Held
Right of appeal is a creature of a statute and it being a statutory right can be conditional or qualified. If the statute does not create any right of appeal, no appeal can be filed. Right to appeal is neither an absolute right nor an ingredient of natural justice, the principles of which must be followed in all judicial and quasi judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant. In other words, while granting this right, the legislature can impose conditions for exercise of such right and there is no constitutional or legal impediment to imposition of such a condition. The requirement about the deposit of the amount claimed as a condition precedent to the entertainment of an appeal does not nullify the right of appeal. All that the statutory provision seeks to do is to regulate the exercise of the right of appeal. The object of the provision is to keep balance between the right of appeal and the right of the revenue to speedy recovery of the amount. The conditions imposed including prescription of a pre-deposit are meant to regulate the right of appeal and the same cannot be held to be violative of Article 14 of the Constitution of India unless demonstrated to be onerous or unreasonable. To put it differently, right of appeal being a statutory right, it is for the legislature to decide whether to make the right subject to any condition or not. In the light of the above enunciation, we proceed to examine Section 62(5) of the PVAT Act. A perusal of sub section (5) of Section 62 of the PVAT Act shows that pre-deposit of twenty five percent of the total amount of tax, interest and penalty is a condition precedent for hearing an appeal before the first appellate authority. Any challenge to the constitutional validity of this provision for pre-deposit before entertaining an appeal on the ground that onerous condition has been imposed and right to appeal has become illusory must be negatived and such a provision cannot be said to be ultra vires Article 14 of the Constitution of India. The object of the provision is to keep in balance the right of appeal conferred upon a person aggrieved with a demand of tax and the right of the revenue to speedy recovery of the tax. It is, thus, concluded that the State is empowered to enact Section 62(5) of the Act and the said provision is legal and valid. The condition of 25% pre-deposit for hearing first appeal is not onerous, harsh, unreasonable and violative of the provisions of Article 14 of the Constitution of India.
HIGH COURT OF PUNJAB AND HARYANA
Punjab State Power Corporation Ltd.
v.
State of Punjab
AJAY KUMAR MITTAL AND RAMENDRA JAIN, JJ.
CWP NO. 26920 OF 2013
DECEMBER 23, 2015
K.L. Goyal, Sr. Adv., Sandeep Goyal, Dr. Naveen Rattan, Rohit Gupta, Rishabh Singla, J.S. Bedi, Amit Bajaj, G.R. Sethi, Varun Chadha, Inderpal Singh Parmar, S.P. Garg, Divya Suri, Sachin Bhardwaj, Madhur Sharma, Aman Bansal, Gaurav Dhull, Avneesh Jhingan and Ms. Tanvi Gupta, Advs. for the Petitioner. Ms. Radhika Suri, Addl. A.G. Punjab, Ms. Anita Gupta, AAG and I.P.S. Doabia, Adv. for the Respondent.
ORDER
Ajay Kumar Mittal, J. – This order shall dispose of a bunch of 386 petitions viz. CWP Nos. 26920, 22437, 27788, 27789 of 2013, 10554, 10560, 19587, 2343, 3297, 6844, 21260, 21260, 21774, 23041, 21860, 23397, 23454, 25146, 26316, 26323, 26371, 26559, 26589, 11405, 22928, 22947, 24389, 24390, 24391 of 2014, 28, 149, 319, 315, 423, 456, 478, 1105, 1118, 1119, 1142, 1253, 1254, 1299, 1393 , 1813, 1817, 1998, 2059, 2090, 2184, 2334, 2345, 2346, 2406, 2407, 2409, 2412, 2416, 2628, 2483, 2633, 2635, 2858, 2944, 3043, 3073, 3096, 3099, 3561, 3605, 3615, 3573, 3196, 3132, 3038, 3302, 3462, 3501, 3504, 3526, 3554, 3567, 3649, 1932, 5337, 5338, 5341, 5471, 4791, 4860, 1931, 4100, 4101, 4104, 4106, 4167, 4245, 4407, 4426, 4429, 4697, 4704, 4707, 4874, 4906, 4907, 4919, 4949, 4970, 4992, 5043, 5074, 5084, 5098, 5168, 5229, 5520, 5522, 5547, 5076, 5548, 5551, 5736, 5758, 5772, 5790, 5803, 5910, 5918, 5920, 5926, 5937, 5943, 5967, 5986, 6065, 6097, 6104, 6123, 6209, 6407, 6408, 6522, 6847, 7036, 7185, 7188, 7205, 7216, 7242, 7447, 7498, 7520, 7526, 7537, 7576, 7779, 7882, 7883, 7884, 7886, 7887, 7888, 7891 7893, 10118, 10142, 10144, 10878, 10915, 10920, 10956, 10960, 10990, 10991, 10993, 10994, 11246, 11755, 11757, 11828, 11852, 11884, 11903, 11938, 11952, 12001, 12020, 11537, 11660, 7994, 11307, 11322, 11352, 4578, 8120, 8482, 8600, 8707, 8804, 8814, 8835, 8880, 8893, 8896, 9007, 9008, 9014, 9023, 9026, 9028, 9113, 9250, 9269, 9270, 9346, 9468, 9625, 9641, 9675, 9744, 10020, 10029, 10032, 10034, 10035, 10100, 10264, 10295, 10302, 10456, 10457, 10532, 10555, 10575, 10738, 10723, 11158, 11294, 11351, 12316, 12852, 12885, 12925, 12932, 12934, 12991, 12993, 12996, 13000, 13021, 13027, 13031,13041, 13043, 13075, 13195, 13217, 13227, 13237, 13355, 13357, 13466, 13772, 13787, 13884, 13918, 14024, 4675, 11004, 10998, 7491, 11763, 13894, 14510, 14183, 13003, 15373, 15374, 15377, 15254, 15270, 15903, 16141, 16158, 16532, 16820, 16824, 16848, 16869, 16871, 16880, 15261, 15522, 15523, 15536, 15550, 15553, 15653, 15664, 15677, 16101, 16165, 16190, 16202, 16203, 16189, 16988, 17073, 17075, 17038, 17303, 15915, 17849, 16382, 17561, 17568, 17584, 17595, 18097, 18104, 18108, 18109, 18127, 18128, 18136, 18148, 18166, 18174, 18246, 18730, 18733, 18914, 18915, 19012,19290, 19292, 19295, 19390, 19233, 19421, 19543, 20660, 20686, 20691, 20840, 21451, 21539. 21561, 21584. 21644, 22058, 22263, 22278, 22414, 22426, 22432, 22560, 22544, 22692, 22812, 22813, 22814, 22821, 23416, 23658, 23936, 23940, 24099, 24509, 24598, 24681, 24689, 24692, 24695, 24701, 24799, 24803, 24842, 24851, 24946, 24954, 24999, 25012, 25015, 25200, 25064 and 22829 of 2015, as according to the learned counsel for the parties, the issue involved in all these petitions is identical. However, the facts are being extracted from CWP No. 26920 of 2013.
