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TMI Blog2014 (4) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to considering only the points raised in the grounds of appeal - However, an appeal being a creature of a statute, the powers of the appellate authority are still circumscribed by the limitations set out in the statute - - The subject matter of the order appealed against admittedly does not fall within section 55 (7) (a) which gives the power to the appellate authority to enhance, reduce, confirm or annul the assessment - No such power has been conferred on the appellate authority in sections 55 (7) (b) or 55 (7) (c) – There is no hesitation in holding that even assuming that the second appeal was covered u/s 55(7)(c), the appellate authority had no power or jurisdiction to confirm, enhance, reduce or annul the assessment as the said power could be exercised only in an appeal against an order of assessment as more particularly set out in section 55 (7) (a) - The order of Tribunal rejecting the reference applications of the Applicant does not suffer from any error - No case for interference is made out- Sales-Tax Applications are accordingly dismissed – Decided against Revenue. - Sales Tax Application No.19 of 2011, Reference Application No.78 of 2010, Sales Tax Application No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the Works Contract (Re Enacted) Act, 1989. The Respondent Dealer was assessed by the Asst Commissioner of Sales Tax (B-111) for the period 1st April 1996 to 31st March 1997 who issued an assessment order of refund of Rs.2,72,886/-. Being aggrieved by the assessment order, the registered dealer preferred an appeal under section 9 of the Works Contract (Re Enacted) Act, 1989 read with Section 55 (6) of the BST Act interalia on the ground that the assessing officer levied Works Contract Tax with respect to the purchase of declared goods from registered dealers which were used in the execution of works contract in its original form, and therefore no tax could have been levied. In view thereof, the Respondent claimed additional refund as well as interest on the same under section 43A of the BST Act. 4. The 1st appellate authority Deputy Commissioner of Sales Tax (Appeals) II Mumbai, by his order dated 11th July, 2002 held that the assessing authority wrongly levied tax on the purchase of declared goods purchased from the registered dealers and used them in the same form. On the ground of interest, the 1st appellate authority held that the Respondent was entitled to interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest awarded on the refund granted to the Respondent. The MSTT further dismissed the misc applications filed by the Applicant on the ground that the Respondent had not challenged the assessment of tax but only the order of withdrawal of interest and consequently held that the appeal filed by the Respondent was under section 55 (7) (b) and not under section 55 (7) (a) of the BST Act. 9. Being aggrieved by the said order of the MSTT, the Applicant preferred a Reference Application under section 61 of the BST Act for drawing up a statement of case for referring the questions of law set out earlier in this judgement, for a decision of this court. By an order dated 15th April, 2011 the MSTT rejected the Reference Application on the ground that the MSTT had no power to enhance the assessment of tax whilst exercising its power under appeal filed against an order under section 55 (7) (b) or 55 (7) (c) of the BST Act. 10. The narrow controversy before us is the extent of the power and jurisdiction of the appellate authority (both in the first appeal and the second appeal) under sections 55 (7) (b) and 55 (7) (c) of the BST Act. 11. Section 55 (6) of the BST Act as introduced ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh assessment and determine, where necessary, the amount of tax payable on the basis of such fresh assessment; (b) in an appeal against an order imposing a penalty, ***[or interest] the appellate authority may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty ***[or interest]; (c) in any other case, the appellate authority may pass such orders in the appeal as it deems just and proper: Provided that, the appellate authority shall not enhance an assessment or a penalty ***[or interest], or reduce the amount of drawback, set-off or refund of tax, unless the Appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. 14. From an analysis of the foregoing provisions it emerges that:- (a) Section 55 (6) of the BST Act as originally enacted (with effect from January 1, 1960) empowered the appellate authority to pass such orders on appeal as it deemed just and proper. There was no categorisation of appeals at that time, and in all appeals the appellate authority was required to pass just and proper orders; (b) By Maharashtra Act No. 42 of 1971, section 55 (6) was substituted with effect from Dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the MSTT was in error when it held that the appeal filed by the Respondent was covered under section 55 (7) (b) of the BST Act. Ms. Palsuledesai further submitted that under section 55 (7) (c) the MSTT had very wide powers and therefore even in such a case the appellate authority (namely the MSTT in the present case), had the power and jurisdiction to enhance the assessment. In support of this submission, she placed reliance on a judgement of the division bench of this Court in the case of Ranchhoddas Bhaichand Vs Commissioner of Sales Tax, Maharashtra State, Bombay reported in [1996] 101 STC 218. 17. It is an admitted position that the second appeal filed by the Respondent was not covered by section 55 (7) (a) of the BST Act. Though we are not expressing any view on whether the MSTT was correct in holding that the second appeal filed by the Respondent was covered under section 55 (7) (b), it would make no difference in the present case. We will presume for the sake of argument that the second appeal filed by the Respondent was covered under section 55 (7) (c) as contended by the Applicant, and not under section 55 (7) (b) of the BST Act. 18. From the opening words of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty order and in other cases were separately provided. Section 55(6)(a) provides that in an appeal against the assessment order, the appellate authority shall have power to confirm, reduce, enhance or annul the assessment order. Section 55(6)(b) provides that in an appeal against penalty order, the appellate authority shall have power to confirm, cancel, reduce or enhance the order of penalty. Section 55(6)(c) provides that in respect of all other appeals the appellate authority may pass such orders in the appeal as it deems just and proper. In the present case we are concerned with the appeal filed under section 55(6)(c) of the BST Act. The Tribunal on construction of the words just and proper in section 55(6)(c) of the BST Act has held that the powers of the appellate authority are restricted to the issues raised in the appeal. 32. As stated earlier, prior to December 1 1971, the appellate authority under section 55(6) of the BST Act was empowered to pass just and proper order on all appeals, if the word just and proper contained in the original section 55(6) of the BST Act was wide enough to include the power of enhancement, then there was no need for the Legisla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 55 (1) provides for appeal against original orders passed under the Act of the Rules made thereunder by different authorities. An appeal against such order made by the Sales-Tax Officer lies to the Assistant Commissioner. On such appeal being filed, the Assistant Commissioner can confirm, reduce, enhance or annul the assessment and confirm or cancel the order of penalty or vary it so as either to enhance or reduce the penalty. The powers of the Assistant Commissioner in an appeal under section 55 of the Act are thus very wide. His powers are not confined to consider only the points raised by the assessee in the grounds of appeal or urged at the time of hearing of the appeal. It is open to him to correct the Sales-Tax Officer not only with regard to the matter raised by the assessee in the memorandum of appeal, but also with regard to a matter which has been considered by the Sales-Tax Officer and decided in course of the said order. The only limitation upon his powers is the subject-matter of order appealed against. The appellate authority has thus plenary powers in disposing of an appeal under section 55 (1) of the Act. The scope of his power is co-terminous with that of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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