9911796707
TMI Blog2024 (11) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... Added Tax Act, 2004 [DVAT Act] and which came to be promulgated on 01 April 2005. Mr. Aggarwal, learned counsel appearing for the respondents, would contend that in light of the provisions enshrined in Section 106 of the DVAT Act, the appellants would have been legally obliged to approach the Appellate Tribunal for drawing up a 'statement of case' for the consideration of this Court and that the appeals which have come to be directly instituted would not be maintainable. According to learned counsel, while the issue of maintainability of the instant appeals and identical questions would appear to have been ostensibly considered and answered in favour of the appellants, those judgments are clearly distinguishable since none of them have engaged with the provisions which came to be introduced in Section 106 by virtue of the DVAT (Amendment) Act, 2012 [2012 Amendment] and which saw sub-section (4) coming to be incorporated therein, with retrospective effect from 01 April 2005. According to Mr. Aggarwal, since these appeals pertain to a tax period prior to 01 April 2005, it is the stipulated procedure enshrined in Section 45 of the DST Act which would consequently apply and be liable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such judgment under the seal of the Court and the signature of the Registrar, and the Appellate Tribunal shall dispose of the case accordingly. (6) Where a reference is made to the High Court under this section, the costs [which shall not include the fee referred to in sub-section (1)] shall be in the discretion of the Court. (7) The payment of the amount of tax and penalty (if any) due in accordance with the order of the Appellate Tribunal in respect of which an application has been made under sub-section (1) shall not be stayed pending the disposal of such application or any reference made in consequence thereof but if such amount is reduced as a result of such reference, the excess tax paid shall be refunded in accordance with the provisions of section 30." 3. The provision of appeal under the DVAT Act stands comprised in Section 81 and is constructed in the following terms: "81. Appeal to High Court. - (1) An appeal shall lie to the High Court from every order passed by the Appellate Tribunal in appeal under this Act, if the High Court is satisfied that the case involves a substantial question of law. (2) The Commissioner or the other party aggrieved by any order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, the provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to the High Court shall, as far as may be, apply in the case of appeals under this section." 4. Section 106 of the DVAT Act represents the repeal and savings clause and is reproduced below: "106. Repeal and savings. - (1) The Delhi Sales Tax Act, 1975 (Act 43 of 1975), the Delhi Tax on Entry of Motor Vehicles into Local Areas Act, 1994 (Delhi Act 4 of 1995), the Delhi Sales Tax on Works Contract Act, 1999 (Delhi Act 9 of 1999), and the [Delhi Sales Tax on Right to Use Goods Act, 2002 (Delhi Act 13 of 2002)] as in force in Delhi (referred to in this section as the "said Acts"), are hereby repealed. (2) Notwithstanding sub-section (1) of this section, such repeal shall not affect the previous operation of the said Acts or any right, title, entitlement, obligation or liability already acquired, accrued or incurred thereunder. (3) For the purposes of sub-section (2) of this section, anything done or any action taken including any appointment, notification, notice, order, rule, form or certificate in the exercise of any powers conferred by or under the said Acts shall be deemed to have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Savings clause in a repealing statute and Section 6 of the General" Clause Act has nothing to do with the forum where the remedy of appeal has to be pursued. The forum of appeal was thus held only to be a procedural matter and not a substantive or a vested rights issue. In the second case of P. Mohd. the appeal instead of being heard by the two Judges of the High Court was heard by a Single Judge and it was held that there is no vested right in getting the matter heard by two Judges. It was held that the hearing of an appeal, whether by one Judge or by two Judges is merely a matter of procedure. 9. In view of the above, when we examine the provision of appeal under Section 81 of the Delhi VAT Act and the provision of reference under Section 45 (1) and 45 (2) of the Delhi Sales Tax Act, it becomes clear that no vested right has been taken away by passing of the Delhi VAT Act and in fact only the forum has changed. Under the old Delhi Sales Tax Act, to approach the High Court, either an application had to be made before the. Tribunal or before the High Court which would call for the question of law with the statement of case from the Tribunal. However under the new Delhi VAT Act, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect from 01 April 2005. 7. The second decision which would merit consideration was the judgment of the Court rendered on a Review Petition in Kumagai Skanska HCC Itochu Group vs. The Commissioner of Value Added Tax & Anr. 2014:DHC:2330-DB ['Kumagai I']. It would appear that the Court, by its judgment dated 22 May 2012, had initially taken the view that a revision under the DVAT Act initiated after 01 April 2005 would be governed by the period of limitation of four years as constructed in terms of Section 74A (2) (b) thereof. The Court in terms of its original judgment had negatived that contention and held that the period of limitation would be governed by Section 46 of the repealed DST Act. However, on the Review Petition, the attention of the Court was specifically invited to sub-section (4) of Section 106 of the DVAT Act, and which was inserted in that provision after the original judgment was rendered. In view of the aforesaid, the Division Bench proceeded to recall its original judgment which had been pronounced on 22 May 2012. 