Punjab-Haryana High Court
Khazan Chand Nathi Ram vs State Of Haryana And Ors. on 22 March, 2004
Equivalent citations: [2004]136STC261(P&H)
Author: Hemant Gupta
Bench: N.K. Sud, Hemant Gupta
JUDGMENT Hemant Gupta, J.
1. This judgment shall dispose of Civil Writ Petition Nos. 17178, 17188, 17696, 18898, 19073, 19132 and 20031 of 2003, 207 and 4415 of 2004 as all these cases involve similar question of law consequent to enactment of the Haryana Value Added Tax Act, 2003, w.e.f. April 1, 2003. However, for facility of reference, the facts are being taken from Civil Writ Petition No. 17178 of 2003.
2. The petitioner is a registered dealer under the Haryana General Sales Tax Act, 1973 (for short "the HGST Act") and is engaged in the business of purchase of paddy. For the assessment year 1998-99, the Assessing Authority framed the assessment under the HGST Act and raised an additional demand on account of purchase tax calculated under Section 6 of the HGST Act. The petitioner filed appeal along with an application under Section 39(5) of the HGST Act for entertaining the appeal without prior payment of tax on account of financial hardship on March 3, 2003. However, before the appeal filed by the petitioner could be entertained by the learned Appellate Authority, the HGST Act was repealed by virtue of Section 61(1) of the Haryana Value Added Tax Act, 2003 (for short "the HVAT Act"). It was then alleged that under the HVAT Act, the appeal filed by the petitioner is required to be entertained without any condition of pre-deposit of tax assessed, therefore, the appeal filed by the petitioner is required to be heard and decided under Section 33 of the HVAT Act. No payment of tax can be insisted upon as a condition precedent for hearing of appeal but still the learned appellate authority vide order dated April 2, 2003 ordered the payment of tax assessed in six monthly instalments as a condition precedent for hearing of appeal. The said order of the learned appellate authority was challenged by the petitioner in appeal before the Haryana Tax Tribunal (for short "the Tribunal"). The learned Tribunal dismissed the appeal holding that there is no implied repeal of provisions of Section 39(5) of the HGST Act and the appeal is to be entertained only under the provisions of Section 39(5) of the HGST Act. It is the said order which is impugned in the present writ petition.
3. In the written statement, it has been pleaded that tax liability related to the period when erstwhile HGST Act was still in existence and has not been repealed. Reference was made to the decision of the Supreme Court in the case of Titaghur Paper Mills Co. Ltd. v. State of Orissa [1983] 53 STC 315 to state that where any right or liability arises under a particular Act, the remedy available under that Act has to be availed of. Reference was also made to the decision of the Supreme Court in the case of Manphul Singh Sharma v. Smt. Ahmedi Begum (1994) 5 JT 49 (SC) to state that when a repeal is accompanied by a fresh legislation on the same subject, the provisions of the new Act will have to be looked into to determine whether and how far the new Act projects or keeps alive the old rights and liabilities. It has been stated that the provisions of Sub-section (2) of Section 61 of the HVAT Act envisages the procedure regarding entertainment of pending appeals, applications, revisions or other proceedings made or preferred to any authority under the old Act and pending at the commencement of the HVAT Act. It has been pointed out that since the order of assessment has been made before coming into operation of the HVAT Act, therefore, the right of appeal is to be exercised in terms of the HGST Act. Reliance was also placed upon Section 4 of the Punjab General Clauses Act, 1898 (as applicable to the State of Haryana).
4. Before adverting to the respective contentions of the parties, it would be beneficial to reproduce the relevant provisions of the Haryana General Sales Tax Act, 1973, the Haryana Value Added Tax Act, 2003 and the Punjab General Clauses Act, 1898 (as applicable to the State of Haryana) :
Haryana General Sales Tax Act, 1973 :
"Section 25. Submission of returns and payment of tax.--(1) Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals, as may be prescribed.
(2) Such dealer as may be required so to do by the assessing authority by notice served in the prescribed manner, and a dealer who has applied for the grant of registration certificate and no final decision in that behalf has been taken, and every registered dealer shall furnish such correct returns by such dates and to such authority as may be prescribed.
(2A) to (5)................"
"Rule 17. Payment of tax and submission of returns [Section 25].--(1) Every registered dealer or a dealer on whom a notice in form ST-8 has been served under Sub-section (2) of Section 25 in the State or a dealer who has applied for the grant of registration certificate and no final decision in that behalf has been taken in the State shall furnish return to the appropriate assessing authority in form ST-9 or in form ST 10 or both, as the case may be, for each quarter of a year, within one month of the expiry of the quarter.
(2) Every dealer as mentioned in Sub-rule (1) shall pay the full amount of tax due from him under the Act according to return in form ST-9 or ST-10 or both as the case may be before filing the return, in the manner prescribed in Rule 30.
(3) to (7) ......................."
