Doctrine of merger bars reliance on an order set aside in appeal for challenging later proceedings.

An order that has been set aside on appeal ceases to have independent existence in law, and its observations cannot be treated as surviving findings for use in later proceedings after remand. The doctrine of merger applies once the superior forum annuls the earlier order, so the earlier reasoning cannot form a valid basis to sustain or challenge a subsequent order. On that footing, the Revenue could not rely on remarks in the set-aside order to support its appeal, and the appeal failed as not maintainable on the ground urged.

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Issues: Whether the Revenue could sustain the appeal on the basis of observations contained in an earlier order that had already been set aside in appeal and did not survive in law.

Analysis: The earlier order had been set aside by the appellate forum and the matter was remanded for de novo consideration. Once the superior forum had annulled that order, its observations could not be treated as continuing findings or as a valid basis to challenge the later order. The doctrine of merger applied, and the earlier order ceased to have independent existence in law. The appeal could not therefore be founded on remarks recorded in that set-aside order.

Conclusion: The Revenue's challenge failed, and the appeal was not maintainable on the basis urged.

Ratio Decidendi: An order that has been set aside in appeal loses its independent legal existence, and its observations cannot be relied upon to impeach or sustain subsequent proceedings after remand.

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