Appellate tribunal stay powers survive amendment, while pre-1997 assessment disputes remain governed by the unamended provision.

The amendment restricting stay powers under section 36 of the Tamil Nadu General Sales Tax Act was upheld as valid, since the right of appeal is statutory and the appellate remedy itself remained intact. The Tribunal nevertheless retained incidental and ancillary power to entertain stay applications in appropriate cases because such powers survive unless expressly excluded. Sections 36(3)(iii) and 39-A(3) were not treated as independent sources of interim stay jurisdiction. For disputes and assessment orders arising before 8 May 1997, the unamended section 36(5) continued to apply; later cases were governed only by the limited incidental power recognised by the Court.

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Issues: (i) Whether section 3 of the Tamil Nadu General Sales Tax (Amendment) Act, 1997, in so far as it restricted the appellate power under section 36 of the Tamil Nadu General Sales Tax Act, 1959, was unconstitutional. (ii) Whether, after the amendment to section 36(5), the Sales Tax Appellate Tribunal retained an incidental or ancillary power to entertain stay applications. (iii) Whether section 36(3)(iii) or section 39-A(3) conferred an independent power on the Tribunal to grant stay or interim directions regarding recovery of tax. (iv) Whether the amended provision applied to disputes and assessment orders arising before 8 May 1997.

Issue (i): Whether section 3 of the Tamil Nadu General Sales Tax (Amendment) Act, 1997, in so far as it restricted the appellate power under section 36 of the Tamil Nadu General Sales Tax Act, 1959, was unconstitutional.

Analysis: The restriction on the statutory stay power was examined against articles 14 and 19(1)(g) of the Constitution of India. The right of appeal is a creature of statute and is not a fundamental right. The Court noted that the amendment did not destroy the appellate remedy itself, and the attack based on arbitrariness could not be sustained in the light of the settled principle that the Legislature may regulate appellate incidents.

Conclusion: Section 3 of the Tamil Nadu General Sales Tax (Amendment) Act, 1997 was held valid and intra vires, against the assessee.

Issue (ii): Whether, after the amendment to section 36(5), the Sales Tax Appellate Tribunal retained an incidental or ancillary power to entertain stay applications.

Analysis: The Court applied the principle that an appellate tribunal vested with appellate jurisdiction carries incidental powers necessary to make that jurisdiction effective, unless the statute expressly excludes them. The amended text did not use language of total prohibition comparable to other enactments that expressly barred stay. The Court therefore held that the statutory amendment curtailed the express proviso but did not extinguish the Tribunal's inherent ability to prevent injustice in appropriate cases.

Conclusion: The Sales Tax Appellate Tribunal retained an incidental and ancillary power to entertain stay applications in fit and proper cases, in favour of the assessee.

Issue (iii): Whether section 36(3)(iii) or section 39-A(3) conferred an independent power on the Tribunal to grant stay or interim directions regarding recovery of tax.

Analysis: The words allowing the Tribunal to "pass such orders as it may think fit" were read in the context of disposal of an appeal, and not as a separate source of interim jurisdiction during pendency. Section 39-A(3) was also not treated as enlarging the Tribunal's power to grant stay. The Court held that these provisions did not supply an independent statutory basis for interim stay orders.

Conclusion: No independent power to grant stay or recovery directions was found under section 36(3)(iii) or section 39-A(3), against the assessee.

Issue (iv): Whether the amended provision applied to disputes and assessment orders arising before 8 May 1997.

Analysis: The Court treated the right to seek stay in appeal as part of the vested appellate right that accrues when the lis commences. For assessment orders and disputes arising before 8 May 1997, the unamended section 36(5) continued to govern. For assessment orders made after that date, the Tribunal's power was confined to the limited incidental and ancillary jurisdiction recognised by the Court.

Conclusion: The unamended section 36(5) applied to pre-8 May 1997 assessment orders, while post-8 May 1997 cases were governed only by the limited incidental and ancillary power, in favour of the assessee on the transitional issue.

Final Conclusion: The petitions succeeded in the manner indicated by the Court. The amendment was upheld, but the Tribunal's incidental stay jurisdiction was preserved, and the transitional right to seek stay was recognised for pre-amendment assessment orders.

Ratio Decidendi: An appellate tribunal's incidental and ancillary powers survive a statutory amendment unless expressly excluded, and a vested appellate incident relating to stay is governed by the law in force when the lis commences for pre-amendment proceedings.

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