Shiv Shakti Kirana Kendra vs Commissioner, Vat
2009 Latest Caselaw 3246 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

                                             Reserved on:     July 16, 2009.

                                             Pronounced on: August 19, 2009

                                     S.T. Appeal No.2/2009



Shiv Shakti Kirana Kendra                                          ...Appellant.

                              Through:    Mr. S. Ganesh, Sr. Advocate with Mr.
                                          Vineet Bhatia, Advocate.

               VERSUS

Commissioner, VAT                                                  ....Respondent

Through: : Mr. Rajesh Mahna, Advocate with Mr. Ramanand Roy, Advocate and Mr. Manu K. Giri, Advocate.

                                 S.T. Appeal No.3/2009

Shiv Shakti Kirana Kendra                                         .....Appellant

Through: Mr. S. Ganesh, Sr. Advocate withMr. Vineet Bhatia, Advocate.

               VERSUS

Commissioner, VAT                                                 .......Respondent

                              Through: Mr. Rajesh Mahna, Advocate with Mr.
                                       Ramanand Roy, Advocate and Mr. Manu K.
                                       Giri, Advocate.




S.T. Appeals No.2-3-4 and 5/ 2009.                                             Page 1
                                      S.T. Appeal No.4/2009

Shiv Shakti Kirana Kendra                                          .....Appellant
                        Through:          Mr. S. Ganesh, Sr. Advocate with Mr.
                                          Vineet Bhatia, Advocate.




               VERSUS

Commissioner, VAT                                                   .......Respondent

                              Through:     Mr. Rajesh Mahna, Advocate with Mr.
                                           Ramanand Roy, Advocate and Mr. Manu
                                           K. Giri, Advocate.

                                     S.T. Appeal No.5/2009



Shiv Shakti Kirana Kendra                                           .....Appellant

                              Through:     Mr. S. Ganesh, Sr. Advocate with Mr.
                                                 Vineet Bhatia, Advocate.



               VERSUS

Commissioner, VAT                                                   .......Respondent

                              Through:     Mr. Rajesh Mahna, Advocate with Mr.
                                           Ramanand Roy, Advocate and Mr. Manu
                                           K. Giri, Advocate.
CORAM:
HON'BLE MR. JUSTICE A. K. SIKRI
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

1. Whether the Reporters of local papers may be allowed to see the judgment?

   2. To be referred to the Reporter or not?                              yes

   3. Whether the judgment should be reported in the Digest?              yes
S.T. Appeals No.2-3-4 and 5/ 2009.                                              Page 2
  %                                   JUDGMENT

VALMIKI J. MEHTA,J

1. The Delhi Sales Tax Act, 1985 was repealed on the passing of the Delhi

Value Added Tax Act, 2004 with effect from 01.04.2005. The issue in these

batch of appeals is : with respect to appellate proceedings which were pending

under the Delhi Sales Tax Act whether further appeal, after repeal of the Delhi

Sales Tax Act, would lie under the provisions of Section 81 of the new Delhi

VAT Act, 2004 or whether the appellants have to seek reference under Section

45(1) or 45(2) of the old Delhi Sales Tax Act.

2. The respondent contends that the present appeals are not maintainable

under the Delhi VAT Act and the appellant contends that the appeals are

maintainable.

3. At this stage, it is relevant to reproduce Section 106 of the Delhi VAT

Act which reads as under:

"106. Repeal and savings.-(1) The Delhi Sales Tax Act, 1975(Act 43 of 1975), the Delhi Tax on Entry of Motor Vehicles into Local Areas Act, 1994 (Delhi Act 4 of 1995), the Delhi Sales Tax on Works Contract Act, 1999 (Delhi Act 9 of 1999), and the [Delhi Sales Tax on Right to Use Goods Act, 2002 (Delhi Act 13 of 2002)] as in force in Delhi (referred to in this section as the "said Acts"), are hereby repealed.

(2) Notwithstanding sub-section (1) of this section, such repeal shall not affect the previous operation of the said Acts or any right, title, entitlement, obligation or liability already acquired, accrued or incurred thereunder.

