9911796707
TMI Blog1963 (9) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... essment years 1951-52 and 1952-53. The claim of the petitioner that the sales of copper, tin, nickel and zinc or any alloy containing any of these metals was exempt from levy of sales tax under notification no. ST-3085/X-902(16), 49 dated 3rd August, 1949, issued under the U.P. Sales Tax Act, was not accepted by the Sales Tax Officer. The Judge (Appeals) Sales Tax allowed the appeal of the petitioner against the assessment order aforesaid and upheld the contentions of the petitioner that the said alloy was exempt. The department filed revisions against the aforesaid appellate orders before the Judge (Revisions), who upheld the order of the Judge (Appeals) for the assessment for 1951-52. The department filed a reference to this Court against the aforesaid order of the Judge (Revisions) and that reference is still pending. The revision of the department against the order of the Judge (Appeals) for the assessment year 1952-53 is still said to be undisposed of by the Judge (Revisions) because of the aforesaid reference pending in this Court in respect of the previous year. In the assessment proceedings for the assessment year 1953-54 the Judge (Appeals) had, however, taken a different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority under the Sales Tax Act of this State or any other State nor under the provisions of section 31 of the Incometax Act, 1922, where the provision is analogous, and the case, therefore, has to be decided on first impressions. Let me, therefore, first examine the relevant section which is section 9 of the Act. It runs: "(1) Any dealer objecting to ................ or to an assessment under section 7 ................ may within 30 days from the date of service of the copy of the order or notice of assessment as the case may be, appeal to such authority as may be prescribed: Provided that no appeal against an assessment shall be entertained unless it is accompanied by a satisfactory proof of the payment of the amount of tax admitted by the appellant to be due, or of such instalments thereof as may have become payable. Provided, secondly, that the appellate authority shall not exercise any powers or perform any further function except those conferred on or entrusted to him as such authority. (2) The appeal shall be in the prescribed form and shall be verified in the prescribed manner. (3) The appellate authority may, after giving the appellant a reasonable opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 370. There the question for decision was whether an appeal presented under section 30 of the Income-tax Act can be withdrawn? If so, whether the notice for enhancement could be legally given after the appeal had been asked to be withdrawn? The question was answered by holding that the appellant could not withdraw the appeal and therefore the notice of enhancement could be legally given. In this connection it was observed: "The Income-tax Act is a special piece of legislation dealing with a special subject and so far as it goes it is self-contained. It will be seen that whereas the powers of a Civil Court are vested in the Income-tax Authorities by virtue of section 37 of the Income-tax Act, they have been restricted to the particular matters dealt with in the body of the section itself. This clearly shows that in all other matters the Incometax Authorities cannot exercise the power ordinarily vested in a Civil Court. Similarly, they are under no obligation to conform to the procedure laid down in the Civil Procedure Code in respect of matters not expressly mentioned in section 37. A right of appeal under the Act has been conferred by section 30 of the Income-tax Act and the method ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indeed, to prevent the Commissioners from estimating or valuing or assessing the taxpayer's liability according to the true facts which had been elicited, or that they should be debarred from proceeding further to develop the facts so that they can feel that they have ascertained the true position." Earlier Lord Wright, M.R., at page 393 had observed: "The conclusion I draw from the code is that the Commissioner, having set before them the duty of ascertaining and settling according to the best of their judgment the sum on which the taxpayer ought to be assessed, are required to make the assessment in accordance with that judgment, and in view of that I find it quite impossible to accept the argument that the giving of the notice of appeal is merely, as it were, a sort of offer, or is merely an act from which the taxpayer can at his discretion at any time realise, subject to his obeying the precepts and so forth, and that he can at any moment prevent the Commissioners from ascertaining and settling the sum to be assessed by the simple process of intimating by word or by deed that he withdraws from the appeal, or rather that he withdraws the notice of appeal, and that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have no duty to consider the appeal on its merits and could proceed to dismiss it in default. It will be noticed that the word "enhance" in sub-clause (3)(a) fall in between the words "confirm, reduce or annual the assessment" in subclause (a) of section 9(3) of the Act. Enhancement, annulment or reduction of the assessment cannot reasonably be made without the application of the mind to the facts of the case. Only if it could be said that the powers which are given under section 9(3)(a) of the Act to the appellate court can be exercised without the application of the mind by the appellate court, then it may be