1981 (5) TMI 113 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Applicability of principles underlying section 105(2) of the Code of Civil Procedure to orders of remand by the Appellate Assistant Commissioner and the Appellate Tribunal.
2. Bar of res judicata based on general principles of that doctrine.

Summary:

1. Applicability of Section 105(2) of the Code of Civil Procedure:

The petitioners were assessed to sales tax u/s 17(3) of the Kerala General Sales Tax Act. They contested their liability, arguing they had discontinued their business. The assessing authority overruled their objection, and the Appellate Assistant Commissioner confirmed the assessment but remanded the case for fresh orders. The petitioners reiterated their objection, but the assessing authority and the Appellate Assistant Commissioner dismissed their appeals. The Kerala Sales Tax Appellate Tribunal upheld the dismissal, stating that the petitioners could not challenge the liability as they did not appeal against the initial remand order, drawing an analogy to section 105(2) of the Code of Civil Procedure.

The High Court examined whether the principles of section 105(2) of the Code of Civil Procedure apply to the Act. Section 105(2) states that if an appeal is not filed against an order of remand, its correctness cannot be challenged in an appeal from the final decision. The Court noted that section 105(2) is specific to the Code of Civil Procedure and does not apply to proceedings under the Act. The Act does not contain provisions similar to section 105(2), and the general principles of law based on expediency apply instead. Judicial precedents support this conclusion, indicating that interlocutory orders can be challenged in appeals from final decisions unless explicitly barred by statute.

2. Bar of Res Judicata:

The High Court considered whether the principle of res judicata barred the petitioners from challenging the liability to assessment. The learned Advocate-General argued that the decision of the Appellate Assistant Commissioner became res judicata as no appeal was filed against the remand order. The Court clarified that res judicata presupposes the finality of the earlier decision. If the previous decision is liable to be challenged at a subsequent stage, the fact that no appeal was filed at an earlier stage does not make it res judicata.

The Supreme Court in Satyadhyan v. Smt. Deorajin Debi (A.I.R. 1960 S.C. 941) held that interlocutory orders not appealed from can be challenged in an appeal from the final decree or order. The Court reiterated that finality is essential for a decision to be res judicata. An interlocutory order is only provisionally final and becomes really final only if no appeal is filed against the ultimate decision or if confirmed in such appeal.

In the present case, the Appellate Tribunal erred in holding that it had no jurisdiction to decide the issue of liability. The Tribunal's order was set aside, and the cases were remitted for fresh disposal on the merits.

Ordered accordingly.