1. By these stay petitions, the assessee seeks extension of the stay of collection of tax already granted by various orders of this Tribunal details of which are given below, pending disposal of the appeals 2. The learned representative for the assessee-petitioner submitted that : the stay granted by the Tribunal for the above years is still in force. However, the AO by a letter dt. 25th Jan., 2002, required the assessee to pay the entire tax demand for the above years in view of the amended provisions of Sub-section (2A) of Section 254 of the IT Act introduced by the Finance Act, 2001, w.e.f. 1st June, 2001. The last stay order passed by this Tribunal say, for the asst. yr. 1997-98 is on 15th June, 2001. In view of the amendment to Section 254(2A), the stay granted by the Tribunal has ceased to be in operation and the demand has become due to be payable. Besides, the AO has further warned that unless necessary arrangements are made to pay off the total demand in arrears, he would be constrained to deem the assessee-Corporation as an assessee in default and necessary coercive action will be taken to collect the demand in arrears in lump sum. On account of difference of opinion between the Members of the Tribunal, the appeal Nos. 1537 to 1542/Hyd/96 for the asst. yrs, 1983-84, 1984-85, 1986-87, 1987-88, 1990-91, 1993-94 and appeal No. 1705/Hyd/95 for asst. yr. 1992-93 were referred to Third Member and they stand finally posted for hearing on 15th March, 2002. As for the asst. yrs. 1994-95, 1995-96, 1996-97 and 1997-98, the appeals for these years are kept pending for disposal till the outcome of the appeals before the Third Member Bench, for the earlier years. Because of the non-constitution of the Third Member Bench, the disposal of the appeals are delayed which cannot be attributed to the assessee as it has been requesting the Tribunal for an early disposal of the appeals. The petitioner Corporation is not in a position to pay such huge demand as directed by the AO as its funds are meant only for carrying out its objects, i.e., public distribution of essential commodities and not for any other purpose. There is no liquid resources, and even for procuring essential commodities, the Corporation has to depend on overdraft being accorded by the RBI and subsidy from the Government. Hence, prayed for grant of further absolute stay of the disputed tax till the disposal of appeals by this Tribunal and an interim stay till the disposal of the stay petitions.
3. On the other hand, the learned representative for the Revenue countered, to say in brief, by submitting that as has been correctly pointed out by the assessee, for all the assessment years in question, the Tribunal has granted stay of the recovery proceedings pending disposal of the appeals. It is stated by the assessee that only for the asst. yr. 1997-98 the stay that has been granted by the Tribunal got expired on the completion of six months since the date, of passing the order of the Tribunal by virtue of amendment by insertion of the proviso to Section 254(2A) of the Act and that, therefore, the asst.
yr. 1997-98, atone if at all, may deserve extension of stay to be granted by the Tribunal unlike the rest of the assessment years for which, according to the assessee stay granted has not expired by virtue of those orders having been passed prior to the aforesaid amendment.
According to the stand of the Department it makes no difference as to whether the Tribunal has passed its order prior or subsequent to the amendment for the reason that the amendment made though w.e.f. 1st June, 2001, has got retrospective operation. Hence, the stay granted by the Tribunal for all the assessment years in question has expired warranting therefore the assessee to get a fresh stay from the Tribunal for all the assessment years in question. The interpretation of the amended provision as per the Department is that it dates back i.e., retrospectively for the reason that the substantial right of the assessee is not affected, and only when it gets affected it will not be retrospective and as in the instant case no substantial right of the assessee is affected, the amended provision dates back i.e., retrospectively even to the date prior to the amendment. That apart, we do not find that there is any necessity for grant of stay in all these stay petitions especially when the stay has been already once granted by the Tribunal which stand expired. In the view of the Department, it is reiterated that the assessee has no prima facie case especially when the Members of the Tribunal who have heard some of the concerned appeals earlier and differed from each other in their view. It cannot also be stated that the assessee has financial stringency to the extent of finding difficulty to pay the demands in dispute. In other words, financial stringency has not been satisfactorily demonstrated. Hence, there is nothing wrong if coercive steps are taken for recovery of the amounts outstanding especially when the Government is in need of funds particularly at the end of the financial year, more so when the stakes involved in the instant case are heavy. Hence, all the stay petitions are prayed to be kindly rejected by this Tribunal, particularly in the light of the following decisions-K. Eapen Chako v. Provident Investment Co. (P) Ltd. AIR 1976 SC 2610; 4. In reply, the learned counsel for the assessee submitted that it cannot be disputed that the Tribunal has already granted by its respective orders for the relevant assessment years detailed above, stay of the recovery proceedings of the Department on the assessee.
