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AmIn Chand Payarelal Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1984)(16)ELT126TriDel
AppellantAmIn Chand Payarelal
RespondentCollector of Central Excise
Excerpt:
f.s. gill, j. (president) and b.b. gujral, d.n. lal, (t) and s. duggal, (j) members 1. this appeal has been referred to a larger bench because the bench hearing this appeal did not agree with the decision dated 17-8-1983 given by another bench of the tribunal in appeal no. ed(sp)67/83c. this is how the matter is before us and we have heard counsel for both sides at great length and given our consideration to the matter as well.2. the main question for consideration is whether the appellant is bound to deposit the duty demanded or the penalty levied as a condition precedent to the hearing of the appeal as required by section 35f of the central excises and salt act 1944 (as amended by finance act no. 2 being act no. 44 of 1980) hereinafter referred to as the act. the amendment inserted a.....
Judgment:
F.S. Gill, J. (President) and B.B. Gujral, D.N. Lal, (T) and S. Duggal, (J) Members 1. This appeal has been referred to a larger Bench because the Bench hearing this appeal did not agree with the decision dated 17-8-1983 given by another Bench of the Tribunal in Appeal No. ED(SP)67/83C. This is how the matter is before us and we have heard counsel for both sides at great length and given our consideration to the matter as well.

2. The main question for consideration is whether the appellant is bound to deposit the duty demanded or the penalty levied as a condition precedent to the hearing of the appeal as required by Section 35F of the Central Excises and Salt Act 1944 (as amended by Finance Act No. 2 being Act No. 44 of 1980) hereinafter referred to as the Act. The amendment inserted a new chapter VIA containing a series of Sections 35, 35A to 35P and 36 in the Act in substitution of the previous Sections 35, 35A and 36 of the old Act. We will first extract the relevant amended provisions of the said Act. They read as follows: - Appeals to Collector (Appeals) :-(1) Any person aggrieved by any decision or order passed under this Act by a Central Excise Officer lower rank than a Collector of Central Excise may appeal to the Collector of ( entral Excise (Appeals) [hereafter in this chapter referred to as the Collector (Appeals) within three months from the date of the communication to him of such decision or order : Provided that the Collector (Appeals) may if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months allow it to be presented within a further period of three months.

(2) Every appeal under this section shall be in the prescribed form and shall be verified in the prescribed manner.

Appeals to the Appellate Tribunal : (1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order :- (c) :in order passed by the Central Board of Excise & Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), (hereafter in this Chapter referred to as the Board) or the Appellate Collector of Central Excise under Sec. 35, as it stood immediately before the appointed day ; (d) an order passed by the Board or the Collector of Central Excise, either before or after the appointed day, under Sec. 35A as it stood immediately before that day : Provided that the Appellate Tribunal may, in its discretion, refuse to admit an appeal in respect of an order referred to in Col. (b) or Cl. (c) or Cl. (d) where- (i) in any disputed case other than a case where the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assesment is in issue or is one of the points in issue, the difference in duty involved ; or (ii) the amount of fine or penalty determined by such order, does not exceed ten thousand rupees.

The Collector of Central Excise may, if he is of opinion that an order passed by the Appellate Collector of Central Excise under Sec.

35, as it stood immediately before the appointed day, or the Collector (Appeals) under Sec. 35A, is not legal or proper, direct any Central Excise Officer authorized by him in this behalf (hereafter in this Chapter referred to as the authorized officer) to appeal on his behalf to the Appellate Tribunal against such order.

Powers of Board or Collector of Central Excise to pass certain orders : (4) Where in pursuance of an order under Sub-section (1) or Sub-section (2) the adjudicating authority or the authorised officer makes an application to the Appellate Tribunal or the Collector (Appeals) within a period of three months from the date of communication of the order under Sec-section (1) or Sub-section (2) to the adjudicating authority, such application shall be heard by the Appellate Tribunal or the Collector (Appeals), as the case may be, as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of Sub-section (4) of sec. 35B shall, so far as may be, apply to such application.

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 the adjudicating authority the duty demanded or the penalty levied : Provided that where in any particular case, the Collector (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 Collector (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue.

Appeal to Supreme Court-An appeal shall lie to the Supreme Court from- (a) any judgment of the High Court delivered on a reference made under Sec. 35-G in any case which, on its own motion or on an oral application made by or on behalf of the party aggrieved immediately after the passing of the judgment, the High Court certifies to be a fit one for appeal to the Supreme Court; or (b) any order passed by the Appellate Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment.

Transfer of certain pending proceedings and transitional provisions :- (1) Every appeal which is pending immediately before the appointed day before the Board under Sec. 35, as it stood immediately before that day, and any matter arising out of or connected with such appeal and which is so pending shall stand transferred on that day to the Appellate Tribunal and the Appellate Tribunal may proceed with such appeal or matter from the stage at which it was on that day : Provided that the appellant may demand that before proceeding further with that appeal or matter, he may be re-heard.

(2) Every proceeding which is pending immediately before the appointed day before the Central Government under Sec. 36, as it stood immediately before that day, and any matter arising out of or connected with such proceeding and which is so pending shall stand transferred on that day to the Appellate Tribunal and the Appellate Tribunal may proceed with such proceeding or matter from the stage at which it was on that day as if such proceeding or matter were an appeal filed before it: Provided that if any such proceeding or matter relates to order where- (a) in any disputed case other than a case where the determination of any question having a relation to the rate of duty or excise or to the value of goods for purposes of assessment is in issue or is one of the points in issue, the difference in duty involved or the duty involved ; or (b) the amount of fine or penalty determined by such order, does not j exceed ten thousand rupees, such proceeding or matter shall continue to be dealt with by the Central Government as if the said Sec. 36 had not been substituted : Provided further that the applicant or the other party may make a demand to the Appellate Tribunal that before proceeding further with that proceeding or matter, he may be re-heard.

(3) Every proceeding which is pending immediately before the appointed day before the Board or the Collector of Central Excise under Sec. 35A ; as it stood immediately before that day and any matter arising out of or connected with such proceeding and which is so pending shall continue to be dealt with by the Board or the Collector of Central Excise, as the case may be, as if the said section had not been substituted.

(4) Any person who immediately before the appointed day was authorized to appear in any appeal or proceeding transferred under Sub-section (1) or Sub-section (2) shall, notwithstanding anything contained in Sec. 35-O have the right to appear before the Appellate Tribunal in relation to such appeal or proceeding.

3. The principal argument on behalf of the appellant is that the right of appeal is a substantive right and not merely a matter of procedure.