(3) For the purposes of sub-section (2) of this section, anything done or any action taken including any appointment, notification, notice, order, rule, form or certificate in the exercise of any powers conferred by or under the said Acts shall be deemed to have been

S.T. Appeals No.2-3-4 and 5/ 2009. Page 3 done or taken in the exercise of the powers conferred by or under this Act, as if this Act were in force on the date on which such thing was done or action was taken, and all arrears of tax and other amounts due at the commencement of this Act may be recovered as if they had accrued under this Act"

4. The appellant has strongly relied upon the decision of the Punjab and

Haryana High Court in the case of M.U.S. Marketing Pvt Ltd. Vs. State of

Punjab & Another [(2008) 12 VST 123 (P&H)] and also the decision of this

Court in the case of International Metro Civil Contractors Vs. Commissioner

of Sales Tax/VAT (2008) 16 VST 329 (Delhi). The respondent on the other

hand has relied upon the recent decision of the Hon'ble Supreme Court in the

case of Gammon India Ltd. Vs. Spl. Chief Secretary & others [2006] 145 STC

1(SC) and the earlier decision of the Supreme Court in the case of Hoosein

Kasam Dada (India) Ltd. Vs. The State of Madhya Pradesh 4 STC 114(SC).

5. Principally, the case advanced by the respondent, who has raised this

preliminary objection as to non-maintainability of these appeals, is that by

virtue of sub section (2) to Section 106 of the Delhi VAT Act, the repeal of the

Delhi Sales Tax Act will not affect the previous operation of the said Act or any

right, title, entitlement, obligation or liability already acquired, accrued or

incurred thereunder. The contention is that the right of reference under the

provisions of Section 45(1) and 45(2) of the Delhi Sales Tax Act is a vested

right by virtue of Section 106(2) of the Delhi VAT Act and consequently, it is

contended that such vested rights have been saved by the said sub-section (2) of

Section 106. It is contended that since the proceedings with respect to which

S.T. Appeals No.2-3-4 and 5/ 2009. Page 4 the present appeals are filed, originated with respect to assessment years 1994-

95 and 1995-96 and were initiated under the Delhi Sales Tax Act,

consequently, the repeal of the Delhi Sales Tax Act would not affect the vested

rights under sub section (1) and (2) of Section 45 of the Delhi Sales Tax Act.

The appellant on the other hand has relied upon the sub-section (3) of Section

106 of the Delhi Vat Act which specifies that for the purposes of sub-section (2)

anything done or any action taken including any appointment, notification,

notice, order, rule in the exercise of any powers conferred by or under the Delhi

Sales Tax Act shall be deemed to have been done or taken in exercise of the

powers conferred by or under Delhi VAT Act as if this Act were in force on the

date on which such thing was done or action was taken. The appellant has

relied upon the decision of the M.U.S. Marketing's case (supra) wherein the

Punjab and Haryana High Court with respect to similar provisions appearing in

the Punjab VAT Act, 2005 held as under:

"that section 92 of the Punjab VAT Act, 2005 coming into force from April 1, 2005 repealed the remedy of filing reference which was available under the 1948 Act and instead conferred on a party right of filing appeal or revision to the High Court by operation of section 68 of the Act on a substantial question of law. All these appeals which were decided by the Tribunal, after coming into force of the 2005 Act would, thus, be governed by the provisions of section 68 of the VAT Act and in all such cases the appeal or revision would lie to the High Court on a substantial question of law".

6. A reading of the judgment in the case of Gammon India Ltd.'s case

(supra) is very instructive. The Supreme Court has considered in detail various

S.T. Appeals No.2-3-4 and 5/ 2009. Page 5 decisions on this aspect both of English Courts as well as of the Supreme Court

itself in order to inter-alia trace the development of the law of repeals, savings

of vested rights and retrospective operation of statutes. From a reading of this

judgment we can cull out the following principles of law:

(i) Ordinarily the effect of repeal is that a statute is wiped out from the

statute book for all intents and purposes.

(ii) However, a need was felt on certain occasions to protect certain

vested rights and consequently in the repealing Act a provision came to be

incorporated for saving of the vested rights accrued or liabilities arisen under

the repealed Act.

(iii) Since this need to save vested rights was felt in many cases, instead

of having a Savings provision in each Act, a general provision was made in

Section 6 of the General Clause Act, 1897 and which is similar to Section 38 of

the English Interpretation Act, 1889. By virtue of this Section all vested rights

under a repealed Act continued to operate and liabilities incurred thereunder

continued to be binding.