2. The petitioner – Punjab State Power Corporation Limited is a statutory body constituted under the Electricity (Supply) Act, 1948. It is engaged in generation, distribution and supply of electric energy/electricity power and other allied material to the consumers viz. domestic, commercial and industrial consumers in the State of Punjab and for that purpose, it is governed by the Indian Electricity Act, 1910 and Electricity (Supply) Act, 1948 as well as the Rules and Regulations framed thereunder. The petitioner had been filing returns as prescribed and whatever tax was payable in terms of Section 15 of the Punjab Value Added Tax, 2005 (in short, “the PVAT Act”) was being deposited. For the year 2007-08, returns for the period from 1.4.2007 to 31.3.2008 under the PVAT Act alongwith requisite information in prescribed form had been filed with the authority. Thereafter, annual statement in Form VAT 20 had been filed before the last date as prescribed under section 26 of the PVAT Act and Rule 40(1) of the Punjab Value Added Tax Rules, 2005 (in short, “the Rules”). Similarly, for the years 2008-09 and 2009-10, returns were filed in time and annual statements in Form VAT 20 were also filed before the last dates. The Excise and Taxation Officer cum Designated Officer (ETO) – respondent No. 2 initiated assessment proceedings for the years 2007-08, 2008-09 and 2009-10 by issuing notice under section 29 of the PVAT Act. The representatives of the petitioner attended the proceedings and tendered explanation. Assessments had been framed under the PVAT Act vide orders dated 19.9.2011, 31.10.2012 and 31.11.2012 for the assessment years 2007- 08, 2008-09 and 2009-10, Annexures P.1, P.1/A and P.l/B respectively. The officer made following additions to the taxable turnover declared in the returns:—
(i)
the receipts in respect of charges from the customers as meter rent had been brought to tax;
(ii)
the receipts in respect of charges from the customers as service line rental had been brought to tax while treating these as meter rent.
In addition to the above tax, the ETO imposed penalties under section 53 and interest under section 32 of the PVAT Act, resulting in raising demand of Rs. 26,52,79,716/-, Rs. 27,64,73,245/- and Rs. 22,18,31,454/- respectively for the aforesaid years. The petitioner challenged the order before this Court by filing CWP No. 21127 of 2011. Vide order dated 7.11.2012, Annexure P.2, this Court relegated the petitioner to the remedy of appeal. The petitioner approached the appellate authority i.e. the Deputy Excise and Taxation Commissioner (Appeals) by filing appeals under Section 62 of the PVAT Act for all the aforesaid assessment years. Alongwith the appeals, applications under Section 62 of the PVAT Act for stay of recovery of tax and entertainment of the appeals by dispensing with the requirement of pre-deposits had also been filed on the ground that financial position of the petitioner was very tight and there were no liquid assets so as to make payment of demand involved. Vide order dated 13.2.2013, the appellate authority directed the petitioner to make deposit of 25% of the additional demand in the government treasury by 27.2.2013 failing which the appeals would be dismissed in limine. Aggrieved by the order, the petitioner filed appeals before the Punjab VAT Tribunal (in short, “the Tribunal”). It was pleaded by the petitioner that its financial position was very poor and it was not in a condition to make payment of 25% and the losses incurred by the petitioner had been duly explained to the appellate authority. Since the petitioner had already paid voluntarily tax of Rs. 1,97,05,910/-, Rs. 1,88,34,187/- and Rs. 1,94,93,597/- for the assessment years in question, the same should be adjusted against the additional demand created by the assessing authority. The Tribunal agreed with the contentions raised by the petitioner to the extent that the amount of voluntarily tax was required to be adjusted against the additional demand created by the assessing authority. However, the Tribunal while disposing of he appeals had observed that the petitioner was required to deposit 25% of the amount of tax, penalty and interest in terms of the order in the case ofAhulwalia Contracts India (P.) Ltd. Aggrieved by the order, the petitioner filed [CWP No. 17370 of 2013, 17031 and 17053 of 2013 which were disposed of vide order dated 31.10.2013] Annexure P.8. The petitioner was allowed to withdraw the writ petition so as to enable it to challenge the vires of Section 62(5) of the PVAT Act alongwith challenge to the orders passed by the Tribunal. Hence the instant writ petitions by the petitioner(s).
3. We have heard learned counsel for the parties.
4. From the submissions made by learned counsel for the parties, the following questions emerge for our consideration:—
(a)
Whether the State is empowered to enact Section 62(5) of the PVAT Act?
(b)
Whether the condition of 25% pre-deposit for hearing first appeal is onerous, harsh, unreasonable and, therefore, violative of Article 14 of the Constitution of India?
(c)
Whether the first appellate authority in its right to hear appeal has inherent powers to grant interim protection against imposition of such a condition for hearing of appeals on merits?
5. Examining questions No. (a) and (b) as noticed above, these are being taken up together as the issue involved therein is overlapping. It may be noticed that vide sub section (5) of Section 62 of the PVAT Act, the State has imposed a condition of 25% of the tax etc. to be deposited as a condition precedent for hearing of an appeal.
6. It would be expedient to notice Section 62 of the PVAT Act which reads thus:—
“62.
