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PETITIONER: HOOSEIN KASAM DADA (INDIA) LTD.

       Vs.

RESPONDENT: THE STATE OF MADHYA PRADESH AND OTHERS.

DATE OF JUDGMENT: 23/02/1953

BENCH: DAS, SUDHI RANJAN BENCH: DAS, SUDHI RANJAN MAHAJAN, MEHR CHAND

CITATION:  1953 AIR  221            1953 SCR  987  CITATOR INFO :  E          1957 SC 540  (20,65)  R          1960 SC 980  (5,8,11)  RF         1967 SC 344  (4,8,9)  R          1968 SC  13  (9)  D          1978 SC2280  (10)  D          1988 SC2010  (7)

ACT: Appeal-Right to appeal-Whether vested right-When right vests -Change  of  law after initiation of  proceedings  in  lower Court -Law governing appeal-Law making deposit of amount  of appeal a condition for admission of appeal-Whether manner of mere procedure- -Central Provinces and Berar Sales Tax  Act, 1947,  s.  22 (1) -Central Provinces Sales Tax  Act  (Second Amendment) Act, 1950.

HEADNOTE: The right of appeal is a matter of substantive right and not merely a matter of procedure, and this right becomes  vested 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  enactment  or necessary intendment. Section 22(l.) 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 due from him, had  been  paid. This  Act  was amended on the 25th November,  1949,  and  s. 22(l) as amended provided that no appeal should ])a 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 Officer, who, finding that the turnover exceeded 2 lacs,  submitted the case to the Assistant Commissioner  for disposal and the latter made an assessment on the 8th April, 1950.   The appellant preferred an appeal on the  10th  May, 1950,  without  depositing the amount of tax in  respect  of which he had appealed.  The Board of Revenue was of  opinion that  s.  22(l.)  as  amended applied to  the  case  as  the assessment was made, and the appeal was preferred, after the

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amendment came into force,’ and rejected the appeal. Held,  (i) that the appellant had a vested right  to  appeal when the proceedings were initiated, i.e., in 1947, and  his right  to  appeal 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 had no retrospective effect as the Amendment Act of 1950 did not expressly or by  necessary intendment give it retrospective effect, and the 988 appeal  could not therefore be rejected for  non-payment  of the tax in respect of which the appeal was preferred. Colonial Sugar Refining Co. Ltd. v. Irving [1905] A.C.  369, Nanabin  Aba v. Sheku bin Andu (I.L.R. 32 Bom.  337),  Delhi Cloth and General Mills Co. Ltd. v. Income-tax Commissioner, Delhi  (54 I.A. 421), Kirpa Singh v. Rasaldar Ajaipal  Singh (A.I.R. 1928 Lab. 627), Sardar Ali v. Dalimuddin (I.L.R.  56 Cal. 512) applied. Badraddin  Abdul  Rahim v. Sitaram Vinayak Apte  (I.L.R.  52 Bom. 753) disapproved. In re Vasudeva Samiar (A.I.R. 1929 Mad. 381), Ram Singha  v. Sankar  Dayal (I.L.R. 50 All. 965), Radhakisan v.  Sri  Dhar (A.I.R.  1950 Nag. 17), Gordhan Das v. Governor--General  in Council  (A.I.R. 1950 Punj. 103) and Nagendra Nath  Bose  v. Monmohan (1930, 34 C.W.N. 1009) referred to.

JUDGMENT: CIVIL APPELLATE 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.   C.  Chatterjee  (R.  M. Hajarnavis, with him)  for  the appellant. R.   Ganapathy Iyer for the State of Madhya Pradesh. 1953.  February 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 account 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 rupees two lacs  the  Sales  Tax Officer submitted the case to the Assistant Commissioner  of Sales Tax, Amravati, for assessment, 989 On the 25th January, 1949, the Assistant Commissioner issued a  fresh  notice in Form XI under section 11 and  fixed  the case for disposal on the 5th February, 1949.  After  various adjournments and proceedings to which it is not necessary to refer, the hearing commenced on the 9th June, 1949, when  an agent of the assessee appeared with books of account of  the Akola Branch.  Eventually after various further  proceedings the Assistant Commissioner on the 8th April, 1950,  assessed the assessee, to the best of his judgment, in the sum of Rs. 58,657140  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

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the  Sales Tax Commissioner, Madhya Pradesh,  under  section 22(l) of the Central Provinces and Berar Sales Tax Act, 1947 (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(l)  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(l)  of the Act as it stood when  the  assessment proceedings  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 appeal 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 128 990 order directing the Sales Tax Commissioner to admit and hear the appeal without demanding payment of the amount of  sales tax  assessed  by the Assistant Commissioner of  Sales  Tax. The High Court dismissed the application on the 2nd  August, 1951.   The assessee    applied to the High Court for  leave to  appeal  to this  Court which was also dismissed  by  the High Court on the 14th March, 1952.  ’The assessee thereupon applied  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(l)  of the Act was originally expressed  in  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 or  without  penalty,  shall  be  entertained  by  the  said authority 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 follows:-- "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 or  without penalty shall be admitted by the said  authority unless such appeal is accompanied by a satisfactory proof of the payment of the tax, with