Reliance is placed on :Hoosein Kasam Dada (India) Ltd. v. The State of Madhya Pradesh, AIRState of Bombay v. Supreme General Films Exchange, AIR 1960 S.C. 980 ; and 4. The first judgment of the Supreme Court we shall be dealing in detail later and the second and third judgments referred to above are on the same lines and they leave an exception about express provision or necessary intendn ont. The judgment of the Supreme Court in Collector of Customs v. A.S. Bava dealt with notification dated 4-5-1963 by which Section 129 of the Customs Act was sought to be applied to Section 35 (unamended) of the Central Excises and Salt Act.

That notification was held to be invalid, for it resulted in whittling down the right of appeal which was held to be substantive. There the question was whether the notification was bad in relation to the rights conferred under Section 35 of the (unamended) Act. In the present case the Act itself has been amended and a complete procedure has been provided. For reasons stated hereinafter we are not deciding whether the amendment carried out is constitutional or not.

5. It was then argued that the right of appeal accrued on the date the original proceedings were initiated, and not from the date the order appealed against was passed and for this purpose it was stated that the date of issue of show cause notice marked the commencement of the Us, It was also urged that the appeal was nothing but a continuation of the proceedings and therefore the old law should be applicable. Reliance was placed also on State of Kerala v. K.M. Gharia Abdulla, AIR 1965 S.C. 1585. It is true that there are observations in the judgment to the effect that an appeal is a continuation of the proceedings and that in effect the entire proceedings are before the Appellate authority but the question involved in the present case is a different one. We have to see whether in face of the amended Act the old law would survive or the amendment specifically applies to pending matters. Therefore, this argument is of no avail.

6. It was argued that abolition of the appellate authority without establishment of a substitute amounted to deprivation of the substantive right of appeal and further that neither the Government of India nor the Central Board of Excise & Customs (which were the earlier forums) had been abolished. This argument is without force, for the Act by a comprehensive amendment has provided complete procedure and is self-contained. In the face of the wording of the amended Act, which in our opinion is clear, this argument loses force. Further, although the Central Government or the Board have not been abolished but they have been deprived of their power to hear appeals which is sufficient requirement under law. There were other arguments as well but we need not deal with them in view of the clear legal position which we are discussing hereinafter.

7. First of all, we must make it clear that we do not intend to rule upon the vires or otherwise of the amendment carried out by the Finance Act of 1980 or of the Act as amended. To us the amendment appears to be squarely intra-vires, but this Tribunal being itself a creature of the amended Act, cannot go into vires of the Act. We therefore decline to rule upon the constitutionality or otherwise of the Act as amended and proceed on the basis that the Act and the amendment are all constitutional and that we are only to construe the provisions as they stand.

8. The main-stay of the submission by the appellant has been the dictum of the Supreme Court in " Hoosein Kasam Dada (India) Ltd. v. The State of Madhya Pradesh "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 supreme Tribunal becomes vested in a party when proceedings are first initiated in and before a decision is given by the inferior Court".

The Supreme Court was construing the C.P. and Berar Sales Tax Act of 1947 as amended in 1949. The amendment was held not applicable to those appeals which arose out of the proceeding initiated under the old Act because the amending Act did not at all indicate that the appeals arising out of the proceedings initiated under the old Act would be governed by the amendment. Throughout the judgment the test by which the applicability of the amendment was to be judged was said to be this : Whether or not pending proceedings would be governed by the amendment. Since the amendment did not apply to the pending proceedings, it did not have a retrospective application. Reliance was placed on the leading decision by the Privy Council in Colonial Sugar Refining Co. v. Irving 1905 AC 369. In that case also the appeal was governed by the old Act and not by the amendment because the amendment did not apply to the pending proceedings. The same test as to whether the amending Act applies to the pending proceeding was the basis of the decision of the Supreme Court in Garikapati Veeraya v. N. Subhia Choudhry-AlR. "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." 9. Let us apply this test to the amendment made in the Central Excises & Salt Act of 1944 by the Finance Act (No. 2) being Act No. 44 of 1980.

Firstly, the appeals which under the old Act lay to the Collector of Central Excise should now go to the Collector (Appeals) under the new Sections 35 and 35A inserted by the amendment. Secondly, appeals which under the old Act went to the Central Board of Excise would now go to the Appellate Tribunal under Section 35B. Under Section 35B(1) (c) appeal is to lie to the Tribunal against an order passed by the Appellate Collector under Section 35 as it stood immediately before the appointed day, namely, 11-10-1982. The under-lined words are important.

They expressly state that the orders which were passed under the old Act and which would have been subject to appeals to different authorities under the old Act are now to be subject to an appeal before the Tribunal.. This provision is expressly retrospective. The substantive right of appeal arising out of the proceedings under the old Act lay to the Central Board of Excise and the Appellate Collector under the old Act. This right has been taken away from the appellants and the appellants have been told that their appeals would lie to the Tribunal only and not to the Appellate Collector arid the Central Board of Excise. Thirdly, under Section 35B (d) appeals against the order before or after the appointed day under Section 35A as it stood immediately before that day, namely, before the amendment, are also to be heard by the Tribunal. This is another provision which expressly treats the pending proceedings in the same way as those which are initiated under the amended Act. Fourthly, Section 35B(2) empowers the Collector to file an appeal against an order made under Section 35 as it stood immediately before the appointed day, or an order passed under Section 35A to file an appeal to the Tribunal. This again is a provision affecting the pending proceedings and is therefore retrospective. Fifthly, Section 35E(4) enables an appeal to be filed before the Tribunal in respect of the cases which would have been otherwise heard by the Central Government in exercise of their revisional powers under the old Act. Sixthly, even those appeals which were already filed to the old Appellate authorities under the old Act before the amendment came into force on 11-10-1982, are transferred to the Tribunal by Section 3i P(l). introduced by the amendment.

Similarly, Section 35 P(2) transfers to the Tribunal the revisions pending before the Central Government. All these provisions expressly apply the amended Act to those appeals which arose out of the proceedings initiated under the old Act and which would have been heard by the Appellate Collector or the Central Board of Excise but for the amendment.

10. The rule of interpretation of Statutes is that the right to appeal is a substantive right and it vests in the party as soon as the proceeding is initiated out of which ultimately the appeal arises. This vested right is not taken away from the party by a change in the law unless the change either expressly or by necessary implication does so.

