BACKGROUNDThe National Consumer Disputes Redressal Commission directed the appellant to pay Rs.265.01 Crores with interest at 10% p.a. from 19.09.2016. The complainant had obtained two insurance policies from the appellant by paying a premium of Rs.10,38,03,912/-, obtained for a construction contract awarded by the Government of Basra, Iraq. When the contract was withdrawn due to internal conflict and payments were suspended, the appellant rejected the insurance claim. The complaint was filed and decided under the Consumer Protection Act, 1986. The appellant filed an appeal before the Supreme Court under Section 23 of the 1986 Act, depositing Rs.50,000/- as pre-deposit in accordance with the 1986 Act. However, the Consumer Protection Act, 2019 had come into force on 20.07.2020, and under Section 67 of the 2019 Act, the condition for filing an appeal is deposit of 50% of the entire awarded amount — with no upper ceiling — which would mean depositing approximately Rs.132 Crores. FACTSThe pre-deposit condition under the two Acts is starkly different. Under the 1986 Act, the condition was 50% of the awarded amount or Rs.50,000, whichever is less. Under the 2019 Act, it is a flat 50% of the awarded amount with no ceiling whatsoever. The appellant filed an Interlocutory Application praying that the appeal be entertained under the conditions prescribed by the 1986 Act, i.e., the law applicable at the time the complaint was filed and proceedings were initiated. The respondent contended that the 2019 Act applies as it was in force at the time of filing of the appeal and that pre-deposit is a mere procedural requirement, hence retrospective. The Court examined a long line of Constitution Bench judgments on the doctrine of vested right of appeal and whether imposition of a more onerous pre-deposit condition amounts to curtailing a substantive right that had already accrued. COURT OBSERVATIONS (Verbatim)(From Hoosein Kasam Dada — approved and relied upon by the Court): "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."(From Garikapati Veeraya — Constitution Bench principles approved and applied): "(ii) The right of appeal is not a mere matter of procedure but is a substantive right. (iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit. (iv) The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. (v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise."(From State of Bombay v. Supreme General Films Exchange — applied by the Court): "it has been held that an impairment of the right of appeal by putting a new restriction thereon or imposing a more onerous condition is not a matter of procedure only; it impairs or imperils a substantive right and an enactment which does so is not retrospective unless it says so expressly or by necessary intendment."(Court's own final conclusion — Para 34): "In view of the binding precedents of the Constitution Bench judgments referred to above, we hold that onerous condition of payment of 50% of the amount awarded will not be applicable to the complaints filed prior to the commencement of the 2019 Act." FINAL VERDICTThe Interlocutory Application was allowed. The Supreme Court held that the more onerous pre-deposit condition of 50% of the entire awarded amount under Section 67 of the Consumer Protection Act, 2019 will not apply to appeals arising from complaints filed prior to the commencement of the 2019 Act. The right of appeal is a vested substantive right governed by the law in force at the time of initiation of the proceedings, and it cannot be curtailed by the new law unless the new law expressly or by necessary intendment says so.👍 IN FAVOUR OF APPELLANT      KEY CASES REFERRED AND RELIED UPON BY THE COURT#Case NameCitation1Nogendra Nath Bose v. Mon Mohan Singha Roy & Ors.AIR 1931 Cal. 100 (Calcutta HC — approved by SC)2Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh & Ors.AIR 1953 SC 221 (Supreme Court)3Garikapati Veeraya v. N. Subbiah Choudhry & Ors.AIR 1957 SC 540 (Constitution Bench)4State of Bombay v. M/s. Supreme General Films Exchange Ltd. & Anr.AIR 1960 SC 980 (Three-Judge Bench)5Vitthalbhai Naranbhai Patel v. Commissioner of Sales Tax, M.P., NagpurAIR 1967 SC 344 (Constitution Bench)6M/s. Hardeodas Jagannath v. State of Assam & Ors.AIR 1970 SC 724 (Supreme Court)7K. Raveendranathan Nair & Anr. v. Commissioner of Income Tax & Ors.(2017) 9 SCC 355 (Supreme Court)8Anant Mills Co. Ltd. v. State of Gujarat & Ors.(1975) 2 SCC 175 (Four-Judge Bench)9Ramesh Singh & Anr. v. Cinta Devi & Ors.(1996) 3 SCC 142 (Supreme Court)10M/s Gurcharan Singh Baldev Singh v. Yashwant Singh & Ors.(1992) 1 SCC 428 (Supreme Court)11Thirumalai Chemicals Limited v. Union of India & Ors.(2011) 6 SCC 739 (Supreme Court)12Neena Aneja & Anr. v. Jai Prakash Associates Ltd.2021 SCC OnLine SC 225 (Supreme Court)13Newtech Promoters and Developers Pvt. Ltd. v. State of UP & Ors.2021 SCC OnLine SC 1044 (Three-Judge Bench)14New India Assurance Co. Ltd. v. Smt. Shanti Misra(1975) 2 SCC 840 (Supreme Court)15M/s. Dream Castle & Anr. v. Union of India & Ors.W.P. No. 13431 of 2015 decided on 18.04.2016 (Madras HC, Division Bench) 

