A S L ENTERPRISES LTD.
VERSUS
THE SENIOR JOINT COMMISSIONER, SALES TAX, CENTRAL AUDIT UNit & Ors
Date -25th March 2022
Forum-Calcutta High Court

Sub-Whether proviso to Section 84(1) of the West Bengal VAT Act, 2003 which provides for mandatory pre-deposit of 15% is ultra vires and it effects the vested rights of the appellant and also it is discriminatory in nature as it holds liable for payment all kinds of assessee to pay blanket 15%

The Calcutta high court division bench in this case was hearing bunch of appeals against order of the single bench which had dismissed the challenge to the vires of the said proviso where the appellants contended that the amendments which were made to Section 84 of the WBVAT Act 2003 by the Finance Act, 2015 in so far as they made it compulsory to make payment of 15% of tax , interest and other dues before the appeal could be entertained were arbitrary, discriminatory in nature as the said provisions did not consider whether the assessment was regular, exparte or otherwise and having been made applicable to even orders passed before the amendment was retrospective in nature and also effected the vested right to appeal. Reliance was made on several decisions including the decision in the case of H.K. Dada (India) Limited Versus State of M.P. AIR 1953 SC 221 where the apex court had held that such amendments to be made prospective in nature.
The bench however brushed aside all the arguments by dismissing all the appeals in a 72 page landmark decision by holding interalia that

i) the reliance on decision of H.K.dada was unfounded as in that case the Supreme Court held that the amendments cannot be made applicable retrospectively without express words or words of intendment which in the present case was clearly seen that the amendments were retrospective in nature and hence applicable to all appeals to be filed after the date of the amendment.

ii) When the legislature has imposed a condition for entertaining the appeal, it cannot be said that the vested rights of the appellant are effected.

iii) simply because the word payment is used in the proviso, it does not mean that it amounts to compulsory levy and the word payment has to be read in conjunction with deposit.
Iv) whatever assessments are made whether regular or best judgement having been made after giving opportunity cannot be said to be discriminatory in nature.

These grounds weighed in the mind of court before dismissing the appeal.

This judgement will have a far reaching impact on all the legislations which require pre deposit for filing of the appeals.

Ramesh Patodia
29-03-2022