2005 (5) TMI 323 - SC - VAT and Sales Tax

Whether High Court was correct in rejecting the appellant s appeal challenging the order of the Tribunal dated April 29, 1997 when the appellant had not challenged the earlier order of the Tribunal dated February 24, 1996? Held that - Appeal dismissed. The appellant s appeal to the High Court was correctly dismissed. The grounds agitated before the High Court as indeed before this Court are those which had been taken in the second order of rejection dated September 8, 1995 which had been held unsustainable by the Tribunal in its order dated February 28, 1996 and from which order the appellant has not preferred any appeal. It is not open to the appellant to reopen the issue having accepted the same in respect of very same parties.

Issues:
1. Rejection of appellant's appeal challenging the order of the Tribunal dated April 29, 1997.
2. Rejection of the application for grant of an eligibility certificate under section 4 of the U.P. Trade Tax Act, 1948.
3. Multiple rejections by the Divisional Level Committee (D.L.C.) based on the Explanation to section 4A of the Act.
4. Tribunal's orders setting aside rejections and remanding the matter back to the D.L.C.
5. Third rejection by the D.L.C. on the same grounds previously negatived by the Tribunal.
6. Dismissal of appellant's appeal by the High Court and the Supreme Court.

Analysis:

1. The Supreme Court dismissed the appeal on the basis that the High Court was correct in rejecting the appellant's challenge to the Tribunal's order dated April 29, 1997. The dismissal was primarily due to the appellant not having challenged the earlier order of the Tribunal dated February 24, 1996, which was a crucial aspect in the case.

2. The respondent had applied for an eligibility certificate under section 4 of the U.P. Trade Tax Act, 1948, which was initially rejected by the Divisional Level Committee (D.L.C.) on May 1, 1993. Subsequently, the Sales Tax Tribunal set aside this rejection in 1995, citing a lack of reasonable opportunity for the respondent to be heard. The matter was then remanded back to the D.L.C. for reconsideration.

3. Despite the Tribunal's order negating the three grounds for rejection by the D.L.C. in 1996, a subsequent rejection was issued by the D.L.C. based on the same grounds. This led to the respondent filing another appeal before the Sales Tax Tribunal, which was allowed as the grounds for rejection had already been deemed unsustainable by the Tribunal.

4. The appellant's appeal to the High Court was rightly dismissed as it attempted to re-agitate the same grounds that had been previously addressed and rejected by the Tribunal. The High Court upheld the Tribunal's decision, emphasizing that the appellant could not reopen the issue after having accepted the Tribunal's decision on the same matter involving the same parties.

5. Ultimately, the Supreme Court upheld the decisions of the lower courts and dismissed the appeal. The Court affirmed that the appellant could not challenge the Tribunal's decision after failing to appeal the earlier order, thereby concluding the legal proceedings in favor of the respondent.

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