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TMI Blog2019 (11) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... o place the questions of law for the opinion of the Larger Bench of this Court. Place the petitions on board after 12 weeks under the caption for directions. X X X X Extracts X X X X X X X X Extracts X X X X ..... ndations of the Goods and Services Tax Council. Changes were carried out to the Lists in the Seventh Schedule to the Constitution, more particularly to entry 54 in the list II, which dealt with the right of the State government to levy a tax on goods. Earlier under the Entry No 54, the State Government could collect tax on sale or purchase of goods other than the newspaper. After the amendment, the entry relates only to the taxes on the sale of petroleum crude, high-speed petrol, natural gas and aviation turbine fuel and alcoholic liquor for human consumption. 4. Meanwhile, Section 26 of MVAT Act was amended by the State Legislature on 15 April 2017. Sub-section (6A), (6B) and (6C) of section 26 were added, which read as under: "26. Appeals:- ….. ….. ….. ….. ….. ….. ….. ….. (6A)No appeal against an order, passed on or after the commencement of the Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2017, shall be filed before the appellate authority in first appeal, unless it is accompanied by the proof of payment of an aggregate of the following amounts, as applicable,- (a) in case of an appeal against an orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use (c), shall not exceed rupees fifteen crores. Explanation.- For the purposes of clause (b) or clause (c) of sub-section (6B), the expression, "balance amount of disputed tax" shall mean an amount of disputed tax, which remains outstanding, after considering the amount paid, as directed by the appellate authority in first appeal under clause (b) or, as the case may be, clause (c), respectively of sub-section (6A). (6C) The appellate authority or, as the case may be, Tribunal shall stay the recovery of the remaining disputed dues, in the prescribed manner, on filing of an appeal under sub-section (6A) or, as the case may be, sub-section (6B)." Thus a precondition for the deposit of the part amount was stipulated for filing an appeal. 5. The stipulation of deposit under the amended MVAT Act came up for consideration of the Division Bench of this court. The Maharashtra Sales Tax Tribunal, Nagpur had dismissed the appeal filed by one Anshul Impex Private Limited for not depositing ten percent of the disputed tax as required under the provision of section 26(6B)(b) of the MVAT Act. Anshul Impex Private Limited filed a Sales Tax Appeal No.2/2018 at the Nagpur Bench of this Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the petitioners in the other petitions to address us on the questions of law. The facts in the present petitions are that the Petitioners filed an appeal along with an application for a stay to the Appellate Authority. A communication was addressed by the Appellate Authority to the Petitioners referring to the amended section 26(6A) of the MVAT Act that unless payment, as specified under this section, is made, the appeal will not be entertained. Aggrieved, the Petitioners have approached this Court by way of the present petitions. 9. We have heard Mr. Vikram Nankani, Senior Advocate, Mr. Prakash Shah learned Advocate for the Petitioners and Mr. Ashutosh Kumbhakoni, learned Advocate General for the State, The learned counsel also submitted a compilation of documents and written submissions. 10. Broadly three issues have emerged from the submissions : (a) Whether the State of Maharashtra, after the 101st constitutional amendment dated 16 September 2016, has legislative competence to amend the MVAT Act to enact the mandatory condition of pre-deposit of the disputed amount for filing appeal regarding the goods; (b) Whether the explanation to section 26 of the MVAT Act null ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en taken. In short, the legislative competence of the State Legislature to make the impugned amendments can be referred to Article 246, 246A, and also to Article 323B of the Constitution which deals with tribunals. 12. On the Explanation, the petitioners contend there is no amendment to sub-sections 6A to 6C of Section 26, nor is subsection of Section 26 deleted or amended, and the explanation is only a case of legislative overruling. It is contended that legislative overruling is permissible only for curing any defect pointed out in a judicial decision. If the decision is not based on any defect but on a legal interpretation, there cannot be any legislative overruling. It is contended that the decision in Anshul Impex was not based on any defect or construction of the language of the 2017 amending provision. Thus the 2019 amendment, i.e. explanation, is invalid because it encroaches upon the powers of the judiciary seeking to overrule a decision with no legal basis. There is nothing in subsections 6A to 6C, expressly or by implication, to apply to assessment years before 15 April 2017. The Explanation seeks to impose a new condition which did not exist, and is absent in sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitions will have to be dismissed. However, if it is held that the Explanation does not take away the basis of Anshul Impex, then the law laid down in Anshul Impex will have to be followed, and the Petitioners would be entitled to succeed. After hearing the parties for some time, a peculiar position has arisen because we are in prima facie agreement with the learned Advocate General on the issue of legislative competence and with the argument of the petitioner that the Explanation encroaches upon the powers of the judiciary as it seeks to overrule a decision with no legal basis. We are also in respectful disagreement with the view expressed in Anshul Impex. A question has arisen as to the position of the findings given on the above two issues if the matter is referred to the larger bench. The Counsel for the parties agree that even if findings are given regarding the two issues and the third issue is referred to the larger bench. These findings would remain only as prima facie findings with no jurisprudential status. The Counsel took time to examine whether a part controversy can be decided and partly, the issue can be referred to the larger bench. The learned Counsel inform tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as applicable - a) in case of an appeal against an order, in which claim against declaration of certificate has been disallowed on the grounds of non-production of such declarations or as the case may be, certificates then amount of tax, as provided in the proviso to sub-section (6). b) in case of an appeal against an order, which involves disallowance of claims as stated in clause (a) above and also tax liability on other grounds, then, an amount equal to 10 per cent of the balance amount of disputed tax, so far as such tax liability pertains to tax on grounds, other than those mentioned in clause (a), c) in case of an appeal against an order, other than an order described in clauses (a) and (b) above, an amount equal to 10 per cent of the balance amount of disputed tax, d) in case of an appeal against any other order, an amount as directed by the Tribunal. Provided that the amount required to be deposited under clause (b) or, as the case may be, clause (c) shall not exceed rupees fifteen crores." So far as present appeal is concerned, provisions of section 26 (6-B)(c) are