TaxTMI 
TaxTMI 
2018 (2) TMI 13
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....ndatory predeposit may be waived. 2. Heard the ld. AR for Revenue. 3. After hearing both sides, we find that compliance of mandatory predeposit stands settled by the decision of the Hon'ble Madras High Court in the case of Dream Castle Vs. Union of India reported in 2016 (43) STR 25 (mad.), wherein the Hon'ble High Court observed as under:- 34. Drawing our attention to the decision in R. Rajagopal Reddy v. Padmini Chandrasekharan [AIR 1996 SC 238], the learned senior counsel further contended that where a statutory provision which has not made retrospective by the legislature seeks to affect the vested rights and corresponding obligations of parties, such provision cannot be said to have any retrospective effect by necessary implication. The Supreme Court quoted Maxwell to the effect that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matters of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. 35. The next decision relied upon by the learned senior counsel for the writ petitioner is that of a Division Bench of this Cou....
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....ssued before the coming into force of the amendment and where the lis had started before the amendments. The case appears to be pending before the Andhra Pradesh High Court. 38. The interim order passed by the Andhra Pradesh High Court in K. Rama Mohanarao & Co. was followed by a learned Judge of the Kerala High Court in two cases, namely (i) Muthoot Finance Ltd. v. Union of India [2015 TIOL 632 HC Kerala = 2015 (38) S.T.R. 1133 (Ker.) = 2015 (320) E.L.T. 51 (Ker.)] and (ii) Secretary to Government, Department of Agriculture v. Union of India [2015 TIOL 895 HC Kerala = 2015 (40) S.T.R. 438 (Ker.)]. In an interim order passed by a Division Bench of the High Court of Punjab and Haryana in Super Threading (India) Pvt. Ltd. v. Union of India [2015 (323) E.L.T. 119 (P&H)], the decision of the single Judge of the Kerala High Court in Muthoot Finance Ltd. was followed. 39. However, a Division Bench of the Allahabad High Court struck a different note in Ganesh Yadav v. Union of India [2015 (39) S.T.R. 177 (All.) = 2015 (320) E.L.T. 711 (All.)]. In the said case, the Allahabad High Court was dealing with a writ petition challenging the very vires of the amendment. After po....
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....1) of the Act as amended only in the case of those stay applications and appeals which were pending before any appellate authority prior to the commencement of Finance (No. 2) Act, 2014. Consequently, both by virtue of the opening words of Section 35F(1) of the Act as well as by the second proviso to the provision, it is clear that appeals which are filed on and after the enforcement of the amended provision on 6 August, 2014 shall be governed by the requirement of pre-deposit as stipulated therein. The only category to which the provision will not apply that would be those where the appeals or, as the case may be, stay applications were pending before the appellate authority prior to the commencement of Finance (No. 2) Act, 2014." 41. Mr. Joseph Prabhakar, learned counsel for the respondent/assessee in the writ appeal contended that in Winwind Power Energy Private Limited v. Commissioner of Central Excise [2013 TIOL 863 Madras = 2015 (324) E.L.T. 111 (Mad.)], a learned Judge of this Court was concerned with a situation where the time limit for filing an appeal was reduced by an amendment to Section 85 of the Finance Act, 1994. Since the amendment came into force on 28-5-2....
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....of the matter is that if the argument of the learned counsel for the petitioner is accepted then he is required to pre-deposit 100% of the excise duty levied on him as he has not filed any waiver application under the old provision before the Tribunal exempting him from making any pre-deposit. The Legislature has granted benefit to the assessees by fixing pre-deposit equivalent to 7.5% or 10% of the confirmed amount of duty liability as per the provisions of Section 35F of the Central Excise Act, 1944. Therefore, we do not find any illegality in the impugned order passed by the Tribunal." 44. A view similar to the one taken by the Gujarat High Court in Premier Polyspin Pvt. Ltd. had already been taken in two decisions of the Rajasthan High Court. In Paramount Security v. Union of India [W.P. No. 12232 of 2015], one Division Bench of the Rajasthan High Court recorded an opinion that the effect of the amendment cannot be restricted only to those appeals which are filed after 6-8-2014. The Court proceeded on the footing that the amendment was actually beneficial to the assessee and hence, the Bench held that to restrict such a benefit only to one category of assessees would b....
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....8. But, it appears that in all the decisions either of the High Courts or of the Supreme Court, there has been no reference to another Constitution Bench of the Supreme Court in Hardeodas Jagannath v. State of Assam [AIR 1970 SC 724]. The said case arose out of the Assam Sales Tax Act, 1947, as amended by Act 6 of 1958. Under the said Act, an appeal against an order of assessment or penalty cannot be entertained by the authority unless the amount of tax assessed or penalty levied had been paid. The provisions of the Assam Sales Tax Act, 1947, were extended to the Administered Area in Shillong under Section 4 of the Extra Provincial Jurisdiction Act, 1947, by a notification issued by the Government of India on 15-4-1948. In the case before the Supreme Court, the period of assessment was prior to the date of coming into force of Act 6 of 1958. But, the orders of assessment and penalty were passed after 1-4-1958, the date of coming into force of the amendment. The assessee contended that the amended Act 6 of 1958 could not be given retrospective effect so as to apply to assessment periods anterior to that date. Prior to the amendment, Section 30 contained a proviso requiring the asses....
