1998 (12) TMI 571 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Power of the Trade Tax Tribunal to entertain disputes not arising from the first appellate order.
2. Jurisdiction of the Commissioner to challenge the assessment order in the second appeal.
3. Tribunal's power to enhance the assessment in the absence of an appeal or cross-objection by the department.
4. Scope of the Tribunal's powers under section 10 of the U.P. Trade Tax Act.

Issue-wise Detailed Analysis:

1. Power of the Trade Tax Tribunal to entertain disputes not arising from the first appellate order:
The primary question of law was whether the Trade Tax Tribunal, while hearing a second appeal under section 10(2) of the U.P. Trade Tax Act, could entertain a dispute raised by the Commissioner that did not arise from the first appellate order. The Tribunal had no jurisdiction to entertain or deal with matters not covered by the first appellate order under section 9 of the Act. The Tribunal's powers are limited to addressing issues arising out of the first appellate order and cannot extend to matters not appealed against initially.

2. Jurisdiction of the Commissioner to challenge the assessment order in the second appeal:
The Commissioner of Trade Tax does not have the right to appeal against an assessment order under section 9 of the Act. The Commissioner can only revise the order using the powers under section 10-B. The appeal to the Tribunal under section 10(2) is restricted to challenging the order passed under section 9 and cannot revert to challenge the original assessment order. Hence, the Commissioner could not challenge the quantum of turnover determined by the assessing officer in the second appeal.

3. Tribunal's power to enhance the assessment in the absence of an appeal or cross-objection by the department:
The Tribunal's power to enhance the assessment is not a general power and can only be exercised if there is an appeal by the Commissioner against the reduction of the assessment by the first appellate authority. The Tribunal cannot enhance the assessment in the absence of an appeal or cross-objection by the department. This principle was supported by the Supreme Court's ruling in State of Kerala v. Vijaya Stores, where it was held that the Tribunal had no jurisdiction to enhance the assessment without an appeal by the department.

4. Scope of the Tribunal's powers under section 10 of the U.P. Trade Tax Act:
The Tribunal's powers are not as extensive as those of the first appellate authority under section 9. The first appellate authority has the jurisdiction to enhance the assessment even if the enhancement does not arise from the grounds of appeal. However, no such power is conferred on the Tribunal under section 10. The Tribunal's jurisdiction is confined to the matters dealt with in the appellate order under section 9 and does not extend to revisiting the original assessment order.

Conclusion:
The revision petitions were allowed, and the Tribunal's order dated October 13, 1997, was set aside. The Commissioner's appeals challenging the turnover determined by the assessing officer were dismissed as not maintainable. The Tribunal was directed to decide on other controversies arising out of the order under appeal. The revisionist was awarded costs of Rs. 3,000 from the respondent.

Petitions allowed.