It is well settled law that pending proceedings are not governed by the new law unless the new law says so, either expressly or by necessary intendrnent. Applicability of the new law to pending proceedings was made the test. Once new law is made applicable to a pending proceeding, it is retrospective and takes away the vested right of appeal. This test.of applicability to a pending proceeding was laid down in Workmen Firestone Tyre Co. v.. Management AIR 1973 S.C. 1227, in K. Kapan Chakov. Provident Investment Co, 1977-1 S.C. Cases 593, in Daya Wati v.Inderjit AIR 1966 S.C. 1423, in Shabbuddin v. Gadoty Betgeri Municipal Euro AIR 1955 S.C. 31.4, in Indermani Pyarelal Gupta v. W.R. Natu, AIR 1963 S.C. 274. In our view this test is expressly satisfied by the provisions inserted by the amendment in the Central Excises Act as pointed out above and therefore these provisions are retrospective and deprive the appellants of their right of appeal before the Central-Board of Excise and the Appellate Collector.

11. Another test specifically relating to the right of appeal is also laid down by the Supreme Court. It is this : These are two exceptions to the general rule that the right of appeal is not taken away by a change in the law. These exceptions are: (1) When by competent enactment such right of appeal is taken away expressly or impliedly with retrospective effect, and (2) When the Court to which appeal lay under the unamended Act stands abolished.(Jose Da'Costa v. Bascora Sadasiva Sinia-AIR.Para 28 relying upon AIR 1957 S.C. 540 and 1905 AC 369 already referred to above.

12. These exceptions are also satisfied in the present case. Firstly, the right of appeal as it existed before is expressly taken away from the appellants in so far as they cannot now file the appeal before the Central Board of Excise & Customs, This is why the present appellants have not filed their appeals before those authorities. This is an admission on the part of the appellants that their previous right of appeal under the old Act has been taken away from them by the amendment. The second exception also applies because the Central Board of Excise & Customs acting as Appellate authority has been abolished by the amending Act. The abolition of these bodies as appellate authorities is material and significant, even if these bodies continue to do work other than the hearing of appeals. Hence by this test also the amending Act is retrospective and applies to these appeals. Section 35F is a part of the amending Act and it cannot be argued that only Section 35F does not apply. while the rest of the amending Act applies, 13. Another way of looking at these cases is this Section 6 of the General Clauses Act saves the vested right of appeal under the old Act unless a different intention appears. The provisions of the amending Act which expressly apply to the pending proceedings are an express expression of the different intentions contemplated by Section 6.

Whenever the amending Act itself provides how far the rights under the unamended Act are to be saved and how far they are to be modified or taken away, Section 6 of the General Clauses Act does not apply. It is only the provisions of the amending Act which apply because they evinced a different intention contrary to Section 6 of the General Clauses Act. This has also been held by the Supreme Court in several decision such as Indra Sohanlal v. Custodian of E. Property AIR 1966 S.C. 77, Kalavati Devi v. C.I.T. AIR 1968 S.C. 162,'Bishambar Nathv.State of U.P. AIR 1966 S.C, 573, Karam Singh v. Partap Chand AIR 1964 S.C. 1305, Narain Lal v. Manak Feroz Mistri AIR 1961 S.C. 29, State of Punjab \. Mohar Singh AIR 1955 S.C. 84, and Union of India v. Mohan Gopal AIR 1954 S.C. 158. Since Section 6 of the General Clauses Act does not apply, there is no saving of the right of the appellants to file their appeals under the old Act. Hence their appeals have to be filed only under the amended Act. If so, the appellants cannot intend that while their appeals have to be heard by the Tribunal, nevertheless Section 35F should not apply to their appeals. The presumption against an amending Act not taking away a vested right of appeal under the unamended Act is not absolute. It is rebuttable. In the present case it is rebutted by provisions of the amending Act which make, it expressly retrospective and applicable to those appeals which arosu out of the proceedings initiated under the old Act.

14. It is not as if legislation cannot take away a vested right of appeal. There is no constitutional bar in doing so. Therefore, the legislation in the present case has taken away the vested right of appeal and if it has done so, the appellants cannot in any way challenge the validity of the amending Act.

15. A specific authority on this question is the decision of the Supreme Court in Ittyavira Mathai v. Varkey Varkey and anr. AIR 1964 S.C. 907 para 15 & 16. In this case also the amending Act showed contrary intention and, therefore, the Court held that : "A litigant has no right to contend that a Tribunal before whom he should have taken an appeal when he instituted the suit should not be abolished. The Legislature has full power to enact a law of that kind and it is not contended before us that the repeal of the previous Act was unconstitutional. It would, therefore, follow that whatever rights may have vested in the party in the matter of filing an appeal were abrogated by competent legislature. New rights were conferred in place of those which were taken away and it is only the new rights which could be availed of. After the new rights were conferred even they were modified in one respect and that was with regard to the hearing of certain kinds of appeals by a Full Bench.

The rights to have the appeal heard by a Full Bench by virtue of a new provision never vested in any of the parties to the present litigation. Therefore, their abrogation by a later law cannot entitle them to make a complaint." 16. These observations aptly apply to the present case. In accordance with them, the right to have the appeal heard by the Central Board of Excise and Customs has been repealed and in its place a new right has been given for appeal to the Tribunal. Since this is not unconstitutional in any way and since this has been done clearly and expressly by the amending Act, the appeals have to be heard only by the Tribunal and that too in accordance with the provisions of the amended Act and not under the provisions of the old Act 17. Lastly, the contention of the appellants that the amending Act is not retrospective and does not take away their vested right of appeal, would mean their appeals are not governed at all by the amending Act.

Had it been done so, they would have filed their appeals before the Central Board of Excise and Customs and/or the Appellate Collector under the unamended Act. Why did they not do so The plain reason is that the amending Act expressly says that such appeals must be filed under the amending Act before the Tribunal. If these appeals are "under this Chapter VIA" then Sec. 35F must apply because Sec. 35F expressly says so. The appellants cannot deny that these appeals are filed under Chapter VIA. For. the appeallants themselves are prosecuting these appeals under Chapter VIA. Thus the entire framework of Chapter VIA, making the amended provisions, applicable to even pending proceedings, as summarised in Para 9 above, manifests the implicit intention of the legislature to make the operation of the newly introduced provisions retrospective. This situation clearly satisfies the test of 'necessary intendment" as stressed in the judicial authorities cited before us.

18. For the reasons stated above we are not in agreement with the view taken in Appeal No. ED(SB) 67/83-C titled Piya Pharmaceutical Works v.Collector of Central Excise decided on 17-8-1983. We thus hold that th appellant must deposit the duty demanded or the penalty levied as enjoined by Sec. 35F of the Central Excises & Salt Act before the appeal is heard. The reference is answered accordingly.