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991 penalty,  if  any, in respect of which the appeal  has  been preferred." It is clear from the language used in the proviso to section 22 (1) as it stood prior to the amendment that an  aggrieved assessee  had  only to pay such amount of tax  as  he  might admit  to  be  due from him, whereas under  the  proviso  to section 22(l) as amended the appeal has to be accompanied by satisfactory proof of payment of the tax in respect of which the  appeal  had  been preferred.   The  contention  of  the present assessee is that as the amendment has not been  made retrospective its right of appeal under the original section 22(l) remains unaffected 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 Revenue  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 assessee’s  right of appeal from a decision  in  proceedings which  commenced prior to such amendment and which right  of appeal was free from such restriction under the section asit stood at the time of the commencement   of the  proceedings. The question was answered     in   the   negative   by   the Judicial Committee in Colonial.  Sugar Refining Co., Ltd. v. Irving(1).   In  that case the Collector of  Customs  acting under  an Act called the Excise Tariff Act,  1902,  required the appellants to pay pound 20,100 excise duty on 6,700 tons of  sugar.   The  appellants disputed the  claim.   So  they deposited (1)  L.R. [1905] A.C. 369. 992 the money with the Collector and then brought the action  by issuing  a writ on the 25th October, 1902.  A  special  case having  been  stated for the opinion of the  Supreme  Court, that Court on the 4th September, 1903, gave judgment for the Collector.   In  the meantime the Judiciary Act,  1903,  was passed  and received Royal assent on the 25th August,  1903, that  is  to  say  about 10 days  before  the  judgment  was delivered.  By section 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  controversy.  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

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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 a 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  princi- ple, 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 993 with  existing  rights contrary to  the  well-known  general principle   that  statutes  are  not  to  be  held  to   act retrospectively  unless a clear intention to that effect  is manifested." The  principle of the above decision was applied by  Jenkins C.J. in Nana bin Aba v. Sheku bin Andu (1) and by the  Privy Council itself in Delhi Cloth and General Mills Co. Ltd.  v. Income-tax  Commissioner,  Delhi(’).  A Full  Bench  of  the Lahore  High  Court adopted it in Kirpa  Singh  v.  Rasaldar Ajaipal  Singh (3).  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  com mencement  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 (4), 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  appeal  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 unless 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  clause 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, for  to  do so would be to apply it retrospectively  and  to impair and indeed to defeat a substantive right which was in existence (1)  (1908)  I.L.R. 32 Bom. 337.    (3) A. I. R   1928  Lah. 627. (2) (1927) L.R. 54 I.A. 421 ; I.L.R. 9 Lah. 284. (4)  (1929) I.L.R. 56 Cal. 5I2. 994 prior to the date of the amendment.  The apppllants  claimed that on the 7th October, 1920, when the suit was filed  they had  vested in them by the existing law a substantive  right to  a  Letters Patent appeal from the decision of  a  Single Judge and that an intention to interfere with it, to clog it with a new condition or to impair or imperil it could not be presumed  unless it was clearly manifested by express  words or   necessary   intendment.   In  giving  effect   to   the

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contentions  of  the appellants Rankin C.J. observed  at  p. 518:- Now, the reasoning of the Judicial Committee in The Colonial Sugar  Refining Company’s case is a conclusive authority  to show that rights of appeal are not matters of procedure, and that  the  right  to enter the superior  court  is  for  the present  purpose  deemed to arise to a litigant  before  any 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  new  clause  could  not  be  given retrospective  effect  and  accordingly  the  date  of  pre- sentation 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  Ganapathy Aiyar, appearing for  the  respondent, refers  us  to the decision of a Bench of  the  Bombay  High Court  in  the  case of Badruddin  Abdul  Rahim  v.  Sitaram Vinayak  Apte (1), where it was held that the  amendment  of clause  15 of the Letters Patent  operated  retrospectively. That  case  followed an earlier decision of  the  same  High Court  in  Fram  Bomanji  v.  Hormasji  Barjorji  (2).   The decision in the old case proceeded upon two grounds, namely, (1) that the question was one of procedure and (2) that sec- (1)  (1928) I.L R. 52 Bom. 753; A.I.R. (1928) Bom. 371. (2)  (1866) Bom.  H.C. (O.C.J.) 49. 995 tion 2 of the New Letters Patent of 1865 gave  retrospective operation  to the Letters Patent by making it applicable  to all  pending  suits.   In  so far as  the  first  ground  is concerned  it  clearly runs counter to the decision  of  the Privy Council in Colonial Sugar Refining Co. Ltd. v.  Irving (supra) and must be taken as overruled as Fawcett J. himself acknowledged  at page 756.  As regards the second ground  it is  inapplicable  to  the  case before  us  and  it  is  not necessary  to 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 (1) another  Bench of the same High Court expressly dissented from the decision in  Badruddin Abdul Rahim v. Sitaram Vinayak  Apte  (supra). The principle laid down in the Colonial Sugar Refining Co.’s case (supra) was followed by a Special Bench of Madras in In re Vasudeva Samiar (2).  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 (4) 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 (5  ) 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 (1). The  case of Nagendra Nath Bose v. Mon Mohan Singha Roy  (7) is  indeed  very  much  to the  point.   In  that  case  the plaintiffs instituted a suit for rent valued at Rs.  1,30615 and  obtained  a decree.  In execution of  that  decree  the defaulting  tenure was sold on the 20th November, 1928,  for Rs.  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, (1)  I.L.R (1945) Bom. 17. (2)  A I.R. (1929) Mad 381 ; 56 M.L.J 369.