(iv) The Legislature can however vary this general rule of saving of

vested rights by giving retrospective effect to a Statute and take away vested

rights. This is clear from Section 6 itself which uses the expression "unless a

different intention appears".

(v) A right of appeal is a vested right and ordinarily is not taken away

by a repealing Statute.

S.T. Appeals No.2-3-4 and 5/ 2009. Page 6

7. In view of the aforesaid ratio of the Supreme Court in Gammon India Ltd.

case, we would have to examine the effect of Section 106 sub sections (2) and

(3).

8. Before, however, we proceed to do so, it would be relevant to refer to two

other judgments of the Supreme Court, namely, Maria Cristinia Desouza Sordu

Vs. Amaria Jhurana Parera Pinta, 1979 Vol.I SCC 92 and P. Mohd Vs.

Thisumalaya, AIR 1966 SC 430. In Maria's case (supra), the Supreme Court

has laid down that though the right of appeal is a vested right/ substantive right,

however the forum with respect to exercise of such right of appeal is not a

vested right. It was held in the said case that the forum of filing of an appeal is

a procedural matter and the Savings clause in a repealing statute and Section 6

of the General Clause Act has nothing to do with the forum where the remedy

of appeal has to be pursued. The forum of appeal was thus held only to be a

procedural matter and not a substantive or a vested rights issue. In the second

case of P. Mohd. the appeal instead of being heard by the two Judges of the

High Court was heard by a Single Judge and it was held that there is no vested

right in getting the matter heard by two Judges. It was held that the hearing of

an appeal, whether by one Judge or by two Judges is merely a matter of

procedure.

9. In view of the above, when we examine the provision of appeal under

Section 81 of the Delhi VAT Act and the provision of reference under Section

45(1) and 45(2) of the Delhi Sales Tax Act, it becomes clear that no vested right

S.T. Appeals No.2-3-4 and 5/ 2009. Page 7 has been taken away by passing of the Delhi VAT Act and in fact only the

forum has changed. Under the old Delhi Sales Tax Act, to approach the High

Court, either an application had to be made before the Tribunal or before the

High Court which would call for the question of law with the statement of case

from the Tribunal. However under the new Delhi VAT Act, 2004, the only

difference is that the procedure has changed and a party has been given a right

to directly approach the High Court which will frame a question of law. In fact,

the right of appeal has been further strengthened and the procedure has been

simplified by passing of the Delhi VAT Act, 2004 and it is not as if any vested

right of appeal has been taken away. As already stated above, and so held in

Maria's case, there is no vested right in a forum of appeal and which is only a

procedural matter.

10. The decision of the Punjab and Haryana High Court without relying upon

the decision of the Gammon India's case has independently arrived at a

decision that an appeal will lie under the new VAT Act. We, respectfully agree

with this view as expressed in the said decision of the Punjab and Haryana High

Court, also for additional reasons which we have indicated above.

11. Even if we look at the issue from the aspect of retrospectivity of a

legislation, even then in such a case, we find that the legislature, qua the forum

of appeal, has taken a conscious decision on retrospective operation of Delhi

VAT Act as regards forum of a second appeal to the High Court by virtue of

Section 106(3) and which provision makes it clear that all orders passed under

S.T. Appeals No.2-3-4 and 5/ 2009. Page 8 the Delhi Sales Tax Act will be treated as if they have been passed under the

Delhi VAT Act. Thus vide Section 106(3) the order passed by the Appellate

Tribunal will be an order, not under Section 44 of the Delhi Sales Tax Act, but

one under Section 74 of the Delhi VAT Act. The unambiguous language of

Section 106(2) can lead to no other conclusion than that the appeal will now lie

to the High Court under Section 81 of the Delhi VAT Act even if the order

which is passed by the Tribunal is in respect to proceedings which were

initiated when the Delhi Sales Tax Act was in force.

12. We accordingly hold that the present appeals under Section 81 of the

Delhi VAT Act are maintainable. The preliminary objection of the respondent

is accordingly rejected.

Post the appeals for hearing on 3rd December, 2009.

(A.K. SIKRI) JUDGE

(VALMIKI J.MEHTA) JUDGE August 19, 2009 Ne

S.T. Appeals No.2-3-4 and 5/ 2009. Page 9