8. The original writ petition in Kumagai I was taken up for consideration thereafter and came to be finally allowed on 26 April 2016 in Kumagai Skans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at "the larger issue regarding the applicability of the Delhi Value Added Tax Act, 2004 as also question of repeal of the Delhi Sales Tax Act and related issues discussed in the impugned judgment of the High Court are kept open." 15. It may be also noticed at this stage that with retrospective effect from 1st April 2005 sub-section (4) in Section 106 of the DVAT Act was introduced. Section 106 was the 'repeal and savings' provision. Section 106 (4) stated that notwithstanding anything contained in the DVAT Act, for the purpose of levy, assessment, deemed assessment, reassessment, appeal, revision, review etc. which relates to any period ending before 1st April 2005 "the repealed Act, and all rules, regulations, orders, notifications, forms and notices issued thereunder and in force immediately before 1st day of April 2005 shall continue to have effect as if this Act has not been passed." 9. Insofar as the scope and ambit of the revisional power is concerned and its interplay with Section 106 (4), the same ultimately came to be authoritatively laid to rest by a Full Bench of the Court in Dharam Pal Satya Pal Ltd. vs. Commissioner, VAT (Del) 2011 SCC OnLine Del 3708 in the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if no action is taken under the repealed Act, the civil as well as the criminal liability that had incurred under the repealed statute are not obliterated and are kept alive if there is a saving provision. (vii) A legal proceeding which could have been initiated under the repealed Act continues to subsist if the savings and repeal provision so stipulates subject to the law of limitation. To elaborate, the right to initiate a legal proceeding can only be obliterated or effaced or meet its legal death if the period of limitation thereon has expired. 66. Regard being had to the aforesaid principles the Scheme of section 106 of the DVAT Act is required to be scanned. The basic facet of section 106 of the DVAT Act has to be interpreted on the touchstone of the above culled out principles. Sub-section (1) of section 106 of the DVAT Act, as it clearly reveals, is a simple repeal of the DST Act. Sub-section (2) saves the right, title, entitlement, obligation or liability already acquired, accrued or incurred under the repealed Act. Sub-section (3) postulates that anything done under the DST Act shall be deemed to be done or taken in exercise of the power conferred by or under the DVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of section 74A of the DVAT Act read with section 106 of that Act. 68. Turning to the previously mentioned three categories of cases, in the first category of cases, wherein assessment has been completed and already revised, by virtue of the language employed in section 106 (3) of the DVAT Act, the order passed has to be considered as an order passed under the DVAT Act. In the second category of cases, wherein assessment has been completed and revisional power has been invoked though the process is not completed, the assessee has incurred the liability of the order of the assessing officer being scrutinized by the Commissioner which includes the revisional power and sub-section (3) gets attracted. In the third category of cases, where the assessments are completed but no revisional power is invoked, here again sub-section (3) of section 106 would be attracted as if the same is deemed to be an order passed under the DVAT Act. If the order of assessment could not have been revised under the DST Act as on April 1, 2005, the power of revision conferred under the DVAT Act cannot be exercised if the time span has expired. To elaborate, if an order of assessment has attained finality i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment has been passed, the transaction is closed and, therefore, the assessment/order is not revisable under section 74A of the DVAT Act. (d) The liability incurred or accrued under the DST Act has a larger expanse and a broader canvas and it would in view of section 106 (2) of DVAT Act include initiation of any legal proceeding which is permissible within the period of limitation and till then no final or vested right accrues in favour of the assessee. (e) The amendment brought by the Legislature retrospectively incorporating section 74A with effect from April 1, 2005 has been done to further elucidate the legislative intention and has to be given full effect to. The said amendment has been brought in the statue book by ex abundanti cautela and in essence, removes the anomaly and is only curative in nature. (f) The proceeding initiated under the DST Act is saved by the DVAT Act and further the proceedings could be initiated under section 74A during the period of limitation as stipulated under section 74A subject to the conditions precedent stipulated therein. (g) The decisions in International Metro Civil Contractors [2008] 16VST 329 (Delhi) and L. G. Electronics (India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal, the aggrieved party (the dealer or the Commissioner) could, however, request for a reference to the High Court under Section 45 on question of law. However, the new law (Delhi VAT Act) having now provided for a second appeal (Section 81) to the High Court against orders of the Appellate Tribunal, though confined to substantial questions of law, the impugned order having been passed by the Appellate Tribunal (constituted under Section 76 of Delhi VAT Act) after coming into force of the new law, the appeal has been entertained by this court. 