B.N. Mahapatra, J.
1. This writ petition has been filed seeking a large number of reliefs. However, at the time of hearing learned Counsel for the petitioner has confined his argument only to the relief to quash the order dated 23.12.2008 (Annexure-3) by which the Deputy Commissioner of Sales Tax, Cuttack-1 Range, Cuttack (for short 'DCST') summarily rejected the appeal memo as well as the stay petition filed by the petitioner under Section 77(4) of the Orissa Value Added Tax, 2004 (for short 'OVAT Act') on the grounds that the said order is arbitrary and not maintainable in law.
2. The facts of the case in a nutshell are that the petitioner is a dealer registered both under the OVAT Act and Central Sales Tax Act, 1956 (for short 'CST Act'). It was assessed under Rule 12(4) of the Central Sales Tax (Orissa) Rules, 1957 (for short 'CST(O) Rules') for the period commencing from 01.04.2005 to 31.07.2007 wherein the total tax demand of Rs. 41,70,825/- was raised towards tax, penalty and interest. Against the said demand, the petitioner filed appeal before the DCST along with a petition for stay of realization of the demanded amount.
In the said appeal, the DCST issued notice 6636 dated 12.11.2007 pointing out the defect in the appeal memo that a sum of Rs. 2,78,055/- had not been paid towards 20% of the tax dues. In the said notice, it was indicated that if the defect pointed out was not removed within the date specified in the notice, the petition for stay as well as appeal would be rejected summarily. In response to said notice, the petitioner appeared before the DCST and submitted that the appeal being filed against assessment made under the CST Act the requirement of deposit of 20% of tax and interest in dispute as provided in Sub-section (4) of Section 77 of the OVAT Act is not applicable. Since the petitioner did not pay 20% tax and interest in dispute, the DCST rejected the stay petition as well as appeal petition summarily under Section 77(4) of the OVAT Act. Hence, the petition.
3. Mr. B. Panda, learned Counsel appearing for the petitioner submits that Sub-section (4) of Section 77 of the OVAT Act speaks that no appeal against any order shall be entertained by the appellate authority unless it is accompanied by satisfactory proof of payment of admitted tax in full and 20% of the tax or interest or both in dispute. The said provision was made applicable to CST appeal with effect from 06.07.2006. Hence, the DCST is fully unjustified in asking the petitioner to deposit 20% of the tax and interest raised for the entire period from 01.04.2005 to 31.07.2007, which is in dispute. At the best, the petitioner may be asked to deposit 20% of tax and interest levied by the assessing officer on the transactions effected during the period from 06.07.2006 to 31.07.2007. Therefore, the impugned order under Annexure-3 is liable to be quashed.
4. Mr. R.P. Kar, learned Addl. Standing Counsel for the Revenue vehemently argued that on receipt of the letter dated 31.11.2008 by which the petitioner was asked to deposit a sum of Rs. 2,78,055/-, i.e. 20% of the tax and interest demanded for the period 01.04.2005 to 31.07.2007 the petitioner appeared before DCST and submitted that the appeal was preferred against the order of assessment passed under Rule 12(4) of CST(O) Rules and, therefore, the petitioner was not liable to pay 20% of the tax and the interest in dispute as provided under Sub-section (4) of Section 77 of the OVAT Act. The above contention of the petitioner is not sustainable in law as the petitioner is required to pay 20% of the amount of tax and interest in dispute in view of the clear provision of Rule 22 of CST (O) Rules. Therefore, the present petition is liable to be dismissed.
5. At this juncture, it is necessary to know what is contemplated under Section 77 of the OVAT Act, which deals with appeal and Rule 22 of the CST (O) Rules. The relevant portions of Section 77 and Rule 22 are quoted below:
Section 77 of OVAT Act:
77. Appeals - (1) Any dealer aggrieved by an order passed under Section 34, 40, 42, 43, 44, 45 or 52 may prefer an appeal to such authority as may be prescribed.
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(4) No appeal against any order shall be entertained by the appellate authority, unless it is accompanied by satisfactory proof of payment of admitted tax in full and twenty per centum of the tax or interest or both, in dispute.
