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TMI Blog2007 (8) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... ate authority and it is liable to be set aside and accordingly, it is set aside. X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1,18,17,326 and entire penalty under section 12(3)(b) of the TNGST Act of Rs. 26,29,703 and penalty under section 12(3)(b)(ii) of the TNGST Act of Rs. 88,62,995. The appellants are directed to file bank guarantee or valid security for the entire balance tax, additional tax and entire penalty amounting totally to Rs. 2,85,69,429, before the assessing officer on or before August 9, 2007." It is submitted by the petitioner that while they were making arrangements to comply with the condition of furnishing bank guarantee, to their shock, the first respondent, viz., the Assistant Commissioner (CT), Fast Track II Assessment Circle, Chennai-6, passed the impugned proceedings dated July 30, 2007, and held that the stay granted in S.P. No. 54 of 2007 dated July 10, 2007 by the Appellate Assistant Commissioner (CT)-VI, Chennai as null and void and liable to be set aside. The assessing officer has further stated that the TNGST Act contemplates payment of 12.5 per cent disputed tax and 100 per cent payment of admitted tax as a pre-requisite condition for entertaining an appeal. For the above said reasons, the assessing officer held that the stay order granted by the appellate authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation Ltd. reported in [1991] 55 ELT 433, the Supreme Court has considered the binding nature of the orders of higher appellate authorities. In paragraphs 6 and 7 of the judgment, the Supreme Court held as follows: ". . . The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors, who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not 'acceptable' to the department--in itself an objectionable phrase--and is the subject-matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws. 7.. The impression or anxiety of the Assistant Collector that, if he accepted the assessee's contention, the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "11. The very conferral of appellate jurisdiction carries with it certain consequences. Conferral of a principal substantive jurisdiction carries with it, as a necessary concomitant of that power, the power to exercise such other incidental and ancillary powers without which the conferral of the principal power shall be rendered redundant. As held by their Lordships of the Privy Council in Nagendra Nath Dey v. Suresh Chandra Dey AIR 1932 PC 165 (Sir Dinshah Mulla speaking for the Bench of five), an appeal is an application by a party to an appellate court asking it to set aside or revise a decision of a subordinate court. The appeal does not cease to be an appeal though irregular or incompetent. Placing on record his opinion, Subramania Ayyar, J. as a member of the Full Bench (of five judges) in Chappan v. Moidin Kutti [1899] 22 ILR 68 (Mad) (at page 80) stated, inter alia, that appeal is 'the removal of a cause or a suit from an inferior to a superior judge or court for re-examination or review'. According to Wharton's Law Lexicon such removal of a cause or suit is for the purpose of testing the soundness of the decision of the inferior court, in consonance with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course, as stated by the Supreme Court, in the above said process, there will be some delay in conclusion of the proceedings, for that matter, the assessing officer cannot ignore the directions given by the appellate authority." Section 31(3) of the TNGST Act empowers the Appellate Assistant Commissioner, after giving the appellant a reasonable opportunity of being heard, and for the sufficient reasons to be recorded in writing, to confirm, reduce, enhance or annul the assessment or penalty or both or set aside the assessment and direct the assessing authority to make a fresh assessment after such further inquiry as may be directed or in the case of any other order, to confirm, cancel or vary such order. The proviso to the said section envisages that at the time of hearing of any appeal, the appropriate authority shall have the right to be heard either in person or by a representative. The first appellate authority is having wide powers to revise or re-write the order of assessment. Once the appellate authority gives direction to the assessing officer, he is bound to follow the same, as the Appellate Assistant Commissioner is placed vertically over the assessing officer unde ..... 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