(1) An appeal against every original order passed under this Act or the rules made thereunder shall lie, –
(a)
if the order is made by a Excise and Taxation Officer or by an officer-Incharge of the information collection centre or check post or any other officer below the rank of Deputy Excise and Taxation Commissioner, to the Deputy Excise and Taxation Commissioner; or
(b)
if the order is made by the Deputy Excise and Taxation Commissioner, to the Commissioner; or
(c)
if the order is made by the Commissioner or any officer exercising the powers of the Commissioner, to the Tribunal.
(2)
An order passed in appeal by a Deputy Excise and Taxation Commissioner or by the Commissioner or any officer on whom the powers of the Commissioner are conferred, shall be further appealable to the Tribunal.
(3)
Every order of the Tribunal and subject only to such order, the order of the Commissioner or any officer exercising the powers of the Commissioner or the order of the Deputy Excise and Taxation Commissioner or of the designated officer, if it was not challenged in appeal or revision, shall be final.
(4)
No appeal shall be entertained, unless it is filed within a period of thirty days from the date of communication of the order appealed against.
(5)
No appeal shall be entertained, unless such appeal is accompanied by satisfactory proof of the prior minimum payment of twenty-five per cent of the total amount of tax, penalty and interest, if any.
(6)
In deciding an appeal, the appellate authority, after affording an opportunity of being heard to the parties, shall make an order –
(a)
affirming or amending or canceling the assessment or the order under appeal; or
(b)
may pass such order, as it deems to be just and proper.
(7)
The appellate authority shall pass a speaking order while deciding an appeal and send copies of the order to the appellant and the officer whose order was a subject matter of appeal.”
7. The issues relating to validity of Section 62(5) of the PVAT Act embedded in Questions (a) and (b) have been subject matter of judicial interpretation under different statutes incorporating similar provisions in several pronouncements of the Apex Court and also various High Courts. Examining the legal proposition, reference is made to the catena of decisions as noticed hereinafter.
8. In Anant Mills Co. Ltd. v. State of Gujarat [1975] 2 SCC 175, the Apex Court while considering the issue of right of appeal and pre-deposit held as under:—
’40. After hearing the learned counsel for the parties, we are unable to subscribe to the view taken by the High Court. Section 406 (2) (e) as amended states that no appeal against a rateable value or tax fixed or charged under the Act shall be entertained by the Judge in the case of an appeal against a tax or in the case of an appeal made against a rateable value after a bill for any property tax assessed upon such value has been presented to the appellant unless the amount claimed from the appellant has been deposited by him with the Commissioner. According to the proviso to the above clause where in any particular case the Judge is of opinion that the deposit of the amount by the appellant will cause undue hardship to him, the Judge may in his discretion dispense with such deposit or part thereof, either unconditionally or subject to such conditions as he may deem fit. The object of the above provision apparently is to ensure the deposit of the amount claimed from an appellant in case he, seeks to file an appeal against a tax or against a rateable value after a bill for any property tax assessed upon such value has been presented to him. Power at the same time is given to the appellate judge to relieve the appellant from the rigour on the above provision in case the judge is of the opinion that it would cause undue hardship to the appellant. The requirement about the deposit of the amount claimed as a condition precedent to the entertainment of an appeal which seeks to challenge the imposition or the quantum of that tax, in our opinion, has not the effect of nullifying the right of appeal, especially when we keep in view the fact that discretion is vested in the appellate judge to dispense with the compliance of the above requirement. All that the, statutory provision seeks to do is to regulate the exercise of the, right of appeal. The object of the above provision is to keep in balance the right of appeal, which is conferred upon a person who is aggrieved with the demand of tax made from him, and the right of the Corporation to speedy recovery of the tax. The impugned provision accordingly confers a right of appeal and at the same time prevents the delay in the payment of the tax. We find ourselves unable to accede to the argument that the impugned provision has the effect of creating a discrimination as is offensive to the principle of equality enshrined in article 14 of the Constitution. It is significant that the right of appeal is conferred upon all persons who are aggrieved against the determination of tax or rateable value. The bar created by section 406(2)(e) to the entertainment of the appeal by a person who has not deposited the amount of tax due from him and who is not able to show to the appellate judge that the deposit of the amount would cause him undue hardship arises out of his own omission and default. The above provision, in our opinion, has not the effect of making invidious distinction or creating two classes with the object of meting out differential treatment to them; it only spells out the consequences flowing from the omission and default of a person who despite the fact that the deposit of the amount found due from him would cause him no hardship, declines of his own volition to deposit that amount. The right of appeal is the creature of a statute. Without a statutory provision creating such a right the person aggrieved is not entitled to file an appeal. We fail to understand as to why the legislature while granting the right of appeal cannot impose conditions for the exercise of such right. In the absence of any special reasons there appears to be no legal or constitutional impediment to the imposition of such conditions. It is permissible, for example to prescribe a condition in criminal cases that unless a convicted person is released on bail, he must surrender to custody before his appeal against the sentence of imprisonment would be entertained. Likewise, it is permissible to enact a law that no appeal shall lie against an order relating to an assessment of tax unless the tax had been paid. Such a provision was on the statute book in section 30 of the Indian Income-tax Act, 1922. The proviso to that section provided that “. . . . . . . . . . . . .no appeal shall lie against an order under sub-section (1) of section 46 unless the tax had been paid”. Such conditions merely regulate the exercise of the right of appeal so that the same is not abused by a recalcitrant party and there is no difficulty in the enforcement of the order appealed against in case the appeal is ultimately dismissed. It is open to the legislature to impose an accompanying liability upon a party upon whom a legal right is conferred or to prescribe conditions for the exercise of the right. Any requirement for the discharge of that liability or the fulfillment of that condition in case the party concerned seeks to avail of the said right is a valid piece of legislation, and we can discern no contravention of article 14 in it. A disability or disadvantage arising out of a party’s own default or omission cannot be taken to be tantamount to the creation of two classes offensive to article 14 of the Constitution, especially when that disability or disadvantage operates upon all persons who make the default or omission.’
