A) ABSTRACT / HEADNOTE

The Supreme Court of India, in Hoosein Kasam Dada (India) Ltd. v. The State of Madhya Pradesh and Others, AIR 1953 SC 221, decisively upheld the principle that the right of appeal is a substantive right, not a mere matter of procedural law. The Court ruled that such a right becomes vested at the inception of the legal proceedings and cannot be retrospectively curtailed unless expressly stated or necessarily implied. The appellant, assessed under the Central Provinces and Berar Sales Tax Act, 1947, had filed an appeal without depositing the tax amount as required under a subsequent amendment introduced in 1950. The Court held that the amended provision mandating deposit of the entire assessed amount prior to filing the appeal could not apply retrospectively to proceedings that commenced before its enactment. The judgment elaborated the distinction between procedural law and substantive rights, reinforcing the settled legal doctrine of non-retrospectivity in the absence of clear legislative intent. It was also clarified that altering a statutory precondition for appeal, particularly a financial burden such as pre-deposit of tax, is not a mere procedural change but a substantive restraint on the vested appellate right.

Keywords: Substantive right, Right of Appeal, Retrospective application, Procedural law, Tax assessment, Central Provinces Sales Tax Act

B) CASE DETAILS

i) Judgement Cause Title: Hoosein Kasam Dada (India) Ltd. v. The State of Madhya Pradesh and Others

ii) Case Number: Civil Appeal No. 182 of 1952

iii) Judgement Date: 23 February 1953

iv) Court: Supreme Court of India

v) Quorum: Justice Mehr Chand Mahajan and Justice S. R. Das

vi) Author: Justice S. R. Das

vii) Citation: AIR 1953 SC 221, [1953] SCR 987

viii) Legal Provisions Involved:
Section 22(1) of the Central Provinces and Berar Sales Tax Act, 1947, as amended by the Central Provinces and Berar Sales Tax (Second Amendment) Act, 1950

ix) Judgments Overruled by the Case (if any):
Badruddin Abdul Rahim v. Sitaram Vinayak Apte, ILR 52 Bom 753, was disapproved.

x) Case is Related to which Law Subjects:
Constitutional Law, Taxation Law, Administrative Law, Procedural Law

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The case examined a pivotal question of whether an amendment to a taxation statute affecting the right to file an appeal would apply retrospectively to assessment proceedings initiated prior to the amendment. The appellant, Hoosein Kasam Dada (India) Ltd., had filed a return under the Central Provinces and Berar Sales Tax Act, 1947, before the 1950 amendment came into effect. The amendment required proof of full payment of assessed tax as a precondition for the admission of an appeal. The appellant’s appeal was rejected by the authorities for non-compliance with the new procedural requirement. This rejection gave rise to a constitutional challenge based on vested rights and the temporal application of statutory amendments. The High Court of Madhya Pradesh upheld the application of the amended provision, which was then appealed to the Supreme Court under special leave.

D) FACTS OF THE CASE

On 28 November 1947, the appellant submitted a sales tax return to the Sales Tax Officer, Akola. The officer, finding the turnover to exceed ₹2 lakhs, referred the case to the Assistant Commissioner of Sales Tax. On 8 April 1950, the Assistant Commissioner assessed the appellant to a tax of ₹58,657-14-0. Dissatisfied with this order, the appellant filed an appeal on 10 May 1950 without depositing the assessed amount. This was done in accordance with the law as it stood before the amendment introduced on 25 November 1949. The 1950 amendment modified Section 22(1) of the Act to mandate that appeals be accompanied by proof of payment of the full tax assessed. The Sales Tax Commissioner refused to admit the appeal for lack of such proof. The Board of Revenue upheld this decision. The High Court also dismissed the appellant’s writ petition under Articles 226 and 227 of the Constitution. Special leave to appeal to the Supreme Court was granted only on the issue of retrospective application of the amended provision.

E) LEGAL ISSUES RAISED

i) Whether the right of appeal under a statute is a substantive right or merely procedural.

ii) Whether a statutory amendment that imposes a condition precedent for the admission of an appeal affects the substantive right of appeal.

iii) Whether such a condition can be retrospectively applied to proceedings that commenced before the amendment.

iv) Whether the rejection of an appeal for non-compliance with such a condition, imposed by a later amendment, is legally sustainable.

F) PETITIONER/APPELLANT’S ARGUMENTS

i) The counsels for Petitioner / Appellant submitted that the appellant had a vested right of appeal under Section 22(1) as it existed at the time the assessment proceedings commenced. This vested right, acquired when the return was filed in 1947, could not be abridged by a subsequent amendment unless the legislature expressly made the amendment retrospective. They argued that the 1950 amendment requiring pre-deposit of the assessed amount fundamentally altered the nature of the right and imposed a substantive burden. They relied heavily on the doctrine of vested rights enunciated in the Privy Council decision in Colonial Sugar Refining Co. Ltd. v. Irving, [1905] AC 369, where it was held that the right of appeal is a substantive right that accrues at the commencement of proceedings, not merely at the stage of decision. Further, the petitioner emphasized that the amendment does not merely regulate appeal procedure but imposes a condition that could potentially deny the right altogether due to financial incapacity. Therefore, they contended that the appellate authority had no jurisdiction to reject the appeal on the basis of a condition that was not in existence when the proceedings were initiated.