"Section 39. Appeal.--(1) An appeal from every original order, including an order under Section 40, passed under this Act or the rules made thereunder shall lie--
(a) to (c)...............
(2) to (4).................
(5) No appeal shall be entertained unless it is filed within sixty days from the date of the order appealed against and the appellate authority is satisfied, that the amount of tax assessed and the penalty and interest, if any, recoverable from the person has been paid :
Provided that the said authority, if satisfied that the person is unable to pay the whole of the amount of tax assessed, or the penalty imposed, or the interest due, he may, if the amount of tax and interest admitted by the appellant to be due has been paid, for reasons to be recorded in writing, entertain the appeal and may stay the recovery of the balance amount subject to the furnishing of a bank guarantee or adequate security in the prescribed manner to the satisfaction of the appellate authority :
Provided further that in the case of an appeal against any order which has to be communicated by the appropriate authority to the appellant, the period of sixty days shall commence from the date of receipt of the copy of the order by the appellant and in the case of an appeal against any other order made under this Act, the time spent in obtaining the certified copy of the order shall be excluded in computing the period of sixty days.
(6) and (7) ........................"
Haryana Value Added Tax Act, 2003 :
"Section 33. Appeal.--(1) Any assessee considering himself aggrieved by an original order may prefer an appeal and the said appeal shall lie,--
(a) to (c) ...............
(2) to (4) ...............
(5) No appeal preferred by an assessee to an appellate authority shall be entertained unless it is filed within sixty days from the date of the order appealed against and the amount of tax and interest admitted by the appellant to be due as a result of the said order has been paid by him.
(6) to (8) .............."
"Section 61 : Repeal and saving.--(1) The Haryana General Sales Tax Act, 1973 (20 of 1973), is hereby repealed :
(2) Notwithstanding anything contained in Sub-section (1),--
(a) any application, appeal, revision or other proceedings made or preferred to any authority under the said Act, and pending at the commencement of this Act, shall, after such commencement, be transferred to and disposed of by the officer or authority who would have had jurisdiction to entertain such application, appeal, revision/or other proceedings under this Act as if it had been in force on the date on which such application, appeal, revision or other proceedings was made or preferred."
Punjab General Clauses Act, 1898:
"Section 4. Effect of repeal.--Where this Act or any Punjab Act repeals any enactment, then, unless a different intention appears, the repeal shall not--
(a) and (b) .......
(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or
(d)...........
(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid;
and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the Repealing Act had not been passed."
5. The learned Tribunal in the impugned order has relied upon Manphul Singh Sharma's case (1994) 5 JT 49 (SC) and India Tobacco Co, Ltd. v. Commercial Tax Officer, Bhavnipore [1975] 35 STC 95 (SC) to hold that the HGST Act (Haryana Act No. 20 of 1973) has not come to an end altogether with its repeal by the HVAT Act (Act No. 6 of 2003). Notwithstanding the repeal of the HGST Act, since the tax has been assessed under the HGST Act, the appeal is under the aforesaid Act alone.
6. A comparison of the provisions of the HGST Act and the HVAT Act shows that earlier assessee was bound to pay the amount of tax assessed along with penalty and interest before his appeal could be entertained by the learned appellate authority. However, assessee was given a right to seek exemption from pre-deposit of tax assessed along with penalty, etc., on satisfying the conditions prescribed in Sub-section (5) of Section 39 of the HGST Act. The learned appellate authority was competent to pass such order as it may consider appropriate. However, under the HVAT Act, the appeal cannot be entertained by the learned appellate authority unless the amount of tax and interest admitted by assessee to be due has been paid. It has been argued that the condition of pre-deposit of tax and interest has not been retained in the HVAT Act w.e.f. April 1, 2003, therefore, the appeals which are filed and pending after the commencement of the HVAT Act are required to be dealt with in terms of the provisions of the said Act. It has been argued that Section 61(2) of the HVAT Act contemplate transfer of application, appeal or revision or other proceedings and its disposal in terms of the HVAT Act, therefore, the appeals which are pending on the commencement of the HVAT Act are required to be decided in accordance with the provisions of the HVAT Act. It is contended that the condition of pre-deposit of tax is a condition relating to filing of appeal and, therefore, it will operate retrospectively, i.e., to all appeals which are pending irrespective of the assessment year or date of the assessment order.
7. Mr. Kashmiri Lal Goyal, learned counsel for the petitioners has relied upon the following decisions;
(i) Haryana Spun Pipe Construction Co. v. State of Haryana [1983] 53 STC 112 (P&H).
(ii) Vinod Gurudas Raikar v. National Insurance Co. Ltd. AIR 1991 SC 2156; and
(iii) Kalawati Devi Harlalka v. Commissioner of Income-tax, West Bengal [1967] 66 ITR 680 (SC); AIR 1968 SC 162.
