Disputed tax liability cannot be treated as admitted tax to reject an appeal for non-deposit, and merits cannot be decided after dismissal.

A disputed tax liability cannot be treated as admitted tax for rejecting an appeal for non-deposit when the assessee has never admitted the liability and adjudication is still required. The dismissal of the appeal on maintainability was therefore unsustainable. Once the appellate forum upheld dismissal on that ground, it could not also examine and decide the merits of the dispute. Doing so exceeded jurisdiction. The matter was accordingly required to be restored to the appellate stage for a fresh decision on merits in accordance with law.

---

---

Issues: Whether the appeal could be dismissed as not maintainable for non-deposit of admitted tax when the liability itself was disputed, and whether the Tribunal could also examine the merits after affirming that dismissal.

Analysis: The liability to tax on the disclosed turnover of Rs. 49,100 had never been admitted by the assessee and was itself a matter requiring adjudication. In such circumstances, the amount could not be treated as admitted tax for the purpose of rejecting the appeal as not maintainable. Further, once the Tribunal upheld the dismissal of the appeal on maintainability, it ought not to have gone into the merits of the dispute. The Tribunal exceeded its jurisdiction in deciding the merits while sustaining the order of dismissal.

Conclusion: The dismissal of the appeal for non-deposit of alleged admitted tax was unsustainable, and the Tribunal's decision on merits could not be sustained.

Final Conclusion: The matter had to be restored to the appellate stage for a fresh decision on merits in accordance with law.

Ratio Decidendi: A disputed tax liability cannot be treated as admitted tax for rejecting an appeal on the ground of non-deposit, and once an appellate order is sustained on maintainability, the merits cannot simultaneously be adjudicated.

---