TaxTMI 
TaxTMI 
2010 (2) TMI 1072
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....ection 55 of the Bombay Sales Tax Act, 1959? (b) Whether, on the facts and circumstances of the case and on true and correct interpretation of section 36(3)(c) of the Bombay Sales Tax Act, 1959, the Tribunal was justified in holding that the order passed by the Appellate Deputy Commissioner levying for the first time penalty under section 9(2A) of the Central Sales Tax Act, 1956 read with section 36(3)(d) of the Bombay Sales Tax Act, 1959 was not an original order passed in exercise of the powers under section 36 of the Bombay Sales Tax Act, 1959? (c) Whether, on the facts and circumstances of the case and on true and correct interpretation of the provisions in section 55 of the Bombay Sales Tax Act, 1959, the Tribunal was justified in holding the appeal against penalty levied for the first time by the Appellate Deputy Commissioner, as a third appeal and in dismissing it on the ground of its being not maintainable?" The statement of case sent by the Tribunal states that, the applicant, who was the appellant in Second Appeal No. 159 of 2000 before the Tribunal is a dealer registered under the provisions of the BST Act, 1959 as well as the Central Sales Tax Act, 1956 (in sho....
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.... were referred for the opinion of this court. Mr. Thakar, learned counsel appearing for the applicant, submitted that an action of the Deputy Commissioner of Sales Tax (Appeals) levying penalty for the first time in appeal is without jurisdiction. According to him, the appellate powers contained in section 55(6) of the BST Act, 1959 empower the appellate authority either to cancel or enhance or reduce the interest but there is no power to levy any fresh penalty. In his submission, levy of penalty for the first time while deciding the appeal under section 55(6)(b) is without jurisdiction. He submitted that the appellate authority did not have powers to impose such penalty. He placed reliance on section 55(6)(b) of the BST Act, 1959. Per contra, Mr. Sharma, learned Additional Government Pleader appearing for the respondents urged that the Sales Tax Officer by assessment order dated March 30, 1996 for the financial year April 1, 1992 to March 31, 1993, inter alia, levied interest on the applicant-assessee under section 9(2) of the CST Act, 1956 read with section 36(3)(b) of the BST Act, 1959. He further submitted that the first appellate order dated August 30, 1997 passed....
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....me was done by issuing the show-cause notice to the applicant-assessee and after hearing him the order in second appeal as required was passed. The learned Additional Government Pleader further submitted that section 55 of the BST Act, 1959 deals with appeals. Sub-section (2) of section 55 provides that in the case of an order passed in appeal by the Assistant Commissioner or by the Deputy Commissioner, a second appeal shall lie at the option of the appellant therein either to the Commissioner or to the Tribunal. He submitted that in the instant case, the applicantassessee opted to appeal to the Commissioner and the appeal was heard by the Deputy Commissioner of Sales Tax exercising the powers of the Commissioner under section 20(5) of the BST Act, 1959. He further submitted that sub-section (3) of section 55 provides that every order passed in appeal under this section shall be final subject to the provisions of section 57 (revision), section 61 (reference) and section 62 (rectification of mistakes). He, therefore, submitted that the order passed by the Deputy Commissioner in second appeal has become final under the BST Act, 1959. The right of appeal is a creation of statute....
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....t the taxpayer's 'opponent', in the strictly procedural sense of the term, so too the appellate authority sitting in appeal over the assessing authority's order of assessment is not strictly an arbitral Tribunal deciding a contested issue between two litigants ranged on opposite sides. In a tax appeal, the appellate authority is very much committed to the assessment process. The appellate authority can itself enter the arena of assessment, either by pursuing further investigation, or causing further investigation to be done. It can do so on its own initiative, without being prodded by any of the parties. It can enhance the assessment, taking advantage of the opportunity afforded by the taxpayer's appeal, even though the appeal itself has been mooted only with a view to a reduction in the assessment. These are special and exceptional attributes of the jurisdiction of a tax appellate authority. These attributes underline the truth that the appellate authority is no different, functionally and substantially, from the assessing authority itself. . ." The learned Additional Government Pleader further submitted that there is no provision in the BST Act, 1959 for th....
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.... the assessment proceedings and the penalty proceedings are distinct and different, therefore, if no penalty is levied in the order of assessment, then legally there is no "order" imposing penalty. In the absence of an order imposing penalty, the revisional authority cannot in exercise of its power of suo motu revision impose penalty for the first time. In the present case, admittedly, penalty was not levied initially at the time of passing the assessment order but the same was levied by the Deputy Commissioner of Sales Tax (Appeals) in the second appeal. Plain reading of section 55(6)(b) of the BST Act, 1959 shows that the appellate authority may confirm or cancel the order against which the appeal is preferred or vary it so as to either enhance or to reduce the penalty. Section 55(6)(b) of the BST Act, 1959 reads as under: "(b) in an appeal against an order imposing a penalty, the appellate authority may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty;" The apex court in the matter of Food Corporation of India v. Commissioner of Sales Tax, M.P. reported in [1998] 109 STC 131 held that at appellate stage the authority cannot impose....