Binding remand directions and turnover bifurcation govern taxability where milling and resale activities are carried on separately.

A subordinate taxing authority must comply strictly with the directions in a binding remand order; a fresh assessment made on a basis inconsistent with those directions is illegal and unsustainable. Where an assessee carries on both milling and resale activities, groundnut purchase turnover cannot be taxed as a single undivided whole merely because the assessee is also a miller. The accounts and surrounding circumstances must be examined to segregate the turnover attributable to milling from the portion relating to separate trading activity, and tax can be levied only on the proper taxable segment.

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Issues: (i) Whether the assessing authority was bound to comply with the directions contained in the remand order passed by the appellate authority; (ii) whether, where the assessee was both a miller and a dealer, the entire turnover of groundnut purchases could be brought to tax or only that part attributable to milling.

Issue (i): Whether the assessing authority was bound to comply with the directions contained in the remand order passed by the appellate authority.

Analysis: A remand order, once final, governs the further enquiry. A subordinate authority cannot disregard the specific directions issued by the appellate authority and make an assessment on a basis inconsistent with those directions. Failure to carry out such directions is illegal and contrary to the hierarchy of adjudication.

Conclusion: The assessing authority was bound by the remand order and its contrary assessment was unsustainable.

Issue (ii): Whether, where the assessee was both a miller and a dealer, the entire turnover of groundnut purchases could be brought to tax or only that part attributable to milling.

Analysis: The levy under the relevant schedule provision attaches to the purchase of groundnut by the miller, but the Court accepted that the legal position is different where the assessee purchases part of the stock for milling and keeps the rest for resale as a separate trading activity. In such a case, the accounts and surrounding circumstances must be examined to identify the turnover relatable to each activity, and the taxable turnover cannot be treated as a single undivided whole merely because the assessee is also a miller.

Conclusion: Only the portion of the turnover attributable to milling could be subjected to tax, and the resale turnover required separate examination.

Final Conclusion: The assessment orders were quashed and the matter was sent back for fresh assessment in accordance with the remand directions, after bifurcating the turnover on the basis of the assessee's distinct trading and milling activities.

Ratio Decidendi: A subordinate taxing authority must strictly obey a binding remand order of the appellate authority, and where an assessee carries on distinct milling and resale activities, purchase turnover must be segregated according to its real purpose before tax is levied.

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