Doctrine of merger does not apply when an appeal is dismissed only for limitation, without merits adjudication.

An appeal dismissed solely as time-barred does not result in merger of the original order with the appellate order because merger requires an appellate decision on merits. Where the first appellate forum rejects the appeal only for limitation and the delay is not condoned, there is no affirmance on substance and the higher forum cannot insist on a merits-based examination merely on that basis. The doctrine of merger therefore did not apply, and the assessee was not entitled to a merits decision in the second appeal.

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Issues: Whether, when the first appeal is dismissed only on the ground of limitation, the doctrine of merger applies so as to require the further appellate forum to examine the matter on merits.

Analysis: The first appellate authority had dismissed the assessee's appeal as barred by limitation and had not adjudicated the controversy on merits. The settled principle applied is that merger depends on a decision on merits by the appellate forum; where an appeal is rejected solely for delay and the delay is not condoned, the original order does not merge with the appellate order. Consequently, the higher forum cannot insist on merits being gone into merely because an appeal was filed from the order of dismissal for delay.

Conclusion: The doctrine of merger did not apply, and the assessee was not entitled to a decision on merits in the second appeal. The issue was decided against the assessee and in favour of the Revenue.

Ratio Decidendi: An order rejecting an appeal solely as time-barred does not operate as an affirmance on merits and does not attract the doctrine of merger.

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