Facts:The petitioner’s goods (barbed wire) being transported from Raipur (Chhattisgarh) to Sitapur (U.P.) were intercepted on 19.02.2018. The authorities seized the goods and imposed tax of ₹2,08,800 and equal penalty under Section 129(3) of the U.P. GST Act on the ground that the petitioner was not carrying a U.P. State e-way bill during transportation. The petitioner challenged the seizure and penalty orders before the High Court. Court Decision:The High Court held that the transaction involved inter-State movement of goods and therefore the provisions of the IGST Act and CGST Act would apply. At the relevant time (19.02.2018) the e-way bill system under the CGST Rules had not yet been implemented and the requirement of carrying a U.P. State e-way bill was not applicable to inter-State trade.The Court further observed that the petitioner was carrying valid documents such as tax invoice, consignment note and national e-way bill and IGST had already been paid. As the transportation was bona fide and the requirement of State e-way bill was not applicable, the seizure and penalty orders passed under Section 129(3) of the U.P. GST Act were held to be unsustainable. The impugned orders were quashed and the authorities were directed to refund the amount deposited as tax and penalty. Cases Referred by Court:•    Satyendra Goods Transport Corp. vs. State of U.P. & Ors.•    ASCICS Trading Company vs. Assistant State Tax Officer & Anr.•    Godrej & Boyce Manufacturing Co. Ltd. vs. State of U.P.•    M/s. Shaurya Enterprises vs. State of U.P. & Ors. 

BackgroundThe assessee is a registered dealer under the Karnataka Value Added Tax Act, 2003, engaged in the business of sale of textiles and readymade garments. The assessee purchased goods from registered dealers within the State, paid tax through account payee cheques, and issued tax invoices to buyers as required under Section 29 of the KVAT Act. The Audit Authority, upon audit of the books of accounts, rejected the returns and by order dated December 26, 2014 under Section 39(1) of the Act, disallowed the Input Tax Credit claimed by the assessee for the tax period September 2012 to March 2013, on the ground that certain selling dealers — namely M/s. Taksons, M/s. Jasky Exporters Pvt. Ltd., and M/s. Venus Printers — were suspected to be bogus dealers and had not remitted the tax to the Department. FactsThe assessee challenged the order of the Audit Authority before the Joint Commissioner of Commercial Taxes (Appeals), who dismissed the appeal by order dated October 30, 2015, upholding the re-assessment and penalty order. The assessee thereafter appealed to the Karnataka Appellate Tribunal (KAT), which by judgment dated August 21, 2017 allowed the appeal, set aside the orders of the authorities below, and restored the ITC claim of the assessee. The State of Karnataka filed the present revision petition before the High Court challenging the order of the KAT. The State contended that the Tribunal failed to appreciate that under the KVAT Act, only tax actually collected and discharged by the selling dealer is eligible to be availed as ITC by the purchasing dealer, and that the assessee failed to prove the genuineness of the transactions and that the selling dealers were not bogus. The assessee, on the other hand, maintained that it had made purchases supported by proper documentation including account payee cheques reflected in the invoices themselves, thereby fully discharging its burden under Section 71 of the Act, and that it cannot be made responsible for the failure of the selling dealer to remit tax. Court Observations (Verbatim — Crucial Extracts)"From perusal of these documents, it can safely be concluded that the transaction is not a bogus transaction or make believe transaction. Since M/s. Tallam Apparels is not a bogus dealer, as is evident from the documents produced by the assessee, dis-allowing of input tax is incorrect. There cannot be any dispute, that burden is cast on the assessee to establish the transaction to lay a claim for deduction of input tax by production of necessary documents. This Court is of the considered opinion that the assessee has discharged this burden by placing necessary documents referred to supra. The details of the account payee cheques mentioned in the invoice itself demonstrates that the amount is transferred from the assessee to the dealer through the Bank which fact establishes that the transaction is not a bogus transaction." — Para 12"In the case on hand, if M/s. Tallam Apparels has not remitted the tax to the Department, for which assessee cannot be penalized." — Para 13"Under the scheme of the Act, there is no power vested in the authority to proceed against the assessee for non-remittance of tax by his purchaser. This aspect of the matter has been rightly considered by the Karnataka Appellate Tribunal in the right perspective." — Para 14 Final VerdictThe High Court of Karnataka dismissed the State's revision petition and upheld the order of the Karnataka Appellate Tribunal. It was held that once the assessee had established the genuineness of purchases through proper documentation including account payee cheques, ITC could not be denied merely on the ground that the selling dealer had not remitted tax to the Department, as the assessee cannot be penalized for the default of the selling dealer.  

