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Issues: (i) whether the revisional authority could, in a revision filed by the assessee alone, alter the appellate finding and hold that the two firms constituted an association of persons; (ii) whether there was material on record to support the finding that the two firms constituted an association of persons and were liable to be jointly assessed; (iii) whether the two firms could be treated as a dealer within the meaning of section 2(c) of the U.P. Sales Tax Act despite the definition of person in the General Clauses Act; (iv) whether the revisional authority could reverse the appellate finding that the firms were separate firms when the State had not filed revision against that part of the order.
Issue (i): whether the revisional authority could, in a revision filed by the assessee alone, alter the appellate finding and hold that the two firms constituted an association of persons
Analysis: The revisional power under section 10, as it stood before amendment, authorized the revising authority to call for the record and pass such order as it thought fit, including the power to act suo motu. That power was wide enough to examine the legality and propriety of the entire order under revision and to vary findings recorded by the lower authorities, even on a point not specifically urged by the revision petitioner. The later amendment removing suo motu power did not affect the present matter because the appellate order had been made when the earlier wider revisional power still applied.
Conclusion: The revisional authority was competent to substitute its own finding and hold that the two firms constituted an association of persons.
Issue (ii): whether there was material on record to support the finding that the two firms constituted an association of persons and were liable to be jointly assessed
Analysis: The expression association of persons requires a common purpose or common action directed to a joint enterprise. Here, the two firms had jointly sought registration as dealers for the relevant years, had described one as a branch of the other, and had filed common turnover returns. These circumstances furnished relevant material from which a joint business venture and, therefore, an association of persons could be inferred. The sufficiency of that material was not open to reconsideration in reference if some material existed.
Conclusion: There was material on record to support the finding of association of persons and joint assessment.
Issue (iii): whether the two firms could be treated as a dealer within the meaning of section 2(c) of the U.P. Sales Tax Act despite the definition of person in the General Clauses Act
Analysis: A dealer under section 2(c) includes a person or an association of persons carrying on business. The term person in the General Clauses Act is of wide import and includes an association or body of individuals. There was nothing in the statutory definition relied upon by the assessee to exclude firms, when their conduct showed that they were carrying on business together as one unit. The statutory scheme therefore did not prevent the two firms from being regarded as a dealer for assessment purposes.
Conclusion: The two firms could lawfully be treated as a dealer and assessed jointly.
Issue (iv): whether the revisional authority could reverse the appellate finding that the firms were separate firms when the State had not filed revision against that part of the order
Analysis: Once the matter was before the revisional authority, it was entitled to examine the legality and propriety of the entire order. The power to vary an order included the power to alter findings on which the order rested. The appellate finding that the firms were separate did not become immune from revisional scrutiny merely because the State had not filed a cross-revision. The revisional authority could therefore disturb that finding while dealing with the assessee's revision.
Conclusion: The appellate finding that the firms were separate firms could be reversed in revision.
Final Conclusion: The questions referred were answered against the assessee and in support of the revenue, sustaining the joint assessment and the revisional authority's power to vary the lower findings.
Ratio Decidendi: A revisional authority empowered to examine the legality or propriety of an order may vary the order and substitute findings of the lower authorities, and relevant conduct showing a common business purpose can justify treating separate firms as an association of persons for joint assessment.
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