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TMI Blog2019 (3) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Whether the order of the Tribunal below in sustaining the direction of the first appellate authority that the assessment for A.Y. 2012-13 (Central) be also carried out once again by the assessing authority, despite the assessment order in A.Y. 2012-13 (Central) not being a subject matter of appeal is illegal and contrary to law ?" 3. The facts giving rise to the present revision may be noted first. The assessee/appellant is a manufacturer of bicycle spokes. On 21.01.2013 (during A.Y. 2012-13), the appellant's business premises were subjected to survey by the Special Investigation Branch of the Commercial Tax Department wherein certain documents etc. were seized. A show cause was issued by the Special Investigation Branch (SIB), to which replies were submitted. Subsequently, assessment proceedings were taken up against the assessee for the A.Y. 2012-13 (U.P.). Those were concluded by order dated 31.10.2014. The assessing officer rejected the books of account of the assessee and made additions under the heads: undisclosed purchase of raw material (Rs. 45,00,000/-); undisclosed purchase of packing material from unregistered dealers (Rs. 1,00,000/-) and undisclosed intra-state sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stand as to the allegation of under assessment. 8. It is in such facts that the appeal authority decided on merits, the appeal of the assessee for the A.Y. 2012-13 (U.P.), by his order dated 14.12.2017. In that order, the appeal authority observed, the assessee had filed an application to not press his appeal after the first appeal authority had proposed to make enhancement on the basis of two documents seized during the survey dated 20.01.2013. In view of such fact, the application to not press the appeal, was not considered and notice under Section 55(5)(2)(ii) of the Act was issued to the assessee on 20.06.2017. While extracting the contents of that notice, the appeal authority referred to the notice dated 20.06.2017 as one issued under Section 55(5)(a)(ii) of the Act. 9. While, response of the assessee to the aforesaid notice was also noted in the order being reiteration of the request to dismiss the appeal is not pressed, it was further noted that in response to the comments called from the assessing authority the non4 commitant stand taken by the officer (as already noted above), was also recorded. 10. Thereafter, the first appeal authority observed, his predecessor had u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd on the reasoning that the assessee had failed to give any specific factual reply to the notice issued by the first appeal authority proposing to make enhancement while the assessing authority had prayed for opportunity to re-examine the seized material in light of the regular books of account of the assessee. The Tribunal therefore opined in such circumstance the direction for fresh assessment for A.Y. 2012-13 (U.P.) was wholly justified. It distinguished the decision of this Court in the case of R.R. Brick Factory Vs. Commissioner Of Sales Tax reported in 2004 (137) STC 297 (All) by stating, that was a case under the U.P. Sales Tax Act while the present case had arisen under the U.P. VAT Act, 2007. 14. It further observed that in the case of R.R. Brick Factory Vs. Commissioner Of Sales Tax (supra), no request had been made by the assessing officer while in the present case, the assessing officer had requested to be allowed an opportunity to re-examine the books of account of the assessee in light of the seized material. It distinguished the other decision in the case of Orissa Cement Limited and Another Vs. The State of Orissa and Others reported in 1988 (70) STC 254 (Ori.) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the possibility of such enhancement arising after reconciliation of the seized material with the regular books of account of the assessee. 19. Then, it has also been submitted, in any case, there was no jurisdiction with the first appeal authority to make any observation requiring a re-assessment to be made in the case of the assessee for the A.Y. 2012-13 (Central) inasmuch as no appeal for that year was before the first appeal authority and the facts of that case were not in issue in the appeal for the A.Y. 2012-13 (U.P.), which was before the appeal authority. 20. Last, reliance has been placed on the provisions of Section 29(9) of the Act to submit, no power exists under that provision to allow for a re-assessment to arise for the assessment year whose facts are not in issue in the matter heard by the higher appeal authority or the court. Therefore, there never arose any jurisdiction or justification to issue directions in terms of Section 29(9) of the Act. 21. Sri B.K. Pandey, learned Standing Counsel has submitted that in the first place, the assessing authority had requested to the first appeal authority to remand the matter to re-examine the seized material in light of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the regular books of account of the assessee would be required before any conclusion may be drawn as to under-assessment, the appeal authority in all fairness, did not exercise its power under Section 55(5)(a)(ii) of the Act but in fact, he chose to pass an order that is referable to Section 55(5) (iii) of the Act. He has allowed the appeal and set aside the order with a direction to the assessing authority to pass a fresh assessment order in light of the directions issued by him. 25. It is then submitted, merely because a notice may have been issued under Section 55(5)(a)(ii) of the Act, it did not imply that the appeal authority must necessarily vary the assessment himself. 