8. Mr. B.K. Jhingan, learned counsel for the petitioners in connected writ petitions has relied upon the following decisions :
(i) Manphul Singh Sharma v. Smt. Ahmedi Begum (since deceased) through her legal representatives successors, Judgments Today (1994) 5 JT 49 (SC);
(ii) Hardeodas Jagannath v. State of Assam [1970] 26 STC 10 (SC).
(iii) Gajraj Singh v. State Transport Appellate Tribunal (1996) 8 JT 356 (SC); and
(iv) Shiv Shakti Co-operative Housing Society, Nagpur v. Swaraj Developers (2003) 6 SCC 659.
9. Learned single Judge of this Court in the case of Haryana Spun Pipe Construction Co. [1983] 53 STC 112 has held that right of appeal is a mere creature of the statute and the Legislature which confers such a right can equally take it away or prescribe conditions for the exercise of the right which may be onerous or otherwise. The Legislature would be perfectly within its right to regulate the right of appeal conferred by it while imposing conditions or restrictions on its exercise, including the requirement of the deposit of a tax or penalty before the entertainment of the appeal. This Court held as under :
"It is well-settled that a right of appeal is a mere creature of statute and the Legislature which confers such a right can equally take it away or prescribe conditions for the exercise of this right which may be onerous or otherwise. Reference may in this connection be made to the division Bench ruling of this Court in Subhash Chander & Co. v. State of Punjab [1979] 44 STC 331 where it was held that the right of appeal was neither a fundamental nor a constitutional right. There was no inherent claim or right of appeal from an original forum, and in particular, against an assessment of tax. The right of appeal was a mere creature of the Legislature and the Legislature which confers such a right can equally take the same away, if necessary. The Legislature would, thus, be perfectly within its right to regulate the right of appeal conferred by it while imposing conditions or restrictions on its exercise, including the requirement of the deposit of a tax or penalty before the entertainment of the appeal."
10. In Vinod Gurudas Raikar's case AIR 1991 SC 2156, the accident took place on January 22, 1989 when the Motor Vehicles Act, 1939, was in force. On July 1, 1989, the Motor Vehicles Act, 1988 came into force. The period of limitation for filing a claim petition under the old Act and the new Act being six months expired on July 22, 1989. The claim petition was filed on March 15, 1990 with an application for condonation of delay. The application was dismissed as delay of more than six months could not be condoned under the new Act. It was the case of the claimants that since the accident had taken place before the new Act came into force, the proceedings are governed by the old Act. It has been held that the right of appeal to file claim application is not affected at all by the substitution of one Act with another. The occasion to take the benefit of the provisions for condonation of delay arose only after the repeal of the old Act, therefore, the benefit of repealed law cannot be taken for the reason that the cause of action for the claim arose before repeal.
11. In Kalawati Devi Harlalka's case [1967] 66 ITR 680; AIR 1968 SC 162, the Supreme Court was seized of the provisions of Section 297 of the Income-tax Act, 1961 and Section 6 of the General Clauses Act, 1897. It was held that Section 6 of the General Clauses Act, 1897, would not apply to the repeal of the Income-tax Act, 1922, because in Section 297(2), the Parliament has clearly evidenced a contrary intention by express provisions. It was held that in view of the provisions of Section 297(2) of the Income-tax Act, 1961 the contrary intention would not be available. In the said case, it was held that the Commissioner had the jurisdiction to issue notice under Section 33B of the Income-tax Act, 1922 even in 1963 in respect of assessment under 1922 Act.
12. In Manphul Singh Sharma's case (1994) 5 JT 49 (SC), the honourable Supreme Court was considering the matter where the Delhi and Ajmer Rent Control Act, 1952, was repealed by the Delhi Rent Control Act, 1958. Sub-section (2) of Section 57 of the Delhi Rent Control Act, 1958, contemplated that notwithstanding such repeal, all suits and other proceedings under the said Act pending at the commencement of the 1958 Act before any Court or other authority shall be continued and disposed of in accordance with the provisions of the said Act as if the said Act had continued in force and this Act had not been passed. It was contended that when a repeal is accompanied by a fresh legislation on the same subject, the provisions of the new Act will have to be looked into to determine whether and how for the new Act projects or keeps alive the old rights and liabilities. It was, thus, contended that by virtue of Section 61(2) of the HVAT Act, all pending applications, appeals, revisions or other proceedings are not only required to be transferred to the corresponding authorities constituted under the HVAT Act but also required to be disposed of in accordance with the new HVAT Act.
