1999 (9) TMI 930 - HC - VAT and Sales Tax

Successor Deputy Commissioner (Appeals) cannot review predecessor's order on appeal maintainability. Demand notice is appealable.

Precise Laboratories Limited Versus Commissioner, Trade Tax, UP., Lucknow

The court held that the successor Deputy Commissioner (Appeals) could not review the earlier order passed by his predecessor regarding the maintainability ... - Issues Involved:1. Whether the Deputy Commissioner (Appeals) can review an order passed by his predecessor regarding the maintainability of an appeal.2. Whether a demand notice/order is an order under section 9 of the U.P. Trade Tax Act against which an appeal is maintainable.Issue-wise Detailed Analysis:1. Review of Order by Successor Deputy Commissioner (Appeals):The revisionist argued that once the Deputy Commissioner (Appeals) had decided the maintainability of the appeal, his successor could not review this order based on a change of opinion. The court examined the order sheet which showed that the appeal was initially registered as defective, but after hearing both parties, the Deputy Commissioner (Appeals) held the appeal maintainable on March 31, 1998. The court referred to Section 22(1) of the U.P. Trade Tax Act, which allows rectification of mistakes apparent on the record within three years. However, it clarified that a legal question decided after lengthy arguments does not constitute an error apparent on the face of the record and thus cannot be rectified under Section 22. The court cited the Supreme Court's decision in Satyadhyan Ghosal v. Smt. Deorajin Debi, emphasizing that principles analogous to res judicata apply to proceedings before a Tribunal or an authority under any law, and the same question cannot be re-agitated at a subsequent stage of the same proceeding. Consequently, the Deputy Commissioner (Appeals) had no authority to review the earlier order passed by his predecessor.2. Demand Notice as an Order under Section 9 of the U.P. Trade Tax Act:The court examined whether a demand notice constitutes an order under Section 9 of the U.P. Trade Tax Act, which allows appeals against orders made by the assessing authority. The court defined an 'order' as a command or direction authoritatively given, referencing Black's Law Dictionary. It analyzed Rule 45 of the U.P. Trade Tax Rules, 1948, which mandates that a notice in form XI, together with a copy of the assessment order, be sent to the dealer, directing payment of the assessed tax within a specified period. The court concluded that the demand notice, being a command to deposit the tax amount, qualifies as an order under Section 9, against which an appeal is maintainable. The court supported this interpretation by referring to a Division Bench decision in Jajmau International Tanners v. Trade Tax Officer, which recognized the right to appeal against a demand notice under Section 9.The court dismissed the Standing Counsel's reliance on Commissioner of Sales Tax v. Dwarika Das and Co. and Commissioner of Sales Tax, U.P. v. Swadeshi Cotton Mills Ltd., distinguishing these cases on the grounds that a recovery certificate is not an order and that the validity of a demand notice during pending litigation does not negate its status as an order. The court affirmed that the right to appeal is statutory, and the dispute over the exemption period should be resolved by the Deputy Commissioner of Appeals on merit.Conclusion:The court allowed the revision, set aside the impugned orders, and directed the Deputy Commissioner of Appeals to dispose of the appeal on merit in accordance with the law. The petition was allowed.