2016 (1) TMI 142

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....- "i) Whether on the facts and circumstances of the case, the learned Tribunal is justified in holding that the first appellate authority was within his jurisdiction to remand the matter for fresh assessment including those issues which were not subject matter of appeal before him? ii) Whether on the facts and circumstances of the case, the appellate authority is empowered to decide those issues which have not been raised in the grounds of appeal and no appeal has been filed by the revenue? 3. A few facts relevant for the decision of the controversy involved as narrated in VATAP No.11 of 2015 may be noticed. The assessee is a dealer who is engaged in the manufacturing and sale of cement having its manufacturing units at Ropar and Bathinda in Punjab. The Ropar unit is exempted under the provisions of the Punjab General Sales Tax (Deferment and Exemption) Rules, 1991 read with notification dated 6.4.2005 issued under section 92(3) of PVAT Act for a period from 24.6.2004 to 23.6.2019 for an amount of ` 498,49,74,000/-. Similarly, Bathinda unit is exempt for an amount of ` 171,87,00,000/- for a period from 14.2.2001 to 13.2.2016. The assessee is registered with ass....

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....orded the version of the Excise and Taxation Inspector in detail to the effect that the impugned order was illegal and needed to be set aside as fresh orders were required to be made since the stock transfer price had been determined on the lower side and therefore, the case needed reconsideration in the interest of State revenue and justice. According to the assessee, infact, the appeal proceedings being carried out were converted into revisional proceedings for the benefit of the department by the first appellate authority and that too without granting any opportunity of hearing in that regard. The assessee went in appeal before the VAT Tribunal. During the pendency of the said appeal, the respondents initiated fresh assessment proceedings in pursuance to the directions given by the first appellate authority. The assessee approached this Court by filing CWP No.18476 of 2014. This court allowed the assessment proceedings to continue but directed that draft order shall be produced before the court on the next date of hearing. The assessee approached the Apex Court by filing SLP(C) No.26831 of 2014. The Apex Court granted liberty to the assessee to raise the issues before this court....

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....hority i.e. the DETC(A) had not been vested with the powers to act on his own motion. Only when an appeal was filed under Section 39 of the Act, did the appellate authority adjudicate upon the specific issues raised in the grounds of appeal or upon those which were urged before it at the time of hearing. The respondent was also given an opportunity to be heard and to reply to the points raised by the appellant. However, the appellate authority while deciding an appeal filed by a party could not take up issues on merit which had not been raised by the appellant. The respondent in the appeal could not invite the appellate authority to take up on merits points or issues not raised,pleaded or urged by the appellant. Accordingly, the DETC(A) was not held to be competent to go into the matters not raised in the appeal and set aside the order of the assessing authority. The relevant observations read thus:- "6. It is manifest that Section 39 ibid confers a right on a party aggrieved by any order passed under the Act or the rules made thereunder to file an appeal. When the order is made by the Assessing Authority, the appeal lies to the Deputy Excise and Taxation Commissioner ; wh....

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.... 2013.04.26 12:24 I attest to the accuracy and integrity of this document Chandigarh VATAP Nos.123 & 122 of 2012 -7- appeal filed by him. The court observed as under: "5. Considerable emphasis was laid by counsel for the appellant upon sub-section (4) which indicates what things the Appellate Tribunal may do while disposing of an appeal and in particular it was pointed out that under sub-section (4)(a)(i) the Appellate Tribunal has been given power "to enhance the assessment" while disposing of an appeal against an order of assessment after giving the party a reasonable opportunity of being heard and it was urged that such power could be exercised even when the appeal against the Appellate Assistant Commissioner's assessment order had been preferred by the assessee and not by the Department. To place such a construction on sub-section (4) (a)(i) would amount to ignoring the scheme of Section 39. Subsection (1) provides for an appeal being preferred against an assessment order passed by the Appellate Assistant Commissioner under Section 34(3) either by the assessee or by the Department through an officer empowered by the Government in that behalf. Further, sub- section ....

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....Cords Pvt. Ltd. case (supra). We may notice that the provisions under consideration in Vijaya Stores case (supra) were some what different. The Kerala Act contemplated filing of appeal and cross objections. Therefore, the court held that scheme of the Statue does not contemplate enhancement of Tax, without availing the remedy of appeal or cross objections. Though, in the Statue under consideration, there is no provision of filing of cross objections but that fact will not materially change the position of law. Therefore, we hold that without appeal or the provisions of cross- objections, the Tribunal or the Appellate Authorities under the Act could not enhance the tax lability. Consequently, the appeals are allowed and the order passed by the Tribunal and the first Appellate Authority are set aside. The matter is remitted back to the Joint Excise and Taxation Commissioner to pass fresh Kumar Vimal 2013.04.26 12:24 I attest to the accuracy and integrity of this document Chandigarh VATAP Nos.123 & 122 of 2012 -9- orders in accordance with the orders now passed by this court. However, the acceptance of these appeals will not preclude the Revenue to initiate such othe....

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....y the Government under sub-section (1), it shall be accompanied by such fee not exceeding one hundred rupees as may be prescribed. (4) In disposing of an appeal, the Appellate Tribunal may, after giving the parties a reasonable opportunity of being head either in person or by a representative. (a) in the case of an order of assessment or penalty. (i) confirm, reduce, enhance or annul the assessment or penalty or both; (ii) set aside the assessment and direct the asses sing authority to make a fresh assessment after such further enquiry as may be directed; or (iii) pass such other orders as it may think fit; or (b) in the case of any other order, confirm, cancel or vary such order." Considerable emphasis was laid by counsel for 'the appellant upon sub-s.(4) which indicates what things the Appellate Tribunal may do while disposing of an appeal and in particular it was pointed out that under 'sub-s.(4)(a)(i) the Appellate Tribunal has been given power 'to enhance the assessment" while disposing of an appeal against an order of assessment after giving the party a reasonable opportunity of being heard and it was ....