Judgment:
ORDER
Arijit Pasayat, C.J.
1. Order dated 26.8.1999 disposing of revision petitions under Section 47 of the Delhi Sales Tax Act, 1975 (in short, 'the Act') and Section 9(2) of the Central Sales Tax ACt, 1956 (in short, 'the Central Act') forms subject matter of challenge in this wit petition.
2. Background in which the writ petition has come to be filed is as follows :
Petitioner has been assessed to extra demands of Rs. 2,34,93,150/- and Rs. 1,43,44,384/- under the Act and Central Act respectively. Appeals have been filed against he said orders of assessment. Simultaneously an application for stay had been filed, The Additional Commissioner No. 1 directed payment of Rs. 20 lakh and Rs. 5 lakh respectively. By the impugned revisional order, the commissioner reduced the quantum to Rs. 15 lakhs and Rs. 3 lakhs respectively. An application for review of the order was turned down by the order dated 25.1.2000 However, time for deposit as stipulated by the earlier order was extended.
3. The grounds on which the demands have been raised under the Act and the Central Act, are, as per orders of assessment, as follows :
Amounts in dispute Turnover (Rs.) Rate Tax
(Local)
1. Difference in suppressed
Purchases plus Profit @10% 7,92,85,416 10% 79,28,541
2.Variation in stock not 42,65,163 12% 5,11,819
explained
3. Enhancement of sale 20,,00,000 10%/12% 220,000
Amounts in dispute (Central) Turnover(Rs.) Rate Tax
1. Non furnishing of C Forms 1969931.54 6% 1,18,195
2. C Forms defective &
rejected 121900.00 6% 73146
3. E-1 forms not tallied
with Books of accounts 57495046 10% 57,49,504
4. F Form claim rejected 83985337 10% 83,98,536
4. According to learned counsel for petitioner, requirement of pre-deposit is unreasonable restriction on the right to file an appeal against an adverse adjudication. In any event, according to him, imposition of stringent conditions makes the right illusory. In the case at hand, it is submitted that the authorities lost sight of the actual factual position and acted on surmises and conjectures to levy huge extra demands. Several documents have been pressed into service to show that the assessments were unsustainable. Additionally, it is urged that precarious financial position of the petitioner makes it impossible to comply with the conditions. It is further submitted that on a careful consideration of the relevant materials, the assessment will not stand the test of appeal. Liquidation of the amounts directed to be deposited would cause undue hardship to the petitioner. In essence it is submitted that the discretion of dispensing with pre-deposit has not been judiciously exercised.
Learned counsel for the Revenue, on the other hand, submitted that the documents and materials placed on record were duly analysed by the assessing officer and the conclusions are in order. Petitioner has not made out a case for being granted stay of realisation of the extra demands. Nowhere before the first appellate authority or the revisional authority any financial stringency was pleaded and for the first time without any material to support the stand, a contention cannot be raised. It is pointed out that against the demand of more than Rs. 3 crores, only Rs. 18 lakhs have been directed to be paid.
5. Section 43(5) appearing in Chapter 8 of the Act deals with the filling of an appeal, where it has clearly stipulated that no appeal against the assessment with or without penalty or order imposing penalty shall be entertained unless such an appeal is accompanied by satisfactory proof of payment of the tax with or without penalty in respect of which appeal has been preferred. However, a discretion has been conferred on the authority to entertain an appeal for reasons to be recorded in writing that insistence on full amount being paid, need not be there furnishing any prescribed amount of security for the amount as may be directed or deposit of smaller sum that raised as extra demand.
6. Requirement of deposit of the amount in dispute is a condition precedent for entertaining the appeal and not for filing the appeal. The provisions are mandatory in nature and failure to deposit the amount in question would render the appeal incompetent. While considering an application for grant of stay, the concerned authority has to, inter alia, consider the following aspects :
(a) Whether there is prima facie case in favor of the assessee.
(b) the balance of convenience qua deposit or otherwise.
(c) Irreparable loss, if any, to be caused in case stay is not granted.
(d) Safeguarding of public interest.
In the Asstt. Controller Central Excise West Bengal Vs . Dunlop, : 1985ECR4(SC) the Apex Court held that normally four factors for grant of stay order should be kept in view i.e. prima facie case, which by itself is not enough, balance of convenience, possibility of irreparable injury and safeguarding the public interest.
