Conditional tax payment without prejudice to appeal rights does not bar challenge; open remand must be read broadly.

A deposit made pursuant to a conditional court order to resume business did not amount to unconditional acceptance of tax liability, so the assessee remained entitled to challenge the assessment. The appellate order directed fresh consideration of purchase details and refund claim, and was therefore an open remand covering all assessment issues, not merely penalty. The assessing officer erred in treating the payment as acceptance of liability, and the subsequent appeal could not be rejected as functus officio. The assessment and appellate order were interfered with, and the matter was remanded for fresh consideration with a personal hearing on all issues.

---

---

Issues: (i) Whether payment of tax pursuant to the Division Bench order precluded the petitioner from challenging the assessment; (ii) whether the appellate remand was an open remand or confined only to penalty; (iii) whether the assessing officer was justified in treating the tax payment as acceptance of liability while passing the reassessment order; and (iv) whether the appellate authority was right in rejecting the subsequent appeal on the ground of functus officio.

Issue (i): Whether payment of tax pursuant to the Division Bench order precluded the petitioner from challenging the assessment.

Analysis: The payment directed by the Division Bench was treated as a condition enabling the petitioner to restart business and pursue the pending appeal. The direction to maintain charge over the business until disposal of the appeal showed that the payment was not intended as an unconditional acceptance of liability. The deposit was thus made without prejudice to the petitioner's appellate rights.

Conclusion: The petitioner was not estopped from challenging the assessment.

Issue (ii): Whether the appellate remand was an open remand or confined only to penalty.

Analysis: The appellate order directed fresh consideration, verification of purchase details, and examination of refund claim, and expressly required the assessing officer to take up the case afresh. The reference to penalty in the factual narration did not restrict the scope of the remand. The remand therefore covered all issues arising from the assessment.

Conclusion: The remand was an open remand and not confined to penalty.

Issue (iii): Whether the assessing officer was justified in treating the tax payment as acceptance of liability while passing the reassessment order.

Analysis: The assessing officer proceeded on an premise that the appeal related only to waiver of penalty and that the petitioner had accepted the tax liability. That approach misconstrued both the effect of the Division Bench order and the scope of the remand, and therefore the reassessment was founded on an erroneous understanding of the record.

Conclusion: The assessing officer was not justified in so treating the petitioner's payment.

Issue (iv): Whether the appellate authority was right in rejecting the subsequent appeal on the ground of functus officio.

Analysis: Since the earlier remand was open and the petitioner's payment did not amount to abandonment of the challenge, the subsequent appeal against the fresh assessment remained maintainable. The conclusion that the appellate authority had become functus officio was unsustainable.

Conclusion: The rejection of the appeal on the ground of functus officio was incorrect.

Final Conclusion: The assessment and the appellate order were interfered with, and the matter was remanded to the assessing officer for fresh consideration after giving the petitioner an opportunity of personal hearing on all issues.

Ratio Decidendi: A deposit made pursuant to a conditional order for the limited purpose of resumption of business does not amount to unconditional acceptance of tax liability, and where an appellate order directs fresh consideration, the remand is to be treated as open unless the restriction is expressly confined by the order itself.

---