13. In the case of Hardeodas Jagannath [1970] 26 STC 10, the Supreme Court was considering the amendment in the Assam Sales Tax Act, 1947, as amended in the year 1958, w.e.f. April 1, 1958. By virtue of amendment in Section 30 of the Assam Sales Tax Act, 1947, it was contemplated that no appeal could be entertained by the appellate authority unless the amount of tax assessed or penalty levied has been paid. It was held that since the assessment for the relevant period were completed after the amending Act came into force, i.e., after April 1, 1958 and the appeals against the assessments were also filed after the amendment, therefore, it is not correct to say that the amending Act has been given retrospective effect. It was held as under :
"It was contended that the amendment came into force with effect from April 1, 1958, and it cannot be given retrospective effect so as to apply to assessment periods ending on September 30, 1956, March 31, 1957-, and September 30, 1957. We are unable to accept this argument as correct because the assessments for these three periods were completed after the amending Act came into force, i.e., after April 1, 1958. The appeals against the assessments were also filed after the amendment. It is, therefore, not correct to say that the amending Act has been given a retrospective effect and the Assistant Commissioner of Taxes was, therefore, right in asking the appellant to comply with the provisions of the amended Section 30 of the Act before dealing with the appeals."
14. In Gajraj Singh's case (1996) 8 JT 356 (SC), it has been held that whenever an Act is repealed it must be considered, except as to transactions past and closed, as if it had never existed. The effect of the repeal is to obliterate the Act completely from the record of the Parliament as if it had never been passed, it never existed except for the purpose of those actions which were commenced, prosecuted and concluded while it was existing law. The petitioner has relied upon the following observations made by the Supreme Court in the above case :
"......Section 6 of the GC Act enumerates, inter alia, that where the Act repeals any enactment, unless a different intention appears, the repeal shall not (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed of anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced. In India Tabacco Co. Ltd. v. Commercial Tax Officer, Bhavanipore [1975] 35 STC 95 at 100 (SC); (1975) 3 SCC 512 at 517 in paras 6 and 11, a Bench of three-Judge had held that repeal connotes abrogation and obliteration of one statute by another from the statute book as completely as if it had never been passed. When an Act is repealed, it must be considered, except as to transactions past and closed, as if it had never existed. Repeal is not a matter of mere form but is of substance, depending on the intention of the Legislature. If the intention indicated either expressly or by necessary implication in the subsequent statute was to abrogate or wipe off the former enactment wholly or in part, then it would be a case of total or pro tanto repeal.
15. In Shiv Shakti Co-operative Housing Society's case (2003) 6 SCC 659, the honourable Supreme Court, while considering the scope of revisional jurisdiction in terms of Section 115 of the Code of Civil Procedure, 1908, has held that appeal is a right of entering a superior Court and invoking its aid and interposition to redress the error of the court below. Right of appeal is statutory and when conferred by statute it becomes a vested right. The court had drawn a distinction between a right of appeal and revision.
16. On the basis of the judgments referred to above, learned counsel for the petitioners submitted that the petitioners had a substantive right to file an appeal. The condition of pre-deposit of the tax, interest or penalty is a condition of appeal which is procedural in nature and, therefore, the amendment in the law would be applicable to all proceedings pending or to be initiated after the commencement of the HVAT Act. It has been pointed out that the learned Tribunal has misinterpreted the provisions of law and erred in law in holding that the HGST Act and HVAT Act operate in different fields and, therefore, liability under the one Act cannot be said to be repealed by another Act, Even judgment in Manphul Singh Sharma's case (1994) 5 JT 49 (SC), has been misread by the Tribunal as right to file appeal without pre-deposit of tax, penalty or interest does not affect vested rights of the parties.
17. Mr. Ashok Aggarwal, learned Advocate-General, Haryana, vehemently argued that there is no express provision under the HVAT Act in respect of continuation of proceedings under the HGST Act. Section 61(2) of the HGST Act, only defines the authorities constituted under the HVAT Act as competent to hear and decide the pending application, appeal, revision or other proceedings. Sub-section (2) of Section 61 of the HVAT Act deals with only proceedings pending at the commencement of this Act which are to be transferred to and disposed of by the corresponding authorities constituted under the new Act. Even by implication, it cannot be said that the provisions of the new Act, i.e., the HVAT Act have substituted the provisions of the HGST Act with retrospective effect. In the absence of an express enactment, the provisions of the new Act cannot apply to the proceedings pending on the date when the new Act came into force. Reliance was placed upon judgment of the Supreme Court in the case of Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh [1953] 4 STC 114, wherein it has been held that a right of appeal is not merely a matter of procedure. It is a matter of substantive right. The right of appeal vested in a party when proceedings are first initiated in, and before a decision is given by the inferior Court. Such pre-existing right of appeal is not destroyed by an amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that pre-existing right of appeal continues to exist must necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. The old Act continues to exist for the purpose of supporting the pre-existing right of appeal. The said case arose out of the Central Provinces and Berar Sales Tax Act, 1947, wherein originally right of appeal was given on the payment of tax or penalty or both as admitted to be due from assessee. However, the provisions of Section 22 of the said Act were amended on November 25, 1949 when as a condition precedent to appeal, the appeal was required to be accompanied by satisfactory proof of payment of tax in respect of which the appeal had been preferred.
