TaxTMI 
TaxTMI 
2004 (3) TMI 47
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....e Act, court fee has to be paid as provided under section 52A read with sub-item (c) of item (iii) of article 3 of Schedule II to the Act. Standing counsel for the Income-tax Department filed objections and maintained that only a court fee of Rs.10 is to be paid on the appeals. The appellants took the stand that they have a vested right of appeal under section 260A of the Income-tax Act from October 1, 1998; once an assessee files an appeal before the first appellate authority on or after October 1, 1998, as against an assessment the law with regard to the appeal and court fee should be as on the date on which a vested right inheres in a party from the commencement of the action in the court of first instance and such right cannot be taken away except by an express provision or by necessary implication. The Revenue has also relied on the decision of the Supreme Court in Hoosein Kasam Dada (India) Ltd. v. State of M.P., AIR 1953 SC 221 and in State of Bombay v. Supreme General Films Exchange Ltd., AIR 1960 SC 980. It is stated that in the light of the principles laid down by the Supreme Court in the above decisions, since, at the time of introduction of section 260A on October 1, ....
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....vailability of the benefit of payment of one-third of the court fee before the admission in civil appeal to appeals filed under the Income-tax Act and the Wealth-tax Act before the High Court and that the word "filed" just like the word "altered" used in Namdeo Lokman Lodhi v. Narmadabai, AIR 1953 SC 228 and the words "entertained" or "instituted" in United Bank of India v. Abhijit Tea Co. Pvt. Ltd. [2000] 7 SCC 357; [2000] 102 Comp Cas 53 (SC), does not make the provision retrospective. The non-conferment of appeal originally or conferment of appeal at a later stage does not in any way alter the vested right. The decision of the Supreme Court in Special Military Estates Officer v. Munivenkataramiah [1990] 2 SCC 168 was also relied on. It is also stated that in the light of article 254(1) of the Constitution, the amendment is void and alternatively in the absence of Presidential assent being obtained under article 254(2) of the Court Fees and Suit Valuation (Amendment) Act, 2003, cannot be enforced since the same has not become law. Sri Balachandran, learned counsel appearing as amicus curiae, has also filed a reply to the statement filed by the State. It is stated that the assess....
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....ned at the time of insertion of section 52A in the Kerala Court Fees and Suits Valuation Act, by Act 2 of 2003, both under the Income-tax Act, 1961, and under the Wealth-tax Act, 1957. The provisions regarding appeals, reference, etc., under both the above enactments are similar and hence, further discussion hereinbelow is with reference to the provisions of the Income-tax Act only. Ever since the commencement of those two enactments the assessees had a right of appeal against the assessment order before the first appellate authority (section 249(1)) and if aggrieved a further appeal to the Income-tax Appellate Tribunal (section 253(6)) and if the assessees are aggrieved by the appellate order of the Tribunal they can file application before the Tribunal for reference of questions of law arising from the said appellate order for decision by the High Court under section 256(1) of the Income-tax Act. The court fee payable on a reference application was Rs.200 only. If the questions of law are referred by the Tribunal then the matter comes up before the High Court as an income-tax referred case. No separate court fee is payable in such referred cases in the High Court. If the assessee....
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.... specified in the relevant law relating to court fees for filing appeals to the High Court ([1999] 236 ITR (St.) 184). Thus, though fees for appeal to the High Court against the orders of the Appellate Tribunal was provided from October 1, 1998, under section 260A(2)(b) in the case of appeals filed by the assessees the said provision, since omitted by the Finance Act, 1999, with effect from June 1, 1999, no court fee was payable on appeals filed by the assessee from June 1, 1999. So far as the Revenue's appeal was concerned no fee was payable even under section 260A as originally enacted. This position continued till the insertion of section 52A and sub-item (C) of item (iii) of article 3 of Schedule II in the Kerala Court Fees and Suits Valuation (Amendment) Act of 2003. However a court fee of Rs.10 was being paid under article 3(iii)(A)(1)(b) of Schedule II to the said Act. The Kerala Court Fees and Suits Valuation Act was initially amended by an Ordinance dated October 26, 2002, and later it was replaced by the Kerala Court Fees and Suits Valuation (Amendment) Act, 2003, with effect from October 26, 2002, inserting section 52A. Now let us see the provisions of section 52A inser....
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....y when proceedings are first initiated in and before a decision is given by the inferior court. Such a vested right, according to the parties, cannot be taken away except by express enactment or by necessary intendment. It is also their contention that the intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication. According to the parties the assessment proceedings in all these cases were initiated long before the amendment Act and even the orders of the Tribunal impugned in the appeals were also passed before the said date. According to them since section 52A has not been expressly made retrospective the said section has got only prospective operation and has got application only in respect of assessment proceedings under the Income-tax Act/Wealth-tax Act commenced after the coming into force of the amendment Act. The further contention of the Revenue, as already noted, is that the right of appeal conferred under section 260A did not provide for any court fee in an appeal filed by the Revenue and that such a right cannot be taken away unless there are express word....
