TaxTMI 
TaxTMI 
2019 (11) TMI 779
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 2. The MVAT Act was brought into force with effect from 1 April 2005. The Act was to consolidate and amend the laws regarding levy and collection of tax on sale and purchase of certain goods in the State of Maharashtra. The Act was amended from time to time. Section 2 of the Act deals with the definition of the terms under the Act. Section 2(8) defines Dealer and various categories enumerated which would fall under the definition of Dealer. Goods were defined under section 2(12) as meaning every kind of movable property not being the properties mentioned in the said sub-section such as newspaper, actionable claims, money, stock, share etc. The sale was defined under section 2(24) as the sale of goods within the State for cash or deferred payment excluding the categories listed. The Chapter-II of the Act deals with the incidence and levy of tax. The incidence of tax is provided in Section 3, and certain goods on which tax was not leviable were referred to under Section 5 of the Act. Chapter-III deals with Sales Tax Authorities and the Tribunal. The Sales Tax Authorities as enumerated under Section 10 include Joint Commissioners, Deputy Commissioners, Assistant Commissioners, Sale....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity in first appeal, unless it is accompanied by the proof of payment of an aggregate of the following amounts, as applicable,- (a) in case of an appeal against an order, in which claim against declaration or certificate, has been disallowed on the ground of non-production of such declaration or, as the case may be, certificate then, amount of tax, as provided in the proviso to sub-section (6), (b) in case of an appeal against an order, which involves disallowance of claims as stated in clause (a) above and also tax liability on other grounds, then, an amount equal to 10 per cent of the amount of tax, disputed by the appellant so far as such tax liability pertains to tax, on grounds, other than those mentioned in clause (a), (c) in case of an appeal against an order, other than an order, described in clauses (a) and (b) above, an amount equal to 10 per cent. of the amount of tax disputed by the appellant, (d) in case of an appeal against a separate order imposing only penalty, deposit of an amount, as directed by the appellate authority, which shall not in any case, exceed 10 per cent. of the amount of penalty, disputed by appellant: Provided that, the amount required to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....x as required under the provision of section 26(6B)(b) of the MVAT Act. Anshul Impex Private Limited filed a Sales Tax Appeal No.2/2018 at the Nagpur Bench of this Court. The Division Bench considered whether the Tribunal had committed an error in dismissing the appeal as not maintainable for want of deposit of ten percent of the amount assessed, to give retrospective effect to the amendment introduced on 15 April 2017 to Section 26 of the Maharashtra Value Added Tax Act, 2002. The Division Bench held that since the relevant year was 2010-11 and lis started in the year 2011, a right accrued to the appellant to be governed by the unamended provisions. The question of law was, answered, and the proceedings were remitted to the Maharashtra Sales Tax Tribunal, Nagpur STAX No.2/18 decided on 28 Sept.2018 (Anshul Impex Pvt. Ltd. V. State of Maharashtra) 6. The State of Maharashtra filed a Special Leave to Appeal No.6310/2010 challenging the judgment and order passed by the Division Bench in Anshul Impex. The Supreme Court by order dated 11 March 2019 summarily dismissed the SLP. 7. On 6 March 2019, the State of Maharashtra promulgated an Ordinance No. VI OF 2019, the Maharashtra Tax La....