26. As to the further submission advanced by learned counsel for the assessee that no direction could have been issued to make assessment for the A.Y. 2012-13 (Central), learned Standing Counsel would submit that the language of Section 29(9) of the Act is very clear and it lies with the higher authority to ensure that no part of revenue escapes assessment. 27. Having heard learned counsel for the parties, in the first place, it requires examination whether upon filing the application dated 13.06.2017, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court observed, under the proviso to Section 9(3)(b) of the Central Act, the appeal authority was not empowered to allow the appeal and set aside the assessment in face of the application to withdraw the appeal. At most, the appeal authority could have dismissed the appeal. It was specifically held that in any view, the order allowing the appeal against the wishes of the appellant could not be sustained. Such finding is found recorded in paragraph 7 of the report. 31. That being the interpretation made by this Court, it is seen, in the instant case also, there did not exist any positive request made by any other officer of the rank of Joint Commissioner and above to the first appeal authority at any stage, to examine the legality or propriety of the order under appeal. The notice issued by the first appeal authority dated 20.06.2017 and 07.12.2017 cannot ever be read as request made to the appeal authority inasmuch as for a request to arise to the appeal authority, it must be by another authority, namely the 'Commissioner'. There was no such request made. 32. The subject/context contained in the response given by the assessing authority dated 05.12.2017 also not relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order of assessment and penalty - (i) confirm or annul such order; or (ii) vary such order by reducing or enhancing the amount of assessment or penalty, as the case may be, whether such reduction or enhancement arises from a point raised in the grounds of appeal or otherwise; or (iii) set aside the order and direct the assessing authority to pass a fresh order after such inquiry as may be specified; or (iv) direct the assessing authority to make such inquiry and to submit its report within such time as may be specified in the direction or within such extended time as it may allow from to time, and on the expiration of such time the appellate authority may, whether the report has been submitted or not decide the appeal in accordance with the provisions of the preceding sub-clauses; or (b) in the case of any other order - (i) confirm, cancel or vary such order; or (ii) set aside the order and direct the assessing authority to pass a fresh order after such inquiry as may be specified: Provided that nothing in this sub-section shall preclude the appellate authority from dismissing the appeal at any stage with such observation as it deems fit where the appellant applie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion reached by this Court in the case of R.R. Brick Factory Vs. Commissioner Of Sales Tax (supra) the appeal could not be decided on merits, against the wishes of the appellant. The appeal authority could only have dismissed the appeal as withdrawn with such observations as it may have deemed fit. 40. Then, interestingly, after rejecting the assessee's application to withdraw the appeal, the appeal authority did not pass the final order with reference to his powers under Section 55(5)(a)(ii) of the Act. It has not made any enhancement to the assessed turnover of the assessee. He has not varied the turnover assessed. Therefore, even if it is assumed, there existed any power with the appeal authority to decide assessee's appeal on merits even then, the appeal order could not be justified on that reasoning inasmuch as the eventual order passed by the appeal authority is not to enhance the assessment but to set aside the same which is referable to Section 55(5)(iii) of the Act. 41. That order, by very nature, in the first place, is an order in favour of the assessee inasmuch as it was the assessee alone who challenged the assessment order on specific grounds. It would be for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act and it would be wholly impermissible and erroneous to refer to Section 29(9) of the Act to infer existence of any larger or other powers to the appeal authority. The reliance placed by the learned Standing Counsel on Section 29(9) of the Act in that regard, is wholly misconceived. 45. As to the direction issued by the appeal authority for the purpose of making assessment for the A.Y. 2012-13 (Central) is concerned, it is seen, admittedly, that assessment order was not in appeal before the appeal authority. Further, in any case, even according to the reasoning offered by the first appeal authority, no part of the inter-state transaction for the A.Y. 2012-13 (Central) had been assessed to tax in the order for the A.Y. 2012-13 (U.P.). 46. Therefore, since that matter was not in appeal before the appeal authority and those facts had not been examined in the context of the original assessment order, no direction could have been issued to re-open that assessment. No conclusion to that effect is found to have been recorded either in the order of the appeal authority or the Tribunal. Therefore, those observations appear to be clearly beyond jurisdiction. 47. Consequently, question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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