K Raveendranathan Nair vs. CIT (Supreme Court)

(i) We may mention at the outset that after referring to the judgments noted above even the High Court in the impugned judgment has accepted that right of appeal is not a matter of procedure and that it is a substantive right. It is also recognised that this right gets vested in the litigants at the commencement of the lis and, therefore, such a vested right cannot be taken away or cannot be impaired or imperilled or made more stringent or onerous by any subsequent legislation unless the subsequent legislation said so either expressly or by necessary intendment. An intention to interfere with or impair or imperil a vested right cannot be presumed unless such intention be clearly manifested by express words or by necessary implication. However, the High Court has still dismissed the writ petition as it was of the opinion that the vested right of appeal conferred under Section 260A of the IT Act, insofar as payment of court fee is concerned, is taken away by necessary implication. In other words, the provisions of Section 52A of the 1959 Act inserted by the Amendment Act of 2003, in that sense, have retrospective operation thereby effecting the earlier assessment also. This proposition is advanced with the logic that before prior to introduction of Section 260A in the IT Act with effect from October 01, 1998, there was no right of appeal.

(ii) It is difficult to accept such a logic given by the High Court. No doubt, before October 01, 1998, in the absence of any statutory right of appeal to the High Court, there was no such vested right. At the same time, the moment Section 260A was added to the statute, right to appeal was recognised statutorily. Therefore, as already pointed out, in respect of those proceedings where assessment orders were passed after October 01, 1998, vested right of appeal in the High Court had accrued. Same was the position qua Department in respect of those cases where the demand raised by the Department stood negatived by the appellate authority after October 01, 1998.

(iii) In the present case, as noted above, when Section 260A of the IT Act was introduced by way of amendment with effect from October 01, 1998, it contained provision in the form of clause (2) of sub-section (2) thereof relating to payment of court fee as well. As per that provision, fixed court fee of Rs.2,000/- was provided. This provision was, however, omitted with effect from June 01, 1999. The court fee became payable as per Section 52 of the 1959 Act. The amendment in question in the 1959 Act, i.e. Section 52A, was made effective from March 06, 2003. This provision has not been made retrospective.

(iv) We, therefore, are not able to subscribe to the aforesaid view of the High Court and set aside the same. In fine, we hold as under:

(i) Wherever assessee is in appeal in the High Court which is filed under Section 260A of the IT Act, if the date of assessment is prior to March 06, 2003, Section 52A of the 1959 Act shall not apply and the court fee payable shall be the one which was payable on the date of such assessment order.

(ii) In those cases where the Department files appeal in the High Court under Section 260A of the IT Act, the date on which the appellate authority set aside the judgment of the Assessing Officer would be the relevant date for payment of court fee. If that happens to be before March 06, 2003, then the court fee shall not be payable as per Section 260A of the IT Act on such appeals.