2025 (4) TMI 1060 - HC - VAT / Sales Tax

Legality of remanding the matter while recording the finding in favour of the revisionist - HELD THAT - It is not in dispute that against the assessment order first appeal was filed by the revisionist which was partly allowed. Against the first appellate order both the revisionist and revenue preferred second appeals out of which the appeal filed by the revisionist was allowed and the appeal filed by the revenue was dismissed by remanding the matter back for fresh innings to the assessing officer to adjudicate the case as fresh while fresh material was available on record before the Tribunal to take the decision. This Court in the case of Sugar General Engineering Corporation has held that all the materials relating to the nature of transaction are available and on the basis of such materials decision is only required to be taken. Therefore in my view remand of the case is not justified. Deputy Commissioner (Appeals) in my opinion should decide the appeal on merits as its own stage. Conclusion - The Tribunal erred in remanding the matter for fresh assessment despite having recorded findings in favor of the revisionist and dismissing the revenue s appeal. The impugned order passed by the tribunal is set aside. The matter is remanded to the Tribunal to decide the matters by passing reasoned and speaking order after hearing all the stakeholder - revision allowed by way of remand.

Summary

1. ISSUES PRESENTED and CONSIDERED

- Whether the Commercial Tax Tribunal erred in remanding the matter back to the assessing authority for fresh assessment despite having recorded findings in favor of the revisionist?

- Whether the Tribunal, as the last fact-finding authority, ought to have decided the issues on the basis of the material available on record instead of remanding the case?

- Whether remanding the matter for fresh assessment amounted to granting the department an opportunity for a fishing and roving enquiry, which is impermissible?

- Whether the deletion of turnover enhancement based on purchase of wheat by twenty trucks was rightly considered and whether the appeal filed by the revenue on this ground was justifiably dismissed?

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 & 2: Legitimacy of the Tribunal's Remand Instead of Deciding on Merits

Relevant legal framework and precedents: The Court referred to a precedent from this High Court in the case of Indian Sugar & General Engineering Corporation (supra), which emphasized that appellate authorities should exercise the power to remand sparingly. The preference is to decide matters finally at the appellate stage when sufficient material is available on record. Remand is justified only when the appellate authority finds that the material on record is insufficient for decision and further factual investigation or enquiry is necessary. Rule 68(8) of the relevant Rules permits seeking reports if factual queries arise during appeal adjudication.

Court's interpretation and reasoning: The Court observed that the Tribunal had before it all the material necessary to decide the matter. The Tribunal had allowed the revisionist's appeal and dismissed the revenue's appeal but still remanded the matter for fresh assessment. The Court found this approach to be a misdirection because the Tribunal, as the final fact-finding authority, should have adjudicated the matter on merits rather than providing a fresh opportunity to the assessing authority to reconsider the same material.

Key evidence and findings: The assessment order was based on a survey report and rejection of books of accounts, estimating tax on turnover including purchase of wheat and packing materials from unregistered dealers. The revisionist's first appeal partly deleted the turnover enhancement related to twenty trucks and granted partial relief on best judgment assessment. Both parties filed second appeals; the Tribunal allowed the revisionist's appeal and dismissed the revenue's appeal but remanded the matter.

Application of law to facts: Since all relevant material was on record, the Tribunal's remand for fresh assessment was equivalent to granting the department a "fresh innings" without new material or investigation. This was contrary to the principle that remand should be sparingly used and only when factual investigation is necessary. The Court held that the Tribunal should have decided the appeal on merits and could have sought factual clarifications under Rule 68(8) if needed, rather than remanding the entire matter.

Treatment of competing arguments: The revenue argued that the revisionist had himself pleaded for an opportunity to rebut material regarding the twenty trucks, justifying remand. The Court, however, found that the Tribunal had recorded findings against the revisionist but remanded nonetheless, which was unjustified. The Court noted an apparent inadvertent mistake in recording the dismissal of the revenue appeal but emphasized that the remand was improper regardless.

Conclusions: The Court concluded that the Tribunal's remand was not justified as it had sufficient material to decide the matter. The remand was quashed, and the matter was directed to be decided by the Tribunal on merits expeditiously.

Issue 3: Whether Remand Amounted to Permitting Fishing and Roving Enquiry

Relevant legal framework and precedents: The principle against allowing fishing and roving enquiries is well-settled, emphasizing that tax authorities cannot be granted repeated opportunities to reopen settled issues without new material or cause.

Court's interpretation and reasoning: The Court observed that by remanding the matter for fresh assessment despite having all material before it, the Tribunal effectively permitted the department a fishing and roving enquiry. This was impermissible and contrary to the principle of finality in tax proceedings.

Key evidence and findings: The Tribunal's order remanded the matter for fresh adjudication despite dismissing the revenue's appeal and allowing the revisionist's appeal, indicating no new material or investigation was necessary.

Application of law to facts: The Court applied the principle that remand should not be used to prolong proceedings or allow repeated assessments on the same material, thereby preventing harassment and delay.

Treatment of competing arguments: The revenue's argument that the revisionist sought opportunity to rebut was rejected as the Tribunal had already recorded findings and remand was not warranted.

Conclusions: The Court held that the remand amounted to impermissible fishing and roving enquiry and was therefore improper.

Issue 4: Deletion of Turnover Enhancement Based on Twenty Trucks and Dismissal of Revenue Appeal on This Ground

Relevant legal framework and precedents: The assessment order included enhancement of turnover based on purchase of wheat via twenty trucks from unregistered dealers. The revisionist's first appeal deleted this enhancement partly. The revenue's appeal against this deletion was dismissed by the Tribunal.

Court's interpretation and reasoning: The Court noted that the Tribunal had allowed the revisionist's appeal and dismissed the revenue's appeal on this ground. However, despite this, the matter was remanded for fresh assessment, which was contradictory and unjustified.

Key evidence and findings: The deletion of turnover enhancement related to the twenty trucks was upheld in the appellate proceedings, and the revenue's challenge to this was rejected.

Application of law to facts: Since the revenue's appeal on this ground was dismissed, the Tribunal should have upheld the deletion and decided the matter accordingly without remand.

Treatment of competing arguments: The revenue contended that the revisionist's plea for opportunity to rebut justified remand, but the Court found this unpersuasive given the Tribunal's dismissal of the revenue's appeal.

Conclusions: The Court held that the deletion of the turnover enhancement was rightly upheld and remanding the matter despite this was erroneous.

3. SIGNIFICANT HOLDINGS

- "Remand should be made only in a situation when it is found that on the basis of the material available on record, decision is not possible at the appellate stage and the matter requires factual investigation and enquiry."

- "The appellate authority has power to remand the case for fresh decision but such power should be exercised sparingly and preference should be to decide the matter finally instead of keeping the matter pending for long time."

- "Effort should be that the proceeding should be finally closed and settled as early as possible. Unnecessary remand of the case, keep the matter pending for long time and delay in reaching to finality."

- "In the present case, all the materials relating to the nature of transaction are available and on the basis of such materials, decision is only required to be taken. Therefore, in my view, remand of the case is not justified."

- The Tribunal erred in remanding the matter for fresh assessment despite having recorded findings in favor of the revisionist and dismissing the revenue's appeal.

- Remanding the matter amounted to granting the department an impermissible "fresh innings" and facilitated fishing and roving enquiry.

- The matter is remanded to the Tribunal with directions to decide the appeals by passing reasoned and speaking orders expeditiously after hearing all stakeholders.