TaxTMI 
TaxTMI 
2014 (4) TMI 544
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....the Works Contract (Re Enacted) Act, 1989) read with section 55 (7) (b) of the Bombay Sales Tax Act, 1959 (BST Act)? (B) Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that it was not open for the Tribunal to exercise its powers of enhancement of tax under section 55 (7) (a) of the BST Act, as the appeal was restricted only to decide under the provisions of section 55 (7) (b) of the BST Act, as it was against the order of withdrawal of the interest on refund payable to the dealer? (C) Whether on the facts and in the circumstances of the case, the Tribunal was justified in rejecting the miscellaneous application made on behalf of the Commissioner for seeking enhancement of tax during the pendency of the appeal preferred by the Respondent dealer against the revision order? (D) Whether on the facts and in the circumstances of the case, and upon a true and correct interpretation of section 55 (7) (a), (b) and (c) of the BST Act the Tribunal erred in not holding that the appeal filed before it was covered by section 55 (7) (c) of the BST Act? 2. Since the facts as well as the questions of law in both the applications are identical, b....
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....under the Works Contract (Re Enacted) Act, 1989. 7. Being aggrieved by the said revision order, the Respondent preferred a 2nd appeal before the First Bench of the Maharashtra Sales Tax Tribunal (MSTT). In the said second appeal, the Applicant also filed a miscellaneous application for considering the issue of "Purchase Price" under section 2 (i) of the Works Contract (Re Enacted) Act, 1989 which would have resulted in enhancing the assessment by Rs.65,56,052/- for the FY 1996- 1997. The Respondent resisted the said miscellaneous application inter alia on the ground that an entirely new issue was being canvassed which was neither raised nor contested during the assessment. The Respondent further submitted that the appeal filed by it was challenging the withdrawal of interest granted on the refund amount and it had not challenged the order of assessment. The Respondent therefore contended that its appeal was filed under section 55 (7) (b) of the BST Act and not under section 55 (7) (a). The Respondent submitted that in view of the fact that its appeal was filed under section 55 (7) (b) the Tribunal had no power to enhance the assessment as that could be done only when an appeal was....
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....y, the amount of tax payable on the basis of such fresh assessment; (b) in an appeal against an order imposing a penalty, Inserted by Mah. 11 of 1987, w.e.f. 21-04-1987 [or interest] the appellate authority may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty ***[or interest]; (c) in any other case, the appellate authority may pass such orders in the appeal as it deems just and proper: Provided that, the appellate authority shall not enhance an assessment or a penalty ***[or interest,] or reduce the amount of draw-back, set-off or a refund of the tax, unless the Appellant has had a reasonable opportunity of showing cause against such enhancement or reduction." 13. Thereafter, the existing section 55(6) was renumbered as section 55(7) by Mah. Tax Laws (Levy and Amendment) Act, 2001. Section 55(7) reads as follows:- "(7) subject to such rules of procedure as may be prescribed, every appellate authority (both in the first appeal and the second appeal) shall have the following powers:- (a) in an appeal against an order of assessment, it may confirm, reduce, enhance or annul the assessment; or it may set aside the assessment and refer the ca....
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.... authority for making a fresh assessment in accordance with the directions given by it. Section 55 (7) (b) deals with the situation where an appeal is filed only against an order imposing a penalty or interest. In this situation the appellate authority may confirm or cancel such order or vary it so as to either enhance or reduce the penalty or interest. From a bare reading of sections 55 (7) (a) and 55 (7) (b) it is clear that in an appeal against an order imposing penalty or interest, the appellate authority can only enhance or reduce the penalty or interest awarded. It has no power or jurisdiction to confirm, reduce, enhance or annul the assessment. Those powers can be exercised by the appellate authority only when an appeal is filed under section 55 (7) (a) of the BST Act. Section 55 (7) (c) provides that in an appeal against an order in any other case, the appellate authority has the power to pass such orders in the appeal as it deems just and proper. 16. It was submitted by Ms. Palsuledesai, the learned AGP on behalf of the Applicant, that the second appeal filed by the Respondent before the MSTT did not fall under section 55 (7) (b) as the same was not against an order impos....
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.... power to enhance the assessment. In our view that power can be exercised by the appellate authority only under section 55 (7) (a) of the BST Act. We therefore find that the MSTT, in its order dated 15th April 2011, was correct in coming to the conclusion that it had no power of enhancement of the assessment whilst exercising powers in appeal against orders under sections 55 (7) (b) or 55 (7) (c) of the BST Act. In view thereof, the MSTT was fully justified in dismissing the reference applications filed by the Applicant. 19. We are supported in our view by a division bench judgement of this court in the case of Bombay Electric Supply & Transport (Best) Undertaking vs. State of Maharashtra Commissioner of Sales Tax, Mumbai reported in [2005] 140 STC 308. Paragraphs 30, 32 & 36 which are relevant for our purposes read as under:- "30. Section 55(6) of the BST Act as originally enacted (from January 1, 1960) empowered the appellate authority, subject to the prescribed rules of procedure to pass such order on appeal as it deems just and proper. There was no categorisation of appeals and in all appeals the appellate authority was required to pass just and proper order. By Maharashtra A....
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....in holding that in an appeal filed under section 55(6)(c) of the BST Act, the powers of the appellate authority are restricted to the issues raised in the appeal and, accordingly dismiss the miscellaneous application filed by the CST." 20. In the present case, the only issue raised in the second appeal filed by the Respondent, was the withdrawal of interest on the refund granted to it. This being the case, as held by the division bench, the powers of the appellate authority were restricted to the issues raised in the appeal. The issue of enhancement of assessment was not an issue in the second appeal filed by the Respondent and hence the MSTT had no power or jurisdiction to grant any enhancement. 21. The reliance placed by Ms. Palsuledesai, on the judgement of the Division Bench of this Court in the case of Ranchhoddas Bhaichand (supra) is wholly misplaced. Firstly, the facts of that case were wholly different from the facts before us. The question of law that was framed in that case was whether the Tribunal erred in law that Ranchhodas Bhaichand could not challenge the levy of tax by way of raising additional grounds, after the period of limitation of 60 days prescribed to file ....