possible to say that such Court had the power to dismiss for default. Mr. Gopi Nath, the learned Standing Counsel for the department, has contended that the word "confirm" in section 9(3)(a) of the Act has relation only to the power that is given to the appellate court, but the manner in which that power is to be exercised, the function or the procedure necessary therefor, is not in any way circumscribed by section 9. As the result of the dismissal of the appeal filed by the assessee is necessarily the confirmation of the assessment then how that result is to be achieve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amed under the Act requiring the Tribunal to pronounce its decision in open court is therefore not in conflict with section 6." According to the learned Standing Counsel, the dismissal of the appeal in default is merely the manner of confirming the assessment, and is not in conflict with the power conferred under section 9, which is to confirm the assessment, and in the absence of any express prohibition in section 9 of the Act to the dismissal of an appeal in default, rule 68(5) ought not to be declared to be ultra vires. The Supreme Court authority relied upon, however, is clearly distinguishable. The matter which arose there was a pure and simple matter of functions and procedure. It had nothing to do with the powers of the Tribunal in disposing of the dispute. All that clause 9(7) of the statutory order had provided was that the award should be pronounced in open court. That was certainly a matter incidental or supplementary to the powers of making an award given by the Statute to the Tribunal. In the present case if it can be said that the power to dismiss an appeal in default is merely an incidental or supplementary matter to the power of confirming the assessment given und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or surer without applying the mind and adding reasons to what has already been said in respect of that particular matter. Dismissal of the appeal in default might indirectly corroborate what has been done by the Assessing Officer inasmuch as the result would be to confirm the assessment but it would not be a confirmation of the assessment as the mind was never applied to the question of the adequacy or inadequacy of the assessment. The word "confirm" when read along with the succeeding words in section 9(3)(a) "reduce, enhance or annul the assessment" leaves no room for doubt as to what the Legislature really intended to convey. If no assessment can be reduced, enhanced or annulled without the application of the mind it would follow that no assessment can also be confirmed without the mind having been brought to bear on the question of the adequacy of the assessment. It would, therefore, appear that what the Legislature had clearly in mind was that the confirmation of the assessment should be achieved by a deliberate and conscious application of the mind by the appellate court and when that was done then only could the appellate court be said to be discharging its duty in the lar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which case the Tribunal is bound to dismiss the same. In the circumstances where notice was in fact served on an assessee and he did not choose to appear, the Tribunal could as well assume that he did not wish to proceed further with the appeal and dismiss it for default and it cannot, therefore, be said that the provision in rule 24 for dismissal of an appeal for default was in any way in conflict with section 33(4) of the Income-tax Act." This decision, manifestly, proceeded on the interpretation of section 33(4) of the Act where the powers of the Tribunal are almost plenary and in that state of the law there could be no question of declaring rule 24 for dismissal in default as ultra vires. There is also no power given to the Tribunal to enhance any assessment and as such a decision given in respect of the powers of the Tribunal cannot be pressed into service for considering the powers of the Appellate Assistant Commissioner or the Judge (Appeals). The Madras High Court in Ravula Subba Rao v. Commissioner of Income-tax [1955] 27 I.T.R. 164., pointed out that a very wide power is given to the Tribunal, for the language employed is that "it may pass such order thereon as it th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case must take place, because the section opens with the words: 'The High Court upon the hearing of any such case' etc. Where the party, who has caused the reference to be made and who is in the position of a plaintiff, fails to appear, no hearing of the case can take place and in my view since the preliminary condition of the sub-section is not satisfied in such a case, the consequent obligation of deciding the questions of law and delivering a judgment does not also arise." Strong reliance was placed on these observations but, manifestly, the provision of section 66(5) of the Income-tax Act is not in any way analogous to section 31 of that Act or section 9 of the Sales Tax Act. Little or no comfort can, therefore, be derived by the department from the observations made by the learned Chief Justice of the Calcutta High Court. The Madras case in Tamarind Products v. Commissioner of Income-tax[1956] 30 I.T.R. 348. merely followed the aforesaid Calcutta case and therefore requires no discussion. The observations made in respect of the Calcutta case would equally apply to the Madras case. For the reasons given above I would hold that the intention of the Legislature in ena ..... X X X X Extracts X X X X X X X X Extracts X X X X
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