Rule 22 of CST(O) Rules:
22. Application of the Orissa Value Added Tax Act, 2004, and the rules made thereunder, to certain matters.:
The provisions of the Orissa Value Added Tax Act, 2004 and the rules made thereunder shall mutatis mutandis apply in respect of all procedural and other matters incidental to the carrying out of the purpose of the Act for which no provision is made in these rules or in the Central Sales Tax (Registration and Turnover) Rules, 1957.
6. Rule 22 of CST(O) Rules makes it amply clear that the provisions of the OVAT Act and the Rules made thereunder shall mutatis mutandis apply in respect of all procedural and other matters incidental to the carrying out of the purpose of the act for which no provision is made in these rules or in the Central Sales Tax (Registration and Turnover) Rules, 1957 (for short 'CST (R & T) Rules']. Admittedly, there is no provision in the CST (O) Rules and 'CST (R & T) Rutes relating to appeal against assessment orders passed under CST Act read with Rules framed thereunder. Therefore, provisions contained in Section 77 of the OVAT Act, which deals with appeals against the order of assessment passed under the OVAT Act shall govern the appeal filed against assessment order passed under CST (O) Rules. The necessary amendment to this effect has been brought to Rule 22 of the CST (O) Rules vide Notification No. 29330-CTA-53/2004-F. (SRO No. 405/2006), dtd. 06.07.2006 (OGE No. 962, dtd. 06.07.2006. Thus, no appeal against assessment order passed under the CST(O) Rules shall be entertained on and after 06.07.2006 unless the appeal is accompanied by satisfactory proof of payment of admitted tax in full and 20 percentum of the tax and interest or both in dispute, The said notification dated 06.07.2006 has no retrospective applicability.
Hon'ble the Supreme Court in State of Bombay v. Supreme General Films Exchange Ltd. : [1960]3SCR640 ; held that an impairment of the right of appeal by putting a new restriction thereon or imposing a more onerous condition is not a matter of procedure only; it impairs or imperils a substantive right and an enactment which does so is not retrospective unless it says so expressly or by necessary intendment. [Also see Hoosein Kasam Dada (India) Ltd. v. State of M.P. : 1983(13)ELT1277(SC) and Vitthalbhai Naranbhai Patel v. Commissioner of Sales Tax : AIR1967SC344 ]
The Apex Court time and again held that right of appeal is a substantive right, but how the appeal is to be decided is a matter of procedure. The rules of procedure are intended to advance justice and not to defeat it. 'Procedural law is intended to facilitate and not to obstruct the course of substantive justice.' (vide Hoosein Kasam Dada (India) Ltd. v. State of M.P. : 1983(13)ELT1277(SC) ; Garikapti Veeraya v. N. Subbiah Choudhry : [1957]1SCR488 ; Ganesh Trading Co. v. Moji Ram : [1978]2SCR614 ; Harcharan v. State of Haryana : AIR1983SC43 ; and Shiv Shakti Coop. Housing Society, Nagpur v. Swaraj Developers and Ors. : [2003]3SCR762 ).
Admittedly, in the case at hand, the petitioner was directed by DCST to deposit 20% of the tax and interest in dispute raised for the period from 01.04.2005 to 31.07.2007 to entertain the first appeal filed before him which is not permissible. Petitioner's admitted tax during the period being nill he is required to pay only 20% of the tax and interest levied by the assessing officer on the transactions effected during the period from 06.07.2006 to 31.07.2007.
7. In view of the above, the order passed by DCST under Annexure-3 is hereby quashed. The DCST is directed to recompute 20% of the tax and interest Jevied by the assessing officer for the period from 06.07.2006 to 31.07.2007 and intimate the same to the petitioner within a period of four weeks from today. If the petitioner pays the said amount within two weeks thereafter, the DCST is directed to entertain the appeal filed against the assessment order passed for the period from 01.04.2005 to 31.03.2007, if the appeal is otherwise maintainable.
8. The writ petition is allowed to the extent indicated above. There shall be no order as to costs.
B.S. Chauhan, C.J.
9. I agree.