19. I have read with great care the Order proposed to be passed as representing the common view of the learned President, Vice-President and Members Shri D.N. Lal and Smt. S. Duggal. It need hardly be said that I entertain the greatest respect for their views. Nevertheless, after anxious consideration I find myself compelled to record my dissent from the conclusion reached by them.

20. As a party to the order No. 246/1983-C dated 17-8-1983 on the Stay Application of M/s. Piya Pharmaceutical Works, Ghaziabad, which was recorded by my learned brother Shri S.D. Jha and concurred in by my learned brother Shri H.R. Syiem, I had occasion to apply my mind even earlier to the present issue. As would be evident from the Order in the Piya Pharmaceutical Works case, the arguments centred on the Supreme Court judgment in the case of Hoosein Kasam Dada (India) Ltd., v. The State of Madhya Pradesh and Ors. (reported in AIR 1953 SC 221 1953 SCR 987 referred to for convenience henceforth as "the Hoosein Kasam Dada case." During the hearing of the Piya Pharmaceutical case, most of the points raised in the case of M/s. Amin Chand Pyarelal (in which the learned Vice-President and my learned brother Shri A.J.F. D'Souza took the view-which apparently was not shared by the other learned Member of that bench Smt. V.S. Rama Devi- that the provisions of Sec. 35F were applicable even to a first appeal in all cases) and during the very extensive hearings before the present Larger Bench, were not raised and there was no occasion for that bench to consider those points.

Similarly, that bench did not have the benefit of the large number of citations and precedents which were placed before the Larger Bench. As a member of this Larger Bench, I have tried to keep an entirely open mind and to consider the whole matter afresh in the light of the material so ably placed before the bench by many learned persons, including the advocate for the appellants, Sh. H.S. Bedi, the representative of the Department, S/Shri V. Lakshmi Kumaran and Mahesh Kumar, and the interveners, the President and the Secretary of the Bar Association, S/Shri K. Narasimhan and R.K. Jain. Having given the most earnest consideration to the arguments advanced, I have come to the conclusion which I now proceed to record.

21. There are three decisions of the Supreme Court which are of particular relevance to the present issue, namely those in the case of Hoosein Kasam Dada ; in the case of Collector of Customs and Excise, Cochin and Ors. v. A.S. Bava (AIR 1968 SC 13), referred to for convenience henceforth as "the A.S. Bava case" ; and in the case of Garikapati Veeraya v. N. Subbiah Choudhry and Ors. (AIR 1957 SC 540), referred to for convenience henceforth as "the Garikapati case." It would be useful at this stage to set out the main conclusions in each of these cases.

22. Reference to the decision in the Hoosein Kasam Dada case has already been made in the majority Order. That case related to the effect of an amendment to the Central Provinces and Berar Sales Tax Act, 1947. The relevant Section 22(1) of the Act before amendment read as follows :- "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 entertained by the said authority 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." After amendment with effect from 25-11-1949 the Section read as follows :- "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." The important findings in the judgment, in the context of the present case, are as follows :- (a) A right of appeal is not merely a matter of procedure, but a matter of substantive right (para 9); (b) It becomes vested in a party when proceedings are first initiated in, and before a decision is given by the inferior Court (ibid) ; (c) Such a vested right cannot be taken away except by express enactment or necessary intendment, and an intention to interfere with or impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication (ibid); (d) The right that the amended Section gave is certainly less than the right which was available before. A provision which is calculated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure, Indeed the new requirement cannot be said merely 1o regulate the exercise of the appellant's pre-existing right but in troth whittles down the right itself and cannot be regarded as a mere rule of procedure (para 11) ; (e) For the purpose 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 .

(f) The Supreme Court did not specify categorically when the proceedings could be deemed to have been initiated, or the 'lis' deemed to have arisen (though it categorically ruled out the date of the decision itself as the critical date). It was indicated that whenever there is a proposition by another a 'lis' arises. In the facts of the case before it the Supreme Court held that the right of appeal must be held to have been in existence even on the date of filing of the Sales Tax return or at any date when the authority called for evidence and started the hearing (para 12).

23. It is on the basis of the above conclusions that, subsequent to the decision in the Piya Pharmaceutical Works case, a number of cases relating to pre-deposit of duty or penalty under Section 35F in the case of a first appeal have been decided on the basis that the critical date when the proceedings may be deemed to have commenced, or the 'lis" to have arisen, is the date when a show-cause notice was issued.

24. There is one other finding in the Hoosein Kasam Dada judgment which is of such material relevance to the present issue that it deserves to be set out separately. This is that the continued existence of the pre-existing right of appeal necessarily implies that the old law which created that right o appeal must also exist to support the continuation of that right. Paragraph 10 of the judgment, which deals with this aspect, is set out below : "Shri Ganapathy Aiyar urges that the language of S. 22 (1) as amended clearly makes the section retrospective. The new proviso, it is pointed out, peremptorily requires the authority not to admit the appeal unless it be accompanied by a satisfactory proof of the payment of the tax in respect of which appeal is preferred and this duty the authority must dischargeat the time the appeal is actually preferred before him. The argument is that after the amendment the authority has no option in the matter and he has no jurisdiction to admit any appeal unless the assessed tax be deposited. It follows, therefore, by necessary implication, according to the learned Advocate, that the amended provision applies to an appeal from an assessment order made before the date of amendment as well as to an appeal from an order made after that date, A similar argument was urged before the Calcutta Special Bench in Sardar Ali v. Bolimuddin (supra), namely, that after the amendment the Court had no authority to entertain an appeal without a certificate from the Single Judge.

Rankin C.J., repelled this argument with the remark at p. 643 : "Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants' right." In our view the above observations is apposite and applies to the case before us. 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 S. 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 Shri Ganapathy Aiyar on this point, therefore, cannot be accepted." 25. It is to be noted that, although the Hoosein Kasam Dada judgment refers to "Courts", that judgment was with reference to proceeding before Sales Tax authorities, who in this respect are on a similar footing to Central Excise authorities. But any possible doubt as to whether the principles in that judgment would apply to Central Excise is set at rest by the judgment of the Supreme Court in the A.S. Bava case. In that case the Supreme Court struck down a notification under Section 12 of the Central Excise and Salt Act, purporting to apply to appeals under Section 35 of that Act (as then in force) the provisions of Section 129 of the Customs Act, requiring pre-deposit of the amount of duty or penally appealed against. In doing so, the Supreme Court reproduced the relevant observations of that Court in para 11 of the Hoosein Kasam Dada judgment and added : "These observations are fully applicable in the present Case.