9. Following judgment in Anant Mills Ltd.’s case (supra), the Supreme Court in Seth Nand Lal v. State of Haryana [1980] (Supp.) SCC 574 dealing with the validity of Section 18(7) of the Haryana Ceiling on Land Holdings Act, 1972 imposing a condition of making a deposit of a sum equal to 30 times the land holdings tax payable in respect of the disputed area before any appeal or revision was entertained by the appellate or revisional authority, upheld the same with the following observations :—
“21. The next provision challenged as unconstitutional is the one contained in Section 18(7) imposing a condition of making a deposit of a sum equal to 30 times the land holdings tax payable in respect of the disputed area before any appeal or revision is entertained by the appellate or revisional authority-a provision inserted in the Act by Amending Act 40 of 1976. Section 18(1) and (2) provide for an appeal, review and revision of the orders of the prescribed authority and the position was that prior to 1976 there was no fetter placed on the appellate/revisional remedy by the statute. However, by the amendments made by Haryana Act No. 40 of 1976, sub sections (7) and (8) were added and the newly inserted sub section (7) for the first time imposed a condition that all appeals under sub section (1) or sub section (2) and revisions under sub section (4) would be entertained only on the appellant or the petitioner depositing with the appellate or the revisional authority a sum equal to 30 times the land holdings tax payable in respect of the disputed surplus area. Under sub section (8) it was provided that if the appellant or the petitioner coming against the order declaring the land surplus failed in his appeal or revision, he shall be liable to pay for the period he has at any time been in possession of the land declared surplus to which he was not entitled under the law, a licence fee equal to 30 times the landholdings tax recoverable in respect of this area. On 6th June, 1978, the Act was further amended by Amending Act 18 of 1978 whereby the rigour of the condition imposed under sub section (7) was reduced by permitting the appellant or the petitioner to furnish a bank guarantee for the requisite amount as an alternative to making cash deposit and while retaining sub section (8) in its original form, a new sub section (9) was inserted under which it has been provided that if the appeal or revision succeeds, the amount deposited or the bank guarantee furnished shall be refunded or released, as the case may be, but if the appeal or revision fails the deposit or the guarantee shall be adjusted against the licence fee recoverable under sub section (8). In the High Court, two contentions were urged: first, that section 18(1) and (2), as originally enacted in 1972, gave an unrestricted and unconditional right of appeal and revision against the orders of the prescribed authority or the appellate authority but by inserting sub sections (7) and (8) by Act 40 of 1976, a fetter was put on this unrestricted right which was unconstitutional; secondly, even the mellowing down of the condition by Act 18 of 1978 did not have the effect of removing the vice of unconstitutionality, inasmuch as even the conditions imposed under the amended sub section (7) were so onerous in nature that they either virtually took away the vested right of appeal or in any event rendered it illusory. Both these contentions were rejected by the High Court and in our view rightly. 22. It is well settled by several decisions of this Court that the right of appeal is a creature of a statute and there is no reason why the legislature while granting the right cannot impose conditions for the exercise of such right so long as the conditions are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory (vide the latest decision in Anant Mills Ltd. v. State of Gujarat. Counsel for the appellants, however, urged that the conditions imposed should be regarded as unreasonably onerous especially when no discretion has been left with the appellate or revisional authority to relax or waive the condition or grant exemption in respect thereof in fit and proper cases and, therefore, the fetter imposed must be regarded as unconstitutional and struck down. It is not possible to accept this contention for more than one reason. In the first place, the object of imposing the condition is obviously to prevent frivolous appeals and revision that impede the implementation of the ceiling policy; secondly, having regard to sub sections (8) and (9) it is clear that the cash deposit or bank guarantee is not by way of any exaction but in the nature of securing mesne profits from the person who is ultimately found to be in unlawful possession of the land; thirdly, the deposit or the guarantee is co-related to the landholdings tax (30 times the tax) which, we are informed, varies in the State of Haryana around a paltry amount of Rs. 8/- per acre annually; fourthly, the deposit to be made or bank guarantee to be furnished is confined to the landholdings tax payable in respect of the disputed area i.e. the area or part thereof which is declared surplus after leaving the permissible area to the appellant or petitioner. Having regard to these aspects, particularly the meagre rate of the annual land tax payable, the fetter imposed on the right of appeal/revision, even in the absence of a provision conferring discretion on the appellate/revisional authority to relax or waive the condition, cannot be regarded as onerous or unreasonable. The challenge to section 18(7) must, therefore, fail.”
10. In Vijay Prakash D. Mehta v. Collector of Customs (Preventive) 1988 taxmann.com 619 (SC) the Apex Court while considering identical issue held that right to appeal was neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant. If the statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the right becomes vested and exercisable to the appellant. It was recorded as under:—
“9. Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant.
**
**
**”
13. It is not the law that adjudication by itself following the rules of natural justice would be violative of any right-constitutional or statutory, without any right of appeal, as such. If the statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the right becomes vested and exercisable to the appellant. The proviso to Section 129E of the Act gives a discretion to the Tribunal in cases of undue hardships to condone the obligation to deposit or to reduce. It is a discretion vested in an obligation to act judicially and properly.”
11. The Full Bench of the Delhi High Court in Shyam Kishore v. Municipal Corpn of Delhi AIR 1991 Delhi 104 was adjudicating the issue as to whether the deposit of tax amount under Section 170(b) of the Delhi Municipal Corporation Act, 1937 as a condition precedent for hearing or determination of the appeal was ultra vires. The question was answered by the majority in the negative holding as under:—
’43. We may also refer to the case Chatter Singh Baid v. Corporation of Calcutta and others, AIR 1984 Calcutta 283. It was a case relating to the payment of house-tax and the right of the aggrieved party who filed an appeal. Petitioners in the said case were the owners of Premises No. 11, Indra Kumar Karnani Street, and with effect from 4th quarter, 1978-79 the Corporation of Calcutta had determined the annual value of the said premises at Rs. 4,30,606/-. Objections filed by the owners were disposed of by Special Officer of the Corporation and the value was fixed at Rs. 3,61,135/-.
