Hoosein Kasam Dada (India) Ltd. v. the State of Madhya Pradesh and Others

Judgment

S.C.R. S"CPRElVIE COURT REPORTS HOOSEIN KASAM DADA (INDIA) LTD. THE STATE OF MADHYA PRADESH AND OTHERS. [MEHR CHAND MAHAJAN and S. R. DAS ,JJ.] Appeal-Right to appeal-Whether vested right-When 1·ight vests-Change of law after initiation of proceedings in lower Court -Law governing appeal-Law making deposit of a1nount of appeal a condition for admission of appeal - Whether matter of mere prncedure -Ce1!trnl Provinces andBerar S•tleB Ta.v Act, 1947, s. 22 (1) · -Centred Provinces Sales Tax Act (Second A11wndment) Act, 1950. The right of appeal is a matter of substantive right and not merely a matter of procedure, and this right becomes vesterl in a party when the proceedings are first initiated in, and before a decision is given by, the inferior Court and such a right cannot be taken away except by express enttctment or necessary intendment.

Section 22(1) of the Central Provinces and Berar Sales Tax Act, 1947, provided that no appeal against an order of assessment should be entertained by the prescribed authority unless it was satisfied that such amount of tax as the appellant might admit to be d11e from him, had bean paid. This Act was amended on the 25th November, 1949, and s. 22(1) as amended provided that no appeal should be admitted by the said authority unless such appeal was accompanied by satisfactory proof of the payment of the tax in respect of which the appeal had been preferred. On the 28th of November, 1947, the appellant submitted a return to the Sales Tax Officor, \vho, fincl.ing that the turnover exceeded 2 lacs, sub~ mitted the case to the Assistant Co1n1uissioner for disposal and the latter made an assessment on the 8th April, 1950. The appellant praiel'l'ad an appeal on the 10th ;\fay, 1950, without depositing the a1nount oI ta.x in respect o{ \Vhich he ha<l apperLled.

The Board of Havetme was of opinion that s. 22(1) as amended applied t;o the case as the assessment was made, and the appeal was preferred, after the amendment came into force, and rejected the appeal. Held, (i) that the appellant had a vested right to appeal when the proceedings v.'ere initiated, i.e., in 1947, and his right to ap· peal was governed by the law as it existed on that date; (ii) that the amendment of 1950 cannot be regarded as a mere alteration in procedure or an alteration regulating the exercise of the right of appeal, but whittled down the right itself, and it Jmd no ratrospocth·e effect as tlrn Amendment Act of 1950 did not oxpressly or by necessary intendn1ent give it retrospective effect, a.µd th~ February 23. SUPREME COURT Rl~PORTS [1953] appeal could not therefore he rejected for non-payment of the tax in respect of which the appeal was preferred. • H oo8ein Kasarn Dada (India) Colonial Sngar Refining Co. Ltd. v. Irving [1905] A.O. 369, N,1nabin Aba v. Sheku bin Andu (I.hR.

32 Born. 337), Delhi Cloth and General Mills Co. Ltd. v. Income-tam Commissioner, Delhi 54 The State of I.A. 421), Kirpa Singh v. Rasaldar Ajaipal fingh (A.LR. 1?28 Madhya Pradesh Lah. 627), Sardar Ali v. Dalim7tddzn (I.L.R. 06 Cal. 512) applied. and Othors, Badruddin Abdnl Rahim v. Sitaram Vinayak Apte (I.L.R. 52 Born. 753) disapproved. In re Vasudeva Sainiar (A.I.R. 1929 1fad. 381), Rain Sinqha v. Sankar Doyal (I.L.R. 50 All. 965). Radhakisnn v. Sri Dhar (A.LR. 1950 N"ag. 17), Gordhan Das v. Governor-General in Conncil (A.LR. 1950 Pnnj. 103) and Nagendm ?Vath Bose v. ~Ionmohan (1930, 34 C.W.N. 1009) referred to. CIVIL APPELLA't'E ,JURISDICTION: Civil Appeal No. 182 of 1952. Appeal by special leave from the Judgment and Order dated 2nd August, 1951, of the High Court of Judicature at Nagpur in Miscellaneous Petition No. 187 of 1950 under arts. 226 and 227 of the Constitution. N. 0. Chatteijee (R. 111. Hajamavi8, with him) for the appellant. R. Ganapathy Iyer for the State of Madhya Pradesh.