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....w would be the date on which the cause of action arose. 53. Despite all the conflicts, sometimes latent, sometimes patent and sometimes incorrigible, there has been uniformity of opinion at least on one thing, namely that the right of appeal is neither an absolute right, nor an ingredient of natural justice, and that it is only a statutory right which can be circumscribed by the conditions in the grant. A useful reference can be made in this regard to the decisions in Seth Nand Lal v. State of Haryana [1980 (Supp.) SCC 574] and Vijay Prakash D. Mehta v. Collector of Customs [(1988) 4 SCC 402 = 1989 (39) E.L.T. 178 (S.C.)]. 54. Therefore, it is well settled that the right of appeal is a creature of statute and the legislature is well within its competence to impose conditions for the exercise of such a right subject only to the restriction that the conditions so imposed are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory. 55. Therefore, the question of prime importance that arises is, as to whether a switchover from a regime where the deposit of the entire duty was mandatory subject however to the discretion gra....
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....is writ petition lies squarely in our answer to the question as to whether the condition of this nature requiring the assessee to make a pre-deposit of 7.5% could be placed in between the categories narrated in (i) and (ii) or in between categories narrated in (ii) and (iii) above. If this condition falls in between categories (i) and (ii), it is more onerous than the existing condition and hence, cannot take retrospective effect. If this condition falls in between categories (ii) and (iii), it is less onerous than the existing condition and hence, the question whether it is retrospective or not will not even be raised by those who are benefited by it. 58. The issue could also be looked at from another angle. Whenever an amendment (i) does not take away a right of appeal, or (ii) does not impose an additional condition for the exercise of the right of appeal, the parties can have no cause to complain. In Osram Surya (P) Ltd. v. Commissioner of Central Excise [2002 (142) E.L.T. 5 (S.C.)], the Supreme Court was concerned with an amendment to the Central Excise Rules, 1944. Prior to 29-6-1995, Rule 57G of the said Rules entitled a manufacturer to withdraw the Modvat credit at....
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....Court held in Para 20 of its decision in Ganesh Yadav that the appeals filed on or after the commencement of the amended provision on 6-8-2014 shall be governed by the requirement stipulated therein. In other words, the second proviso excluded certain types of cases from the purview of the amendment and the Allahabad High Court came to the conclusion that cases which do not fall within such exclusions, should be taken to be covered by the amended provision. 63. Therefore, it is sought to be contended by Mr. C. Natarajan, learned Senior Counsel appearing for the writ petitioner that a proviso carving out an exception, need not necessarily be an indicator that what is not covered by the exception, will fall within the general Rule. In support of such a contention and in order to drive home the manner in which a proviso is to be interpreted, the learned Senior Counsel relied upon certain decisions which we shall now consider. 64. In Madras and Southern Mahratta Railway Company Limited v. Bezwada Municipality [AIR 1944 Privy Council, 74], the Judicial Committee of the Privy Council opined that the proper function of a proviso is to accept and deal with a case which wo....
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....tutory provision. 67. In Ali M.K. v. State of Kerala [AIR 2003 SC 4006], the Supreme Court quoted with approval the opinion rendered by the Privy Council in Jinnings v. Kelly - 1940 AC 206, to the effect that a proviso cannot be used to import into the enacting part, something which is not there. But where the enacting part is susceptible to several possible meanings, it may be controlled by the proviso. 68. In the light of the principles of law laid down in the above decisions, it is contended by Mr. C. Natarajan, learned Senior Counsel that the second proviso cannot be taken to curtail the effect of the substantive provision and that the second proviso cannot also be taken to cover all cases that do not come within the purview of the substantive provision. 69. But unfortunately, all the above contentions of the learned Senior Counsel revolving around the effect of the second proviso, overlook one important aspect. The Allahabad High Court did not say in Ganesh Yadav that the second proviso is a complete code in so far as cases that would not fall within the purview of the substantive provision. While interpreting the substantive provision, the Allahabad....
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....ed arguments on the basis of two Circulars dated 16-9-2014 and 5-1-2015. In Para 1.2 of the Circular dated 16-9-2014, it was stated that the amended provisions would apply to appeals filed after 6-8-2014 and that Section 35F of the Central Excise Act and Section 129E of the Customs Act, contain specific saving clauses providing that all pending appeals/stay applications filed till the enactment of the Finance Bill shall be governed by the erstwhile provisions. 75. On the ground that the aforesaid Para 1.2 of the Circular dated 16-9-2014 created some confusion, the second Circular dated 5-1-2015 was issued. Para 4 of the second Circular reads as follows :- 4. Para 1.2 of the Circular ibid stated that amended provisions would apply to appeals filed after 6th of August, 2014. An Act of Parliament comes into effect on the date it received the assent of the President of India. Hence, the amended provisions regarding filing of appeal along with stipulated percentage of pre-deposit shall apply to all appeals filed on or after 6th August, 2014. Para 1.2 of the earlier Circular stands suitably modified. 76. We do not know how the above passage goes to the rescue o....