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TMI Blog1981 (5) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... n to pass fresh assessment orders in the light of certain observations made in the appellate order. Even after remand, the petitioners took the stand that they were not liable to be assessed. The assessing authority held that the plea was not available to them in the light of the order of the Appellate Assistant Commissioner. A fresh assessment order was accordingly passed. The petitioners again preferred appeals before the Appellate Assistant Commissioner, during the hearing of which their objection regarding liability to assessment was reiterated. The Appellate Assistant Commissioner refused to consider the point. The appeals were dismissed. Against the order of dismissal Tax Appeals Nos. 817 to 820 of 1977 were filed under section 39 of the Act before the Kerala Sales Tax Appellate Tribunal. The Tribunal held that since no appeals had been filed against the orders of the Appellate Assistant Commissioner dated 12th April, 1976, those orders became final so far as the liability to sales tax was concerned and that it was not open to the petitioners to reagitate the matter in the appeals against the final orders of assessment. The above conclusions were reached basing on the analo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided in Chapter 43, which dealt with appeals against certain orders; but the right to put forward any error, defect or irregularity in "such order" affecting the decision of the case was retained in the above enactment and also in the Code of 1882. There was controversy regarding the scope of the words "such order", whether they had application to appealable orders. The dispute was set at rest by the Privy Council which held that the section applied to all orders. There is no scope for doubt that an order of remand is an interlocutory order. Under section 591, a party who omitted to file an appeal from an order of remand could object to its validity in an appeal filed against the final decree in the case. It is only in section 105(2) of the present Code that a special provision is made to the effect that if an appeal lay from the order of remand and an appeal was not filed the correctness of the order of remand is not liable to be challenged in an appeal from the final decision. The above resume of the history of section 105 makes it clear that the principle contained therein is not part of the general law in relation to appeals but is confined to cases governed by the Code of Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n his opponent similar calamities. We believe there have been very many cases before this Tribunal in which their Lordships have deemed it to be their duty to correct erroneous interlocutory orders, though not brought under their consideration until the whole cause had been decided, and brought hither by appeal for adjudication." The dictum was laid down in connection with proceedings of the Sadar Diwani Adalat sitting as Special Commissioners of Revenue. The above decision was followed by the Privy Council in the later cases, Alexander John Forbes v. Ameeroonissa Begum[1866] 10 M.I.A. 340., Sheonath, alias Burray Kaka v. Ramnath, alias Chotay Kara[1866] 10 M.I.A. 413. and Shah Mukhun Lall v. Baboo Sree Kishen Singh [1869] 12 M.I.A. 157. In all these cases the reasoning adopted was that an interlocutory order did not dispose of the cause and therefore the failure to file an appeal therefrom did not preclude the party aggrieved from challenging its correctness in an appeal against the final decree or order. No reference is seen made to the provisions of the Code of Civil Procedure. 5.. The Supreme Court had occasion to consider the matter as early as in 1960 in Satyadhyan v. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had application. 7.. The question as to the applicability of section 105, Civil Procedure Code, in a case arising under the Payment of Wages Act came up before a Division Bench (sic) of the Punjab and Haryana High Court in Hans Raj v. Sangrur Municipality[1974] 45 F.J.R. 311; Sarkaria, J., as he then was, speaking on behalf of the Bench, observed: "The system of the Code, permitting round after round of legal battle over a decree, in a hierarchy of appellate courts, on a vast front, fought with weapons forged of errors picked from the entire gamut of the proceedings right from the institution of the suit, is scarcely an unmixed blessing. It is tardy, cumbersome, expensive and wasteful. It tends to bring in its wake circuity of action and a degree of disconcerting unpredictability in the administration of justice. The framers of the Act were conscious of these evils inherent in the system of the Code, and have endeavoured to keep the proceedings under the Act free from that reproach." 8.. A similar question arose under the Madras Plantations Agricultural Income-tax Act (V of 1955) in Senniappa v. Government of MadrasI.L.R. [1965] 2 Mad. 397.In that case a return of income by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llenged in an appeal filed against the final decision in the case. Following the decisions in Maharajah Moheshur Singh v. Bengal Government[1865] 7 M.I.A. 283. and Satyadhyan v. Smt. Deorajin Debi A.I.R. 1960 S.C. 941., the issue was answered in the affirmative. 10.. The principle recognised in all these decisions is that the appealability of an order passed in the course of a proceeding and the liability of that order being challenged in appeal against the ultimate order are two distinct things. The present case stands on a par with the decisions referred to above. It therefore follows that the principles underlying section 105(2) of the Code of Civil Procedure do not stand in the way of the petitioners in raising the question of liability to assessment before the Appellate Tribunal. 11.. The further question is whether there is the bar of res judicata based on general principles of that doctrine. The argument put forward by the learned Advocate-General is that inasmuch as an appeal lay against the order of remand and no appeal was filed, the decision of the Appellate Assistant Commissioner became res judicata and a further adjudication of the question is barred. The contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stance to the learned counsel for the respondent in his argument that the order of remand made by the High Court not having been appealed from to this court the correctness of that order cannot be challenged now." 13.. It may be recalled that the plea of res judicata was raised also in U.P.E. Supply Co. v. T.N. Chatterjee[1972] 42 F.J.R. 1 (S.C.); A.I.R. 1972 S.C. 1201. already referred to and that it was turned down following Satyadhyan's case A.I.R. 1960 S.C. 941. 14.. The Appellate Tribunal, referred to the decision in Jasraj v. HemrajA.I.R. 1977 S.C. 1011., in coming to the conclusion that the finding in the order of remand is not liable to be challenged. But, a reading of the above decision will show that it does not lend support to the conclusions arrived at by the Appellate Tribunal, as will be clear from the following observations: "Viewed simplistically, the remand order by the High Court is a finding in an intermediate stage of the same litigation. When it came to the trial court and escalated to the High Court, it remained the same litigation. The appeal before the Supreme Court is from the suit as a whole and, therefore, the entire subjectmatter is available f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding on an issue at a preliminary stage is not final if it is liable to be challenged in an appeal against the ultimate decision of the case. To adopt the language of the Supreme Court it is only provisionally final. It will become really final only if no appeal is filed against the ultimate decision of the case or if an appeal is filed, it is confirmed in such appeal. 17.. In the instant case, it is true that no appeal was filed against the decision dated 12th April, 1976, of the Appellate Assistant Commissioner. The effect of non-filing of an appeal is that the finding is binding on the assessing authority when the case went back to that authority and also on the Appellate Assistant Commissioner while disposing of the appeal from the revised decision of the assessing authority. It is not binding on the Appellate Tribunal in the appeal filed under section 39 against the decision of the Appellate Assistant Commissioner. The Appellate Tribunal was free to arrive at its own decision on the question of liability of the petitioners to assessment to sales tax. 18.. It is thus clear that it was under an erroneous interpretation of the law that the Appellate Tribunal held that it h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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