1953. Februarv 23. The Judgment of the Court was delivered by " DAS J. On the 28th November, 1947, the appellant Hoosein Kasam Dada (India) Ltd., (hereinafter referred to as the assessee) submited to the Sales Tax Officer, Akola, a Sales Tax return in Form IV for the first quarter. Notice in Form XI calling upon the assessee to produce evidence in support of the said return having been issued by the Sales Tax Officer, the assessee produced his accouni books. Not being satisfied by the inspection of the account books as to the correctness of the return and being of opinion that the taxable turnover exceeded mpees two lacs the Sales Tax Officer submitted the case to the Assistant Commissioner of Sales Tax, Ammvati, for assessment, S.C.R. On the 25th January, 1949, the Assistant Commissioner issued a fresh notice in Form XI under sec- H 1 d fi 1 oosem Ka,am t10n 1 an xe t e case for d1sposa on the 5t Dada (India) February, 1949.

After various adjournments and Ltd. proceedings to which it is not necessary to refer, the hearing commenced on the 9th June, 1949, when an The State of agent of the assessee appeared with books of account Madhya Pradesh of the Akola Branch. Eventually after various further and Others. proceedings the Assistant Commissioner on the 8th Das J. April, 1950, assessed the assessee, to the best of his judgment, in the sum of Rs. 58,657-14-0 and a copy of the order in Form XIV was sent to the assessee. Being aggrieved by the order of assessment the assessee on the 10th May, 1950, preferred an appeal to the Sales Tax Commissioner, Madhya Pradesh, under section 22(1) of the Central Provinces and Berar Sales Tax Act, 194 7 (hereinafter referred to as the Act). The appeal not having been accompanied by any proof of the payment of the tax in respect of which the appeal had been preferred, the authorities, after giving the assessee several adjournments, declined to admit the appeal.

The assessee moved the Board of Revenue, Madhya Pradesh, by a revision application against the order of the Sales Tax Commissioner contending that his appeal was not governed by the proviso to section 22( 1) of the Act as amended on the 25th November, 1949, by the Central Provinces and Berar Sales Tax (Second Amendment) Act (Act LVII of 1949) but was governed by the proviso to section 22(1) of the Act as it stood when the assessment proceed. ings were started, i.e., before the said amendment. The Board of Revenue took the view that as the order of assessment was made after the amendment of the section and the a ppea.! was filed thereafter such appeal must be governed by the provisions of law as it existed at the time the appeal was actually filed and that the law as it existed before the filing of the appeal could not apply to the case.

The assessee thereupon moved the High Court of Madhya Pradesh under articles 226 and 227 of the Constitution of India praying, amongst other things, for a writ of mandamus or an appropriate [1953] order directing the Sales Tax Commissioner to admit -:--K and hear the appeal without demanding payment of oosein n.oam h Dada (India) t e amount o sales tax assessed by t e ss1stant Ltd. Commissioner of Sales Tax. The High Court dismissed the application on the 2nd August, 1951. The assessee The State of applied to the High Court for leave to appeal to this Madhya Prod"•"- Court which was also dismissed by the High Court on and Other•. the 14th March, 1952. The assessee thereupon applied Das J, to this Court for special leave to appeal on the 12th May, 1952.

This Court granted special leave. to appeal, but such leave was, by the order granting such leave, limited to the question of the effect of the amendment to section 22 of the Act on the petitioner's appeal to the Sales Tax Commissioner, Madhya Pradesh. This Court took the view that the other questions sought to be raised by the assessee would have to be decided by the Sales Tax Commissioner in case the appeal succeeded. The appeal has now come up for final disposal before us and in this appeal we are concerned only with the limited question of the effect of the amendment to section 22 of the Act. Section 22( 1) of the Act was originally expressed rn the following terms :- "22. (1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order:

Provided that no appeal against an order of assessment, with 01· without penalty, shall be entertained by the said authoritv unless it is satisfied that such amount of tax or penalty' or both as the appellant may admit to be due from him, has been paid." The relevant portion of section 22 as amended runs as fo!Jows :- "22. (1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order : Provided thn,t no appeal against an order of assessment, with or without penalty shall he admitted by the said authority unless such appefll is accompanied by a satisfactory proof of the payment of the tax, with s.c.ii. SUPREME couki' REPOHTS 99i penalty, if any, in respect of which the appeal has been 1.953 preferred." It · 1 1 Huu,.in Kasum is c ear rom t c anguagc irne( m t ie tn·ov1so to 1., 1 (I 4 .

