HOOSEIN KASAM DADA (INDIA) LTD v. THE STATE OF MADHYA PRADESH AND OTHERS
Citation: [1953] 1 S.C.R. 987; 1953 INSC 14
Court: Supreme Court of India
Bench: MEHR CHAND MAHAJAN , SUDHI RANJAN DAS
Judgment date:
Case summary
1953 INSC 14. Supreme Court of India judgment dated 1953-02-23. HOOSEIN KASAM DADA (INDIA) LTD v. THE STATE OF MADHYA PRADESH AND OTHERS. Read the judgment...
Judgment text
S. C. R. S"CPRElVIE COURT REPORTS 987 HOOSEIN KASAM DADA (INDIA) LTD. v. THE STATE OF MADHYA PRADESH AND OTHERS. [MEHR CHAND MAHAJAN and S. R. DAS ,JJ. ] Appeal-Right to appeal-Whether vested right-When 1·ight vests-Change of law after initiation of proceedings in lower Court -Law governing appeal-Law making deposit of a1nount of appeal a condition for admission of appeal - Whether matter of mere prn-cedure -Ce1! trnl Provinces andBerar S•tleB Ta. v Act, 1947, s. 22 (1) · -Centred Provinces Sales Tax Act (Second A11wndment) Act, 1950. The right of appeal is a matter of substantive right and not merely a matter of procedure, and this right becomes vesterl in a party when the proceedings are first initiated in, and before a decision is given by, the inferior Court and such a right cannot be taken away except by express enttctment or necessary intendment.
Section 22(1) of the Central Provinces and Berar Sales Tax Act, 1947, provided that no appeal against an order of assessment should be entertained by the prescribed authority unless it was satisfied that such amount of tax as the appellant might admit to be d11e from him, had bean paid. This Act was amended on the 25th November, 1949, and s. 22(1) as amended provided that no appeal should be admitted by the said authority unless such appeal was accompanied by satisfactory proof of the payment of the tax in respect of which the appeal had been preferred. On the 28th of November, 1947, the appellant submitted a return to the Sales Tax Officor, \vho, fincl. ing that the turnover exceeded 2 lacs, sub~ mitted the case to the Assistant Co1n1uissioner for disposal and the latter made an assessment on the 8th April, 1950. The appellant praiel'l'ad an appeal on the 10th ;\fay, 1950, without depositing the a1nount oI ta.
x in respect o{ \Vhich he ha t 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 abolish-ing an appeal altogether and transferring the appeal to a new tribunal. In either case there is an interference . ... s. c. R. st:PREME COUH,T HEPO. RTS 993 with existing rights contrary to the well-known general 1953 principle that· statuteR are not to be held to act · - · 1 I 1 · · h · lluu1u,in /[asa1n retrospective y un css a c car mtent10n to t at effect I> d (I . J · · c d '' a a 1u 1 ·ta 1s rnan11este . Ltd. Tho principle of the above decision was applied by "· 1 Jenkins C. J. in Nana bin Aba v. Sheku bin And·u ( ) l'he State 01 1 - b th p · C 'l · If · J'J l' · Cl h d i•fodhya Pradesh anu -y e nvy ou11c1 1tse m e tii ot an d 0 1 1 General ,~1 ills Co. Ltd. v. I nconie-tax Commissioner, "" '"''· Delhi(').
A Full Bench of the Lahore High Court adopt- Da. , J. ed it in Kirpa Singh v. Rasaldar Ajaipal Singh('). It was there regarded as settled that the right of appeal was not a mere matter of procedure but was a vested right which inhered in a party from the com-mencement of the action in the Court of first instance and such right could not be taken away except by an express provision or by necessary implication. In Sardar Ali v. Dalimuddin ('), the suit out of which the appeal arose was filed in the Munsiff's Court at Alipore on the 7th October, 1920. The suit having been dismissed on the 17th July, 1924, the plaintiffs appealed to the Court of the District Judge but the appPal was dismissed. The plaintiffs then preferred a second appeal to the High Court on the 4th October, 1926. That second appeal was heard by a Single Judge and was dismissed on the 4th April, 1928.
In the meantime Clause 15 of the Letters Patent was amended on the 14th January 1928 so as to provide that no further appeal should lie from the decision of a Single Judge sitting in second appeal unle§. s the Judge certi-fied that the case was a fit one for appeal. In this case the learned Judge who dismissed the second appeal on the 4th April, 1928, declined to give any certificate of fitness. The plaintiffs on the 30th April, 1928, filed an appeal on the strength of dause 15 of the Letters Patent as it stood before the amendment. The contention of the appellants was that the amended clause could not be applied to that appeal, iOr to do so would be to apply it retrospectively and to impair and indeed to defeat a substantive right which was in existence (I) (1908) I. LR 32 Born. 337. 13) A. l. R. 1928 Lah. 627. (2) (1927) L. R. 5+ LA. 421; LL. R. 9 Lah. 284. (4) (1929) LL. R 56 Cal. 512, prior to the date of the amendment.