Section 35 of the Excise Act gave a right of appeal, but Section 129 of the Customs Act whittles down the substantive right of appeal and accordingly it cannot be regarded as "Procedure relating to appeals" within Section 12 of the Excise Act." [para 12].

(a) the principles set out in the Hoosein Kasam Dada case relating to Sales Tax law are fully applicable to the analogous provisions of Central Excise law ; (b) The requirement of pre-deposit of duty or penalty whittles down the substantive right of appeal ; and (c) Such a provision is not a matter of procedure bat of substantive right.

26. The Garikapati case contains a very detailed discussion of the question of vested right and the circumstances in which they can be taken away by a subsequent enactment. That case related to a suit for a value exceeding Rs. 10,000 but below Rs. 20,000. The suit was instituted on 22-4-1949, before the coming into force of the Constitution, when there was a right of appeal to the Federal Court in such a case. On the coming into force of the Constitution the Federal Court was abolished and replaced by the Supreme Court, and the valuation necessary for appeal to the Supreme Court was raised to Rs. 20,000. An application to the High Court of Andhra for leave to appeal to the Supreme Court was dismissed on the ground, inter alia, that the value of the property involved was less than Rs. 20,000. Against this dismissal the petitioner made an application to the Supreme Court for Special Leave to appeal under Art. 136 of the Constitution. The Supreme Court by a majority of 4 to 1 held that since the suit had been instituted before the date of the Constitution the parties thereto had, from the date of the institution of the suit, a vested right of appeal upon terms and conditions then in force. Consequently, even after the commencement of the Constitution and the replacement of the Federal Court by the Supreme Court and the raising of the valuation for appeal to the Supreme Court to Rs. 20,000, the petitioner was entitled to come up to the Supreme Court as of right .

27. Paragrap h 23 of the majority judgment in which the Supreme Court laid down the principles emerging from its examination of the whole issue is reproduced below : - "(23) From the decisions cited above the following principles clearly emerge ; (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 proceedings ; (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 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." 28. It will be observed that principle (y) states that the 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 (emphasis added). The abolition of the superior Court is not mentioned separately. The significance of this will be referred to later.

29. It will also be observed that the Garikapati judgment (of para 20 thereof) refers with approval to the earlier judgment of the Supreme Court in Hoosein Kasam Dada.

30. Having referred to the three judgments which have particular relevance to the present question, it would be appropriate now to set out some of the important principles which emerge from these as well as other judgments.

31. The first principle is that, when a statute effects changes in law, the procedural changes would ordinarily have retrospective effect whereas those affecting substantive rights would not apply retrospectively in the absence of express enactment or necessary intendment. This principle has been repeatedly stated, but a few instances will suffice :Delhi Cloth and General Mills Co. Ltd. v. Income Tax Commissioner, Delhi, 54 Ind App. 421 : ILR of Lah 284 (AIR 1927 PC 242 (C). This has been cited with approval by the Supreme Court in Garikapati''s case (para (6) at page 546) : - "The principle which their Lordships must apply in dealing with this matter has been authoritatively enunciated by the Board in 1905 AC 369 (A), where it is in effect laid down that, while provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary inteudment." "A change in the law of procedure operates retrospectively and unlike the law relating to vested right is not only prospective." (c) Syndicate Bank, New Delhi v. Rallis India Ltd., New Delhi, AIR 1979, Delhi 40 :- In para 13, reference has been made to "the rule that a change in law pertaining to procedure would have a retrospective effect but a change in law affecting substantive rights will not have retrospective effect unless specifically so provided or it can be inferred from the subsequent enactment by necessary intendment."' Para 15 ibid .quotes with approval the observations of Lord Wright, M.R. (himself quoting Jessel, M.R.):- "Thus while an Appellate Court is able, and bound to give effect to new remedies which have been introduced by enactment passed after the order appealed from was made by the Court of First Instance, yet with regard to substantive rights it is well established that the Appellate Court must give effect to the same law which was in force at the date of the earlier- proceedings ...." (These observations are particularly significant as showing (a) that some parts of an amending Law can .be given retrospective effect, as being merely procedural, while other parts of the same Law, touching substantive rights, may not be given retrospective effect ; and (b) a litigant is entitled to claim the benefits bestowed by new legislation, while "at the same time insisting on his vested rights in terms of the pre-existing law, in the absence of a specific provision making the amendment or abolition of those provisions retrospective).

"It is well settled that no retrospective effect, should be given to any statutory provision so as to impair or take away an existing right unless the statute either expressly or by necessary implication directs that it should have such retrospective effect." Thus, the rule which was enunciated by the Privy Council in 1927, has been recognized as valid upto the present time.

32. The second principle is that a vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary internment and not otherwise. This principle is closely connected with the first, and the authorities cited under that will generally apply to this as well. The specific enunciation given above is taken from the Garikapaii judgment (para 27 supra).

33. The third principle is that, "In order to see whether the rights and liabilities under the repealed law have been put to an end by the new enactment, the proper approach is not to enquire if the new enactment has by its new provisions kept alive the rights and liabilities under the repealed law but whether it has taken away those rights and liabitities. The absence of a saving clause in a new enactment preserving the rights and liabilities under the repealed law is neither material nor decisive of the question." (AIR 1971 SC 1193 in the case of Jayantilal Amratlal v. Union of India and Ors., following AIR 1955 SC 84 in the case of State of Punjab v. Mehar Singh, and AIR 1969 SC 79 in the case of T.S. Baliah v. Income-tax Officer, Central Circle VI, Madras).

The same principle has been followed in a recent judgment of the High Court of Assam, reported in AIR 1980 Gauhati 3. The relevant paragraph from this judgment is extracted below :- "5. Whenever there is a repeal of an enactment the consequences laid down in Section 6 of the General Clauses Act will follow unless a different intention appears in the repealing statute. The principles of Section 6 are that unless a different intention appears in the repealing Act, any legal proceeding can be instituted and continued in respect of any matter pending under the repealed Act as if that Act was in force at the time of the repeal. The question that is to . be asked is whether the new Act manifests an intnteion to destroy old rights and liabilities and not whether it expressly keeps alive old rights and liabilities. Unless the new legislation manifests an intention incompatible with or contrary to the provisions of Section 6 of the General Clauses Act, the principles of Section 6 will be applicable. Such incompatibility would have to be ascertained on due consideration of the relevant provisions of the new statute.

Provisions of Section 6, General Clauses Act will apply to a case of repeal even if there is simultaneous re-enactment unless contrary intention can be gathered from the new statute." 34. The fourth principle is that the requirement of depositing the duty or penalty levied pending an appeal is calculated to interfere with or fetter, if not to impair or imperil, the substantive right of appeal.

