Provisional finality in tax remand orders allows challenge in appeal against final assessment absent an express statutory bar.

In proceedings under the Kerala General Sales Tax Act, findings recorded in an unappealed remand order did not bar the assessee from challenging liability in an appeal against the final assessment order. Section 105(2) CPC was held to be a special rule confined to civil proceedings and not automatically applicable to tax appeals, and the Act contained no analogous statutory bar. The Court further held that an interlocutory or remand order has only provisional finality unless the statute makes it conclusive, so res judicata did not prevent reconsideration of the issue. The Appellate Tribunal's refusal to examine the challenge was therefore erroneous, and the matter had to be reconsidered on merits.

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Issues: Whether, in proceedings under the Kerala General Sales Tax Act, the principles underlying section 105(2) of the Code of Civil Procedure, 1908 and the doctrine of res judicata barred the assessee from challenging, in an appeal against the final assessment order, findings recorded in an earlier unappealed remand order of the appellate authority.

Analysis: The appellate structure under the Act provided a first appeal under section 34 and a second appeal under section 39, with remand powers also contemplated by the Act. The Court held that the restriction contained in section 105(2) of the Code of Civil Procedure is a special statutory rule confined to proceedings governed by that Code and is not part of the general law applicable to all appeals. Neither section 34 nor section 39 of the Act incorporated any analogous bar, and the Act did not make the principles of section 105(2) applicable to tax proceedings. The Court further held that an interlocutory or remand order has only provisional finality unless the governing statute expressly makes it conclusive. The doctrine of res judicata could not apply because finality is an essential condition for that doctrine, and the earlier finding in the remand order remained open to challenge at the stage of appeal against the ultimate order.

Conclusion: The earlier remand findings did not preclude the assessee from disputing liability before the Appellate Tribunal; the Tribunal's view that it lacked jurisdiction to examine the issue was erroneous.

Final Conclusion: The order of the Appellate Tribunal was unsustainable, and the matters had to be reconsidered on merits by the Tribunal.

Ratio Decidendi: In the absence of an express statutory bar, findings in a remand or interlocutory order in tax proceedings are only provisionally final and may be challenged in an appeal against the final order; section 105(2) of the Code of Civil Procedure does not apply by general implication to such proceedings.

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