18. Learned Advocate-General, Haryana, also relied upon the judgment of the Supreme Court in the case of Ramesh Singh v. Cinta Devi (1996) 3 PLR 507 wherein the honourable Supreme Court was considering the provisions of Section 173 of the Motor Vehicles Act, 1988. It has been held that right of appeal is a substantive right and is governed by the provisions of law as it existed when the lis commenced. Since at the time of commencement of lis, there was no condition of pre-deposit of Rs. 25,000 for the purpose of filing of appeal, there cannot be any insistence of pre-deposit of the said amount.
19. We have heard learned counsel for the parties at great length and with their assistance gone through the case law referred to by them.
20. The Privy Council in Colonial Sugar Refining Co. Ltd. v. Irving 1905 AC 369 was confronted with the question whether imposition of a restriction by the amendment of section can affect the assessee's right of appeal from a decision in proceedings which commenced prior to such amendment. In the said case, Privy Council, held as under :
"As regards the general principles applicable to the case there was no controversy. On the one hand, it was not disputed that if the matter in question be a matter of procedure only, the petition is well-founded. On the other hand, if it be more than a matter of procedure, if it touches a right in existence at the passing of the Act, it was conceded that, in accordance with a long line of authorities extending from the time of Lord Coke to the present day, the appellants would be entitled to succeed. The judiciary Act is not retrospective by express enactment or by necessary intendment. And therefore the only question is, was the appeal to His Majesty in Council a right vested in the appellants at the date of the passing of the Act, or was it a mere matter of procedure ? It seems to their Lordships that the question does not admit of doubt. To deprive a suitor in a pending action of an appeal to a superior Tribunal which belonged to him as of right is a very different thing from regulating procedure. In principle, their Lordships see no difference between abolishing an appeal altogether and transferring the appeal to a new Tribunal. In either case there is an interference with existing rights contrary to the well-known general principle that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested."
21. A division Bench judgment of the Calcutta High Court in the case Nagendra Nath Bose v. Mon Mohan Singha Roy reported as AIR 1931 Cal 100, while considering the imposition of onerous condition in exercise of right or appeal held as under :
"We think the contention of the petitioner is well-founded and must prevail. That a right of appeal is a substantive right cannot now be seriously disputed. It is not a mere matter of procedure. Prior to the amendment of 1928 there was an appeal against an order refusing to set aside a sale for that is the effect also where the application to set aside the sale is dismissed for default under the provisions of Order 43, Rule 1 of the Code of Civil Procedure. That right was unhampered by any restriction of the kind now imposed by Section 174(5), proviso. The court was bound to admit the appeal whether appellant deposited the amount recoverable in execution of the decree or not. By requiring such deposit as a condition precedent to the admission of the appeal, a new restriction has been put on the right of appeal, the admission of which is now hedged in with a condition. There can be no doubt that the right of appeal has been affected by the new provision and in the absence of an express enactment this amendment cannot apply to proceedings pending at the date when the new amendment came into force. It is true that the appeal was filed after the Act came into force, but that circumstance is immaterial--for the date to be looked into for this purpose is the date of the original proceeding which eventually culminated in the appeal."
22. The said judgments were quoted with approval by the honourable Supreme Court in Hoosein Kasam Dada (India) Ltd.'s case [1953] 4 STC 114 wherein it was held as under :
"The above decisions quite firmly establish and our decisions in Janardan Reddy v. State [1950] SCR 941 and in Ganpat Rai v. Agarwal Chamber of Commerce Ltd. [1952] SCJ 564, uphold the principle that a right of appeal is not merely a matter of procedure. It is a matter of substantive right. This right of appeal from the decision of an inferior Tribunal to a superior Tribunal becomes vested in a party when proceedings are first initiated in, and before a decision is given by, the inferior Court. In the language of Jenkins, C.J., in Nana Bin Aba v. Shaik Bin Andu [1908] ILR 32 Bom 337, to disturb an existing right of appeal is not a mere alternation in procedure. Such a vested right cannot be taken away except by express enactment or necessary intendment. An 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."
.........The true implication of the above observation as of the decisions in the other cases referred to above is that 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 to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre-existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right. The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to Section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre-existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist. The argument of Sri Ganapathy Aiyar on this point, therefore, cannot be accepted."
23. Another argument which was dealt by the court was that no lis arises until actual assessment is made and, therefore, no right or appeal can accrue before that event. It was held that whenever there is a proposition by one party and an opposition to that proposition by another a "lis" arises. It was conceded, though not deciding it, that when the assessee files his return a "lis" may not immediately arise as under Section 11(1) the authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State. It was held that the relevant date to determine the accrual of right of appeal is the date of initiation of the proceedings and not the decision itself. Supreme Court held as under :
"Finally, Sri Ganapathy Aiyar faintly urges that until actual assessment there can be no 'lis' and, therefore, no right of appeal can accrue before that event. There are two answers to this plea. Whenever there is a proposition by one party and an opposition to that proposition by another a 'lis' arises. It may be conceded, though not deciding it, that when the assessee files his return a 'lis' may not immediately arise, for under Section 11(1) the authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State. The circumstance that the authority who raises the dispute 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."