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.... be held to act retrospectively unless a clear intention to that effect is manifested." The Supreme Court in Hoosein Kasam Dada (India) Ltd. v. State of M.P. [1953] 4 STC 144; AIR 1953 SC 221, observed that the principles of the above decision were applied by the Privy Council in a 'subsequent decision in Delhi Cloth and General Mills Co. Ltd. v. Income-tax Commissioner, AIR 1927 PC 242 H also and the same was applied by the Full Bench of the Lahore High Court in Kirpa Singh v. Rasalldar Ajaipal Singh, AIR 1928 Lah 627. The Supreme Court then observed that: "it was there regarded as settled that the right of appeal was not a mere matter of procedure but was a vested right which inhered in a party from the commencement of the action in the court of first instance and such right could not be taken away except by an express provision or by necessary implication". In that case the Supreme Court was concerned with the provisions of section 22(1) of the Central Provinces and Berar Sales Tax Act. As per section 22(1) of the Act as originally passed any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order. As per t....
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....Subbiah Choudhury, AIR 1957 SC 540 had reiterated the principles laid down by the Supreme Court in Dada India Ltd.'s case, AIR 1953 SC 221. Here, it must be noted that the decisions in both these cases were rendered by the same learned judge S.R.Das C.J. (in the earlier case as a puisne judge). The Constitution Bench has extracted the principles laid down by the Privy Council in Colonial Sugar Refining Co.'s case [1905] AC 369 which we have already extracted in this judgment and observed that (page 545 of AIR 1957 SC): "this proposition of law has been firmly established in English jurisprudence and this decision is accepted as sound and cited with approval in leading text books. As will be presently seen, it has been followed and applied in numerous decisions in England and India and its correctness or authority has not been questioned by any of the learned counsel appearing before us on the present occasion". The Supreme Court applied the above principles in State of Bombay v. Supreme General Films Exchange Ltd., AIR 1960 SC 980 (three-judge Bench) where it is observed that an impairment of the right of appeal by putting a new restriction thereon or imposing a more onerous condit....
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....onerous by any subsequent legislation unless the subsequent legislation said so either expressly or by necessary intendment. An intention to interfere with or impair or imperil a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication. Two Division Benches of this court (Usha v. Food Corporation of India [1997] 1 KLT 264 and Abdulla v. State of Kerala [2003] 1 KLT 961) in the context of payment of enhanced court fee under the Kerala Court Fees and Suits Valuation Act, relying on the decisions of the Supreme Court discussed above have held that in the absence of retrospectivity given expressly or impliedly the vested right will survive. A different note struck by another Division Bench in Kochappu v. Somasundaran Chettiar [1991] 1 KLT 657 was distinguished stating that the Division Bench decided that, in appeals filed after December 5, 1990, the court fee payable is to be calculated, only on the basis of the new Schedule brought into force along with the promulgation of the Ordinance but in that case, the court fee payable was reduced by the Ordinance and the Amendment Act and the Division Bench held that by reducing the....
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....e 1, 1999, by the Finance Act, 1999. Consequent on the omission with effect from the said date a new sub-section (7) in section 260A was inserted applying the procedure of the Code of Civil Procedure, 1908, relating to appeals to the High Court to appeals under section 260A also. By virtue of the insertion of sub-section (7), the court fee as applicable for filing second appeal under section 100 of the Code of Civil Procedure, 1908 has to be paid for filing an appeal under section 260A. It is in this background, the State Legislature has amended the provisions of the Kerala Court Fees and Suits Valuation Act and has inserted section 52A and by amendment to Schedule II, sub-item (C), to item (iii) of article 3 providing for court fee on appeals filed before the High Court against the orders of the Income-tax Appellate Tribunal. The Statement of Objects and Reasons for the insertion of section 52A and Schedule II, article 3, item (iii), sub-item (C) which we have already extracted earlier also is relevant. It is also relevant to note in this context the memorandum explaining the provisions of the Finance Bill, 1999, for omission of section 260A(2)(b) of the Income-tax Act which state....
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..... The provision for fees in section 260A(2)(b) was omitted so as to enable the State Government to decide the court fee payable on appeals filed before the High Court against the order of the Income-tax Appellate Tribunal. Needless to say, it is for the Legislature to decide as to whether the court fee has to be paid on appeals filed by the State or the Central Government. In the instant case, the State Legislature has not made any distinction between an appeal filed by the Central Government or by an assessee in the matter of court fee. The court fee is uniform irrespective of whether the appeal is filed by the assessee or by the Department. Here, it must also be noted that till the Kerala Court Fees and Suits Valuation (Amendment) Act, 2003, under which a new section 73A was inserted in the Court Fees Act both the State and the other litigants had to pay court fees on appeals, etc. As per section 73A where a suit, appeal, revision/review/or other pleadings or documents is filed or presented by or on behalf of the Government or its officers in their official capacity before any court, no court fee is chargeable in respect of such suit, appeal, revision, review or other proceedings....