When the amendment to Section 254(2A) is made, it is specifically mentioned therein that the proviso inserted by such amendment takes operation w.e.f. 1st June, 2001, only as clearly mentioned. It does not say that it takes its operation retrospectively. When there is no word 'retrospectively' mentioned therein, the Tribunal cannot give effect to such amendment retrospective operation. If such amendment has been specifically mentioned as retrospectively operative, then, there will not be any difference when it mentioned retrospectively and when it is not mentioned, as of, now, retrospectively, to give the meaning as interpreted by the Department. Therefore, for all the assessment years in question except for the asst. yr. 1997-98 the order of which was passed by the Tribunal on 15th June, 2001, granting stay, because of the specific mention of the commencement of operation of the said amendment to be w.e.f. 1st June, 2001, the earlier orders of the Tribunal granting stay are not affected. However, stay petitions have also been filed for those assessment years as a matter of precaution since the Department has been threatening coercively that the amendment retrospectively applies and coercive steps would be taken. In any event, stay may be granted for all the assessment years in line and in tune with the earlier order of the Tribunal granting stay having been convinced that the assessee deserves grant of stay and which would not have been granted by the Tribunal had it not been convinced after hearing both the parties that the assessee is having a prima facie, case, financial difficulty and coercive steps being taken. Hence, it is most humbly prayed that orders may please be passed by the Tribunal either extending the stay or granting stay afresh for all the assessment years in question especially in the light of the decision of the Supreme Court in the case of R. Rajagopal Reddy and Ors. v. Padmini Chandrasekharan 5.1. Rival submissions heard and relevant orders read besides going through the facts of the case on record that are necessary for the purpose of adjudication of the instant stay petitions. The points that arise for our consideration in the instant proceedings are as to : (a) whether or not the stay granted by the Tribunal by its respective orders prior to 1st June, 2001, when the amendment was inserted with the proviso to Section 254(2A), has expired on account, of the interpretation given by the Department that the said amendment is retrospectively operative; (b) whether or not the assessee deserves to be granted stay afresh for all the assessment years in question, except for the asst. yr.
1997-98, in the event of answer to the aforesaid question being negative, besides for the asst. yr. 1997-98 the order of which granting stay by the Tribunal got expired by reason of the aforesaid amendment made w.e.f. 1st June, 2001.
5.2. Now, coming to the first issue as to whether or not, the amendment is prospective or retrospective, it would be useful and worthwhile to extract the relevant provisions of Section 254(2A) as below : "(2A) In every appeal, the Tribunal, where it is possible, may hear and decide such appeal within a period of four years from the end of the financial year in which such appeal is filed under Sub-section (1) or Sub-section (2) of Section 253 : Provided that where an order of stay is made in any proceedings relating to an appeal filed under Sub-section (1) of Section 253, the Tribunal shall dispose of the appeal within a period of one hundred and eighty days from the date of such order : Provided further that if such appeal is not so disposed of within the period specified in the first proviso, the stay order shall stand vacated after the expiry of the said period." 5.3. It may be seen from the Act that Sub-section (2A) and (2B) have been inserted by the Finance Act, 1999 w.e.f. 1st June, 1999, and the provisos to the aforesaid section are inserted by the Finance Act, 2001 w.e.f. 1st June, 2001. Nowhere in the language employed in the aforesaid section, particularly in the said Sub-section (2A) and especially in the footnote provided thereunder, the word 'retrospectively' has been couched by the Parliament. It simply states "provisos inserted by the Finance Act, 2001, w.e.f. 1st June, 2001".
While so, we are unable to appreciate the stand of the Department that the said provisos are inserted by the Finance Act of 2001, w.e.f. 1st June, 2001, retrospectively. Therefore, we cannot read the language of the section to mean that the word 'retrospectively' has been introduced into it as interpreted by the Department when it has not been done so by the Parliament. If we read so it would amount to amendment of the statute for which neither the Judiciary nor even the executive has any power or jurisdiction to do so since that power is exclusively the power of the legislature, namely, the Parliament. These two wings of a democratic Government cannot encroach or intrude into the domain of the other as the field is specifically carved out for respective and proper functioning by the Constitution of India. Perhaps the interpretation given by the Department before us that the provisos are operative retrospectively is its wishful thinking on account of the nearness of the completion of the financial year in question before it. It is perhaps in dire need of funds but we cannot help the situation as we are bound by the Constitution of India and the relevant statute, namely, the IT Act.