J ,111( a n u1. sect10n 22 ( 1) as it stood prior to the amendment that LtJ. an aggrieved assessee had only to pay such amount of tax as he might admit to be due from him, whereas ~'he State uf under the proviso to section 22( I) as amended the Madhya Pradnh appeal has to be accompanied by satisfactory proof of and_V~ers. payment of the tax in respect of which the appeal had DaaJ. been preferred.

The contention of the present assessce is that as the amendment has not been made retrospective its right of appeal under the original section 22(1) remains imaffected and that accordingly as it does not admit anything to be due it was not liable to deposit any sum along with its appeal and the Commissioner was bound to admit its appeal and had no jurisdiction or power to reject it on the ground that it had not been accompanied by any proof of payment of the tax assessed against the appellant as required under the amended proviso and the Board of l'tevenue and the High Court were in error in not directing the Commissioner to admit the appeal. 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 asscssee's right of appeal from a decision in proceedings which commenced prior to such amendment and which right of appeal was free from such r<:striction under the section as it stood at the time of tho commencement of the proceedings. The question was answered in the negative by the Judicial Committee in Colonial Sugar Refining Co., Ltd. v. Irving('). In that case the Collector of Customs acting under an Act called the Excise Tariff Act, 1902, required the appellants to pay£ 20,100 excise duty on 6,700 tons of sugar. The appellants disputed the claim. So they deposited ( <) L.R. [1905] A.C. 369. SUPREME COURT ItEPOR'f8 [1953] J95J the money with the Collector and then brought the action by issuing a writ on the 25th Oc~ober, 1902. A Jloo8ein J(asa1n Dada 1 India) special case having been stated for the opinion of t ie fol.

Supreme Court, that Court on the 4th September, 1903, gave judgment for the Collector. In the meantime the The State uf Judiciary Act, 1903, was passed and received Royal Madhya Prade .• h assent on the 25th August, 1903, that is to say about aad Others. 10 days before the judgment was delivered. By sec- DasJ. tion 39(2) of that Act the right of appeal from the Supreme Court to the Privy Council given by the Order in Council of 1860 was taken away and the only appeal therefrom was directed to lie to the High Court of Australia. The appellants having with the leave of the Supreme Court filed an appeal to the Privy Council the respondents filed a petition taking the preliminary point that no appeal lay to the Privy Council and praying that the appeal be dismissed. In dismissing that application Lord Macnaghten who delivered the judgment of the Privy Council said: -- "As regards the general principles applicable to the case there was no controversv.

On the one hand, it was not disputed that if the matter in question be a matter of procedure only, the petition is well founded. On the other hand, if it be more than a matter of procedure, if it touches a right in existence at the passing of the Act, it was conceded that, in accordance with a long line of authorities extending from the time of Lord Coke to the present day, the appellants would be entitled to succeed. The Judicary Act is not retrospective by express enactment or by necessary intendment. And therefore the only question is, was the appeal to His Majesty in Council a right vested in the appellants at the date of the passing of the Act, or was it a mere matter of procedure? It seems to their Lordships that the question does not admit of doubt. To deprive a suitor in >t pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regulating procedure.

In principle, their Lordships see no difference between abolishing an appeal altogether and transferring the appeal to a new tribunal. In either case there is an interference s.c.R. st:PREME COUH,T HEPO.RTS with existing rights contrary to the well-known general principle that· statuteR are not to be held to act I 1 lluu1u,in /[asa1n retrospective y un css a c car mtent10n to t at effect I> d (I 1. J d '' 1u ·ta 1s rnan11este . Ltd. Tho principle of the above decision was applied by Jenkins C.J. in Nana bin Aba v. Sheku bin And·u (1 ) l'he State 01 -1 b th p · 'l · If · J'J l' · Cl h i•fodhya Pradesh anu -y nvy ou11c1 1tse m e tii ot an d 0 1 General ,~1 ills Co. Ltd. v. I nconie-tax Commissioner, 1 '"''· Delhi('). A Full Bench of the Lahore High Court adopt- Da., J. ed it in Kirpa Singh v. Rasaldar Ajaipal Singh(').

