Court rules amendment to tax law cannot be applied retrospectively, upholds appellant's right to appeal.

The High Court of Punjab and Haryana rules in favor of the appellant, holding that the amended provision of Section 33(5) of the Haryana Value Added Tax Act cannot be applied retrospectively to assessments prior to the amendment. The court emphasizes the vested right of appeal and directs authorities to decide the appeal on merits in accordance with the unamended provisions of the Act for the assessment year 2005-06.

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Issues involved:
1. Applicability of amended Section 33(5) of the Haryana Value Added Tax Act, 2003 for the assessment year 2005-06.
2. Justifiability of not hearing the appeal on merits due to the absence of a surety bond for the assessment year 2005-06.

Issue 1: Applicability of amended Section 33(5) for the assessment year 2005-06:
The appeal under Section 36 of the Haryana Value Added Tax Act, 2003 challenges the dismissal of the appellant's appeal against the assessment order due to non-submission of the disputed amount bond. The amended provision of Section 33(5) mandates the payment of tax admitted to be due and interest thereon through a bank guarantee or security. The appellant argues that since the assessment relates to 2005-06, the unamended provision should apply. The court considers if the amended provision can apply without retrospective effect. Citing precedents, the court emphasizes that the right of appeal is a vested right governed by the law in force when the cause of action arises. The judgment in Khazan Chand Nathi Ram's case highlights that the right of appeal is not affected by the new Act unless expressly stated. Hence, the court concludes that the amended provision cannot apply retrospectively to assessments prior to the amendment.

Issue 2: Justifiability of not hearing the appeal on merits without a surety bond for the assessment year 2005-06:
The appellant argues that the absence of a statutory requirement for a surety bond in the assessment year 2005-06 should not prevent the appeal from being heard on merits. The court examines the procedural aspect of filing an appeal and the retrospective application of conditions like pre-deposit. The court refers to the judgment in Oswal Agro Mills Ltd.'s case, which states that the right of appeal is vested at the commencement of the legal proceedings. Since the returns were filed before the amendment, the unamended provisions should govern the appeals. Consequently, the court sets aside the orders dismissing the appeal and remits the matter back to decide on merits in compliance with the unamended provision of Section 33(5) of the Act.

In conclusion, the High Court of Punjab and Haryana rules in favor of the appellant, emphasizing that the amended provision of Section 33(5) cannot be applied retrospectively to assessments prior to the amendment. The court highlights the importance of the right of appeal as a vested right and directs the authorities to decide the appeal on merits in accordance with the unamended provisions of the Act for the assessment year 2005-06.

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