It whittles down that right. It is accordingly subject to the operation of the principles set out earlier. (Direct authorities for this principle are the Hoosein Kasam Dada and the A S. Bava judgments).

35. The fifth principle is that even in a case where the requirements of the amended or new legislation are specific and appear to be peremptory, if there is an implied saving of the litigants' right in terms of the preceding principles, "Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants' right." 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. (Hoosein Kasam Dada, para 10).

Similar observations are to be found in para 29 of the Garikapati judgment.

36. At this stage it would be useful to refer to an aspect which has tended to dilute the application of the second principle, namely that a vested right of appeal can be taken away only by a subsequent amendment, if it so provides expressly or by necessary intendment and not otherwise, This is how the principle has been set out in the Garikapati Judgement. However, sometimes another contingency is also included, namely where the Court to which the appeal lay at the commencement of the suit stands abolished. For instance, this has been stated as a second exception (in addition to the one set out above) in the judgment of the Supreme Court in Jose da Costa and anr. v. Bascora Sadashiva Sinai Narcornin and Ors., reported in AIR 1975 SC 1843 (para 28 at page 1850). The inclusion of this second "exception" led to some argument before us as to when an appellate Court or Tribunal can be said to be "abolished".

37. The authority cited in Jose da Costa for this second exception is also the Garikapati case. One would, therefore, have to go back to that judgment for illumination. However, before doing so, it would be useful to refer to a slightly earlier judgment of the Supreme Court, namely that in Daji Sahab and Ors. v. Shankar Rao Vithalrao Mane and anr., reported in AIR 1956 SC 29. It will suffice to reproduce two of the Head Notes prefixed to the report : - "A party to a suit has, on the cause being decided by the Court and when allowed under law, a vested right of appeal to the Superior Court. However if the Court to which an appeal lies is altogether abolished without any forum substituted in its place for the disposal of pending matters or for the lodgment of appeals, the vested right perishes, (para 4).

Merely because the Supreme Court came into existence in place of the Federal Court, a vested right of appeal to the Federal Court is not taken away. An interpretation or construction of the provisions of the Constitution which would lead to such a result should be avoided, unless inevitable, (para 10)." This judgement makes it clear that the vested right of appeal perishes when the Court to which an appeal would lie is altogether abolished without any forum being substituted in its place. This could be considered as a self-evident proposition, because if there is no means of exercising a right, then that right, being only a potential and unexercisable right, becomes unreal and in effect ceases to exist.

Further, the contingency of the Superior Court being abolished without a substitute is clearly included within the first exception set out in the Garikapati judgment, because such abolition can be done only by express enactment ; and where there is such an abolition the necessary intendment or implication follows that the substantive right of appeal is no longer available even in respect of cases where it would otherwise have been available and exercisable. But what emerges clearly from this judgment is that it refers to a case where the appellate Court is abolished without any substitute.

38. This is also apparent if one looks at the Garikapati judgment itself. As already mentioned, the principle as formulated in that judgment does not include the abolition of the appellate Court.

However, in paragraphs 33 to 42 of the judgment the Supreme Court has dealt at great length with a judgment of the Madras High Court with which it did not agree. In that judgment, the Madras High Court, while dealing with the question of the vested right of appeal, appears to have referred to two exceptions, namely the first one as set out by the Supreme Court in the Garikapati case, and a second one, namely when the Court to which the appeal would lie is abolished. The following extract from para 36 of the Garikapati judgment is significant :- "It is clear from the above passage that the reason why the appeal was held to be incompetent was not that the court to which an appeal lay at the date of the institution of the suit had been abolished and, therefore, the right of appeal ceased to exist nor that that court was abolished and a new court was set up in its place and nothing was mentioned about the vested right of appeal but that the new court which took the place of the court to which the appeal originally lay was given jurisdiction in all cases "unless otherwise provided by this Act." and that that very Act having declared the whole of the sections of the Cede in which the provisions relating to the Circuit Court and rights of appeal found place to be replaced by other provisions and those other provisions relating to the appeal from the Circuit Court, it was held that the statute "had otherwise provided." In other words this case illustrates that the matter really came within the first exception, namely that the vested right of appeal had been taken away expressly or by necessary intendment rather than within the second exception where the court to which the appeal lay had been abolished simplici-ter. This case, therefore, can give no support to the conclusions of the Full Bench." This passage makes it clear that the contingency of abolition of the appellate Court applies only when that Court is abolished simpliciter.

In other words, the Garikapati judgment confirms what had been laid down in the Daji Saheb judgment so far as the question of abolition of the appeal court is concerned, and it is in this sense that this "exception" should be understood when it is referred to as a separate category, as for instance in the Jose da Costa judgment.

39. The Jose da Costa judgment should not therefore be understood as laying down that a vested right of appeal perishes when an appellate authority is not abolished simpliciter but replaced by another.

40. It is also pertinent to observe that in paragraph 28 of the Jose da Costa judgment the principles laid down by the Privy Council in the DCM case (referred to in the Garikapati case itself), distinguishing between amendments dealing with procedure and amendments touching substantive rights, and holding that vested substantive rights can be taken away only by express enactment, etc.are referred to as "well-established principles" ; and paragraph 29 goes on : "In the light of the above principles, these points arise for consideration ..." It is, therefore, clear that in that Jose da Costa case the Supreme Court was not seeking to depart from or modify the earlier decision of that Hon'ble Court in the Garikapati case, but on the contrary it was approving and reaffirming them. It is important to note this because there are some observations in a 1963 judgment of the Supreme Court in the case of Ittyavira Mathai v. Varkey Varkey and Anr.

(AIR 1964 SC 907) which might at first appear to be at variance with the principles enunciated in the Garikapati case. Any doubts on this score would however be set at rest by the reaffirmation of those principles in the Jose da Costa judgment, which is of 1975.

41. It would now be appropriate to examine the effect of Section 35F of the Central Excises and Salt Act, as inserted with effect from 11-10-1982, in the light of the principles set out above. This Section introduces a condition which did not exist prior to 11-10-1982, namely that a person desirous of appealing against a decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied. (It also provides for the pre-deposit being waived in cases of undue hardship, but this being a matter of discretion would not materially affect the interpretation of the Section, in the same way as the similar proviso to the old Section 129 of the Customs Act did not make any difference in the shuation covered by the A.S. Bava case). If the affect of this provision is examined, it will be seen that: - (a) in terms of the Hoosein Kasam Dada and A.S. Bava judgments, it is clearly calculated to whittle down the previously unfettered right of appeal ; and (b) there is no express provision stating that this requirement shall apply in respect of appeals filed after the coming into force of this Section, notwithstanding that the original proceedings were instituted prior to that date.