BackgroundThe lead petitioner is a company engaged in import and sale of Ceramic Pigment Ink. It placed an order for a consignment from its principal in Spain, imported through Ahmedabad Airport. The company filed a bill of entry for home consumption and paid applicable customs duty as well as IGST before commencement of movement of goods. While the goods were being transported from Ahmedabad Airport to the company's warehouse in Vadodara, the truck was intercepted on the Ahmedabad-Vadodara Expressway by the GST Authorities. The transporter duly produced all documents including the bill of entry evidencing prior payment of IGST. The vehicle was detained solely on the ground that the e-way bill had not been generated — the clearing and forwarding agent had urgently dispatched the consignment given its perishable nature without waiting for the e-way bill. On learning of the detention, the company promptly generated the e-way bill. However, the authorities refused to release the goods and raised a demand for release which far exceeded the value of the goods themselves. The authorities proceeded to issue a Show Cause Notice directly under Section 130 of the CGST Act demanding payment of tax, 100% penalty and redemption fine equal to the value of goods in lieu of confiscation — without first following the procedure under Section 129 of the Act. Five writ applications raising identical issues were clubbed and disposed of by a common judgment.Relevant FactsIGST had been paid in full at the time of import — before movement commenced. Bill of entry for home consumption accompanying the goods evidenced prior payment of tax. The only lapse was non-generation of e-way bill at the time of transport — attributable to the C&F agent acting in urgency given the perishable nature of the goods and their limited shelf-life. Despite tax having already been paid, the authorities levied 100% penalty under Section 129 AND simultaneously invoked Section 130 for confiscation with redemption fine equal to the full value of goods. The Show Cause Notice under Section 130 was issued without first completing Section 129 proceedings — i.e., without issuing the Section 129(3) notice, granting hearing, and allowing the 14-day compliance window. The petitioners' central argument was that Section 130 is entirely dependent on non-compliance with Section 129(6) and cannot be independently invoked. The Revenue's case was that both sections carry non-obstante clauses making them independent of each other.Court Observations (Verbatim — Final Conclusions)"(i) Section 129 of the Act talks about detention, seizure and release of goods and conveyances in transit. On the other hand, Section 130 talks about confiscation of goods or conveyance and levy of tax, penalty and fine thereof. Although, both the sections start with a non-obstante clause, yet, the harmonious reading of the two sections, keeping in mind the object and purpose behind the enactment thereof, would indicate that they are independent of each other. Section 130 of the Act, which provides for confiscation of the goods or conveyance is not, in any manner, dependent or subject to Section 129 of the Act. Both the sections are mutually exclusive."— Para 182(i) — Core ratio: Sections 129 & 130 are independent"(ii) The phrase 'with an intent to evade the payment of tax' in Section 130 of the Act assumes importance. When the law requires an intention to evade payment of tax, then it is not mere failure to pay tax. It must be something more. The word 'evade' in the context means defeating the provisions of law of paying tax. It is made more stringent by use of the word 'intent'. The assessee must deliberately avoid the payment of tax which is payable in accordance with law. However, the element of mens rea cannot be read into Section 130 of the Act."— Para 182(ii) — On "intent to evade" in Section 130"(iii) For the purpose of issuing a notice of confiscation under Section 130 of the Act at the threshold, i.e., at the stage of detention and seizure of the goods and conveyance, the case has to be of such a nature that on the face of the entire transaction, the authority concerned should be convinced that the contravention was with a definite intent to evade payment of tax. The action, in such circumstances, should be in good faith and not be a mere pretence. In other words, the authorities need to make out a very strong case. Mere suspicion may not be sufficient to invoke Section 130 of the Act straightway."