Vested right of appeal protected against retrospective pre-deposit conditions under amended VAT appeal rules.

A statutory amendment imposing an additional pre-deposit condition for entertaining VAT appeals was held not to apply retrospectively to an assessment year that arose before the amendment. The vested right of appeal was governed by the law in force when the lis commenced, so the unamended Section 33(5) of the Haryana VAT Act applied to the 2005-06 assessment. Insistence on surety or bank guarantee under the later regime was therefore unwarranted, and dismissal of the appeal for non-compliance with the amended condition was unsustainable. The appellate orders were set aside and the appeal restored for decision on merits subject to the earlier statutory requirement.

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Issues: (i) Whether the amended pre-deposit requirement under Section 33(5) of the Haryana Value Added Tax Act, 2003, notified on 20.03.2009, applied to an assessment relating to the year 2005-06; (ii) Whether the appeal could be rejected for non-furnishing of surety or bank guarantee despite the assessment having arisen before the amendment.

Issue (i): Whether the amended pre-deposit requirement under Section 33(5) of the Haryana Value Added Tax Act, 2003, notified on 20.03.2009, applied to an assessment relating to the year 2005-06.

Analysis: The right of appeal is a vested right and is governed by the law in force on the date when the lis commences. The amendment introduced an additional condition requiring payment of admitted tax and interest along with bank guarantee or adequate security. The Court applied the settled principle that an amendment affecting the mode of entertaining an appeal does not operate retrospectively so as to burden proceedings which had already arisen under the earlier regime. On the facts, the assessment proceedings related to a period prior to the amendment, and the unamended provision governed the appeal.

Conclusion: The amended Section 33(5) did not apply to the 2005-06 assessment, and the unamended provision alone governed the appeal.

Issue (ii): Whether the appeal could be rejected for non-furnishing of surety or bank guarantee despite the assessment having arisen before the amendment.

Analysis: Since the appeal was required to be considered under the unamended statutory regime, insistence on the newly introduced surety or bank guarantee condition was not warranted. The prior law did not impose the same requirement for entertaining the appeal in the manner applied by the authorities below. The dismissal of the appeal for failure to comply with the amended condition was therefore unsustainable.

Conclusion: The appeal could not be dismissed for want of surety or bank guarantee under the amended provision.

Final Conclusion: The orders of the appellate authority and the tribunal were set aside, and the appeal was restored to be decided on merits after compliance with the unamended statutory requirement.

Ratio Decidendi: A statutory amendment introducing an additional pre-condition for entertaining an appeal does not apply retrospectively to proceedings whose lis had commenced before the amendment, and the vested right of appeal remains governed by the law then in force.

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