G) RESPONDENT’S ARGUMENTS

i) The counsels for Respondent submitted that the amended provision of Section 22(1) was clear in requiring that no appeal could be admitted unless it was accompanied by proof of tax payment. They argued that the requirement was procedural and applied at the time of filing the appeal. Since the appeal was filed in 1950, after the amendment, the law as it stood on the date of the appeal would govern its admissibility. The respondents urged that the provision did not extinguish the right of appeal but only regulated its exercise. They further submitted that the statute did not need to be expressly retrospective; the language was clear and binding. Moreover, the power of the Commissioner to admit an appeal was conditional and not discretionary post-amendment. The requirement to pre-deposit was within the domain of procedural legislative competence and did not infringe upon any vested rights.

H) RELATED LEGAL PROVISIONS

i) Section 22(1) of the Central Provinces and Berar Sales Tax Act, 1947
Original Provision: Appeal permitted upon admission of tax as self-assessed by appellant.
Amended Provision: Appeal permitted only after depositing the entire assessed amount, regardless of admission.

I) JUDGEMENT

a. RATIO DECIDENDI

i) The Supreme Court held that the right of appeal is a vested substantive right and not a mere matter of procedure. It becomes vested when the legal proceedings are initiated in the original forum, i.e., the assessment stage. Any legislative amendment that alters this right cannot apply retrospectively unless expressly stated. The Court reasoned that the amendment imposed a new condition which could deter or restrict access to appellate remedies. The requirement of full tax pre-deposit as a condition for admission of appeal significantly affects the substantive right of appeal and thus cannot be construed as procedural. The judgment drew strength from Colonial Sugar Refining Co. Ltd. v. Irving, [1905] AC 369, Sardar Ali v. Dalimuddin, ILR 56 Cal 512, and Kirpa Singh v. Rasaldar Ajaipal Singh, AIR 1928 Lah 627, which laid down that vested rights cannot be taken away without clear legislative intent. The Supreme Court rejected the argument that the authority was bound to follow the new provision mechanically and held that the old law would govern such rights.

b. OBITER DICTA 

i) The Court opined that “unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigant’s right.” This observation highlighted that procedural provisions should not be applied in a way that adversely affects pre-existing substantive rights. It also emphasized that even when a law appears absolute, it must be interpreted in harmony with the principle of legal certainty.

c. GUIDELINES 

• A right of appeal vests when proceedings commence, not when the decision is rendered.

• Substantive rights cannot be abridged by procedural amendments unless expressly stated.

• Courts must interpret procedural amendments harmoniously to protect vested rights.

• Statutory authorities must evaluate the law as applicable at the time proceedings commenced.

J) CONCLUSION & COMMENTS

This landmark judgment remains a bedrock for understanding the legal dichotomy between substantive rights and procedural laws. The Supreme Court’s affirmation of the non-retrospective operation of statutory amendments, particularly when they affect vested appellate rights, has become a cornerstone of Indian jurisprudence. The clarity with which the Court distinguished procedural regulations from substantive rights ensures that legislative competence is not allowed to trespass into the realm of vested judicial remedies. The judgment is particularly important in the taxation and regulatory framework, where amendments often seek to impose burdensome preconditions. This case protects litigants from retrospective application of such provisions and reinforces constitutional fairness under Article 14 and Article 19(1)(g) of the Indian Constitution.

K) REFERENCES

a. Important Cases Referred

[1] Colonial Sugar Refining Co. Ltd. v. Irving, [1905] AC 369
[2] Nana bin Aba v. Sheku bin Andu, ILR 32 Bom 337
[3] Delhi Cloth and General Mills Co. Ltd. v. Income-Tax Commissioner, 54 IA 421
[4] Kirpa Singh v. Rasaldar Ajaipal Singh, AIR 1928 Lah 627
[5] Sardar Ali v. Dalimuddin, ILR 56 Cal 512
[6] Badruddin Abdul Rahim v. Sitaram Vinayak Apte, ILR 52 Bom 753 (Disapproved)
[7] In re Vasudeva Samiar, AIR 1929 Mad 381
[8] Ram Singha v. Sankar Dayal, ILR 50 All 965
[9] Radhakisan v. Shridhar, AIR 1950 Nag 17
[10] Gordhandas v. Governor-General in Council, AIR 1950 Punj 103
[11] Nagendra Nath Bose v. Mon Mohan Singha Roy, (1930) 34 C.W.N. 1009

b. Important Statutes Referred

[12] Central Provinces and Berar Sales Tax Act, 1947
[13] Central Provinces and Berar Sales Tax (Second Amendment) Act, 1950
[14] Constitution of India – Article 226, Article 227
[15] Judicature Act, 1903 (Australia) – For comparative jurisprudence
[16] Letters Patent, Clause 15 (As amended)