X X X X Extracts X X X X
X X X X Extracts X X X X
....act the mandatory condition of pre-deposit of the disputed amount for filing appeal regarding the goods; (b) Whether the explanation to section 26 of the MVAT Act nullifies the decision of the Division Bench of this Court in the case Anshul Impex and takes away the right of the assessee to file an appeal without statutory deposit in respect of assessment orders passed before 15 April 2017, and (c) Whether the decision of the Division Bench of this Court in Anshul Impex requires reconsideration. 11. On the question of legislative competence, the Petitioners have contended that the source of power to legislate of the State of Maharashtra is from the articles of the Constitution of India. The entries in Schedule VII to the Constitution are the fields of legislation. After coming into force the 101st constitutional amendment, various articles of the Constitution have been amended. The Goods and Service Tax as defined under Article 366(12A) of the Constitution has been introduced and Article 246A of the Constitution has been inserted. The changes are made in Entry 54 in List-II of Schedule-VII. This entry refers to tax to be levied by the State only in respect of five items. Acco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssly or by implication, to apply to assessment years before 15 April 2017. The Explanation seeks to impose a new condition which did not exist, and is absent in sub-sections 6A to 6C to Section 26 of the MVAT Act. The Explanation violates Article 14 of the Constitution because it discriminates between two assessees in the same assessment year and the delay in passing the assessment orders by the authorities. The State responds that the Explanation is inserted with a specific deeming effect and takes away the basis of the decision in Anshul Impex. The 2019 amendment, clarifies the intention of the Legislature in inserting the said new provisions by 2017 amendment. The 2019 amendment removes the doubt created by the judgment delivered in Anshul Impex. Even if it is assumed that the 2017 Amendment created a doubt such confusion/doubt is now cleared by adding the Explanation by the 2019 amendment. The subsequent amendment of 2019 takes away the very basis of the judgment delivered in the case of Anshul Impex. The subsequent amendment clarifies the scope, applicability and effect of the first amendment of 2017 and takes the matter beyond any doubt or dispute. 13. On the third point, re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....atus. The Counsel took time to examine whether a part controversy can be decided and partly, the issue can be referred to the larger bench. The learned Counsel inform that they have not come across any rule or a decision where such a course of action can be adopted. The Petitioners contend the first two issues should also be referred to the larger bench for consideration. According to Petitioners, the issue regarding the effect of 101st amendment regarding legislative competence of the State have arisen for the first time in this form in the country and is of importance. The learned Advocate General fairly placed on record the decision in the case of Ambarish Rangshashi Patnigere and Ors. v State of Maharashtra and Ors. 2012(1) Mh.L.J. 900 in Writ Petition No. 1797 of 2011 wherein, the entire matter was referred to the larger bench for consideration. 16. We now explain why we cannot persuade ourselves with the view taken in Anshul Impex. 17. The Division Bench in Anshul Impex had framed two issues for consideration: "(1) Whether the Tribunal has committed an error in dismissing the appeal as not maintainable for want of deposit of 10% of the amount assessed, so as to give retro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar as present appeal is concerned, provisions of section 26 (6-B)(c) are found attracted, which refer to deposit of an amount equal to 10% of balance amount of disputed tax along with appeal presented before Tribunal. It is not disputed that the said amended provision came into effect from 15/4/2017. It is also not disputed that review order passed by respondent no.4 was challenged by initiating proceedings on 13/4/2017 itself and that the amended provision has no retrospective effect. 13) Facts in the case of Messers Hoosein Kasam Dada (India) Ltd., referred supra and relied by appellant, are identical as would reveal that during continuation of the assessment proceedings, there was an amendment to Section 21 of the C.P. and Berar Sales Tax Act, 1947. Being aggrieved by the order of assessment, the assessee on 10/5/1950 preferred an appeal to the Sales Tax Commissioner, Madhya Pradesh, under section 22(1), Central Provinces and Berar Sales Tax Act, 1947 (hereinafter referred to as "the Act"). The appeal not having been accompanied by any proof of the payment of the tax in respect of which the appeal had been preferred, the authorities, after giving the assessee several adjournme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty unless it is satisfied that such amount of tax or penalty or both as the appellant may admit to be due from him, has been paid." The relevant portion of Section as amendment runs as follows : "Section 22(1) - Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order : Provided that no appeal against an order of assessment, with or without penalty shall be admitted by the said authority unless such appeal is accompanied by a satisfactory proof of the payment of the tax, with penalty, if any, in respect of which the appeal has been preferred." It is clear from the language used in the proviso to Section 22(1) as it stood prior to the amendment that an aggrieved assessee had only to pay such amount of tax as he might admit to be due from him, whereas under the proviso to Section 22(1) as amended the appeal has to be accompanied by satisfactory proof of payment of the tax in respect of which the appeal had been preferred. The contentions of the assessee was that as the amendment has not been made retrospective, its right of appeal under the original Section 22(1) remains unaffected and that accordingly....
X X X X Extracts X X X X
X X X X Extracts X X X X
....spute is himself the judge can make no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State. It will appear from the dates given above that in this case the 'lis' in the sense explained above arose before the date of amendment of the Section. Further, even if the 'lis' is to be taken as arising only on the date of assessment, there was a possibility of such a 'lis' arising as soon as proceedings started with the filing of the return or at any rate, when the authority called for evidence and started the hearing and the right of appeal must be taken to have been in existence even at those dates. For the purposes of the accrual of the right of appeal, the critical and relevant date is the date of initiation of the proceedings and not the decision itself." The Hon'ble Apex Court in the above-said set of circumstances thus observed that for the purpose of accrual of right of appeal, the relevant date is of initiation of proceedings and not the decision. 15) In the appeal in hand, admittedly review proceedings in respect of assessment order passed on 30/10/2014 for the financial year 2010-11 were init....