The appellants claimed that on the 7th October, 1920,- when the snit cuutin . . . . (forNaJ was filed they had vested m them by the ex1stmg law a substantive right to a Letters Patent appeal from the decision of a Single Judge and that an intention to interfere with it, to clog it with a new condition or h'mde. •h to impair or im1>eril it could not be ]lrcsumed unless it ·. b was clearly mamfested y express words or necessary inteudment. In giving effect to the contentions of the appellants Rankin C. J. observed at p. 518 :- "Now, the reasoning of the J ndicial Committee in The Colonial Sugar R~fining Company's case is a co•,-clusive authority to show that rights of appeal are not matters of procedure, ag. rn- (6) A. LR, (r952) Punjab ro3 (l'. B. ). 17) (r930) 34 C. W. N. roog, for setting aside the sale. That application having been dismissed for default of his appearance the peti-aeain . f' d 1 t ti D' t . t J d f tioner pre crre an appea o ie .
1s ric u ge o Hoogly who refused to admit the appeal on the ground that the amount recoverable in execution of the decree had not been deposited as required by the proviso to sec- Prade. ,h tion 174, clause (e), of the Bengal Tenancy Act as amended by anamending Act in 1928. The contention of the petitioner was that the amended provision which came into force on the 21st February, 1929, could not affect the right of appeal from a decision on an application made on the 19th December, 1928, for setting aside the sale. ]\fitter J. said at page 1011 :- "We thiI! k 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 re-fusing 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 unham-pered 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 re-quiring 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 a. bsence 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 tho date to be looked into for this purpose is the date of the original proceeding which eventually culminated in the appeal. " , ' ... 5 The above decisions quite firmly establish and our 19 3 1 decisions in J/mardan Reddy v. The State ( ) and in H ~ . A . . al Ch . L ,f C L d (') oo. sein asani Ganpa t R ai v. garw arnuer OJ ommerce t . Dada (India) uphold the principle that a right of appeal is not Ltd. merely a matter of procedure. It is matter of substan- v. 0 tive right. This right of appeal from the decision of an Th< State ! inferior tribunal to a superior tribunal becomes vested Madhy~ :radesh 1 in a party when proceedings are first initiated in, and and era, before a decision is given by, the inferior court. In Das J. the language of Jenkins C. •J. in Nana bin Aba v. Shaik bin Andu (supra) to disturb an existing right of appeal is not a mere alteration in procedurn.
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. $ri Ganapathy Aiyar urges that the language of section 22( 1) as amended clearly makes the section retrospective. The new proviso, it is pointed out, per-emptorily 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 the appeal is preferred and this duty the authority must discharge at 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. Dalirnuddin (supra), namely, that after the amendment the court had no authority to entertain an appeal without a certificate from the Single Judge. (r) [1950] S. C. R. 94r. (2) (r952) S. C. J, 564. na 998 SUPR. EME COVRT REPORTS [1953] Rankin C. J. repelled this argument with the remark at page 520: -- "Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants' right. " . ___, Pmdesh In our view the above observation is apposite and applies to the case before us.
The trne implication of the above observation as of the decisions in the other h cases referred to above is that t e 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 continu-ation of that right. As the old law continues to exist for the purpose of snpporting the pre-existing right of appeal that old hw must govern the exercise and en-forcement ofthr1t 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 Iyer on this point, therefore, cannot be accepted. The learned Advocate urges that the requirment as to the deposit of t. he amount of the assessed costs does not affect the right of appeal itself which still remains intact, but only introduces a new matter of procedure. He contends that this case is quite different from the case of Sardar Ali v.
Dalmuddin (8upra ), for in this case it is entirely in the power of the appellant to deposit the ta;K if }le chooses to do so whereas it was not f within the power of the appellant in that case to 1953 secure a certifioote from the learned Single . Judge who Hoose'ln Ka. sani disposed of the second appeiil. In the first place the Dada rfodia) onerous condition may in a given case prevent the Ltd. exercise of the right of appeal, for the assessee may not v. be in a position to find the necessiiry money in time. The State of Further this argument cannot prevail in view of the Madhya Pradesh decision of the Calcnttii High Court in N agendra Nath and Others, Bose v. M~on }lfohtln Singha (suprrt) . . :'iio cogent argu- DasJ. ment hits been adduced before us to show that that decision is not correct. There can be no doubt that the new requirement "touches" the substnntive right ' of appeal vested in the appellant.
Nor can it be over-looked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right. The right that the amended seotion gives is certainly less than the right which was avail-able before. A proYision which is calculated to deprive the appellant of tho unfettered right of appeal cannot be regarded as a mere alteration in procedurP. Indeed the new requirement cannot be said merely to regulate the exercise of the appellant's pre-existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure. Finally, Sri Gana pa thy Iyer faintly urges that until actual assessment there can be no '! is' 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 '!
is' 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 iind 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 makP no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State, lt 1000 SUPREME COURT REPORTS [1953] will appear from the dates given above that in this case the '! is' in the sense explained above arose before the 1. }. asa1n f d f ] . Tj, • date o amen ment o tie section. l' urther, even 1f the '!
is' is to be taken as arising only on the date of assessment, there was a possibility of such a ']is' arising as soon as proceedings started with the filing of the d"hreturn or, at any rate, when the authority called for evidence and st~rted 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. For all the reasons given above we are of the opinion that the appellant's appeal should not have been rejected on the ground that it was not accompanied by satisfactory proof of the payment of the assessed tax. As the appellant did not admit that any amount was due by it, it was under the section as it stood previous-ly entitled to file its appeal without depositing any sum of money.
We, therefore, allow this appeal and direct that the appeal be admitted by the Commissioner and be decided in accordance with law. The appellant is entitled to the costs of this appeal and we order accordingly. Appeal allowed. Agent for appellant: Rajinder Narain. Agent for respondent: G. H. Rajadhyaksha.
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