24. The question relating to vested right of appeal was again considered by the Constitution Bench of the Supreme Court in the case of Garikapati Veeraya v. N. Subbiah Choudhry AIR 1957 SC 540. The court referred Hoosein Kasam Dada's case [1953] 4 STC 114 (SC) and held that in the suit instituted on April 22, 1949, the right of appeal vested in the parties thereto on that date and is to be governed by the law as it prevailed on that date, that is to say, on that date the parties acquired the right, if unsuccessful to go up in appeal from the sub-court to the High Court and from the High Court to the Federal Court. Constitution Bench in an elaborate judgment concluded to the following effect :
"(i) That 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 the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the 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 by necessary intendment and not otherwise."
25. In the said judgment of the Constitution Bench of the Supreme Court, the Full Bench judgment rendered by the Madras High Court in the case of Veeranna v. China Venkanna AIR 1953 Mad. 878 was held to be not a correct law. It was held that right of appeal becomes vested in the parties to the suit at the time of the institution of the suit and the date of the judgment or the date of the filing of the appeal has nothing to do with it. Therefore, a party to a suit, who is dissatisfied with a judgment passed in civil proceedings had a right of appeal which had accrued to him on the date of the institution of the suit or proceeding in the court of first instance, according to the law then in force and it is immaterial whether the judgment is passed before or after the repeal or amendment. The right to go from court to court in appeal is the right which vests at the date of the institution of the proceedings in the court of the first instance. The relevant observations of the Supreme Court read as under :
"There are, moreover, deeper grounds of objection to the construction placed upon Article 133 by this later Madras Full Bench case we are considering. It overlooks the fact that the right of appeal becomes vested in the parties to the suit at the date of the institution of the suit and the date of the judgment or the date of the filing of the appeal has nothing to do with it. Therefore, a party to a suit, who is dissatisfied with a judgment passed by the High Court in a civil proceeding arising out of a suit of proceeding filed in the court of first instance before the Constitution, has a right of appeal which had accrued to him at the date of the institution of the suit or proceeding in the court of first instance according to the law then in force and it is immaterial whether the judgment is passed before or after the Constitution. The right to go from court to court in appeal is the right which vests at the date of the institution of the proceedings in the court of the first instance. It is true, as pointed out by Rankin, C.J., that the litigant cannot go from Court A to Court B or from Court B to Court C unless and until an adverse order actually is made but the right to go upto Court C vests, not at the date of the adverse judgment or the date of the filing of the appeal but, at the date of the institution of the original proceedings......."
26. Subsequently, in the case of Vitthalbhai Naranbhai Patel v. Commissioner of Sales Tax, Madhya Pradesh [1961] 12 STC 219; AIR 1967 SC 344, another Constitution Bench of the Supreme Court was again seized of a matter pertaining to the Central Provinces and Berar Sales Tax Act, 1947, with the proposition as to when lis commences. The matter was being considered by the Supreme Court on a leave to appeal granted by the High Court. The court found that since the date of filing of return is not available in the records of the case, therefore, on facts it could not be concluded when the lis commenced. It was held by the Supreme Court as under :
"That leaves over for consideration the question whether Hoosein Kasam Dada's case [19531 4 STC 114 (SC); [1953] SCR 987; AIR 1953 SC 221, should be applied. That also presents some difficulty to us. We have before us the petition which was made in the High Court, and we cannot allow that petition to be amended. That petition does not mention the dates on which the return was filed, so that we could apply the dictum of this Court in Hoosein Kasam Dada's case [1953] 4 STC 114 (SC); [1953] SCR 987; AIR 1958 SC 221. Dr. Barlingay deduces the date of the filing of the return from the dates on the challans accompanying the payment of tax in the treasury, and argues that this was prior to the amendment. He contends that this is sufficient for the application of the principle in the said case.
The decision in Hoosein Kasam Dada's case [1953] 4 STC 114 (SC); [1953] SCR 987; AIR 1953 SC 221 proceeded on the ground that when a lis commences, all rights get crystalised and no clog upon a likely appeal can be put, unless the law was made retrospective, expressly or by clear implication. From the record of this case, we cannot say when the lis commenced, and unless it can be proved conclusively that it was before the amendment of the law, the rule in Hoosein Kasam Dada's case [19533 4 STC 114 (SC); [1953] SCR 987; AIR 1953 SC 221, cannot apply. There is no averment that right of appeal had vested, and has been wrongly taken away."