It was there regarded as settled that the right of appeal was not a mere matter of procedure but was a vested right which inhered in a party from the commencement of the action in the Court of first instance and such right could not be taken away except by an express provision or by necessary implication. In Sardar Ali v. Dalimuddin ('), the suit out of which the appeal arose was filed in the Munsiff's Court at Alipore on the 7th October, 1920. The suit having been dismissed on the 17th July, 1924, the plaintiffs appealed to the Court of the District Judge but the appPal was dismissed. The plaintiffs then preferred a second appeal to the High Court on the 4th October, 1926. That second appeal was heard by a Single Judge and was dismissed on the 4th April, 1928.

In the meantime Clause 15 of the Letters Patent was amended on the 14th January 1928 so as to provide that no further appeal should lie from the decision of a Single Judge sitting in second appeal unle§.s the Judge certified that the case was a fit one for appeal. In this case the learned Judge who dismissed the second appeal on the 4th April, 1928, declined to give any certificate of fitness. The plaintiffs on the 30th April, 1928, filed an appeal on the strength of dause 15 of the Letters Patent as it stood before the amendment. The contention of the appellants was that the amended clause could not be applied to that appeal, iOr to do so would be to apply it retrospectively and to impair and indeed to defeat a substantive right which was in existence (I) (1908) I.LR 32 Born. 337. 13) A.l.R. 1928 Lah. 627. (2) (1927) L.R. 5+ LA. 421; LL.R. 9 Lah. 284. (4) (1929) LL.R 56 Cal. 512, [1953] 19;3 prior to the date of the amendment.

The appellants -:-K claimed that on the 7th October, 1920,- when the snit uosein cuutin Dada (forNaJ was filed they had vested m them by the ex1stmg law Ltd. a substantive right to a Letters Patent appeal from the decision of a Single Judge and that an intention 7'hc Stat' a.f to interfere with it, to clog it with a new condition or Mad!tyuo 1h'mde.•h to impair or im1>eril it could not be ]lrcsumed unless it and l crs. was clearly mamfested y express words or necessary Dae J. inteudment. In giving effect to the contentions of the appellants Rankin C.J. observed at p. 518 :- "Now, the reasoning of the J ndicial Committee in The Colonial Sugar R~fining Company's case is a co•,- clusive authority to show that rights of appeal are not matters of procedure, <ind that the right to enter the superior comt is for the present pnrpose deemed to arise to a litigant before auy decision has been given by the inferior court.

If the latter proposition be accepted, I can see no intermediate point at which to resist the conclusion that the right arises at the date of the suit." It was held that the ne1Y clause could not be given retrospective e.ffect and accordingly the date of presentation of the second appeal to the High Court was not the date which determined the applicability of the amended clause of the Letters Patent and that the date of the institution of the suit was the determining factor. As against the last mentioned decision of the Calcutta High Court.Sri Oanapttthy Aiyar, ttppearing for the respondent, refers us to the decision of a Bench of the Bombay High Court in the case of Badruddin Abdiil Rahim v. Si'.ttiram Vinnyak Apte (1), where it was held that the amendment of clause 15 of the Letters Patent operated retrospectively. That case followed an mirlicr decision of the same High Court in Framji Bomanfi v. llonnasji Bai;jorji (').

The decision in the old case proceeded upon two grounds, namely, (1) that the question was one of procedure and (2) that sec- (1) (19i8 1 J.L H.. 52 Born. 753; A.LR. {1928) Boin. 371. (2) (1866) Born. H.C. (O.C.J.) 49. s.c.R. tion 2 of the New Letters Patent of 1865 gave retros. l953 pect~ve operation to t~e Le~ters Patent by making it Hoosein Ka.•am applicable to all pendmg suits. In so far as the first Dada 1 India) ground is concerned it clearly runs counter to the de- Ltd. cision of the Privy Council in Colonial Sugar Re- . fining Co. Ltd. v. Irving (supra) and must be taken as The State 0! overruled as Fawcett .J. himself acknowledged at Madhyz' 0 0 P7 md"h d . . , mu t ""'· page • . s regar s t e secon groun 1t 1s mapp 1- cable to the case before us and it is not necessary to Das J. express any opinion as to the soundness and validity of that ground. It may be mentioned here that in Shaikh Hasan Abdul Karim v. King Emperor(') another Bench of the same High Court expressly dissented from the decision in Badruddin Abdul Rahirn v. Sitararn Vinayak Apte (supra).

