1984 (10) TMI 42 - SC - VAT and Sales Tax

High Court corrects Tribunal error on appeal process, emphasizes joint hearing for fairness

The High Court found the Tribunal incompetent for allowing the Commissioner's appeal after dismissing the assessee's appeal. The doctrine of merger was ... Whether Doctrine Of Merger is applied in the present case? Held that:- On the facts of the case, we do not accept the view of the High Court that the doctrine of merger applied. Both the assessee and the Commissioner had a statutory right of appeal to the Tribunal against the decision of the Assistant Commissioner and in exercise of that right two separate appeals had been filed. On account of the mistake of the Tribunal in not clubbing the two appeals, the statutory right of appeal of one party could not be negatived. It is a well-settled proposition of law that no party should suffer on account of the mistake of the court or the Tribunal. That apart, in a situation like this, the doctrine of merger has no application and the High Court was in error in throwing out the Commissioner's appeal by applying the doctrine of merger. Appeal allowed. Issues:1. Competence of the Tribunal to decide the appeal filed by the Commissioner after dismissing the appeal filed by the assessee.2. Application of the doctrine of merger in the context of separate appeals filed by the assessee and the Commissioner.3. Proper procedure for hearing and deciding appeals filed by both the assessee and the Commissioner.Analysis:Competence of the Tribunal:The judgment involves a situation where the Tribunal dismissed the appeal filed by the assessee but later allowed the appeal filed by the Commissioner, enhancing the turnover. The assessee objected to the Tribunal deciding the Commissioner's appeal after dismissing the assessee's appeal. The High Court held that the Tribunal was incompetent to interfere with its previous order by allowing the Commissioner's appeal after dismissing the assessee's appeal. The doctrine of merger applied in this case, as established by the decision in Jamuna Das Ram Kishan v. Commissioner of Sales Tax [1976] 38 STC 443. The Tribunal should have heard and decided both appeals together to avoid such situations in the future.Application of Doctrine of Merger:The High Court applied the doctrine of merger in the context of the separate appeals filed by the assessee and the Commissioner. The High Court held that once the Tribunal decided and dismissed the assessee's appeal, the judgment of the Assistant Commissioner stood merged in the Tribunal's decision. However, the Supreme Court disagreed with this view. Both the assessee and the Commissioner had a statutory right of appeal to the Tribunal against the decision of the Assistant Commissioner. The mistake of the Tribunal in not clubbing the two appeals should not negate the statutory right of appeal of one party. The doctrine of merger was found to be inapplicable in this situation, and the High Court erred in applying it to throw out the Commissioner's appeal.Proper Procedure for Hearing and Deciding Appeals:The Supreme Court emphasized the importance of hearing and deciding appeals filed by both the assessee and the Commissioner together to avoid complications and ensure justice to both parties. The Court suggested that both appeals should be reheard by the Tribunal on the same day and disposed of by a common judgment. By setting aside the High Court's order and the separate orders of the Tribunal, the Supreme Court directed that both appeals should be reheard to overcome the difficulties arising from the initial mishandling of the appeals. The parties' counsels agreed to this approach, and no costs were awarded in this matter.