Vested right of appeal protects pre-amendment proceedings from a later 20 per cent deposit condition.

The right of appeal was held to be a substantive vested right that accrues when proceedings begin, not a mere procedural privilege. Because the assessment or reassessment proceedings had commenced in 1966, before Amendment Act No. 3 of 1971 introduced the condition requiring deposit of 20 per cent of the assessed tax under section 9(1)(b), the amended requirement could not be applied to defeat the pre-existing appellate right. The principle in Hoosein Kasam Dada was applied, and the later departmental authority was distinguished on the ground that the proceedings there had started after the amendment. The appeal was therefore governed by the unamended law.

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Issues: Whether the amended requirement under section 9(1)(b) applied to an assessee where reassessment proceedings had commenced before the amendment, so as to make the appeal maintainable only on deposit of 20 per cent of the assessed tax.

Analysis: The right of appeal was treated as a substantive and vested right that accrued when proceedings were initiated, not as a mere matter of procedure. On the facts, assessment or reassessment proceedings had begun in 1966, before the amendment introduced by Amendment Act No. 3 of 1971. The amended condition requiring deposit of 20 per cent therefore could not be applied to take away the pre-existing appellate right. The reasoning in Hoosein Kasam Dada was applied, and the later decision relied upon by the department was held to involve a different factual situation because the proceedings there had started after the amendment came into force.

Conclusion: The amended section 9(1)(b) did not apply to the assessee, and the appeal was governed by the unamended law. The reference was answered in favour of the assessee and against the Commissioner.

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