1. The respondent is a firm of dealers in hides and skins at Madras. They were assessed by the Deputy Commercial Tax Officer, No. 3 Moore Market, to their turnover for the year 1955-56 under the Madras General Sales Tax Act, 1939. The order of assessment was passed on 15th December, 1956. Their assessable turnover was determined at Rs. 11,47,315-14-7. They filed an appeal before the Commercial Tax Officer on 15th February, 1957. During the pendency of the appeal, Madras Act I of 1959 came into operation on 1st April, 1959. The appeal was transferred to the Appellate Assistant Commissioner, the prescribed appellate authority under the new enactment. By order of the appellate authority the assessee's turnover was reduced to Rs. 6,22,693-13-11. They preferred a further appeal to the Appellate Tribunal disputing a turnover of Rs. 80,744. This turnover related to sales effected by them through Messrs Beardsell and Co. and they claimed that these sales were in the course of export and therefore not within the ambit of the Act. The Appellate Assistant Commissioner has taken the view in regard to these sales that they were local sales assessable to tax. The Appellate Tribunal negatived the assessee's claim and confirmed the view of the Appellate Assistant Commissioner.
2. In the course of the hearing of the appeal by the Appellate Tribunal, the State Representative filed a petition to enhance the turnover of the assessee by including a turnover of Rs. 1,47,456-15-11 alleged to represent purchases effected within the State, of raw hides and skins till 6th September, 1955. The contention urged on behalf of the State was that the order of the Appellate Assistant Commissioner was illegal and improper in excluding this turnover. The Tribunal rejected the petition holding that the assessee had a vested right to have his appeal disposed of under the provisions of the old Act of 1939. This revision petition has been preferred by the State, and the only question that arises for determination is whether the Tribunal erred in law in not permitting the enhancement of assessment as prayed for by the State.
3. Section 61 of Madras Act I of 1959 provides for the continuance of the proceedings commenced under the repealed Act of 1939, by displacing the old appellate and revisional tribunals and by creating new machineries to take their places. This process of substitution of the new machinery for the old necessarily involves a fiction that the newly constituted machineries were in existence on the date of the commencement or initiation of the prior proceedings by way of appeal or revision. At the same time the new Act, Act I of 1959 expressly saves previous operation of the repealed Act and any right, title, obligation or liability already acquired, accrued, or incurred under the said Act. The - newly constituted Appellate Tribunals are clothed with wider and larger powers in the matter of disposal of the appeals than those of the Tribunals that functioned under the old Act. But the appellate power of these new Tribunals cannot be so exercised as to deprive vested rights which had already accrued in favour of the assessee. In this case when the Appellate Assistant Commissioner heard the appeal of the assessee, he could not have enhanced the assessment to his prejudice despite the fact that he had powers of enhancement, conferred upon him by Section 31 of Madras Act I of 1959. The immunity or protection which the assessee had under the 1939 Act so as to save the assessment made by the Deputy Commercial Tax Officer, the primary assessing authority, from being enhanced by the exercise of the appellate power by the Commercial Tax Officer, is a vested right, which cannot be interfered with or in any way impaired having regard to the specific provision of Section 61(1) of the Madras Act I of 1959. The order of the Appellate Assistant Commissioner only reduced the turnover to the benefit of the assessee, and it is clear that there was no violation of the vested right of the assessee by reason of the said order. The order of the Appellate Assistant Commissioner was passed after the coming into force of the 1959 Act and on that date the assessee had no vested right to prevent an enhancement of his assessment by the further appellate authority, namely, the Tribunal. The Tribunal entertained an appeal at the instance of the assessee only under the new Act as the order appealed against was one passed after the coming into force of the new Act, and by a Tribunal which functioned under the new Act. It is impossible for the assessee to maintain the position that any order of the Appellate Tribunal enhancing the assessment made by the Appellate Assistant Commissioner would amount to deprivation of their vested rights or violation of the provisions of Section 61(1) of the 1959 Act.
4. Learned counsel for the assessee relied upon the decision in Rajah of Pitahapur v. Venkatasubba Rao (1916) 39 Mad. 645 where it was held that the rule of limitation that is in force at the time when a suit is instituted will alone govern the action and that the creation of a new forum for the action to be tried cannot deprive the suitor of the benefit of that rule of limitation. The principle of this decision is that an enactment cannot without the use of express words be given a retrospective operation so as to destroy pre-existing vested and substantive rights. We do not think that this decision can in any way help the respondent to urge the ground of immunity from enhancement of assessment by the Appellate Tribunal.
5. The decision reported in Valid Rajah of Edapally v. Commissioner of H.R. and C.E. (1954) 2 M.L.J. 595 was also referred to by the learned counsel for the respondent. The following observation at page 598 was relied upon :
The point for consideration is whether a mere alteration of the forum without anything more could defeat the right which a party had according to the pre-existing law. It is now settled that a party has a vested right to have a suit tried in a forum in which it was commenced. Such a right is a substantive one. and is not in the realm of procedural law.
6. This again is a case, where what is laid down is, that vested rights cannot be defeated by a mere inference from changes of law effected by legislation subsequent to the accrual of such rights.
7. We cannot accede to the contention of the learned counsel for the respondent that any vested right accrued to the assessee on the date of the first assessment order by the Deputy Commercial Tax Officer ensuring against further assessment at the instance of the State by any appellate authority. The analogy of a suitor in a civil court acquiring a vested right on the date of the institution of the action to avail himself of the benefit of a right of appeal obtaining on such date is hardly apposite to considerations that arise in respect of proceedings under a taxing enactment. We have no doubt that the assessee did not acquire any vested right on the date of the assessment order of the Deputy Commercial Tax Officer to prevent future legislation except to the extent of the immediate appellate authority to which he can resort to for getting relief against the assessment not putting him in a position worse than that which he came to occupy by reason of the order of assessment. This vested right which he had in the present case was in no way affected and the order of the Appellate Assistant Commissioner which was passed after the commencement of the new Act, did not certainly clothe the assessee with any further vested right enabling him to resist enhancement by the Tribunal. The Tribunal went wrong in holding that the petition filed by the State Representative for enhancement of the assessment was not maintainable. The Tribunal has improperly declined to exercise their jurisdiction.
8. The revision petition is allowed ; the order of the Tribunal is set aside and the case is remitted to the Tribunal for fresh disposal in accordance with law. There will be no order as to costs.