found attracted, which refer to deposit of an amount equal to 10% of balance amount of disputed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also dismissed by the High Court on 14/3/1952. The assessee thereupon applied to Supreme Court for special leave to appeal on 12/5/1952. The Supreme Court granted special leave to appeal, but such leave was limited to the question of the effect of the amendment to Section 22 of the Act on the petitioner's appeal to the Sales Tax Commissioner, Madhya Pradesh and took the view that the other questions sought to be raised by the assessee would have to be decided by the Sales Tax Commissioner in case the appeal succeeded, as the Hon'ble Supreme Court in that appeal was concerned only with the limited question of effect of the amendment to Section 22 of the Act. Section 22(1) of the Act was originally expressed in the 12 stxa2.18 following terms : "22(1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order : Provided that no appeal against an order of assessment, with or without penalty, shall be entertained by the said authority unless it is satisfied that such amount of tax or penalty or both as the appellant may admit to be due from him, has been paid." The relevant portion of Section as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deposit of the assessed tax as required by the amended proviso to Section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre-existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the Authority has to be exercised under the old law, which so continues to exist. The Hon'ble Apex Court also observed that - "whenever there is a proposition by one party and an opposition to that proposition by another, a 'lis' arises. It may be conceded, though not deciding it, that when the assessee files his return a 'lis' may not immediately arise, for under Section 11(1), the Authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State. The circumstance that the authority who raises the dispute is himself the judge can make no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State. It will a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the lis commences and although it may be actually exercised when the adverse judgment is pronounced 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 at the date of its decision or at the date of filing of the appeal. (v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise." In view of above stated legal pronouncements and as appellant has admittedly filed his return sometime in the year 2011, he is having right of appeal, which does not speak of pre-deposit of 10% of the disputed tax. 17) Similar issue is once again considered by the Apex Court in the case of National Traders and others vs. State of Karnataka (Civil Appeal No. 4579/2007) wherein on considering effect of amendment on right to appeal, it is held in para 2 of its judgment that the amendment made by the State of Karnataka shall be prospective in nature from the date of its coming into force. 18) As against this, having considered submissions made for respondents and the law laid down in the case of Satya Nand Jha (supra) decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in dispute, or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an Officer of Central Excise lower in rank than the Principal Commissioner of Central Excise or Commissioner of Central Excise; (ii) against the decision or order referred to in clause(a) of sub-section (1) of Section 35B, 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 order referred to in clause(b) of sub-section (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 of the decision 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. Expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) and (b) above, an amount equal to 10 per cent of the balance amount of disputed tax. (d) ..... As such, we find that before amendment, there was no requirement to deposit any amount at the time of filing appeal, but it is only if stay was to be granted, some amount was to be deposited as per orders of the appellate Authority or as the case may be. Thus, to answer the first question formulated as aforesaid, we are required to consider if the amended provisions of Section 26(6B) of the Act of 2002 directing deposit of 10% of the disputed tax as a pre-condition for filing of appeal before Tribunal are applicable to appellant. 20) Perused of impugned judgment reveals that the order which was challenged before the Tribunal is dated 27/7/2017, i.e. after amended provision came into effect on 15/4/2017, thus the Tribunal held that appellant was statutorily bound to deposit an amount equal to 10 per cent of the balance amount of disputed tax as a pre-condition for admission of appeal. However, the Tribunal has failed to consider the fact of initiation of review proceedings on 13/4/2017 as stated above when admittedly amended provisions were not in force. Having considered the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date on which the lis commences. Such a right is governed by the law which prevails on the date of institution of the suit or proceeding and not by the law that prevails at the date of the decision or on the date of filing an appeal. The legislature, while granting the right of appeal can impose conditions for exercising such right. A statutory provision imposing a condition of deposit regulates the right of appeal in the matters of Tax legislations. The object is to balance the right of appeal with a need for the speedy recovery of the tax. Such provisions, while conferring a right of appeal, seek to prevent the delay in the realization of tax. These conditions therefore, merely regulate the right of appeal. Such conditions, however, have to be imposed by express words or by necessary implications. A vested right of an appeal can be taken away by the legislature by express or by necessary intendment and not otherwise. The conditions imposed however, cannot be so oppressive that in effect, it takes away the right of appeal. In the case of Garikapatti Veeraya, which Anshul Impex refers to, the Supreme Court, after taking a review, has laid down these principles: (i) The legal pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se revenue. Therefore though a vested right of appeal has accrued, the right is expressly made conditional and is not so oppressive that it takes nullifies the right of appeal. 21. The Learned counsel for the Petitioners could not dispute the contention of the learned Advocate General that the implications of the words used in Section 26(6A) amounting express intention of the legislature to make the right of appeal conditional, have not been considered by the Division Bench in Anshul Impex. The decision in Anshul Impex proceed on the ground that the appeal is governed by the legal position on the date of order of assessment. Anshul Impex, though it has noticed the decisions of the Supreme Court in Hoosein Kasam Dada (India) Ltd. and Garikapatti Veeraya, which refers to the right of the legislature to curtail the right of appeal or make it conditional, does not comment on the same. 22. This leaves us with two options. One is to distinguish the decision in the case of Anshul Impex on the ground that it is per incuriam and decide the challenge. The second option is to refer the issue to a larger bench. The learned Advocate General fairly submitted that he is not raising the contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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