Court overturns Tribunal's dismissal due to non-deposit, citing retrospective tax law amendment.

The Court held that the Tribunal erred in dismissing the appeal for non-deposit of 10% of the disputed tax due to the retrospective application of an amendment to Section 26 of the Maharashtra Value Added Tax Act, 2002. The Court determined that the appellant was not required to comply with the amended provision as the review proceedings were initiated before the effective date of the amendment. Additionally, the Court found the respondent's recovery proceedings premature and illegal as they were initiated before the expiry of the appeal period. The appeal was allowed, the Tribunal's order was set aside, and the case was remanded for a fresh hearing.

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Issues Involved:
1. Whether the Tribunal erred in dismissing the appeal for non-deposit of 10% of the disputed tax, giving retrospective effect to the amendment introduced on 15.04.2017 to Section 26 of the Maharashtra Value Added Tax Act, 2002Rs.
2. Whether the respondent was competent to initiate coercive recovery action under Section 33 of the Act before the expiry of the period prescribed to prefer an appealRs.

Issue-Wise Detailed Analysis:

1. Retrospective Effect of Amendment to Section 26 of the Maharashtra Value Added Tax Act, 2002:
The appellant challenged the Tribunal's order dismissing the appeal for not depositing 10% of the disputed tax as required under the amended Section 26(6B)(c) of the Maharashtra Value Added Tax Act, 2002. The appellant argued that the assessment order for the financial year 2010-11 was passed on 30/10/2014, and review proceedings were initiated on 13/4/2017, before the amendment came into effect on 15/4/2017. The Tribunal, however, dismissed the appeal, holding the amendment to be retrospective.

The Court examined the amendment's applicability, referencing the case of Messrs Hoosein Kasam Dada (India) Ltd. vs. The State of Madhya Pradesh and others (AIR 1953 Sup. Court 221), which established that a pre-existing right of appeal is not destroyed by an amendment unless made retrospective by express words or necessary intendment. The Court concluded that the relevant date for determining the applicability of the amended provisions is the date of initiation of proceedings, not the decision date. Since the review proceedings were initiated before the amendment, the appellant was not required to deposit 10% of the disputed tax. The Tribunal's dismissal of the appeal for non-compliance with the amended provision was thus erroneous.

2. Legality of Recovery Proceedings Initiated Before Expiry of Appeal Period:
The appellant contended that the recovery proceedings initiated by the respondent during the pendency of the appeal were illegal, citing the case of UTI Mutual Fund vs. Income Tax Officer and others {(2012) 345 ITR 71(Bom)}, which laid down guidelines for recovery proceedings during the pendency of an appeal. The Court noted that administrative directions for fulfilling recovery targets should not foreclose remedies available to assessees for challenging a demand. The guidelines stipulate that no recovery should be made pending the expiry of the time limit for filing an appeal or the disposal of a stay application.

The Court observed that the order passed by the Tribunal on 22/2/2018 was received by the appellant on 17/3/2018, and the prescribed period for filing an appeal is 180 days. The respondent's initiation of recovery proceedings before the expiry of this period violated the guidelines and the proviso to Section 33(1) of the Act, which states that no action can be taken against the assessee if they have intimated the Commissioner by filing Form 314 about their intention to appeal. The Court held that the respondent's recovery proceedings were premature and thus illegal.

Conclusion:
The appeal was allowed, and the Tribunal's order dated 22/2/2018 was set aside. The case was remanded back to the Tribunal for a fresh hearing, with directions to afford an opportunity of hearing to the parties and decide the appeal expeditiously. The Court also directed the respondents to withdraw the coercive recovery steps initiated against the appellant. No order as to costs was made, and Civil Application No. 26/2018 was disposed of accordingly.

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