Tax appeal deposit conditions upheld as a valid appellate restriction, with refund available if the appeal succeeds.

The Calcutta HC upheld the second proviso to Section 84(1) of the West Bengal Value Added Tax Act, 2003, which requires proof of payment of the admitted liability and 15% of the disputed tax for appeals filed on or after 1 April 2015. Applying the presumption of constitutionality and the greater latitude available in taxation matters, the Court held that the condition is a permissible appellate restriction, not a fresh tax levy, and that the word "payment" can include a refundable deposit. The cut-off date was treated as a rational classification, and the appellate remedy was held not to be illusory or violative of Article 19(1)(g).

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Issues: (i) Whether the second proviso to Section 84(1) of the West Bengal Value Added Tax Act, 2003, requiring production of proof of payment of the admitted liability and 15% of the amount of tax in dispute for appeals filed on or after 1 April 2015, is ultra vires the Constitution of India; (ii) what relief, if any, should be granted.

Issue (i): Whether the second proviso to Section 84(1) of the West Bengal Value Added Tax Act, 2003, requiring production of proof of payment of the admitted liability and 15% of the amount of tax in dispute for appeals filed on or after 1 April 2015, is ultra vires the Constitution of India.

Analysis: The statutory scheme of appeal under Section 84 recognises a statutory right of appeal, but that right may be conditioned by the legislature. In testing fiscal legislation, the Court applied the presumption of constitutionality, the greater latitude allowed in taxation matters, and the principle that hardship by itself does not invalidate a taxing provision. The impugned proviso was construed as requiring a deposit that would abide by the result of the appeal, not as a fresh tax levy. The Court held that the word "payment" in the proviso can operate contextually to include a deposit for the appeal condition, and that the amount deposited would be refundable with interest where the appeal succeeds, reading the provision with the refund and interest provisions. The cut-off date of 1 April 2015 was held to be a rational classification linked to the contemporaneous amendment of the assessment procedure, and the condition was found not to render the appellate remedy illusory or infringe Article 19(1)(g).

Conclusion: The second proviso to Section 84(1) is valid and not ultra vires the Constitution; this issue is answered against the petitioners and in favour of the Revenue.

Issue (ii): What relief, if any, should be granted.

Analysis: Since the writ petitions remained pending beyond the appeal period, the Court granted a short protective window so that the petitioners would not be prejudiced in pursuing the statutory remedy, while preserving compliance with the appeal requirements.

Conclusion: The petitioners were permitted to file appeals within four weeks, and if so filed, the appeals were to be treated as within limitation.

Final Conclusion: The constitutional challenge failed, but limited liberty was granted to pursue the statutory appellate remedy within the stipulated time.

Ratio Decidendi: A statutory appeal condition in a fiscal law that requires deposit of a fixed percentage of the disputed amount is constitutionally valid if it is a rational, non-illusory restriction attached to a vested statutory appeal and the deposited amount is refundable on success.

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