Unconditional withdrawal of tax appeal cannot be rejected and remanded where no enhancement of assessment or penalty is sought.

Under section 9 of the U.P. Sales Tax Act, 1948, an appellate authority cannot proceed to decide an appeal on merits or remand the assessment after the dealer seeks unconditional withdrawal, where no enhancement of assessment or penalty has been requested. The proviso to section 9(3)(b) permits only dismissal of the appeal with such observations as the authority thinks fit in that situation. The appellant remains dominus litis, and absent any accrued vested right in the opposite party, the appeal may be withdrawn unconditionally. The commentary states that refusal to accept withdrawal and the resulting merits-based remand exceeded jurisdiction.

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Issues: Whether, under section 9 of the U.P. Sales Tax Act, 1948, the appellate authority could allow an appeal, set aside the assessment and remand the matter for fresh assessment after the appellant had sought unconditional withdrawal of the appeal and no request for enhancement of assessment or penalty had been made.

Analysis: The statutory scheme confers a right of appeal on the aggrieved dealer and the proviso to section 9(3)(b) merely permits the appellate authority, where the appellant seeks withdrawal and no enhancement is sought, to dismiss the appeal with such observations as it thinks fit. That proviso does not confer power to allow the appeal on merits or to remand the matter against the appellant's wishes. The appellant remains dominus litis and, in the absence of any accrued vested right in favour of the opposite party, an appeal filed by the dealer could be withdrawn unconditionally. Since no positive request for enhancement of assessment or penalty was shown, the appellate authority exceeded its jurisdiction in refusing withdrawal and in proceeding to decide the appeal on merits.

Conclusion: The appellate authority had no jurisdiction to allow the appeal and remand the matter after the dealer sought withdrawal; the appeal ought to have been treated as withdrawn. The revisions were therefore allowed in favour of the assessee.

Final Conclusion: The assessment orders restored to the extent that the appellate and revisional interference based on the rejected withdrawal was unsustainable, and the dealer's withdrawal of the appeals stood accepted.

Ratio Decidendi: Where an appellant seeks unconditional withdrawal of an appeal and no enhancement of assessment or penalty is sought, the appellate authority cannot compel a decision on merits or remand the matter merely because it has power to enhance; it may only dismiss the appeal with appropriate observations.

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