Compound levy option and finality in tax proceedings can be inferred from returns and tax payment, despite no separate form.

In tax proceedings, an intermediate finding that was not separately appealed did not bar the appellate tribunal from re-examining the liability issue in the final appeal; the prior remand order was not treated as res judicata. The commentary also states that a taxpayer should not be denied compound levy benefits merely for failing to file a separate formal option when the statutory form was not prescribed, because filing returns and paying tax at the prescribed rate can evidence valid exercise of the option. The tribunal's relief to the assessee was therefore sustained.

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Issues: (i) whether a finding reached at an earlier stage of tax proceedings, which was not separately appealed, barred reconsideration by the appellate tribunal in the later appeal; (ii) whether the assessee could be denied the benefit of compounding merely for not filing a separate formal option within the stipulated time under the compound levy provision.

Issue (i): Whether a finding reached at an earlier stage of tax proceedings, which was not separately appealed, barred reconsideration by the appellate tribunal in the later appeal.

Analysis: Finality of an intermediate order in tax matters does not, by itself, operate as res judicata in the ultimate statutory appeal. A preliminary finding becomes truly final only when it is not liable to be reopened in the appeal against the final assessment or when it is confirmed in such appeal. The appellate tribunal was therefore competent to examine the liability question on the merits notwithstanding the earlier unchallenged remand order.

Conclusion: The issue was rightly reopened before the tribunal and the objection based on finality failed, against the Revenue.

Issue (ii): Whether the assessee could be denied the benefit of compounding merely for not filing a separate formal option within the stipulated time under the compound levy provision.

Analysis: The compound levy provision contemplated an option, but the surrounding facts showed that the assessee had commenced the works contract towards the end of the year, filed returns, and paid tax at the prescribed rate. In the absence of any prescribed separate form, the filing of returns and payment of tax manifested the exercise of option. The assessee could not be denied the concessional rate merely for want of a separate formal declaration. The court also disapproved the tribunal's observation that the provision was merely directory, while still sustaining the relief on the facts.

Conclusion: The assessee was entitled to the compounded rate benefit, against the Revenue.

Final Conclusion: The revision failed, the tribunal's relief to the assessee was sustained, and the tax assessment dispute was finally resolved in favour of the assessee.

Ratio Decidendi: In statutory tax proceedings, an unappealed intermediate finding does not bar reconsideration in the appeal against the final assessment, and the benefit of a compound levy may be taken to have been validly exercised where the assessee's return and tax payment clearly evidence the option in the absence of a prescribed formal procedure.

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