5.4. In fact and indeed, following case laws relied upon by the assessee and rather by the Revenue too come to the rescue of the assessee and also gives strength to the view taken by us as aforesaid : (a) In the case of K. Eapen Chako (supra), the Hon'ble Supreme Court has held that if the legislature forms a new procedure, alterations in the form of procedure are retrospective unless there is some good reason or other why they should not be. In other words, if a statute deals merely with the procedure in an action, and does not affect the rights of the parties it will be held to apply prima facie to all actions, pending as well as future.
(b) In the case of Bhikari Charan Panda (supra) where assessment was completed before amendment and penalty was levied after the amendment but before expiry of unamended period of limitation, the imposition of penalty was held by the Hon'ble Orissa High Court to be valid and that the Tribunal was not justified in setting aside the order of penalty as barred by limitation for the reason that when the amending Act came into force, the two years period provided under the unamended Section 275 had not expired and at that stage, the new provision w.e.f. 1st April, 1971, introduced a new scheme of limitation and no right had accrued to the assessee when the law was changed and that, therefore, the law as in force on the date when the order was made must be applicable; (c) In the case of M. Nagappa (supra), the Hon'ble Karnataka High Court held that the power of the IAC to impose penalty under Section 275 of the Act as it stood before amendment had not come to an end on 1st Jan., 1971, when Section 275 was substituted by a new section which provided for extended period of limitation and that it was open to the IAC to exercise his power until the expiry of the extended period prescribed by the new section, thus resulting that as the IAC could impose penalty till 31st March, 1972, penalties which were imposed on 28th Feb., 1972, were levied in time.
(d) In the case of R. Rajagopal Reddy (supra), the Hon'ble Supreme Court has held, which would be worthwhile to be extracted, as below : "It is now well settled that where a statutory provision which is not expressly made retrospective by the legislature seeks to affect vested rights and corresponding obligation of parties, such provision cannot be said to have any retrospective effect by necessary implication. In Maxwell on the Interpretation of Statutes, 12th Edition (1969) (at page 261), the learned author has made the following observations based on various decisions of different Courts, specially Athlumney, In re (1898) 2 OB 547, at pp. 551, 552 : 'Perhaps no rule of construction is more firmly established than this--that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matters of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only. The rule has, in fact, two aspects, for it, involves another and subordinate rule, to the effect that a statute is not to be construed so as to have a greater retrospective operation than its language renders necessary."Garikapati Veeraya v. N. Subbajah Choudhiy AIR 1957 SC 540, p. 553 in para. 25 of the report, Chief Justice S.R. Das, speaking for the Court, had made the following pertinent observations in this connection : 'The golden rule of construction is that, in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed.' We have already discussed earlier that there is nothing in the Act to show that Section 4(1) and 4(2) have to apply retrospectively to all pending proceedings wherein such a right is sought to be exercised by the plaintiff or such a defence has already got allowed to the concerned defendant. As a result of the aforesaid discussion, it must be held that reason Nos. 1 and 2 which weighed with the Division Bench are not well sustained." 5.5. It would also be further useful and worthwhile to extract some relevant portions in this regard as below : '(i) In K.J. Aiyer's Judicial Dictionary (8th Edition 1980 at p. 836 it is dealt there that the following rules may be considered as established: "(a) every statute is prima facie prospective, unless it, expressly or by necessary implication, is made to have a retrospective operation, or unless, it lays down rules of mere procedure [See Gardiner v. Lucas (1873) 3 App. Cas. 582, Laurie v. Rand (1892) 3 Ch. 402 (420), West v. Gwynne (1911) 2 Ch. 1(5)]. A right of appeal is a substantive right and not merely a matter of procedure. It becomes vested in a party the moment when proceedings are first initiated and before a decision is given by an inferior Tribunal.
Such a right cannot be taken away except by an express enactment or necessary intendment; (Kasim Dada Ltd. v. State of M.P. AIR 1953 SC 221: (1953) SCR 987).