4. A view to above effect was taken by another Division Bench of this court in Shiv Shakti Kirana Kendra v. Commissioner, VAT, ILR (2010) I Delhi 237, inter alia, relying on the decision of Supreme Court in Gammon India Ltd. v. Spl. Chief Secretary [2006] 145 STC 1 (SC) setting out its conclusions, with which we respectfully agree and follow, in the following words: "...we find that the legislature, qua the forum of appeal, has taken a conscious decision on retrospective operation of Delhi VAT Act as regards forum of a second appeal to the High Court by virtue of Section 106 (3) and which provision makes it clear that all orders passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that sub-section (1) thereof declares in explicit terms that the DST Act stands repealed. Section 106 (2) constitutes the first of the saving clauses forming part of that provision and which declares that the repeal of the DST Act would not affect the previous operation of that Act or impact any right, title, entitlement, obligation or liability already acquired, accrued or incurred thereunder. Section 106 (2) thus incorporates principles which are broadly spoken of in Section 6 of the General Clauses Act, 1897. By virtue of that provision, all rights, title, entitlements, obligations or liabilities acquired, accrued or incurred under the repealed enactment would thus remain unimpacted, and in any case, by virtue of sub-section (2) would not be obliterated upon the repeal of the DST Act. When we turn our gaze upon sub-section (3) of Section 106, it becomes apparent that the clear intent of that sub-section is to sustain and save all actions that may have been taken under the repealed enactment and to trace the same to the corresponding provisions enshrined in the DVAT Act. 17. That takes us then to the principal provision which was sought to be pressed into aid by the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed as to those provisions which were continued under the new statute." xxxx xxxx xxxx 46. The principle which has been laid down in this case is that whenever there is a repeal of an enactment, the consequences laid down in Section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purposes of determining whether they indicate a different intention. The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. We cannot therefore, subscribe to the broad proposition that Section 6 of the General Clauses Act is ruled out when there is repeal of an enactment followed by a fresh legislation. Section 6 would be applicable in such cases also unless the new legislation manifests an intention incompatible with or contrary to the provisions of the section. xxxx xxxx xxxx 51. The Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal are abated at the consummation of the repeal. When, however, the repeal does not contemplate either a substantive common law or statutory right, but merely the procedure prescribed to secure the enforcement of the right, the right itself is not annulled but remains in existence enforced by applying the new procedure." 22. Undisputedly, the DVAT Act is a cognate statute, similar to the DST Act. The DVAT Act, as its Preamble itself states, constitutes a consolidating legislation relating to a levy of tax on the sale of goods, tax on the transfer of property in goods, tax on the transfer of a right to use and allied subjects. The tax which the DST Act sought to impose also pertained to sale of goods and the regulation of transactions in relation thereto. The DVAT Act thus would appear to be the re-enactment of a similar legislation pertaining to the levy of a tax on the sale of goods and other transactions made subject to the impost created in terms thereof. 23. The repeal and savings provision of Section 106 and more particularly sub-section (4) thereof is clearly not liable to be construed as seeking or intending to regulate matters of procedure. Undoubtedly, Section 106 (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the aforesaid objectives. (SHEILA DIKSHIT) CHIEF MINISTER / MINISTER OF FINANCE NEW DELHI" 24. As is evident from the above, Section 106 (4) appears to have been introduced with the primary objective of inserting a specific savings clause in respect of the power of revision which otherwise existed under the DST Act. Viewed in that light, it becomes manifest that Section 106 (4) was clearly not intended to regulate the procedure for the institution of an appeal. Undisputedly, the remedy of appeal was preserved by virtue of the savings clauses forming part of Section 106. Both the respondent as well as the appellants had the right to prefer an appeal against an order passed by the Appellate Tribunal if it were recognized to give rise to a question of law under the DST Act. There is thus no substantial modification or variation of the right of appeal which existed. Section 81 of the DVAT Act merely changes the procedure liable to be followed for the purposes of petitioning the High Court against an order passed by the Tribunal. That provision cannot possibly be construed or interpreted as regulating a matter of procedure. It is concerned with preservation of positive rights whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
