Vested right of appeal in sales tax cases accrues on filing returns; later enhanced pre-deposit cannot apply retrospectively.

The right of appeal in sales tax proceedings is a substantive vested right that accrues when the lis commences on filing of the return, not when the assessment order or pre-assessment notice is issued. A later amendment imposing a higher pre-deposit requirement operates prospectively and cannot impair appeals already attached to pending proceedings. On that footing, the enhanced pre-deposit condition does not govern returns filed before the amendment took effect, and the appellate forum must entertain the appeals without insisting on the increased deposit.

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Issues: (i) Whether the right of an assessee to file an appeal against assessment or reassessment is a substantive and vested right; (ii) whether such right crystallises at the stage of initiation of assessment proceedings and, for sales tax purposes, on the filing of returns rather than on the date of assessment order or issuance of pre-assessment notice.

Issue (i): Whether the right of an assessee to file an appeal against assessment or reassessment is a substantive and vested right.

Analysis: The governing principle was drawn from the settled line of authority that the right of appeal is not a mere matter of procedure but a substantive right. Such right is treated as vested when the lis commences and is governed by the law prevailing on that date, unless a subsequent enactment takes it away expressly or by necessary implication. The later amendment enhancing the pre-deposit condition was held to be prospective, and therefore incapable of impairing an already vested appellate right arising from proceedings commenced earlier.

Conclusion: The right of appeal is a substantive vested right, and it cannot be curtailed by a later amendment operating only prospectively.

Issue (ii): Whether such right crystallises at the stage of initiation of assessment proceedings and, for sales tax purposes, on the filing of returns rather than on the date of assessment order or issuance of pre-assessment notice.

Analysis: The Court applied the principle that, in tax proceedings, the lis begins when the return is filed or required to be filed, because assessment proceedings then become pending and the appellate right attaches to that stage. The cases relied on by the Revenue were distinguished on their facts, and the Court followed the view that the crucial date is the filing of the return, not the later assessment order or notice. Since the returns in these matters were filed before the amendment increasing pre-deposit to 25% took effect, the amended condition could not govern the appeals.

Conclusion: The right of appeal crystallises on the filing of returns, and the later pre-deposit requirement does not apply to these appeals.

Final Conclusion: The appeals filed by the Revenue failed, and the assessees were entitled to have their appeals entertained without insistence on the enhanced pre-deposit, with the appellate authority directed to decide them according to law.

Ratio Decidendi: In sales tax proceedings, the right of appeal is a vested substantive right that accrues when the lis commences on filing of the return, and a later prospective amendment imposing a higher pre-deposit cannot retrospectively impair that right.

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