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....e vested right or at any rate as clearly manifesting an intention to take away such right by necessary implication is the question to be considered. The contention of senior counsel for the Revenue is that if the legislative intent was to give retrospective operation to the provisions of section 52A provisions similar to sections 249(1) and 253(6) of the Income-tax Act should have been enacted. Section 249(1) which prescribes the form of appeal and limitation states every appeal under this Chapter shall be in the prescribed form and shall be verified in the prescribed manner and shall, in the case of an appeal made to the Commissioner of Income-tax (Appeals) on or after the October 1, 1998, irrespective of the date of initiation of the assessment proceedings relating thereto be accompanied by a fee of... (the rest not relevant and hence not extracted). Similarly section 253(6) provides that an appeal to the Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, in the case of an appeal made on or after the October 1, 1998, irrespective of the date of initiation of the assessment proceedings relating thereto, be accompanied by a fee of . ....
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....ent to the admission of its appeal. In that context, the Supreme Court considered the contention of counsel for the appellant that the expression "admitted" by necessary implication applies to an appeal from an assessment order made before the date of amendment as well as an appeal from an order made after that date. The Supreme Court in that context referred to a Calcutta Special Bench decision in Sadar Ali v. Doliluddin Ostagar, AIR 1928 Cal 640, 643 [FB], where Rankin C.J. observed that: "unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigant's right". The Supreme Court observed that the said observation is apposite and applies to the case before them and stated that the true implication of the above observation as of the decisions in the other cases referred to above is as follows: "The pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist ....
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....since the parties have relied on the non obstante clause in section 52A of the Court Fees Act some clarification is required. Section 51 of the Court Fees Act deals with "fee" on memorandum of appeal against the order relating to compensation under any Act for the time being in force for the acquisition of property for public purposes and provides that the fee shall be computed on the difference between the amount awarded and the amount claimed by the appellant. Section 52 says that the fee payable in an appeal shall be the same as the fee that would be payable in the court of first instance on the subject-matter of the appeal. Of course, the second proviso gives the facility of paying the court fee on the appeal or second appeal; one-third at the stage of admission and the A balance subsequently, in case the appeal is admitted. The fee payable in the appeal is the same as the fee that would be payable on the relief in the court of first instance. Under section 51 also the court fee is payable on the relief claimed. Coming to section 52A of the Act the basis for court fee is totally different. Under section 52A, court fee is not based on relief claimed. It is based on the income as....
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....e noted that the provisions of section 52A read with sub-item (C), item (iii), article 3 of Schedule II did not in any way increase the liability of an assessee from what was provided in section 260A(2)(b) of the Income-tax Act. It only gives some relief to the assessee while avoiding the debatable issue as to whether the fee on appeal is a tax on litigation or a court fee. To put it differently, this is not a case where the vested right has been imperilled or in any way adversely affected from the point of view of an assessee. There may be some difference in the matter of wealth-tax where the maximum court fee payable under section 27A of the Wealth-tax Act was only Rs.5,000 but in the Court Fees Act the maximum payable was enhanced to Rs.10,000. However, so far as the Income-tax Department is concerned it is no solace. In the Income-tax Act throughout we will find that fees are not provided for appeal, reference, etc., filed by the Revenue. Under section 260A also no fee was payable on appeals by the Income-tax Department. Parliament in its wisdom thought that so far as appeals to the High Court against the orders of the Appellate Tribunal both under the Income-tax Act and under....
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.... Commissioner of Income-tax or in any appeal to be filed either by the Revenue or by the assessee under the Income-tax Act and under the Wealth-tax Act against the orders of the Income-tax Appellate Tribunal from October 26, 2002, court fee is payable and has to be paid under section 52A read with Schedule II, article 3, item (iii), sub-item (C), of the Kerala Court Fees and Suits Valuation Act, inserted by the Kerala Court Fees and Suits Valuation (Amendment) Act, 2003. The view expressed in the office note is sustained and the objection raised by the appellant to the contrary is overruled. We place on record our deep appreciation for the valuable assistance rendered by Sri V.K. Beeran, learned Additional Advocate-General, Sri P.K.R.Menon, learned senior standing counsel for the Revenue and Sri P. Balachandran, who has been specially requested by the court for assistance. Before parting with the matter, we would like to point out something about legislative draftsmanship in enacting section 52A and Schedule II, article 3, item (iii), sub-item (C), particularly, to the Schedule portion inserted by the Kerala Court Fees and Suits Valuation (Amendment) Act, 2003. Section 52A pro....