JUDGMENT R.M. Sahai, J.
1. The following question has been referred for the opinion of this court:
Whether, in the facts and circumstances of the case, Section 9(1)(b) as amended with effect from 1st October, 1970, is applicable to the case of the assessee ?
2. The facts giving rise to the reference are that proceedings under Section 21 were initiated in the year 1966 and an ex parte assesssment order was passed on 18th October, 1966. The assessee filed an appeal which was allowed and the case was remanded for reassessment by an order dated 16th September, 1969. The assessing authority passed a fresh order on 31st December, 1970. Aggrieved by the assessment order the assessee filed an appeal which came up for hearing before the Assistant Commissioner (Judicial), Sales Tax, Meerut. An objection was raised on behalf of the department that as the assessee had not deposited 20 per cent of the tax assessed the appeal was not maintainable in view of the amendment made in Section 9 by Amendment Act No. 3 of 1971. The contention was upheld and the appeal was dismissed. The assessee filed a revision which was allowed by the Additional Judge (Revisions), Meerut, relying on a decision given by the Supreme Court reported in Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh [1953] 4 S.T.C. 114 (S.C.).
3. Section 9, before and after amendment, read as follows :
Section 9 before amendment:
9. Appeals-(I)...
Provided that no appeal against an assessment shall be entertained unless it is accompanied by satisfactory proof of the payment of the amount of tax admitted by the appellant to be due or of such instalment thereof as may have become payable;
Section 9 after amendment:
9. Appeal.-(I)...
Provided that no appeal against an assessment order under this Act shall be entertained unless the appellant has furnished satisfactory proof of the payment of not less than-
(a) where return is filed, the amount of tax or fee due under this Act on the turnover of sales or purchases, as the case may be, admitted by the appellant in the return filed by him or at a later stage in proceedings before the assessing authority, whichever is greater ; or
(b) where no return is filed, the amount of tax or fee due under this Act on the turnover of sales or purchases, as the case may be, admitted at any stage in proceedings before the assessing authority, or 20 per cent of the amount of tax or fee assessed whichever is greater.
4. Admittedly, no return was filed and, therefore, the assessee's case fell under Section 9(1)(b). It was, however, urged on behalf of the assessee that as the proceedings in his case had commenced prior to 1970, he had a right to file his appeal under Section 9 as it stood before the amendment, i. e., without complying with the requirement of depositing 20 per cent of the assessed tax. Reliance for this proposition has mainly been placed on Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh A.I.R. 1953 S.C. 221. Counsel for the department has, on the other hand, placed reliance on a decision reported in Hardeodas v. Assam State A.I.R. 1970 S.C. 724. It is settled by a series of decisions that a right of appeal is a substantive right and not merely a matter of procedure : see Janardan Reddy v. State A.I.R. 1951 S.C. 124 Ganpat Rai Hiralal v. Aggarwal Chamber of Commerce Ltd. A.I.R. 1952 S.C. 409 Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh A.I.R. 1953 S.C. 221 and Garikapati Veeraya v. N. Subbiah Choudhry A.I.R. 1957 S.C. 540. The question whether the amendment effected in Section 9 requiring the assessee to deposit 20 per cent of tax was an amendment merely in the procedure of filing an appeal or it was an encroachment on the right of filing of appeal itself has also been settled in the case of Hoosein Kasam Dado's case A.I.R. 1953 S.C. 221. The situation was more or less identical. Before the amendment an aggrieved assessee had only to pay such amount of tax as might be due from him whereas under the amended provision the appeal had to be accompanied by satisfactory proof of payment of tax in respect of which the appeal had been preferred. It was held by their Lordships of the Supreme Court:
That the amendment has placed a substantial restriction on the assessee's right of appeal cannot be disputed, for the amended Section requires the payment of the entire assessed amount as a condition precedent to the admission of its appeal. The question is whether the imposition of such a restriction by amendment of the Section can affect the assessee's right of appeal from a decision in proceedings which commenced prior to such amendment and which right of appeal was free from such restriction under the Section as it stood at the time of the commencement of the proceeding. The question was answered in the negative by the Judicial Committee in Colonial Sugar Refining Company Ltd. v. Irving [1905] A.C. 369.
5. It was further held on page 122 that:
This right of appeal from the decision of an inferior tribunal to a superior tribunal becomes vested in a party when proceedings are first initiated in and before a decision is given by, the inferior court.
6. Proceedings for assessment or reassessment are initiated either by issue of notice or by filing of return. In this case notices were issued to the assessee for escaped assessment in 1966 and the assessment order was passed on 19th October, 1966. The proceedings, therefore, in our opinion, were initiated in the year 1966, at least after the passing of the assessment order and before the Section was amended by Act No. 3 of 1971. The ratio laid down by their Lordships of the Supreme Court in Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh [1953] 4 S.T.C. 114 (S.C) fully applies to the facts of this case. This decision has further been followed in a decision reported in [1963] S.C.R. 640 (sic). This would have been sufficient to dispose of this reference but as reliance has been placed on the decision of Hardeodas3, we consider it necessary to deal with that decision. After a close scrutiny of the decision we do not find that there is any conflict in the two decisions given by the Supreme Court, i. e., Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh [1953] 4 S.T.C. 114 (S.C) and Hardeodas v. Assam State A.I.R. 1970 S.C. 724. It appears that assessment orders were passed sometime in 1957 whereafter the Superintendent of Taxes, Shillong, raided the business premises of the appellant and seized the account books. On the basis of the information received from the account books, the Superintendent of Taxes issued notices on 4th April, 1958, under Section 19A of the Assam Sales Tax Act for reassessment. The proceedings in this case for formal assessment, therefore, were initiated on 4th April, 1958. The amendment putting a restriction on the right of appeal by depositing tax was introduced by an amending Act dated 1st April, 1958. In these circumstances, their Lordships of the Supreme Court held :
It was contended that the amendment came into force with effect from April 1, 1958 and it cannot be given retrospective effect so as to apply to assessment periods ending on September 30, 1956, March 31, 1957 and September 30, 1957. We are unable to accept this argument as correct because the assessments for these three periods were completed after the amending Act came into force, i. e., after April 1, 1958. The appeals against the assessments were also filed after the amendment. It is therefore not correct to say that the amending Act has been given a retrospective effect and the Assistant Commissioner of Taxes was therefore right in asking the appellant to comply with the provisions of the amended Section 30 of the Act before dealing with the appeals.
7. We may point out that 4th April, 1950, mentioned in the judgment appears to be a typographical error as considering the sequence of the dates mentioned it is clear that the notices were issued on 4th April, 1958. It is thus clear that the proceedings were initiated in the case after the amendment came into force. Applying the principles of Hoosein Kasam Dado's case [1953] 4 S.T.C. 114 (S.C.), proceedings were initiated after the Act was amended and the right of appeal was governed by the law as it stood after amendment. We, therefore, do not find any conflict in the two decisions. The case does not support the argument advanced on behalf of the department.
8. In view of what we have stated above we answer the reference in the negative against the Commissioner and in favour of the assessee. The assessee shall be entitled to its costs which we assess at Rs. 100.