— Para 182(iii) — Strong case needed for invoking Section 130 at threshold"(iv) If the authorities are of the view that the case is one of invoking Section 130 of the Act at the very threshold, then they need to record their reasons for such belief in writing, and such reasons recorded in writing should, thereafter, be looked into by the superior authority so that the superior authority can take an appropriate decision whether the case is one of straightway invoking Section 130 of the Act."— Para 182(iv) — Mandatory written reasons & superior authority approval"(vi) Section 130 of the Act is not dependent on clause (6) of Section 129 of the Act."— Para 182(vi) — Rejecting assessee's sequential argument"(xiv) The goods are not liable to be detained on the ground that the tax paid on the product was less. In such circumstances, the Inspecting Authority is expected to alert the Assessing Authority to initiate appropriate proceedings 'for assessment of any alleged sale at which the dealer will have his opportunities to put forward his pleas on law and on fact. The process of detention of the goods cannot be resorted to when the dispute is bona fide, especially concerning the exigibility of tax and, more particularly, the rate of that tax.'"— Para 182(xiv) — Inspecting authority has no jurisdiction on valuation"(xvi) The extraordinary powers under Article 226 of the Constitution, directing for release of the vehicles or goods, during the pendency of the confiscation, can only be sparingly exercised under extraordinary situations and circumstances when injustice occurs because of non-fulfillment of the conditions for confiscation."— Para 182(xvi) — Restricted scope of writ interferenceSummary of Mixed OutcomesAgainst AssesseeSections 129 & 130 held independent — Section 130 can be invoked without first completing Section 129. Section 130 is NOT dependent on Section 129(6) non-compliance. Mens rea not required for Section 130.For AssesseeStrong evidence of "definite intent to evade" mandatory at threshold. Written reasons + superior authority approval mandated. Detention for valuation disputes not permissible. Goods directed to be released pending confiscation proceedings.Final VerdictThe Court laid down 16 general principles on the interpretation of Sections 129 and 130 of the CGST Act and directed all matters to be listed before the tax bench for deciding individual confiscation challenges on merits. The primary argument of the assessees — that Section 130 cannot be independently invoked and is subject to Section 129(6) — was rejected. However, the Court ordered interim release of goods and conveyances in all petitions pending confiscation proceedings, subject to final outcome. No final adjudication on the merits of individual petitions was undertaken. 

Facts:The dispute arose from demands of sales tax on supply of food and drinks by clubs to their permanent members. The clubs contended that such supplies were governed by the doctrine of mutuality and did not constitute “sale”. The Tribunal and High Court held that no taxable sale occurred as members and the club were not distinct persons. The matter was referred to a larger Bench to examine the impact of the 46th Constitutional Amendment on the doctrine of mutuality. Court Decision:The Court held that the doctrine of mutuality continues to apply even after the 46th Constitutional Amendment. It ruled that Article 366(29-A)(e) applies only to unincorporated associations and does not cover incorporated clubs. The Court held that in members’ clubs, there is no transfer of property from one person to another, as members and the club are not distinct. Accordingly, supply of food and beverages by clubs to their members does not constitute a “sale” and is not liable to sales tax/VAT. Cases Referred by Court:•    C.T.O. v. Young Men’s Indian Association •    State of Madras v. Gannon Dunkerley & Co. •    Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi •    State of Punjab v. Associated Hotels of India Ltd. •    Deputy Commercial Tax Officer v. Enfield India Ltd. •    Bacha F. Guzdar v. Commissioner of Income Tax •    Graff v. Evans •    Trebanog Working Men’s Club and Institute Ltd. v. Macdonald•    BSNL v. Union of India