(ii) In Sampath Iyengar's Law of Income-tax, Eighth Edition (revised by Justice S. Ranganathan) Vol. I at p. 57 under Section 38 with the head note 'Retroactive legislation' it is said that ordinarily, a statute is prospective, in its operation, but the legislature has power to make laws with retroactive force and such retroactive operation may be expressed totidem verbis as "shall have effect and shall be deemed for all purposes to have had effect as if had ordinarily been enacted' or by any other words which would manifest a clear intention to retroact. It also further states that the general rule is that all statutes other than those which are merely declaratory or which relate only to matters of procedure or of evidence are prima facie prospective, and retrospective effect is not to be given to the unless by express words or necessary implication it appears that this was the intention of the legislature [vide Halsbury's Laws of England, Vol. 36, 3rd Edn. p.
423 and Union of India v. Raghubir Singh (1989) 178 ITR 548 (SC)].
At p. 60 thereof, it is clearly stated that a fiscal statute will not therefore be regarded as retrospective by implication, particularly a penal provision therein [vide CWT v. Ram Narain Agarwal 1976 TLR 1074 (All)].
(iii) In Chaturvedi & Pithisana's Income-tax Law Fourth Edition, 1990, Vol. 1 at p. 239, it is stated that a statute will not affect rights which had accrued before the statute came into force unless there are express words in the statute affecting such rights or where a retrospective effect to the statute is inevitable by necessary intendment or implication there is one exception, viz., that if the amendment was nothing more than a procedural matter which did not affect substantive rights of the parties, it will have a retrospective effect. At the bottom of p. 239, it further states that a statute is retrospective when it takes away or impairs any vested right acquired under the existing laws, or creates a new obligation, or imposes a new duty, or attaches a new disability in respect of transactions or considerations already past, but a statute is not retrospective because a part of the requisites for its action is drawn from time antecedent to its passing. At p. 240, it further states that the presumption against retrospective operation is strong in cases in which the statute, if operated retrospectively, would prejudicially affect vested rights.
5.6. In the instant case, where stay has been granted by the Tribunal already, i.e., prior to 1st June, 2001, i.e., the date of coming into force of the aforesaid amendment by inserting the proviso to Section 254(2A), right has accrued in favour of the assessee and against the Department by virtue of the Tribunal's order staying recovery proceedings on the assessee for collection of the demand in dispute.
Such a right accrued to the assessee by virtue of the Tribunal order coming into effect would get impaired, if the proviso to Section 254(2A) is read as retrospective when it has been actually not effected so but only w.e.f. 1st June, 2001, by the Finance Act of 2001. If at all, the said insertion of the proviso might be applicable only to stay petition which has been filed prior to the said date of 1st June, 2001, but which has not come up for hearing until the said dt. of 1st June, 2001, but in the instant stay petitions except for the asst. yr.
1997-98, orders have been passed by the Tribunal very much prior to the date of 1st June, 2001. Hence, we hold that the concerned proviso inserted by the Amendment Act is not retrospective but only prospective w.e.f. 1st June, 2001, as spelt out by the Amendment Act itself, Hence, the stay already granted by the Tribunal on various dates prior to 1st June, 2001, holds good and continues to be in force pending disposal of the relevant appeals out of which the stay petitions have arisen.
Consequently all the stay petitions, other than the one for the asst.
yr. 1997-98 have become infructuous by virtue thereof in view of all such stay granted by us the Tribunal earlier being in force even now.
The instant stay petitions other than for 1997-98 are rejected, as infructuous consequently.
5.7. Insofar as the next issue i.e., stay petition for the asst. yr.
1997-98 is concerned, the order was passed by the Tribunal on 15th June, 2001, granting stay. Only this order dt. 15th June, 2001, is impaired by virtue of the aforesaid amendment having come into force w.e.f. 1st June, 2001. Consequently, this alone remains to be adjudicated by us. In our considered view, there having been no difference on the facts and circumstances of the said petition for the asst. yr. 1997-98, before us and that in S.P. No. 22/Hyd/2000 which was allowed by the Tribunal on 15th June, 2001, respectfully following our earlier order, we grant stay in line and in tune therewith against recovery proceedings on the assessee pending disposal of the appeal.
5.8. Before parting with we wish to record, however, our appreciation of the efforts put forth earnestly by the learned representative for the Revenue attempting to give life to the stand of the Department by bringing in the niceties of the issues involved.
6. In the result, all the instant stay petitions of the assessee are dismissed as infructuous except for the asst. yr. 1997-98 being allowed accordingly as above, thus absorbing the ad interim stay order dt. 5th March, 2002.