The principle laid down in the Colonial Sugar R~fining Co.'s case (supra.) was followed by a Special Bench of Madras in In re Vasudeva Samiar ('). A Full Bench of the Allahabad High Court in Ram Singha v. Shankar Dayal (3 ) fell into line and held that the earlier decision on this point of that Court in Zamin Ali Khan v. Genda (') stood overruled by the Privy Council decision in the Colonial Sugar Refining Co.'s case. A Full Bench of Nagpur High Court in Radhakisan v. Shridar (') has also taken the same view. The Punjab- High Court has also adopted the same line in Gordhan Das v. The Governor General in Council(''). The case of Nagr-ndra Nath Bose v. 1l1on 21Iohan Singha Roy (7) is indeed very much to the point. In that case the plaintiffs instituted a suit for rent valued at Rs. 1,306/15 and obtained a decree. In execution of that decree the defaulting tenure was sold on the 20th November, 1928, for Bs. 1,600.

On the 19th December, 1928, an application was made, under Order XXI, rule 90 of the Code of Civil Procedure, by the present petitioner, who was one of the judgment-debtors, {I) J.L.H_ (TCJ45) BonL 17. (2) A LR. ('929) Mad 38r; 56 :11.L.J 369. (3) (r928) I.L.R. 50 AIL 965; A.I.H. (r928) AIL 437. (4) (r904) 1.L.H. 26 All. 375. (5) A.LR. (r950) i'>ag. rn- (6) A.LR, (r952) Punjab ro3 (l'.B.). 17) (r930) 34 C.W.N. roog, t [1953] for setting aside the sale. That application having -:--K been dismissed for default of his appearance the petioosein aeain ti D' t . t J d Dada 1 India) tioner pre crre an appea o ie . 1s ric u ge o Ltd. Hoogly who refused to admit the appeal on the ground that the amount recoverable in execution of the decree The State of had not been deposited as required by the proviso to sec- Madh!fa Prade.,h tion 174, clause ( e), of the Bengal Tenancy Act as amendmul Others. ed by anamending Act in 1928.

The contention of the Das J. petitioner was that the amended provision which came into force on the 21st February, 1929, could not affect the right of appeal from a decision on an application made on the 19th December, 1928, for setting aside the sale. ]\fitter J. said at page 1011 :- "We thiI!k the contention of the petitioner is wellfounded and must prevail. That a right of appeal is a substantive right cannot now be seriously disputed. It is not a mere matter of procedure. Prior to the amendment of 1928 there was an appeal against an order refusing to set aside a sale (for that is the effect also where the application to set aside the sale is dismissed for default) under the provisions of Order 43, rule (1), of the Code of Civil Procedure. That right was unhampered by any restriction of the kind now imposed by section 174(5), Proviso. The Court was bound to admit the appeal whether appellant deposited the amount recoverable in execution of the decree or not.

By requiring such deposit as a condition precedent to the admission of the appeal, a new restriction has been put on the right of appeal, the admission of which is now hedged in with a condition. There can be no doubt that the right of appeal has been affected by the new provision and in the a.bsence of an express enactment this amendment cannot apply to proceedings pending at the date when the new amendment came into force. It is true that the appeal was filed after the Act came into force, but that circumstance is immaterial-for tho date to be looked into for this purpose is the date of the original proceeding which eventually culminated in the appeal." S.C.R. The above decisions quite firmly establish and our decisions in J/mardan Reddy v. The State (1) and in H t R . . . al Ch ,f C L d (') oo.sein asani anpa ai v. garw arnuer OJ ommerce t . Dada (India) uphold the principle that a right of appeal is not Ltd. merely a matter of procedure. It is matter of substantive right.

This right of appeal from the decision of an Th< State 0! inferior tribunal to a superior tribunal becomes vested Madhy~ :radesh in a party when proceedings are first initiated in, and and 1 era, before a decision is given by, the inferior court. In Das J. the language of Jenkins C .• J. in Nana bin Aba v. Shaik bin Andu (supra) to disturb an existing right of appeal is not a mere alteration in procedurn. Such a vested right cannot be taken away except by express enactment or necessary intendment. An [intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication. $ri Ganapathy Aiyar urges that the language of section 22( 1) as amended clearly makes the section retrospective.

