2014 (4) TMI 493 - HC - VAT and Sales Tax

Tribunal Exceeded Jurisdiction in Tax Appeal Review

The High Court held that the tribunal exceeded its jurisdiction by setting aside the order of assessment due to the appellant's failure to fulfill the ... Validity of Tribunal Order – Scope of appeals – Scope before tribunal - Held that:- The scope of appeals before tribunal being first and second appeal are laid down in section 73 of GVAT Act – u/s 73(6), tribunal would pass such order on the appeal as it seems just and proper - Since that portion of the order of AO which was in favour of assessee was not the subject matter of appeal, in terms of section 73(6), Tribunal could not have set aside the said order - The matter would have perhaps be different, had there be any cross objections before the tribunal by the Revenue - The scope of the appeal before the tribunal was therefore, confined to finding out whether AO was correct in confirming central sales tax demand of Rs. 6.77 lakhs and further whether the first appellate authority was justified in rejecting the appellant’s appeal – Therefore, appeals of the appellant are allowed - The order of AO dated 30.10.2012 is restored - The appellant’s appeal before the tribunal being Second Appeal No.235/2013 is restored to tribunal and shall be decided afresh – Decided in favour of assessee. Issues:1. Tribunal setting aside the entire order of assessment due to non-fulfillment of predeposit condition.2. Jurisdiction of the tribunal under section 73 of the VAT Act.3. Scope of appeals before the tribunal - first and second appeal.4. Correctness of the tribunal's decision in setting aside the order of assessment.5. Consideration of cross objections and their impact on the tribunal's decision.The High Court analyzed the case where the tribunal set aside the order of assessment due to the appellant's failure to fulfill the predeposit condition. The Assessing Officer had passed fresh orders without the predeposit being made, leading to the deletion of the entire state tax demand but confirmation of the central sales tax demand. The Commissioner (Appeals) upheld this decision, prompting the appellant to appeal to the tribunal. The High Court held that the tribunal overstepped its jurisdiction by setting aside the order of assessment, which was not the subject of appeal before it. The tribunal's power under section 73 of the VAT Act is limited to the scope of appeals laid down in the Act.The High Court emphasized that the tribunal's authority to pass orders is subject to the rules of procedure prescribed. Without any cross objections by the Revenue and with the absence of such objections by the appellant, the tribunal's scope was confined to assessing the correctness of the central sales tax demand confirmation and the Commissioner's decision. The court reinstated the Assessing Officer's order and directed the tribunal to reconsider the appellant's appeal on its merits in accordance with the law.Furthermore, the High Court addressed the Assessing Officer's oversight in proceeding with the assessment without verifying the predeposit. Despite the reduced duty demand, the court decided not to revive the predeposit requirement. The Commissioner was given the discretion to review the assessment order if necessary under section 75 of the VAT Act. The appeals were allowed, civil applications disposed of, and the court clarified the position on the predeposit issue and potential revision by the Commissioner.Overall, the High Court's judgment focused on the tribunal's jurisdiction, the scope of appeals, the correctness of the tribunal's decision, and the importance of following procedural rules and considering cross objections in appellate proceedings.