42. No doubt the Section on the face of it appears to be mandatory, and to require that the condition of pre-deposit be applied in the case of every appeal filed after the coming into force of the Section. Such could have been the normal interpretation of this legal provision, but for the fact that the law as laid down by the Supreme Court in the cases to which reference has been earlier provides for an exception in those cases where the right of appeal is deemed to have already vested in the appellant. The interpretation that in such a case the old law continues to exist for the purpose of supporting the pre-existing right of appeal has been clearly set out in the Hoosein Kasam Dada and Garikapati judgments in the form of what has been referred to above as the fifth principle.

43. Thus, in the light of the various authorities cited, it is clear that, notwithstanding the apparently mandatory wording of Section 35F, it is subject to the exception set out in the Hoosein Kasam Dada and other judgments, in those cases where the proceedings could be deemed to have been initiated, or the 'lis' could be deemed to have arisen, prior to 11-10-1982.

44. Since the conclusion set out above is based on the clear authority of Supreme Court judgments, it is not necessary to refer in detail to the various, arguments which have been advanced against that conclusion. However, some of these will be mentioned briefly.

45. One such argument is that the new provisions constitute in effect a self-contained code, and that an appellant cannot claim the benefit of certain provisions without being bound by the remaining provisions.

With reference to this argument, Shri K. Narasimhan pointed out before the Larger Bench that the new provisions were in fact not self-contained : even the basic provision setting up the Appellate Tribunal was not contained in the Central Excises and Salt Act but in the Customs Act. But apart from this, it may be pointed out that the changes brought about by new legislation may be partly of a procedural nature and partly affecting substantive rights. In that case, the first principle which has been stated earlier would apply. In other words, the appellant would be baund by the procedural changes which would ordinarily have retrospective effect, but not by the changes affecting substantive rights, if those changes have not been specifically given retrospective effect by express enactment or necessary intendment. Such a situation would be found to exist in many of the reported cases which have been referred to above. Reference has already been made [vide para. 31(c) supra] to the observations of the Delhi High Court in Syndicate Bank v. Rallis India Ltd. 46. It has also been stated that certain of the amended provisions, such as Section 35P(1), are specifically retrospective, and it is implied that therefore all the amended provisions should be given retrospective effect. In my view this would go against the basic principle that procedural provisions would (unless such a construction is textually inadmissible) have retrospective effect, whereas provisions touching substantive vested rights, even if contained in the same amending statute, would not have retrospective effect in the absence of express enactment or necessary intendment This has been brought out in the judgment of the Delhi High Court in Syndicate Bank v. Rallis India Ltd. (vide para 31(c) supra). Such an approach would also be contrary to the third principle enunciated earlier ( vide para 33 supra).

47. It could also be argued that, by filing his appeal in terms of the new provisions an appellant is bound by all those provisions. This argument pre-supposes that the intending appellant has a choice between resorting to the amended provisions and continuing to avail himself of the unamended ones. In fact, however, there is no such choice. If the intending appellant wishes to exercise his vested right of appeal on or after 11-10-1982, he has only a "Hobson's choice", namely to file his appeal to the authorities prescribed in the amended provisions. There are authorities to the effect that a litigant does not have a vested right to be heard by a particular forum, or to be heard by a specified number of judges, this being merely a matter of procedure (see for instance AIR 1964 SC 907 in the case of Ittyavira Mathai v. Varkey Varkey and Anr., and AIRP. Mohammed Meera Lebbai v. Thirumalaya Gounder Ramaswamy Gounder and Ors.). It is obvious that an appellant cannot claim that his appeal should be entertained by a particular authority in terms of the pre-existing law, when that authority has been replaced by another authority in terms of the amended law. He has necessarily to file his appeal to the authority prescribed in the new law, However, if one were to say that he is thereby deemed to be bound by other provisions, which have the effect of whittling down his vested right of appeal, this would amount to going against the principles clearly laid down by the Supreme Court in regard to the vested right of appeal. Reference has already been made in para 31 (c) supra to the decision of the Delhi High Court in the case of Syndicate Bank, New Delhi v. Rallis India Ltd., to the effect that an appellate Court is bound to give effect to new remedies but substantive rights already in force must also be given effect to.

48. Mention deserves to be made of two arguments advanced by Shri Lakshmi Kumaran, SDR, who along with his colleague Shri Mahesh Kumar argued the case for the respondents with great ability. One argument was with reference to the principle that a vested right can be taken away if there is an express enactment or necessary intendment. Shri Lakshmi Kumaran argued that Government had for a considerable time wanted to introduce a provision for pre-deposit of duty and penalty for Central Excise appeals as was the position for Customs appeals, The fact that Government had actually introduced such a provision by notification under Section 12 of the Central Excises and Salt Act, which had subsisted until struck down by the Court in the A.S. Bava case clearly showed, according to Shri Lakshmi Kumaran, that the necessary intendment was present.

49. With all respect to the learned SDR, I consider that this argument misses the essential point. Section 35F no doubt shows the 'intendment' to introduce (or restore) the requirement of pre-deposit: but it does not show from the necessary intendment that it should apply retrospectively even to cases where the proceedings were initiated, or the lis arose, prior to the coming into force of that Section. And it is precisely for this reason that the Special Bench in the Piya Pharmaceutical Works case reached the decision that it did.

50. Another submission of Shri Lakshmi Kumaran, and a very interesting one, was that the interpretation given to Section 35F in the Piya Pharmaceutical Works case amounted to "reading down" that Section, and this was something the Tribunal was not competent to do. Shri Lakshrni Kumaran's subsmission would certainly be valid if the Tribunal of its own accord, and without any compelling reason, proceeded to "read down" a provision of law. However, applying the law as laid down by the Supreme Court in a relevant context when a litigant brings the interpretation of the Supreme Court to its notice is something the Tribunal, like any other quasi-judicial authority, is bound to do : and recognizing and enunciating the logical consequences of such an application of law cannot be regarded as a "reading down of the law" by the Tribunal itself.