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(3) (1928) I.L.R. 50 All. 965; A.I.R. (1928) All. 437. (4)  (1904) I.L.R. 26 All. 375. (5)  A.I.R. (1950) Nag. 177. (6)  A.I.R, (1952) Punjab 103 (F.B.), (7)  (1930) 34 C.W.N. 1009. 996 for  setting aside the sale.  That. application having  been dismissed  for  default  of his  appearance  the  petitioner preferred  an  appeal to the District Judge  of  Hoogly  who refused  to admit the appeal on the ground that  the  amount recoverable  in  execution  of  the  decree  had  not   been deposited as required by the proviso to section 174,  clause (c), of the Bengal Tenancy Act as amended by an amending Act in  1928.   The contention of the 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.  Mitter J. said at page 1011:- "  We think 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 absence 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 the date to be looked into for this  purpose is  the  date of the original  proceeding  which  eventually culminated in the appeal." 997 The,   above  decisions  quite  firmly  establish  and   our decisions  in Janardan Reddy v. The State (1) and in  Ganpat Rai  v.  Agarwal  Chamber of Commerce Ltd.  (2)  uphold  the principle  that a right of appeal is not merely a matter  of procedure.   It is matter of substantive right.  This  right of  appeal from the decision of an .inferior tribunal  to  a superior tribunal becomes vested in a party when proceedings are  first initiated in, and before a decision is given  by, the inferior court.  In 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 procedure.  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. Sri Ganapathy Aiyar urges that the language of section 22(1) as  amended clearly makes the section ret. rospective.   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

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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. Dalimuddin  (supra),  namely, that after the  amendment  the court  had  no authority to entertain an  appeal  without  a certificate from the Single Judge. (1) [1950] S.C.R. 941. (2) (1952) S.C.J. 564. 129 998 Rankin  C.J. repelled this argument with the remark at  page 520:- "  Unless  the contrary can be shown,  the  provision  which takes  away  jurisdiction is itself subject to  the  implied saving of the litigants’ right." In  our view the above observation is apposite and  applies to  the case before us.  The true implication of  the  above observation as of the decisions in the other cases  referred to  above  is that the 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 supporting  the  pre- existing  right  of  appeal that old  law  must  govern  the exercise  and enforcement of that 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 lyer  on this point, therefore, cannot be accepted. The  learned  Advocate urges that the requirment as  to  the deposit of the 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  (supra), for in this case it is entirely  in  the power  of the appellant to deposit the tax if he chooses  to do so whereas it was not 999 within  the power of the appellant in that case to secure  a certificate  from the learned Single Judge who  disposed  of the second appeal.  In the first place the onerous condition may  in  a given case prevent the exercise of the  right  of appeal,  for the assessee may not be in a position  to  find the  necessary money in time.  Further this argument  cannot prevail  in view of the decision of the Calcutta High  Court in  Nagendra  Nath  Bose v. Mon Mohan  Singha  (supra).   No cogent argument has been adduced before us to show that that

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decision is not correct.  There can be no doubt that the new requirement "touches" the substantive 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 section gives is certainly less  than  the right  which  was available before.  A  provision  which  is calculated to deprive the appellant of the unfettered  right of  appeal  cannot  be  regarded as  a  mere  alteration  in procedure.  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 Ganapathy lyer faintly urges that until  actual assessment there can be no ’lis’ 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  ’lis’  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  and 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 make no difference, for the  authority  raises the dispute in the  interest  of  the State and in so acting only represents the State.  It 1000 will appear from the dates given above that in this case the ’lis’ in the sense explained above arose before the date  of amendment of the section.  Further, even if the ’lis’ is  to be  taken as arising only on the date of  assessment,  there was  a  possibility  of  such a ’lis’  arising  as  soon  as proceedings  started with the filing of the  return  or,  at any rate, when the authority called for evidence and started the  hearing and the right of appeal 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. 1001