44. owners were not satisfied by the assessment and so an appeal was filed in the Court of Small Causes, Calcutta.
45. Sub-section (3-A) added to S. 183 reads as under:—
“No appeal under this section shall be entertained unless the consolidated rate payable up to the date of presentation of the appeal on the valuation determined
(a)
by an order under S. 182, in the case of an appeal to the Court of Small Causes,
(b)
by the decision of the Court of Small Causes, in the case of an appeal to the High Court, has been deposited in the municipal office and -such consolidated rate is continued to be deposited until the appeal is finally decided.”
46. This provision is similar to the provision contained in S. 170 of Delhi Municipal Corporation Act.
47. An argument was advanced by learned counsel for the petitioners that unless the appellate authority is given discretionary powers to relax or modify such condition for deposit of the disputed amount, the condition precedent ought to be pronounced as unreasonable. This argument was not accepted by observing that the observations made in para 40 of the Supreme Court decision in Anant Mills ‘case (supra) are directly against the above submission of the petitioners. Reliance was also placed on the case of Nand Lal v. State of Haryana (supra) holding that condition of prepayment before appeal could be heard is not onerous on account of there being no discretion left to the appellate and revisional authority so relax or waive the said condition. This case fully supports the view we are taking.
48. The proviso to S. 170 of the Delhi Municipal Corporation Act does not make the right of appeal nugatory or illusory because it is only on account of his own default to comply with the condition for deposit, the appellant himself may fail to avail of the remedy by way of appeal. We are clearly of the view that the ratio of the decision in Anant Mills’ case (supra) and Nand Lal’s case (supra) is that the right of appeal is creature of statute and while granting the right of appeal the legislature can impose conditions for exercise of such right and there is no constitutional or legal impediment to imposition of such a condition for deposit of tax.
49. Absence of a discretion in the appellate Court to exempt the deposit, of the amount of tax cause hardship in some cases but the Court cannot test the validity of the statutory provision on the touchstone of hardship or stringency. If a provision made in a statute is not invalid, any person desirous of availing the right of appeal has no option but to comply with the condition under which this right of appeal can be exercised. A restriction is, undoubtedly, bound to be irksome and painful to the citizens even though it may be for public good. However, important the right of a citizen or an individual may be, it has to yield to the larger interest of the country or the community.,
50. Learned counsel for the petitioner submits that there may be cases where the assessing authority goes palpably wrong in the determination of the rateable value of the property and may even assess a person not even being the owner of the premises. He has also suggested that on account of clerical mistake the assessment is made ten times or hundred times more and in such like cases the aggrieved person may not be in a position to deposit the amount of tax and, thus, would be deprived of his property even when no such tax was due from him. We do not agree with this submission. The law presumes that all authorities function properly and bona fide with due regard to the public interest, however, in case there is any such contingency a party can resort to the writ jurisdiction of the High Court under Art. 226 of the Constitution of India. The mere fact that an assessed might have to deposit the amount of the tax when filing an appeal could not in every case justify his by- passing the remedies provided by the Act. There must be some thing more in a case to warrant the entertainment of the petition under Article 226 something going to the root of the jurisdiction of the officer or something to show that it would be a case of palpable injustice to the assessed to force him to take the remedy provided under the Act. Reference in this regard can be made to the case Sales Tax Officer, Jodhpur v. M/s. Shiv Ratan G. Mohatta,. In case 1. T.C. Limited v. Union of India, 1983 ELT I (Delhi) it has been held that as a matter of practice and procedure the Courts do not normally permit the aggrieved party to abandon the normal remedies of appeal etc. under the Act in favor of a petition under Art. 226 of the Constitution of India but if any action is taken without jurisdiction or if the Court comes to the conclusion that the alternative remedy provided under the Act is not adequate cannot inspire confidence inasmuch as it would amount to an appeal from ‘Ceaser to Ceaser’ then the existence of an alternative remedy is no bar to the exercise of writ jurisdiction under Art. 226 of the Constitution. These two judgments provide a complete answer to the argument of the assessing authority committing an illegality apparent on the face of the record or going beyond the jurisdiction. Except such like cases an individual has to comply with the provisions of deposit of the amount before he can be permitted to avail the right of appeal.’
12. An appeal was filed against the decision of the Full Bench of Delhi High Court in Shyam Kishore v. Municipal Corpn of Delhi, [1993] 1 SCC 22. The Apex Court hearing appeal in Shyam Kishore’s case (supra) concurred with the majority view taken by the Full Bench.
13. In Gujarat Agro Industries Co. Ltd. v. Municipal Corpn of City of Ahmedabad [1999] 4 SCC 468, it was held by the Apex Court as under:—
‘8. By the Amending Act 1 of 1979 discretion of the Court in granting interim relief has now been limited to the extent of 25% of the tax required to be deposited. It is, therefore, contended that earlier decision of this Court in Anant Mills case may not have full application. We, however, do not think that such a contention can be raised in view of the law laid by this Court in Anant Mills case. This Court said that right of appeal is the creature of a statute and it is for the legislature to decide whether the right of appeal should be unconditionally given to an aggrieved party or it should be conditionally given. Right of appeal which is statutory right can be conditional or qualified. It cannot be said that such a law would be violative of Article 14 of the Constitution. If the statute does not create any right of appeal, no appeal can be filed. There is a clear distinction between a suit and an appeal. While every person has an inherent right to bring a suit of a civil nature unless the suit is barred by statute. However, in regard to an appeal, position is quite opposite. The right to appeal inheres in no one and, therefore, for maintainability of an appeal there must be authority of law. When such a law authorises filing of appeal, it can impose conditions as well {see Smt. Ganga Bai v. Vijav Kumar & Ors. [(1974) 2 SCC 393]}.
9. In M/s. Elora Construction Company v. Municipal Corporation of Greater Bombay & Ors. (AIR 1980 Bom. 162), the question before the Bombay High Court was as to the validity of Section 217 of the Bombay Municipal Corporation Act. This Section provided for filing of appeal against any rateable value or tax fixed or charged under that Act but no such appeal could be entertained unless :
(d) in the case of an appeal against a tax, or in the case of an appeal made against a rateable value the amount of the disputed tax claimed from the appellant, or the amount of the tax chargeable on the basis of the disputed rateable value, up to the date of filing of the appeal, has been deposited by the appellant with the Commissioner.