51. The conclusion I have reached would also find support from the principle of harmonious construction, to which reference was made by Shri K. Narasimhan. Section 35F applies equally to appeals made to the Collector (Appeals) and to the Appellate Tribunal. Whatever may be said in regard to the changes brought about by the substitution of the Tribunal for the Central Government or the Board, it can hardly be argued that there has been any change so far as the appeals to the Collector (Appeals) are concerned, except for the changed designation of the officer. (It has even come to our notice that some Appellate Collectors were using the more impressive designation of Collector (Appeals) even before the new provisions came into force). It would, therefore, be very difficult to contend that the provisions of Section 35F would apply retrospectively in the case of appeals to the Collectors (Appeals). It is often largely a matter of chance whether the original order is passed by an officer of the level of Collector or Additional Collector (in which case the appeal would lie to the Tribunal) or by an officer of the level of Deputy Collector or Assistant Collector in which case the appeal would lie to the Collector (Appeals). Particularly (in matters of classification and valuation, there appear to be no specific dividing lines as to which cases shall be decided by which level of officers. The interpretation as proposed in the majority Order could, therefore, lead to a situation where the provisions of Section 35F would not be applied where the first appeal is to the Collector (Appeals), but would be applied where the first appeal in a similar case is to the Tribunal. Such a situation which would be contrary to the principle of harmonious construction, is avoided if the decision in the Piya Pharmaceutical Works case is followed. (It may be mentioned that during arguments before us the learned SDR, Shri Lakshmi Kumaran, stated that he was not stressing the argument of "abolition of the appeal court" with reference to the substitution of the Tribunal for the Cental Government and the Board, for this very reason that it could lead to.a departure from the principle of harmonious construction).

52. The result of the above discussion is that none of the authorities and precedents so far cited points to the need for any modification of the decision in the Piya Pharmaceutional Works case. However, towards the conclusion of the arguments before the Larger Bench, the learned Secretary of the Bar Association, Shri R.K. Jain, drew our attention to another judgment of the Supreme Court which would appear to have a bearing on the issue. This is the judgment in the case of Messrs Hardeodas Jagannath v. State of Assam and Ors., reported in AIR 1970 SC 724, and referred to for convenience henceforth as "the Hardeodas case." This was a case with reference to the Assam Sales Tax Act, which is in some respects similar to the case of Hoosein Kasam Dada, in that the said Act originally contained provisions similar to the un-amended provisions of Section 22(1) of the Central Provinces and Berar Sales Tax Act, and amended provisions on the lines of the amended provisions in the Central Provinces and Berar Sales Tax Act came into force with effect from 1-4-58. In this case also the question arose regarding the application of the amended provisions to an appeal filed after the date of amendment. The Supreme Court held as follows : - "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 period 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." 53. It is seen from the judgment that in these cases the proceedings were initiated prior to the date of amendment, but the assessment orders were made after that date, and the appeals against those orders were also in consequence made after that date. The judgment is to the effect that in such cases the appeals would be governed by the provisions after amendment. The date of the decision of the lower authority has been taken as the critical date.

54. In the Hoosein Kasam Dada and Garikapati cases and indeed in the generality of cases which have been discussed earlier, the right of appeal is held to have vested when the original proceedings were initiated and not when the decision of the lower authority was given.

In fact, the judgment in the case of Hoosein Kasam Dada specifically rules out the date of the decision as the critical date. None of these judgments seems to have been cited before the Supreme Court when the Hardeodas case was heard. In fact, the argument that the amended provisions would not apply was only one of the arguments advanced by the appellants, in addition to challenging the application of the Assam Sales Tax Act to Shillong Administered Areas. This point does not appear to have been argued at any length, and there is no indication that the previous case law was placed before the Hon'ble Court. The fact, however, remains that the Supreme Court in this case took the date of the original decision or Order as the critical date with reference to which the new provisions were to be applied or not applied. To that extent, the judgment could be regarded as modifying the judgment in the case of Hoosein Kasam Dada, although neither that case nor other cases on the same point have been explicitly referred to.

55. Before setting out my final conclusions, I think it would be desirable to indicate what exactly was decided in the Piya Pharmaceutical Works case. That was a case relating to a first appeal.

(As was brought out at the hearing before the Larger Bench, the same Special Bench, in its earlier Order No. 199/1983C, in the case of Msssrs. Nuchem Plastics Ltd., had not accepted the. applicability of the Hoosein Kasam Dada judgment to the case of a second appeal, since it was held that the right of revision which was in existence prior to 11-10-1982 was not synonymous with a right of appeal. The Special Bench had accordingly held that the provisions of Section 35F would be applicable to all cases of a second appeal filed after 11-10-1982).

Further, it was made clear in para 5 of the Piya Pharmaceutical Works decision that the decision was concerned only with the question of pre-deposit under Section 35F, and that the nature and scope of the incidental and ancillary powers of granting stay which the Tribunal possessed independent of Section 35F, did not arise for consideration and were not dealt with. Thus, the question before the Special Bench was strictly confined to the issue of pre-deposit of duty or penalty in terms of Section 35F, in relation to a first appeal.

56. It may also be mentioned that in the Piya Pharmaceutical Works case, the order of the Collector which was the subject matter of the appeal was passed on 6-10-1982, that is, before the new provisions including Section 35F had come into force. Accordingly, the decision in that case would not be affected even if the view taken in the Hoosein Kasam Dada case is deemed to be modified by the view taken in the Hardeodas case. However, on the basis of the enunciation of principle in the Hoosein Kasam Dada case, which was followed in the Piya Pharmaceutical Works case, some subsequent cases have been decided on the basis that the critical date is the date of the initiation of proceedings or the commencement of the lis, this being equated to the date of the show cause notice. Cases of this nature would in future have to be looked at in the light of the judgment in the Hardeodas case, that is, with reference to the question whether the date of the decision of the lower authority was before 11-10-1982 or thereafter.

(a) the Special Bench decision in the Piya Pharmaceutical Works case was quite in order, having regard to the law as laid down in the Hoosein Kasam Dada case and other relevant cases, and the facts of the Piya Pharmaceutical Works case ; (b) however, the general conclusion drawn from the Hoosein Kasam Dada judgment and applied in some cases after the Piya Pharmaceutical Works case would stand substantially modified in the light of the Supreme Court judgment in the Hardeodas case, in that the requirement of pre-deposit would be inapplicable only in those cases where the order which is the subject matter of the first appeal was passed prior to 11-10-1982 ; and (c) the conclusion that the Hoosein Kasam Dada case is not applicable at all, and that the provisions of Section 35F would apply to all first appeals filed on or after 11-10-1982, would not be sustainable, in the light of the relevant authorities and precedents.

58. In accordance with the majority order of even date, we hold that an appellant must deposit the duty demanded or the penalty levied as enjoined by Section 35F of the Central Excises and Salt Act, 1944 before his appeal is heard. The reference is answered accordingly. The case will now go back to the concerned Benchi for decision in the light of this order.


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