2022 (12) TMI 1294 - HC - VAT and Sales Tax

High Court overturns Tribunal's remand decision, emphasizes adherence to legal standards for fair and timely adjudication.

M/s Johnson Matthey Chemicals India Private Limited Versus Commissioner of Commercial Tax, U.P.

The High Court set aside the Tribunal's remand decision and directed the Tribunal to decide the appeals based on the material available on record. The ... Validity of remanding the case - Whether, the Tribunal, being a last fact finding authority and empowered to examine and adjudicate the factual and legal issues, has erred in remanding the appeal back to the Assessing Authority when all the material for deciding the case were available on record? - HELD THAT:- Through the present revisions, the assessee has tried to raise a question of law that whether the Tribunal which is the last fact finding court and empowered to examine and adjudicate the factual and legal issue, has erred in remanding back the matter to the assessing authority when all the materials for deciding the case was available on record. The matter of remand by various authorities, Tribunals and courts have been under active consideration of this Court and also of the Hon’ble Apex Court for quite a long time. This is a case which was before the Commercial Tax Tribunal which is the last fact finding court and clothed with both power of deciding the appeal on law and fact, had remanded back the matter to the assessing authority setting aside both orders of the assessment as well as of the first appellate authority. In the present case, the Tribunal which was deciding the second appeal was required to frame the point of determination and thereupon records its finding and the decision taken by it, but only after noting the arguments of both the parties, the Tribunal remanded back the matter to the assessing authority to consider certain documents and make fresh assessment - The Hon’ble Apex Court in SHIVAKUMAR & ORS VERSUS SHARANABASAPPA & ORS [2020 (4) TMI 907 - SUPREME COURT] while considering the scope of remand had held order of remand is not to be passed in a routine manner because an unwarranted order of remand merely elongates the life of the litigation without serving the cause of justice. An order of remand only on the ground that the points touching the appreciation of evidence were not dealt with by the trial court may not be considered proper in a given case because the first appellate court itself is possessed of jurisdiction to enter into facts and appreciate the evidence. In the present case, the Tribunal has not recorded any finding to the effect that the assessing authority has failed to deal any issue or has not considered the same which was essential for the right decision of the suit. The Tribunal had only required the revisionist-Company to place certain documents before the assessing authority on the basis of which the assessing authority was to arrive at the finding. The documents mentioned in the judgment was already brought to the notice of the assessing authority through the reply submitted by the assessee on show-cause notice on 12.03.2020 and the same was dealt with by the assessing authority in its assessment order - The order of remand has to be seen within the parameters of Rule 23, 23A and 25 of and not beyond that. Apart from Order 41 of CPC, there is no other provision which provides for the concept of remand. It is a borrowed provision by the taxing authorities from Code of Civil Procedure, 1908. The taxing authorities as well as the Tribunal should first understand the concept of remand before applying it. It should not be in a casual manner. Long litigation in commercial and business matter only spoils the image of the State and its functionaries and cause great loss to business world. Tribunal was not correct in remanding back the matter to the assessing authority when all the material was before it and should have dealt with each of the material and decided the same - the order dated 08.08.2022 passed by the Tribunal is hereby set aside and the matter is remitted back to the Tribunal to decide both the appeals of the assessee in accordance with law on the material available on record, as expeditiously as possible. The revisions stands partly allowed. Issues Involved:1. Whether the Tribunal erred in remanding the appeal back to the Assessing Authority despite having all the material for deciding the case on record.Issue-wise Detailed Analysis:1. Tribunal's Remand Decision:The core issue revolves around the Tribunal's decision to remand the matter back to the Assessing Authority. The revisionist argued that the Tribunal, being the last fact-finding authority, should have adjudicated the case based on the material already available on record. The Tribunal's remand was challenged on the grounds that it unnecessarily prolonged litigation and avoided deciding the matter on merits.2. Background and Facts:The revisionist, a company engaged in manufacturing catalysts, faced an assessment for the year 2014-15. After a survey by the Special Investigation Branch (SIB) and subsequent assessments, the Assessing Authority raised a demand of Rs. 3,07,89,620/-. The revisionist challenged this assessment through various appellate stages, culminating in the Tribunal's decision to remand the case.3. Legal Framework for Remand:The judgment extensively discusses the principles of remand under Order 41 Rules 23, 23-A, and 25 of the Code of Civil Procedure (CPC). Rule 23 allows remand when a case is disposed of on a preliminary point, and the appellate court reverses the decree. Rule 23-A permits remand for retrial when the case is disposed of otherwise than on a preliminary point. Rule 24 restricts remand when sufficient evidence is on record, and Rule 25 allows remand for framing or trying essential issues omitted by the trial court.4. Tribunal's Failure to Adhere to Legal Standards:The Tribunal's decision was scrutinized for not adhering to the principles of remand. It was noted that the Tribunal did not frame points for determination or provide reasons for remand, as mandated by Rule 63(5) of the U.P. Value Added Tax Rules. The Tribunal's action was seen as a shortcut to avoid deciding the matter on merits, which is against the legal standards set by higher courts.5. Precedents and Judicial Opinions:The judgment references several precedents, including decisions from the Supreme Court, emphasizing that remand should not be routine and should only be used when necessary. The cited cases highlight that appellate courts should decide on merits when sufficient evidence is available, rather than remanding the matter.6. Tribunal's Role and Responsibilities:The judgment underscores the Tribunal's role as the last fact-finding authority, responsible for deciding appeals on both facts and law. It criticizes the Tribunal's practice of remanding cases without due consideration, which leads to prolonged litigation and inefficiency in tax matters.7. Conclusion and Directions:The High Court set aside the Tribunal's order dated 08.08.2022, directing the Tribunal to decide the appeals on the material available on record expeditiously. The judgment emphasizes the need for the Tribunal to adhere to legal standards and avoid unnecessary remands, thereby ensuring timely and fair adjudication.Final Outcome:The revisions were partly allowed, and the question of law was decided in favor of the assessee, directing the Tribunal to adjudicate the appeals based on the existing record.