The new proviso, it is pointed out, peremptorily requires the authority not to admit the appeal unless it be accompanied by a satisfactory proof of the payment of the tax in respect of which the appeal is preferred and this duty the authority must discharge at the time the appeal is actually preferred before him. The argument is that after the amendment the authority has no option in the matter and he has no jurisdiction to admit any appeal unless the assessed tax be deposited. It follows, therefore, by necessary implication, according to the learned Advocate, that the amended provision applies to an appeal from an assessment order made before the date of amendment as well as to an appeal from an order made after that date. A similar argument was urged before the Calcutta Special Bench in Sardar Ali v. Dalirnuddin (supra), namely, that after the amendment the court had no authority to entertain an appeal without a certificate from the Single Judge. (r) [1950] S.C.R. 94r. (2) (r952)

S.C.J, 564. na SUPR.EME COVRT REPORTS [1953] Rankin C.J. repelled this argument with the remark Hoos;;n Ka.sam at page 520: -- Dada (Indh•J "Unless the contrary can be shown, the provision Ltd. which takes away jurisdiction is itself subject to the implied saving of the litigants' right." The State of Modhya Pmdesh In our view the above observation is apposite and and Others. applies to the case before us. The trne implication of the above observation as of the decisions in the other Das .J. cases referred to above is that t e pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right.

As the old law continues to exist for the purpose of snpporting the pre-existing right of appeal that old hw must govern the exercise and enforcement ofthr1t right of appeal and there can then be no question of the amended provision preventing the exercise of that right. The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to section 22 ( 1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre-existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist. The argument of Sri Ganapathy Iyer on this point, therefore, cannot be accepted.

The learned Advocate urges that the requirment as to the deposit of t.he amount of the assessed costs does not affect the right of appeal itself which still remains intact, but only introduces a new matter of procedure. He contends that this case is quite different from the case of Sardar Ali v. Dalmuddin (8upra ), for in this case it is entirely in the power of the appellant to deposit the ta;K if }le chooses to do so whereas it was not S.C.R. within the power of the appellant in that case to secure a certifioote from the learned Single .Judge who Hoose'ln Ka.sani disposed of the second appeiil. In the first place the Dada r fodia) onerous condition may in a given case prevent the Ltd. exercise of the right of appeal, for the assessee may not be in a position to find the necessiiry money in time. The State of Further this argument cannot prevail in view of the Madhya Pradesh decision of the Calcnttii High Court in N agendra Nath and Others, Bose v. M~on }lfohtln Singha (suprrt) . .:'iio cogent argu- DasJ. ment hits been adduced before us to show that that decision is not correct.

There can be no doubt that the new requirement "touches" the substnntive right of appeal vested in the appellant. Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right. The right that the amended seotion gives is certainly less than the right which was available before. A proYision which is calculated to deprive the appellant of tho unfettered right of appeal cannot be regarded as a mere alteration in procedurP. Indeed the new requirement cannot be said merely to regulate the exercise of the appellant's pre-existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure. Finally, Sri Gana pa thy Iyer faintly urges that until actual assessment there can be no '!is' and, therefore, no right of appeal can accrue before that event. There are two answers to this plea.

Whenever there is a proposition by one party and an opposition to that proposition by another a 'lis' arises. It may be conceded, though not deciding it, that when the assessee files his return a '!is' may not immediately arise, for under section 11 ( 1) the authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return iind calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State.

The circumstance that the authority who raises the dispute is himself the judge can makP no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State, lt [1953] will appear from the dates given above that in this case the '!is' in the sense explained above arose before the oose1n 1.}.asa1n Tj, Daria (lndia) date o amen ment o tie section. l' urther, even 1f Ltd. the '!is' is to be taken as arising only on the date of assessment, there was a possibility of such a ']is' arising 7'he State 01 as soon as proceedings started with the filing of the Modh%'~ :" 0d"hreturn or, at any rate, when the authority called for an evidence and st~rted the hearing and the right of ap- DM J. peal must be taken to have been in existence even at those dates. For the purposes of the accrual of the right of appeal the critical and relevant date is the date of initiation of the proceedings and not the decision itself.

For all the reasons given above we are of the opinion that the appellant's appeal should not have been rejected on the ground that it was not accompanied by satisfactory proof of the payment of the assessed tax. As the appellant did not admit that any amount was due by it, it was under the section as it stood previously entitled to file its appeal without depositing any sum of money. We, therefore, allow this appeal and direct that the appeal be admitted by the Commissioner and be decided in accordance with law. The appellant is entitled to the costs of this appeal and we order accordingly. Appeal allowed. Agent for appellant: Rajinder Narain. Agent for respondent: G. H. Rajadhyaksha.