7. Right of Appeal is a creation of statute. But in exercise of such right, there is no inherent or constitutional right to file an appeal. While granting such right, legislature can impose any condition. It was observed in Anant Mills Co. Ltd. v. State of Gujarat AIR 1976 SC 1234 and State of Bombay Vs . M/s. Supreme General Films Exchange Ltd : [1960]3SCR640 , that legislature can, while granting right of appeal, lay down a condition for deposit of tax as it is creation of statute. Legislature can also put restriction on it so as to curtail it. There is nothing wrong if under same statute, a right of Appeal is given and then some restrictions are put over it. Right to appeal is a substantive right and not a mere matter of procedure. But such right is neither an absolute right nor an ingredient of natural justice. It must be conferred by statute and can be exercised only as permitted by statute. There is no fetter in imposing conditions about deposit of fees etc. There are many fiscal statutes like Central Excise and Salt Act, Customs Act, Sales tax Acts of various States and many other similar statutes, which mandate deposit of disputed amount as a condition precedent for entertaining appeal. Condition of deposit of court fee in many cases merely regulates exercise of right of appeal. It is open to legislature to impose an accompanying liability upon a party upon whom legal right is conferred or to prescribe conditions for exercise of right. Any requirement for discharge of that liability or fulfilllment of that condition in case the party concerned seeks to avail said right is a valid piece of legislation and Article 14 has no application. Observations in the case of Hannah Cohen v. Beneficial Industrial, (1949) 337 US 541 lend some support to the view we have taken. Headnote 10 which is based upon the observations in the body of the judgment reads as follows :
'10. A state statute which requires that in a stock-holder's derivative action a Plaintiff who owns less than 5 per cent of the Defendant Corporation's outstanding share or shares having market value not exceeding $ 50,000 give security for the reasonable expenses including counsel fee, incurred by the corporation and by other parties Defendant and which makes the Plaintiff liable for such expenses if he does not make good his claims, and subjects the amount of security to increase if the progress of the litigation reveals that it is inadequate or to decrease if it is proved to be excessive, does not violate the contract clause or the due process clause or the equal protection clause of the Federal Constitution '
8. It has to be noted that under proviso to Section 30(1) of Workmen's Compensation Act, 1923 no appeal by an employer shall lie in respect of demand under clause (a) of said sub section, unless memorandum of Appeal is accompanied by a certificate by Commissioner to the effect that appellant has deposited with him the amount payable under order appealed against. In D. Narayanan Nain. v. Union of India, (1990) II LLJ 500 it was held that provision which requires deposit of fee before resorting to appeal cannot be said to be illegal and the inconvenience caused to appellant to make payment is no reason to strike down said statutory provisions. It was observed by Punjab & Haryan High Court in Piara Singh v. Commissioner, Workmen's Compensation, Patiala 1987 LIC 818 that simple fact that compensation awarded has to be deposited before an appeal can be entertain would not furnish ground to entertain writ petition by-passing statutory remedy for appeal. In Nathamani Gounder Vs . State of Tamil Nadu : (1986)IILLJ423Mad , it was observed that if the legislature provides for no appeal in a particular case, or provides for an appeal subject to certain conditions it is a piece of proper legislation. Even if a statute denied right of appeal, statute cannot be said to be bad legislation. Reference to the other statutes where conditions are imposed for entertaining an appeal has been made for purpose of showing that even where apparently more onerous requirements and/or conditions have been imposed that per se has been held to be no ground for declaration of a provision ultra vires.
9. It is submitted by the petitioner that there is clearly non-consideration of relevant documents and erroneous conclusions have been arrived at. In fact documents which have already been brought on record have not been taken note of by the assessing officer. It is also submitted that after production of E-I forms therein without any basis it has been concluded that the amounts therein do not tally with the books of account. Attempt was also made to show that there was no discrepancy, variation or difference as adjudged by the assessing officer. The effect of the documents which are referred to by the learned counsel for the petitioner are to be examined in detail by the first appellate authority. It would not be desirable for us to embark upon detailed enquiry to find out whether the stand of the petitioner is on terra firma. On the contrary, what is required to be seen is whether a prima facie case has been made out for grant of full stay, It would require verification of the records and examination in detail to judge acceptability of the stand. So far as the disallowances is relatable to the forms are concerned, they have to be examined in detail with reference to books of account. Any expression finally on merits at this juncture relating to that would not be desirable and proper as possibility of such conclusiosns influencing the first appellate authority cannot be ruled out. It is to be noted that the prescribed authority is conferred with discretion to dispense with pre-deposit conditionally or in full or in part. Such discretion is governed by a maxim ' Discretio est discerner per lagan quid sit justum' (Discretion consists in knowing what is just in law). Discretion in general is the discernment of what is right and proper. It denotes knowledge and prudence, that discernment which enables a person to judge critically of what is correct and proper united with caution, to discern between falsity and truth, between shadow and substance, between equity and colourable glosses and pretences and not to do according to the will and private affections or illwill. It has to be done according to the rules of reasons and justice, not according to private opinion. It has to be done according to law and not humour. It is not be arbitrary vague and fanciful but legal and regular. In the case at hand the authorities have made all elaborate analysis of factual stands of Petitioner to the extent desirable while dealing with an application for stay. It suffers from no inherent fallibility to warrant interference. Additionally, financial hardship was not one of the grounds urged earlier. Stand regarding financial hardship has not only to be specifically pleaded but also materials to substantiate it must be placed on record which has not been done.
10. On a consideration of the materials on record we do not consider this to be a fit case where any modification of the order passed by the Commissioner is called for. Accordingly, the amounts directed to be paid by him needs no modification. However, time fixed by the Commissioner has elapsed, In case the petitioner deposits the amounts directed to be paid by the Commissioner, by the end of July, 2000 the appeal shall be entertained for disposal on merits if they are otherwise free from defect. Writ Petition is accordingly disposed of.