27. In Hitendra Vishnu Thakur v. State of Maharashtra AIR 1994 SC 2623, the Supreme Court has considered the amendment made in the Terrorist and Disruptive Activities Prevention Act, 1987. By virtue of Amendment Act No. 43 of 1993 w.e.f. May 22, 1993, the maximum period during which the accused under the aforesaid Act can be kept in custody pending investigation was reduced from one year to 180 days. The question arose as to whether the amending Act have retrospective operation and, thus, the amendment applies to cases which were pending investigation when the Amendment Act came into force. It has been held that the law relating to forum and limitation is procedural in nature whereas the law relating to right of action and right of appeal, even though remedial, is substantive in nature. In para No. 25 of the judgment, Supreme Court held as under:
"The Designated Court has held that the amendment would operate retrospectively and would apply to the pending cases in which investigation was not complete on the date on which the Amendment Act came into force and the challan had not till then been filed in the court. From the law settled by this Court in various cases, the illustrative though not exhaustive, principles which emerge with regard to the ambit and scope of an amending Act and its retrospective operation may be culled out as follows :
'(i) A statute which affects substantive rights is presumed to be prospective in operation, unless made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such a construction is textually impossible is presumed to be retrospective in its application, should not be given an extended meaning, and should be strictly confined to its clearly defined limits.
(ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal, even though remedial, is substantive in nature.
(iii) Every litigant has a vested right in substantive law, but no such right exists in procedural law.
(iv) A procedural statute should not generally speaking be applied retrospectively, where the result would be to create new disabilities or obligations, or to impose new duties in respect of transactions already accomplished.
(v) A statute which not only changes the procedure but also creates a new rights and liabilities, shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication'."
28. Such view of the Supreme Court has been referred to by the Constitution Bench with approval in the case of Shyam Sundar v. Ram Kumar AIR 2001 SC 2472.
29. In Vinod Gurudas Raikar's case AIR 1991 SC 2156, the question was of a limitation to file an application to claim compensation under the Motor Vehicles Act. It has been held by the Supreme Court in Hitendra Vishnu Thakur's case AIR 1994 SC 2623, that question of limitation and forum pertain to procedure. Therefore, such amendment relating to procedure will apply even with retrospective effect. The said judgment is, thus, not applicable to the facts of the present case. In Kalawati Devi's case [1967] 66 ITR 680 (SC); AIR 1968 SC 162, the Supreme Court was interpreting the provisions of Section 297 of the Income-tax Act, 1961, wherein Sub-section (2) of Section 297 of the said Act has contemplated applicability of the Income-tax Acts, 1922 and 1961 expressly of assessment relevant to the date of filing of the return. In Manphul Singh Sharma's case (1994) 5 JT 49 (SC), the proceedings under the old Act were specifically saved, therefore, the said judgment is not applicable to the questions arising in the present case. In Shiv Shakti Co-operative Housing Society's case (2003) 6 SCC 659, it has been held by the honourable Supreme Court that the right of appeal is a substantive right which cannot be taken away. There is no dispute about the said proposition. Therefore, the judgments relied upon by the learned counsel for the petitioners are clearly distinguishable and do not deal with the issue arising in the present case.
30. In the present case, the question which arises is whether after the repeal of the HGST Act, the right of appeal is regulated by the provisions of the repealed Act when the new Act has not made any provision either expressly or by implication for giving retrospective effect to the provisions of the new Act.
31. In Hardeodas Jagannath's case [1970] 26 STC 10 (SC) the Constitution Bench has applied the provisions of law existing on the date of the passing of the assessment order although the assessment period was prior to the amendment. However, it may be noticed that the judgments referred to above, i.e., earlier Constitution Bench judgments in Garikapati Veeraya's case AIR 1957 SC 540 and Vitthalbhai Naranbhai Patel's case [1961] 12 STC 219; AIR 1967 SC 344, were not brought to the notice of the court. The issue was debated exhaustively in Garikapati Veeraya's case AIR 1957 SC 540 quoting Hoosein Kasam Dada's case [1953] 4 STC 114 (SC), with approval. In view of the earlier binding principles having not brought to the notice of the court in Hardeodas Jagannath's case [1970] 26 STC 10 (SC), we are faced with difficulty how to resolve the conflicting judgments of co-ordinate Benches of the honourable Supreme Court. The matter was considered by a Full Bench of this Court in Indo Swiss Time Limited, Dundahera v. Umrao (1981) 83 PLR 335, wherein it has been held that in the event of two directly conflicting judgments of the superior Court and of equal authority, the judgment which appears to lay down the law more elaborately and accurately is required to be followed. It was held as under :
"When judgments of the superior Court are of co-equal Benches and therefore of matching authority then their weight inevitably must be considered by the rationale and the logic thereof and not by the mere fortuitous circumstances of the time and date on which they were rendered. It is manifest that when two directly conflicting judgments of the superior Court and of equal authority are extant then both of them cannot be binding on the Courts below. Inevitably a choice, though a difficult one, has to be made in such a situation. On principle it appears to me that the High Court must follow the judgment which appears to it lay down the law more elaborately and accurately. The mere incidence of time whether the judgments of coequal Benches of the superior Court are earlier or later is a consideration which appears to me as hardly relevant."