It will be seen that clause (d) aforesaid was in similar terms as clause (e) of Section 406(2) as it originally existed. Bombay High Court upheld the constitutional validity of Section 217 of the Bombay Municipal Corporation Act. Calcutta High Court in Chhatter Singh Baid & Ors. v. Corporation of Calcutta & Ors. (AIR 1984 Cal 283) also took the same view. There it was sub-section (3A) of Section 183 of the Calcutta Municipal Act, 1951 which provided:
“No appeal under this section shall be entertained unless the consolidated rate payable up to the date of presentation of the appeal on the valuation determined
(a)
by an order under Section 182, in the case of an appeal to the Court of Small Causes,
(b)
by the decision of the Court of Small Causes, in the case of an appeal to the High Court, has been deposited in the municipal office and such consolidated rate is continued to be deposited until the appeal is finally decided.”
Similar provisions existed in the Delhi Municipal Corporation Act, 1957. There it is Section 170 which is as under :
170. Conditions of right to appeal – No appeal shall be heard or determined under Section 169 unless
(a)
the appeal is, in the case of a property tax, brought within thirty days next after the date of authentication of the assessment list under Section 124 (exclusive of the time requisite for obtaining a copy of the relevant entries therein) or, as the case may be, within thirty days of the date on which an amendment is finally made under Section 126, and, in the case of any other tax, within thirty days next after the date of the receipt of the notice of assessment or of alteration of assessment or, if no notice has been given, within thirty days after the date of the presentation of the first bill or, as the case may be, the first notice of demand in respect thereof:
Provided that an appeal may be admitted after the expiration of the period prescribed therefor by this section if the appellant satisfies the court that he had sufficient cause for not preferring the appeal within that period;
(b)
the amount, if any, in dispute in the appeal has been deposited by the appellant in the office of the Corporation.
A Full Bench of the Delhi High Court, by majority, upheld the constitutional validity of the aforesaid provision though there was also challenge to the same based on Article 14 of the Constitution. Appeal against the judgment of the Delhi High Court was taken to this Court which upheld the view of the Delhi High Court. The decision of this Court is reported as Shyam Kishore and Ors. v. Municipal Corporation of Delhi & Anr. [(1993) 1 SCC 22]. This Court relied on its earlier decisions in Ganga Bai case and Anant Mills case. Reference was also made to another decision of this Court in Vijay Prakash D. Mehta/Shri Jawahar D. Mehta v. Collector of Customs (Preventive), Bombay [(1988) 4 SCC 402] where Justice Sabyasachi Mukharji, J., speaking for the Court, said :
Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant.
10. It is not necessary for us to refer to other decisions asserting the same principle time and again. When the statement of law is so clear, we find no difficulty in upholding the vires of clause (e) of sub-section (2) of Section 406 read with proviso thereto. Any challenge to its constitutional validity on the ground that onerous conditions have been imposed and right to appeal has become illusory must be negatived.
11. We also note that under clause (c) of sub-section (2) of Section 406, a complaint lies to the Municipal Commissioner against imposition of any property tax and only after that when the complaint is disposed of that appeal can be filed. Appeal to the Court as provided in clause (e) may appear to be rather a second appeal. Then under Section 408 of the Act provisions exist for referring the matter to arbitration. Under sub-section (1) of Section 408 where any person aggrieved by any order fixing or charging any rateable value or tax under the Act desires that any matter in difference between him and the other parties interested in such order should be referred to arbitration, then, if all such parties agree to do so, they may apply to the Court for an order of reference on such matter and when such an order is made provisions relating to arbitration in suits shall apply. That apart, if a person cannot avail of the right of appeal under Section 406 of the Act, other remedies are available to him under the law. In that case, it may not be possible for the Municipal Corporation to contend that an alternative remedy of appeal exist under Section 406 of the Act.
12. When leave was granted in these appeals by order dated December 12, 1980 this Court granted stay on the condition that seventy-five per cent of the tax is deposited with the Municipal Commissioner within two months from that date and on such deposit being made, the appeals be heard and disposed of (by the Judge) and we believe by this time the appeals filed before the Judge under Section 406 must have been disposed of.’
14. In Government of Andhra Pradesh v. P. Laxmi Devi [2008] 4 SCC 720, the Apex Court was considering the matter relating to pre-deposit of 50% of the stamp duty for the purpose of making a reference to the Collector under Section 47A of the Indian Stamp Act, 1899. After considering its earlier pronouncements on the subject under different statutes interpreting similar provision, it was recorded as under:—
’22. In this connection we may also mention that just as the reference under Section 47A has been made subject to deposit of 50% of the deficit duty, similarly there are provisions in various statutes in which the right to appeal has been given subject to some conditions. The constitutional validity of these provisions has been upheld by this Court in various decisions which are noted below.
23. In Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the city of Ahmedabad and Ors. (1999) 4 SCC 468, this Court referred to its earlier decision in Vijay Prakash D. Mehta v. Collector of Customs (Preventive) (1968) 4 SCC 402 wherein this Court observed : “The right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant.”
24. In Anant Mills Ltd. v. State of Gujarat (1975) 2 SCC 175 this Court held that the right of appeal is a creature of the statute and it is for the Legislature to decide whether the right of appeal should be unconditionally given to an aggrieved party or it should be conditionally given. The right to appeal which is a statutory right can be conditional or qualified.
25. In M/s. Elora Construction Company v. The Municipal Corporation of Gr. Bombay and Ors. AIR 1980 Bombay 162, the question before the Bombay High Court was as to the validity of Section 217 of the Bombay Municipal Act which required pre-deposit of the disputed tax for the entertainment of the appeal. The Bombay High Court upheld the said provision and its judgment has been referred to with approval in the decision of this Court in Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the city of Ahmedabad and Ors. (supra). This Court has also referred to its decision in Shyam Kishore and Ors. v. Municipal Corporation of Delhi and Anr. (1993) 1 SCC 22 in which a similar provision was upheld.