X X X X Extracts X X X X
X X X X Extracts X X X X
....date of its coming into force. 18) As against this, having considered submissions made for respondents and the law laid down in the case of Satya Nand Jha (supra) decided along with bunch of petitions, facts therein are distinguishable as against the facts involved in the appeal in hand, as challenge in that case was to Section 35F of the Central Excise Act, 1944, which is reproduced 17 stxa2.18 below for the purpose of convenience as it stood prior to amendment, i.e. prior to 6/8/2014 : "35F Deposit, pending appeal, of duty demanded or penalty levied : Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with adjudicating authority the duty demanded or the penalty levied : Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....his Section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No.2) Act, 2014. Explanation - For the purposes of this Section "duty demanded" shall include : (i) amount determined under Section 11D; (ii) amount of erroneous Cenvat credit taken; (iii) amount payable under Rule 6 of the Cenvat Credit Rules, 2001 or the Central Credit Rules, 2002 or the Cenvat Credit Rules, 2004." Thus, it is found that before Section 35F of the Central Excise Act, 1944 was amended, power was vested with the Authority to dispense with or waive the deposit subject to conditions as may be deemed fit to impose so as to safeguard the interest of revenue. However, after amendment to Section 35F, no Authority or Tribunal has a power to waive or dispense with such deposit. As such, we find this to be material difference in the cases relied by appellant than the law relied by the respondents. 19) The amended provisions of Section 26(6B) of the Act of 2002, which require consideration in the present appeal, are already reproduced above. Section 27 of the Act of 2002 refers to appeals. Sub-section 1(c) thereof contem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ailed to consider the fact of initiation of review proceedings on 13/4/2017 as stated above when admittedly amended provisions were not in force. Having considered the facts and for the reasons aforesaid, it is clear that amended Section 26(6B) of the Act of 2002 requiring appellant to deposit 10% of the disputed tax is not applicable to appellant since lis started in the year 2011 while effect of amendment is prospective with effect from 15/4/2017. Accordingly, question no.1 framed as aforesaid is replied holding that the Tribunal has committed an error in dismissing the appeal as not maintainable for non payment of amount aforesaid, i.e. 10% of the amount assessed." 18. As the above-reproduced discussion shows that the foundation in Anshul Impex is that the date of initiation of proceedings is relevant for an appeal. The Division Bench referred to the position of law that the right to file an appeal accrues on the initiation of the proceedings. Following this legal position, the Division Bench held that for the assessment orders were passed before the amendment to section 26 on 15 April 2017, the condition of pre-deposit was not applicable. The Petitioners have supported this vi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of appeal. In the case of Garikapatti Veeraya, which Anshul Impex refers to, the Supreme Court, after taking a review, has laid down these principles: (i) The legal pursuit of a remedy, suit, appeal and second appeal are really, but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. (ii) The right of appeal is not a mere matter of procedure, but is a substantive right. (iii) The institution of the suit carries with it the implication that all rights of appeal, then in force are preserved, to the parties thereto till the rest of the career of the suit. (iv) The right of appeal is a vested right and such a right to enter the superior Court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of filing of the appeal. (v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iam and decide the challenge. The second option is to refer the issue to a larger bench. The learned Advocate General fairly submitted that he is not raising the contention that the decision is per incuriam, but he contends that the matter be referred to the larger bench. The Division Bench in Anshul Impex has analyzed the decisions in the case of Hoosein Kasam Dada (India) Ltd. and Garikapatti Veeraya and also considered the very same amended provisions. Since the Division Bench has considered the very same controversy and the decisions of the Supreme Court on the subject, as a matter of propriety, we would prefer to take the second option of referring the issue for consideration of the larger bench. We are cognizant that the first option available to us, but, as a matter of judicial propriety, we do not take the same. Also, as noted earlier, we find it prudent and necessary that all the three issues need to be referred to the larger bench. Rules framed on the Appellate Side and Original Side of this Court also envisage such a course of action. Rule 8 of the High Court (Appellate Side ) Rules and Rule 28 of the High Court (Original Side) Rules enable placing of the matter before t....