Appellate enhancement power survives withdrawal of appeal when statute requires determination of the true assessment.

Section 38(5) of the Madhya Pradesh General Sales Tax Act, 1958 empowers the appellate authority to enhance assessment while disposing of an appeal, and that power carries a duty to determine the true assessment in the interests of the revenue. Once an appeal is filed, the assessee cannot defeat that statutory function by seeking withdrawal of the appeal. The pending enhancement application therefore had to be considered on its merits, and the appeal could not be dismissed as not pressed in a manner that extinguished that jurisdiction.

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Issues: (i) Whether the appellate authority was bound to decide the question of enhancement of tax despite the assessee seeking withdrawal of the appeal; (ii) Whether the assessee's second appeal could be dismissed as not pressed without considering the pending application for enhancement.

Issue (i): Whether the appellate authority was bound to decide the question of enhancement of tax despite the assessee seeking withdrawal of the appeal.

Analysis: Section 38(5) of the Madhya Pradesh General Sales Tax Act, 1958 confers on the appellate authority the power to enhance assessment while disposing of an appeal. That power is treated as coupled with a duty to ascertain the true assessment in the interests of the general body of taxpayers. Once an appeal is filed, the assessee cannot, by withdrawing it, prevent the appellate authority from exercising that statutory function.

Conclusion: The question was answered in the affirmative, in favour of the Revenue.

Issue (ii): Whether the assessee's second appeal could be dismissed as not pressed without considering the pending application for enhancement.

Analysis: The application for enhancement remained pending only so long as the appeal was alive. By allowing the appeal to be withdrawn and dismissing it as not pressed without dealing with the enhancement application, the appellate authority failed to exercise the jurisdiction and duty attached to the appeal. The enhancement request could not be disposed of merely by permitting withdrawal of the appeal.

Conclusion: The question was answered in the affirmative, in favour of the Revenue.

Final Conclusion: The reference was answered by holding that the appellate authority had to consider enhancement notwithstanding withdrawal of the appeal, and the dismissal of the appeal as not pressed could not defeat that statutory power and duty.

Ratio Decidendi: Where a statute confers appellate power to enhance assessment, the assessee cannot frustrate that power by withdrawing the appeal after filing, because the appellate authority must determine the true assessment in discharge of a public statutory duty.

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