26. It may be noted that in Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the city of Ahmedabad and Ors. (supra) the appellant had challenged the constitutional validity of Section 406(e) of the Bombay Municipal Corporation Act which required the deposit of the tax as a precondition for entertaining the appeal. The proviso to that provision permitted waiver of only 25% of the tax. In other words a minimum of 75% of the tax had to be deposited before the appeal could be entertained. The Supreme Court held that the provision did not violate Article 14 of the Constitution.
27. In view of the above, we are clearly of the opinion that Section 47A of the Indian Stamp Act as amended by A.P. Act 8 of 1998 is constitutionally valid and the judgment of the High Court declaring it unconstitutional is not correct.’
15. In Smt. Har Devi Asnani v. State of Rajasthan AIR 2011 SC 3748, Proviso to Section 65(1) of the Rajasthan Stamp Act, 1998 requiring deposit of 50% of demand as precondition for filing revision against the order to pay deficit stamp duty was held to be within legislative powers of the State. It was recorded as under:—
‘5. For appreciating the contentions of the learned counsel for the parties, we must refer to Section 65 of the Act. Section 65 of the Act is quoted hereinbelow:—
“65. Revision by the Chief Controlling Revenue Authority (1) Any person aggrieved by an order made by the Collector under Chapter IV and V and under clause (a) of the first proviso to section 29 and under section 35 of the Act, may within 90 days from the date of order, apply to the Chief Controlling Revenue Authority for revision of such order:
Provided that no revision application shall be entertained unless it is accompanied by a satisfactory proof of the payment of fifty percent of the recoverable amount.
(2) The Chief Controlling Revenue Authority may suo moto or on information received from the registering officer or otherwise call for and examine the record of any case decided in proceeding held by the Collector for the purpose of satisfying himself as to the legality or propriety of the order passed and as to the regularity of the proceedings and pass such order with respect thereto as it may think fit:
Provided that no such order shall be made except after giving the person affected a reasonable opportunity of being heard in the matter.”
10. We need not refer to all the decisions cited by the learned counsel for the parties because we find that inGovernment of Andhra Pradesh and Others v. P. Laxmi Devi (supra) this Court has examined a similar provision of Section 47-A of the Stamp Act, 1899, introduced by the Indian Stamp Act (A.P. Amendment Act 8 of 1998). Sub- section (1) of Section 47-A, introduced by Andhra Pradesh Act 8 of 1998 in the Indian Stamp Act, is extracted hereinbelow:
“47-A. Instruments of conveyance, etc. how to be dealt with-(l) Where the registering officer appointed under the Registration Act, 1908, while registering any instrument of conveyance, exchange, gift, partition, settlement, release, agreement relating to construction, development or sale of any immovable property or power of attorney given for sale, development of immovable property, has reason to believe that the market value of the property which is the subject-matter of such instrument has not been truly set forth in the instrument, or that the value arrived at by him as per the guidelines prepared or caused to be prepared by the Government from time to time has not been adopted by the parties, he may keep pending such instrument and refer the matter to the Collector for determination of the market value of the property and the proper duty payable thereon.
Provided that no reference shall be made by the registering officer unless an amount equal to fifty per cent of the deficit duty arrived at by him is deposited by the party concerned.”
Under sub-section (1) of Section 47-A quoted above, a reference can be made to the Collector for determination of the market value of property and the proper duty payable thereon where the registering officer has reason to believe that the market value of the property which is the subject- matter of the instrument has not been truly set forth in the instrument, or that the value arrived at by him as per the guidelines prepared or caused to be prepared by the Government from time to time has not been adopted by the parties. The proviso of sub-section (1) of Section 47-A, however, states that no such reference shall be made by the registering officer unless an amount equal to fifty per cent of the deficit duty arrived at by him is deposited by the party concerned. This proviso of sub-section (1) of Section 47-A was challenged before the Andhra Pradesh High Court by P. Laxmi Devi and the Andhra Pradesh High Court held that this proviso was arbitrary and violative of Article 14 of the Constitution and was unconstitutional. The Government of Andhra Pradesh, however, filed an appeal by special leave before this Court against the judgment of the Andhra Pradesh High Court and this Court held in para 18 at page 735 of [(2008) 4 SCC 720] that there was no violation of Articles 14, 19 or any other provision of the Constitution by the enactment of Section 47-A as amended by the Andhra Pradesh Amendment Act 8 of 1998 and that the amendment was only for plugging the loopholes and for quick realisation of the stamp duty and was within the power of the State Legislature vide Entry 63 of List-II read with Entry 44 of List-III of the Seventh Schedule to the Constitution. While coming to the aforesaid conclusions, this Court has relied on The Anant Mills Co. Ltd. v. State of Gujarat and others (supra), Vijay Prakash D. Mehta and Another v.Collector of Customs (Preventive), Bombay (supra) and Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the City of Ahmedabad and Others (supra) in which this Court has taken a consistent view that the right of appeal or right of revision is not an absolute right and it is a statutory right which can be circumscribed by the conditions in the grant made by the statute. Following this consistent view of this Court, we hold that the proviso to Section 65(1) of the Act, requiring deposit of 50% of the demand before a revision is entertained against the demand is only a condition for the grant of the right of revision and the proviso does not render the right of revision illusory and is within the legislative power of the State legislature.
11. We also find that in the impugned order the High Court has relied on an earlier Division Bench judgment of the High Court in M/s Choksi Heraeus Pvt. Ltd., Udaipur v. State & Ors. (supra) for rejecting the challenge to the proviso to Section 65(1) of the Act. We have perused the decision of the Division Bench of the High Court in M/s Choksi Heraeus Pvt. Ltd., Udaipur v. State & Ors. (supra) and we find that the Division Bench has rightly taken the view that the decision of this Court in the case of Mardia Chemical Ltd. and Others v. Union of India and Others (supra) is not applicable to the challenge to the proviso to Section 65(1) of the Act inasmuch as the provision of sub-section (2) of Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, requiring deposit of 75% of the demand related to deposit at the stage of first adjudication of the demand and was therefore held to be onerous and oppressive, whereas the proviso to Section 65(1) of the Act in the present case requiring deposit of 50% of the demand is at the stage of revision against the order of first adjudication made by the Collector and cannot by the same reasoning held to be onerous and oppressive. In our considered opinion, therefore, the proviso to Section 65(1) of the Act is constitutionally valid and we are therefore not inclined to interfere with the order dated 16.11.2009 in D.B.CWP No. 14220 of 2009. The Civil Appeal arising out of S.L.P. (C) No. 20964 of 2010 is therefore dismissed.’
