TaxTMI 
TaxTMI 
2020 (1) TMI 754
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....e U.P. Trade Tax Act, 1948 (hereinafter referred to as "the Act, 1948") as well as under Section 7(1) and 7(2) of the Central Sales Tax Act. 4. During course of business the revisionist entered into lease agreement with a firm at New Delhi on 20.08.1993 and 24.08.1993, for the purpose of leasing out certain machinery such as turbine, turbo alternator and other machineries to the sugar unit of the lessee i.e. M/s Gangeshwer Limited at Deoband and Ram Kola, both situated in the State of U.P. 5. Contention of the revisionist is that the lease rent received by the revisionist from the lessee, was not amenable to levy of tax on the transfer of right to use the goods as per Section 3F of the Act, 1948 and therefore they were not liable for payment of any tax, as such. 6. The vires of Section 3F of the Act, 1948 were challenged before this High Court by way of writ petitions and by the this Court by means of judgment in the case of V.K. Singhal Vs. State of U.P., 1995 UPTC 337 (decided on 11.01.1995), the provisions of Section 3F of the Act, 1948 were declared as ultra vires. 7. At the time of assessment for the year 1995-96, the amount received on account of lease rent from t....
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....y the said order, filed second appeal before the Trade Tax Tribunal, Allahabad (hereinafter referred to as "the Tribunal") being Second Appeal No. 294 of 2005, which has been rejected by means of order dated 18.01.2006, which has been impugned in the instant revision. 13. Learned counsel for the revisionist has raised following contentions : (I) In exercise of power conferred under Section 22 of the Act, 1948, an application can be made for rectification of a mistake, where as in the present case there was no mistake committed in the order of the appellate authority and therefore the said application was itself not maintainable. (II) The application seeking rectification of the order of appellate authority was not maintainable inasmuch as the order of the assessing authority stood merged with the order of the appellate authority and the order which is not in existence cannot be rectified and therefore the application filed by the revenue was misconceived. (III) By means of impugned order the Tribunal has upheld the application for rectification which does not amount to rectification of mistake, instead it is a fresh imposition of tax liability which sh....
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....e the amended Section 3F had come into existence and it was open to the assessing authority to assess the revisionist in the light of amended provisions of the Act, 1948. The assessment order dated 07.06.2002, it seems was passed in ignorance of the aforesaid amendment and the amount of lease rent disclosed by the revisionist was not put to tax. 21. The issue regarding liability of tax under Section 3F with regard to lease rent was not carried by the revisionist to the appellate authority, rather appeal was preferred with regard to other issues from which the revisionist was aggrieved with and the issue regarding taxability of lease rent became final. The revenue also did not seek to reopen the assessment in this regard in exercise of powers as conferred by the provisions contained in Act, 1948. It is only after passing of the final order by the first Appellate Authority on 01.01.2003 that the application for rectification of the said order was moved on 17.05.2004, for rectification of the mistake in the appellate order dated 01.01.2003. 22. A perusal of the application dated 17.05.2004, which is part of the record of the instant revision, would indicate that it has been clea....
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....thority or the Tribunal or the High Court may, on its own motion or on the application of the dealer or any other interested person rectify any mistake in any order passed by him or it under the Act, apparent on the record within three years from the date of the order sought to be rectified : Provided that where an application under this subsection has been made within such period of three years, it may be disposed of even beyond such period : Provided further that no such rectification as has the effect of enhancing the assessment, penalty, fees or other dues shall be made unless reasonable opportunity of being heard has been given to the dealer or other person likely to be affected by such enhancement. (2) Where such rectification has the effect of enhancing the assessment, the authority concerned shall serve on the dealer a revised notice of demand in the prescribed form and therefrom all the provisions of the Act and Rule framed thereunder shall apply as if such notice had been served in the first instance." 28. Considering the arguments of learned counsel for the parties as well as perusal of the application under Section 22 of the Act, 1948 moved....
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....of two out of eight deductions claimed by the assessee. The Tribunal was in that appeal concerned only with the question whether the adjudicating authority was justified in disallowing deductions under the said two heads. It had no occasion to examine the admissibility of the deductions under the remaining six heads obviously because the assessee's appeal did not question the grant of such deductions. Admissibility of the said deductions could have been raised only by the Revenue who had lost its case qua those deductions before the adjudicating authority. Dismissal of the appeal filed by the assessee could consequently bring finality only to the question of admissibility of deductions under the two heads regarding which the appeal was filed. The said order could not be understood to mean that the Tribunal had expressed any opinion regarding the admissibility of deductions under the remaining six heads which were not the subject matter of scrutiny before the Tribunal. That being so, the proceedings instituted by the Commissioner, Central Excise pursuant to the order passed by the Central Board of Excise and Customs brought up a subject matter which was distinctively different from ....
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....ective application of Amendment Act, restoring Section 3F and validating all actions take thereunder. The revision being devoid of merit is, accordingly dismissed." 35. Learned counsel for the revisionist has urged that the said judgment would not be binding to decide the controversy raised in the present revision which pertains to the assessment year 1995-96, and that principle of res-judicata are not applicable for subsequent assessment years, and also a binding judgment of the Division Bench of this Court in the case of M.R. Soap (Pvt.) Ltd. (supra) was not considered by the learned Single Judge. The Court in M.R. Soap (Pvt.) Ltd. (supra), in para nos. 12, 13 and 14 observed as under : "12. It will be seen that the jurisdiction of the Appellate Authority under Section 9(3) is of the widest possible amplitude. The Appellate Authority cannot only confirm, vary or annul the order of assessment but may even enhance the amount of assessment, irrespective of whether such enhancement arises from the points raised in the grounds of appeal or otherwise considered by the Assessing Authority. The appellate power under this provision, is, as observed by the learned Chie....
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....y confirm, vary or annul the order of the assessing authority but may enhance and assess the assessee to tax on the issue which was not taken up before the assessing authority and therefore concluded that in exercise of power under Section 22 of the Act, 1948, the assessment cannot be reopened as has been sought to be done in the present case. 38. It has further been contended by learned counsel for the revisionist that the order of assessment on remand was passed on 07.06.2002, thereby no tax was levied on the proceeds of lease rent taken from M/s Gangeshwar Limited under the belief that provisions of Section 3F of the Act, 1948 were declared ultra vires by this Court in the case of V.K. Singhal (supra). An appeal was preferred by the revisionist on some other issues but the issue regarding lease rent attained finality. Even if the stand of the revenue is accepted that no tax was levied on the lease rent, taking into account the fact that same had been declared ultra vires and the assessing authority was ignorant about the reintroduction of the same provision by means of subsequent amendment in the Act, 1948, it was always open for the revenue to exercise the power contained un....