Vested right of appeal limits new pre-deposit conditions and bars coercive recovery before the appeal period expires.

The Bombay HC held that the right of appeal is a vested substantive right and that the amended pre-deposit requirement under Section 26(6B)(c) of the Maharashtra Value Added Tax Act, 2002 applied prospectively only. Because the proceedings had commenced before the amendment, the 10% pre-deposit condition could not govern the appeal, and dismissal for non-deposit was erroneous. The Court also held that coercive recovery could not be initiated before expiry of the statutory appeal period, particularly where the appellant had indicated its intention to appeal, because such action would defeat an effective appellate remedy. The tribunal's order was set aside and the matter remanded for fresh decision after hearing the parties.

---

---

Issues: (i) Whether the amended pre-deposit requirement under Section 26(6B)(c) of the Maharashtra Value Added Tax Act, 2002 applied to an appeal arising from proceedings initiated before the amendment came into force. (ii) Whether coercive recovery could be initiated before expiry of the period prescribed for filing an appeal and during pendency of the appellate remedy.

Issue (i): Whether the amended pre-deposit requirement under Section 26(6B)(c) of the Maharashtra Value Added Tax Act, 2002 applied to an appeal arising from proceedings initiated before the amendment came into force.

Analysis: The right of appeal is a vested substantive right and, unless taken away by express words or necessary intendment, it is governed by the law in force when the lis commences. The review proceedings in the present matter had commenced before the amendment introducing the 10% pre-deposit requirement. The amendment was held to be prospective, and the date of initiation of proceedings, not the date of the decision under challenge, was treated as the relevant date for determining applicability.

Conclusion: The amended pre-deposit condition did not apply, and dismissal of the appeal for non-deposit of 10% of the disputed tax was erroneous.

Issue (ii): Whether coercive recovery could be initiated before expiry of the period prescribed for filing an appeal and during pendency of the appellate remedy.

Analysis: Recovery action was examined in the light of the statutory appellate framework and the principle that coercive steps should not foreclose an effective appellate remedy. Since the prescribed time for preferring the appeal had not expired and the appellant had intimated its intention to appeal, coercive recovery was not justified. The protections against premature recovery were held to operate until the appeal period expired and the appellate process could be meaningfully pursued.

Conclusion: The respondents were not competent to initiate coercive recovery before expiry of the appeal period.

Final Conclusion: The appeal succeeded, the tribunal's order was set aside, and the matter was remanded for fresh decision on the appeal after hearing the parties.

Ratio Decidendi: A statutory amendment imposing a pre-deposit requirement does not apply to appeal rights that vested when the lis commenced, and coercive recovery should not be used to defeat a live appellate remedy before the appeal period expires.

---