16. A full Bench of this Court in Emerald International Ltd. v. State of Punjab [2001] 122 STC 382 (Punj. & Har.) summed up the legal position in the following terms :—
’22. In addition to the law laid down by the honourable Supreme Court in various judicial pronouncements noticed above, two judgments of Calcutta and Punjab and Haryana High Court which have got direct bearing can be quoted with advantage. The Calcutta High Court in Chatter Singh Raid’s case AIR 1984 Cal. 283 was discussing Section 183 (3-A)’ of the Calcutta Municipal Act, 1951, which reads as under :
“No appeal under this section shall be entertained unless the consolidated rate payable up to the date of presentation of the appeal on the valuation determined-
(a)
by an order under Section 182, in the case of an appeal to the Court of Small Causes,
(b)
by the decision of the Court of Small Causes, in the case of an appeal to the High Court, has been deposited in the municipal office and such consolidated rate is continued to be deposited until the appeal is finally decided.”
While dealing with the aforementioned section, it was held that right of appeal was not a natural or inherent right attaching to every litigation and that such a right does not exist and cannot be assumed unless expressly given by the statute. Relying upon the ratio of Anant Mill’s case AIR 1975 SC 1234 it was observed that right of appeal was a creature of statute and Legislature could impose conditions for the exercise of such right and there is no constitutional or legal impediment to imposition of such a condition for deposit of tax. Reference was made to other judicial pronouncements as well. The following observations of the Calcutta High Court deserve reproduction :
“A right of appeal is not a natural or inherent right attaching to every litigation and the right of appeal does not exist and cannot be assumed unless expressly given by statute (See Rangoon Botatung Co. Ltd. v. Collector, Rangoon (1903) 30 Ind. App. 197 : ILR 40 Cal. 21, Soorajmull Nagarmull v. State of West Bengal, AIR 1963 SC 393, Smt. Ganga Baiv. Vijay Kumar AIR 1974 SC 1126. Therefore, the provision, viz., Section 183 which conferred upon the petitioners right to prefer appeal against the order disposing of their objection under Section 181 of the Calcutta Municipal Act, could be lawfully amended by inserting a provision imposing the above condition for deposit for entertaining their appeal.
The condition laid down by Sub-section (3-A) of Section 183 of the Calcutta Municipal Act is not something which is without any parallel. Both Mr. Dipankar Ghosh, learned Advocate for the petitioner, and Mr. Pradip Kumar Ghosh, learned Advocate for the respondents, has drawn my attention to nearly similar provisions for deposit of disputed tax duty and rates contained in various other taxing, municipal and fiscal laws. Mr. Dipankar Ghosh, however, submitted that unless the appellate authority is given discretionary powers to relax or modify such condition for deposit of the disputed amount, the condition precedent ought to be pronounced as unreasonable. In my view, the observations made in para 40 of the Supreme Court decision in Anant Mills v. State of Gujarat AIR 1975 SC 1234, are directly against the above submission of the petitioners. With reference to Section 406(2) of the Bombay Provincial Municipal Act, the Supreme Court upheld the power of the Legislature to impose similar condition for deposit while granting right of appeal. According to the Supreme Court, there was no legal or constitutional impediment to imposition of such a condition. I respectfully agree and apply the aforesaid observations in upholding the validity of Section 183(3-A) of the Calcutta Municipal Act, I am unable to accept Mr. Dipankar Ghosh’s submission, that, the court’s power under Section 406(2) of the Bombay Provincial Municipal Act to relax the condition for deposit the tax due had at all weighed with the Supreme Court in making the aforesaid observations in Anant Mills v. State of Gujarat AIR 1975 SC 1234 The ratio of the said decision is that the right of appeal is a creature of statute and while granting the right of appeal the Legislature can impose conditions for exercise of such right and there is no constitutional or legal impediment to imposition of such a condition for deposit of tax. The Supreme Court in their subsequent decision in the case of Nand Lal v. State of Haryana AIR 1980 SC 2097, had followed their earlier decision in Anant Mills v. State of Gujarat AIR 1975 SC 1234 The Supreme Court in Nand Lal v. State of Haryana AIR 1980 SC 2097 had rejected similar argument that conditions imposed on right of appeal were onerous because no discretion had been given to the appellate or revisional authority to relax or waive the said condition in view of subjects for imposing such a condition.”
24. As a sequal to our discussion on the question of law referred to us the following conclusions can be deduced :
(a)
The appeal is a creation of a statute and in case a person wants to avail of the right of appeal, he has to accept the conditions imposed by the statute.
(b)
The right of appeal being a creature of statute, the Legislature could impose conditions for exercise of such a right. Neither there is a constitutional nor legal impediment for imposition of such a condition.
(c)
The right of appeal is neither natural nor inherent attaching to a litigation and such a right neither exists nor can be assumed unless expressly given by the statute.
(d)
Even if, this Court was to interpret the bare provisions of two statutes, i.e., the Punjab General Sales Tax Act, 1948 and the Haryana General Sales Tax Act, 1973, it could safely be held that there is a complete bar to the entertainment of an appeal by the appellate authority without the payment of tax amount unless the authority is satisfied that the dealer is unable to pay the amount so assessed and only in that situation the appellate authority for the reasons to be recorded in writing can entertain the appeal without deposit of the payment of such amount.
(e)
Neither on the wording nor in view of the spirit of the Punjab and Haryana Acts it is possible to hold that the appellate authority should see the prima facie nature of the case while hearing the stay matter.
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