2) of Section 10 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, the Hon'ble Supreme Court held that a proviso may have three separate functions. Normally, a proviso is meant to be an exception to something within the main enactment or qualifying some thing enacted therein which, but for the proviso, would be within the purview of the enactment. In other words, a proviso cannot be torn apart from the main enactment, nor can it be used to nullify or set at naught the real object of the main enactment. Sometimes, a proviso may exceptionally have the effect of a substantive enactment. After referring to several legal treatises and judgments, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 35F is a piece of procedural law, as has been held above. There is no vested right available to any party in matters of procedure. The changes brought about by amendment made to Section 35F are noted in paragraph Nos. 15 and 17 above. The object of amending Section 35F of the Act is to withdraw the discretion granted to the appellate authorities in the matter of making pre-deposit at the time of filing the appeal by an aggrieved party. As submitted by Additional Solicitor General, there has been innumerable litigations under the first proviso to Section 35F as it stood prior to amendment. Any order passed by the appellate authority regarding the hardship pleaded by the appellant with regard to predeposit, who sought dispensation of such deposit would be a subject matter of further litigation and until that aspect was settled finally, the main appeal would not be taken up for hearing. As a result, there would be considerable delay in disposing of the appeal by the appellate authorities. Parliament must have thought that discretion vested with the appellate authorities with regard to dispensation of deposit to be made by an aggrieved appellant at the time of filing the appeal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty and the application and appeal were pending before the appellate authority, then the appellate authority could exercise its discretion with regard to the pre-deposit to be made by such a party under the provision as it stood prior to amendment. But if no appeal had been filed prior to 6/8/2014, then the amended Section 35F would apply although the lis had commenced prior to 6/8/2014 as the amendment has a retrospective effect. The amendment, thus, has no bearing on the date on which the particular lis had commenced. This is for the obvious reason that in each case, the lis would commence on a different date. But the commencement of the amendment must be certain and from a particular date in respect of all lis. In order to ensure that object and in order to have a uniformity in the matter, Parliament has enacted the second proviso to the amended Section 35F. This would mean that in all cases not covered under the second proviso, the main amended Section 35F would apply, irrespective as to when the lis has commenced. Thus, the date on which the lis has commenced in each case has no bearing on the amendment as it has a retrospective effect. Even if the lis had commenced prior to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein the right to file an appeal from a Supreme Court of Australia to the Privy Council given by the Order in Council of 1860 was taken away and the only appeal therefrom was directed to lie to the High Court of Australia. In that case, it was in fact held, to deprive a suitor in a pending action of an appeal to a superior tribunal, which belonged to him as of right, is a very different thing, from regulating procedure. It was held that there was no difference between abolishing an appeal altogether and transferring the appeal to the new tribunal. In either case, there is an interference with existing rights, which was contrary to the well-known general principle. Also statutes are not to be held to act retrospectively, unless a clear intention to that effect is manifested. The matter in the aforesaid case was in the realm of substantive law concerning the right to file an appeal and the available forum and not in the realm of procedural law as in the instant case. c) Similarly, in Garikapati Veerayya, when a suit was instituted on 22/4/1949 it was held that the right of appeal vested in the parties thereto on that date and was to be governed by the law as it prevailed on that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecisions are not applicable to these cases in view of the second proviso in Section 35F of the Act. In Allied motors (P) Ltd. v. Commissioner of Income Tax, Delhi (supra), it has been held that a proviso, is inserted to remedy unintended consequences and to make the provision workable. A proviso has to be read into the section to give it a reasonable interpretation when the section requires to be treated as retrospective in operation so that the reasonable interpretation can be given to the section as a whole. In M/s. National Traders v. State of Karnataka [2008 (64) KLJ 225 (SC)], it was held that the requirement of the assessee to make prior payment of one half of tax or other amount disputed and to produce proof of having made payment while filing appeal was a condition, which was restrictive and impaired the right of filing an appeal and in those circumstances, it was held to be prospective and not retrospective in operation. The aforesaid decision is also not applicable to the present present case having regard to the nature of Section 35F of the Act amended in the instant case and the requisite amount to be deposited as a pre-deposit. e) The judgments of the High Court of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t restricted to only prospective cases. It applies to all lis which have commenced prior to or after the enforcement of the amendment, except to cases covered under the second proviso thereof. (4) That in view of the insertion of second proviso to amended Section 35F of the Act, it is held that the same is in the nature of a saving clause, keeping intact the earlier provision of Section 35F to be made applicable to circumstances noted under the second proviso. That in all other cases not covered under the second proviso, the amended Section 35F is applicable as it has a retrospective operation. Such a legislation by amendment having a retrospective operation is a valid piece of legislation. (5) It is reiterated that the second proviso in amended Section 35F is significant, which was absent in the provisions considered in Hoosien Kasam Dada and Garikapati Veerayya. The provisions of law considered by the Hon'ble Supreme Court in the aforesaid cases being not in pari materia to Section 35F of the Act under consideration and in view of the later judgments of the Hon'ble Supreme Court it is held that the ratio of those decisions are not applicable to the present case. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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