32. In view of the principle of law laid down by the Full Bench of this Court Indo Swiss Time Limited v. Umrao (1981) 83 PLR 335, we are of the opinion that the law has been more elaborately and accurately laid down in Garikapati Veeraya's case AIR 1957 SC 540 wherein the earlier judgment in Hoosein Kasam Dada's case [1953] 4 STC 114 (SC) has been quoted with approval. Therefore, we prefer to follow the view of the honourable Supreme Court in Hoosein Kasam Dada's case [1953] 4 STC 114, as approved in Garikapati Veeraya's case AIR 1957 SC 540.
33. The decision rendered by a single Bench of this Court in Haryana Spun Pipe Construction Co.'s case [1983] 53 STC 112, is solely based on the judgment of the honourable Supreme Court in Hardeodas Jagannath's case [1970] 26 STC 10, as well as a division Bench judgment of this Court in Subhash Chander & Co. v. State of Punjab [19793 44 STC 331. The division Bench judgment referred to does not deal with the question arising in the present case. Since we have preferred to follow the earlier Constitution Bench judgment in Garikapati Veeraya's case AIR 1957 SC 540, the said judgment of the learned single Bench does not lay down good law.
34. In view of various judgments referred to above and on the reading of Section 61(2) of the HVAT Act, 2003 it is concluded that Section 61(2) of the HVAT Act does not give any retrospective effect to the provisions of the aforesaid Act either expressly or by necessary implication. Sub-section (2) of Section 61 of the HVAT Act, 2003, contemplates transfer of pending proceedings pertaining to application, appeal, revision or other proceedings to the authorities constituted under the HVAT Act, 2003 and to be disposed of by the authorities so constituted. Such authorities constituted under the HVAT Act has been given deemed fiction to be in existence for the purpose of such application, appeal, revision or such other proceedings so as to be in force on the date such application, appeal, revision or other proceedings have been made or preferred. Since expressly or by necessary intendment, no retrospective effect is sought to be given, therefore, the effect of repeal of the HGST Act is required to be examined with reference to Section 4 of the Punjab General Clauses Act, 1898 (as applicable to the State of Haryana).
35. Section 4 of the Punjab General Clauses Act, 1898 (as applicable to the State of Haryana) is the relevant provision of law in such a situation where the subsequent Act while repealing the old Act has not provided for any retrospective operation of the new Act either expressly or by implication. Section 4 of the Punjab General Clauses Act contemplates that in the absence of any contrary intention expressly or impliedly, any right, privilege, liability or obligation under the old law will continue to be governed under the old law. The assessee has a right to file appeal under the HGST Act with a liability or obligation to pre-deposit the amount of tax, interest and penalty. Such obligation or liability confers a right in favour of the State to insist upon pre-deposit of tax, interest or penalty. From the judgments of the honourable Supreme Court in Hoosein Kasam Dada's case [1953] 4 STC 114 and Garikapati Veeraya's case AIR 1957 SC 540, it is apparent that the right of appeal is a vested right and accrues to the litigant and exists as on and from the date the lis commences. Such right is actually exercised when the adverse judgment is pronounced. Such right is to be governed by the law prevailing on the date of the institution of the suit or proceeding and not by the law that prevails on the date of its decision or at the date of the filing of the appeal.
36. In civil proceedings, lis commences on the presentation of the plaint or in cases claiming compensation under the Motor Vehicles Act on filing claim application. The question is when lis can be said to commence under the taxation laws. Section 25 of the HGST Act enjoins a duty upon an assessee to file quarterly return and deposit tax thereon. If such returns are accepted, there is no lis. Consequently, there would be no occasion for the parties to file an appeal. However if such returns are not accepted, the cause of action which arise on the date when returns are required to be filed. The cause of action can be said to be arisen also when an assessee is called upon to furnish return on his failure to do so in terms of the provisions of the old Act. In fact, that is the relevant date as in Vitthalbhai Naranbhai Patel's case [1961] 12 STC 219 (SC); AIR 1967 SC 344.
37. In view of the above discussion, we hold that right of appeal is a vested right as if exists on the date of commencement of lis. The lis can be said to commence under the HGST Act on the date when return is filed or is required to be filed. Therefore, the provisions of Section 39(5) of the HGST Act would continue to govern the right of appeal vested in the petitioner which is saved in terms of Section 4 of the Punjab General Clauses Act (as applicable to State of Haryana).
38. Consequently, writ petitions are dismissed with no order as to costs.
39. However, the petitioners are granted four weeks time to comply with the conditions of Section 39(5) of the HGST Act.