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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 ..... person/authority who could make the 'request' and defeat the right of the assessee to withdraw his appeal was not specified. It could be made by any authority. Only requirement was it (request), had to exist for the purpose of making the enhancement of tax or penalty as the case may be whereas under the VAT Act that request may be made by the Commissioner (as defined under the Act). It includes within its meaning officers of the rank of Joint Commissioner and above - Second, the request now required to be made not with respect to enhancement but to examine the legality or propriety of the order under appeal. However, as to the effect of the application being moved in absence of such request, the two provisions are pari materia. Once the assessment had been made by the assessing authority, no power survived with him to either directly review that order or to ask any authority to be permitted him to review the same. The assessing authority did not have a right to defeat the withdrawal application filed by the assessee. The legislature appears to have been conscious of the fact that an appeal that may be filed by the assessee may be at different stages of hearing before the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct ). 2. The following questions of law are involved in the present revision: (i) Whether the order of the Tribunal below in sustaining the remand of the matters for A.Y. 2012-13 (U.P.) by the first appellate authority despite the application dated 13.06.2017 moved by the revisionist for its withdrawal and without there being any request made by the department for enhancement of assessment is contrary to the provisions of Section 55 of the U.P. VAT Act and the principle of law laid down in R.R. Bricks Factory Vs. CST; 2004 STC (137) 294 (All) and Orissa Cement Ltd. Vs. State of Orissa and Others; 1988 STC (70) 254 (Ori.) ? (ii) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined the same as noted above, with respect to the earlier notice dated 20.06.2017. 7. In the meantime, the assessing authority responded to the earlier notice issued by the appeal authority dated 20.06.2017. By his reply dated 05.12.2017, the assessing authority stated, additions had been made in the original assessment in the case of the assessee on the basis of facts discovered by the SIB during the survey dated 20.01.2013. On the question of under assessment, the assessing officer stated, a final opinion may be formed only after reconciling the seized documents with the books of account of the assessee. Thus, the assessing authority did not take a 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing authority had desired an opportunity to re-examine the issue. Therefore, referring to provisions of Section 29(9) of the Act, a direction was issued to the assessing authority to initiate proceedings under Section 29(9) under the Central Act for A.Y. 2012-13 (Central). However, with respect to the A.Y. 2012-13 (U.P.), the appeal authority allowed the assessee's appeal and remitted the matter to the assessing authority to pass afresh assessment order in light of the directions issued by him. 13. Against that order, the assessee filed second appeal before the Tribunal that came to be rejected by the impugned order. The Tribunal upheld the direction of remand 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 Fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t made on behalf of the competent departmental authority to examine the legality or propriety of the order under appeal. 18. Alternatively, it has been submitted, the first appeal was for the A.Y. 2012-13 (U.P.) and admittedly, no appeal had been preferred by the assessee for the A.Y. 2012-13 (Central). In absence of categorical finding being recorded, the order passed by the first appeal authority cannot be described as one referable to the powers of the first appeal authority under Section 55(5)(a) (ii) of the Act inasmuch as for such an order to arise, the appeal authority must have varied by either reducing or enhancing the amount of assessment. In the present case, the appeal authority had only expressed 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to the powers vested with the first appellate authority under Section 55(5)(a)(ii) of the Act and inasmuch as it clearly refers to enhancement proposed to be made, no benefit can be had by the assessee because of a typographical error in the description of section under which, the notice dated 20.06.2017 had been issued. 24. Then, with respect to the order passed by the first appeal authority, it has been submitted that though a notice was issued by the first appeal authority proposing to make enhancement to the assessment for the A.Y. 2012-13, in absence of any reply being furnished by the assessee and also in view of the stand taken by the assessing authority that a re-examination of the seized material in light of 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 direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of R.R. Brick Factory Vs. Commissioner Of Sales Tax (supra) , the assessee had filed an application to withdraw his appeal pending before the first appeal authority, which was opposed by the departmental representative on the ground - presumably it was a case of under-assessment and therefore, a further inquiry was initiated, which was also pending. Therefore, the department approached the appeal authority to decide the appeal on merits. In such fact, the appeal authority recorded a finding that the assessing authority had not properly recorded its finding on certain aspects having bearing on the determination of the turnover and therefore he remitted the matter to the assessing authority to re-frame the assessment. 30. In those facts, this 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 recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the provision of law. 35. In the context of the right given to the assessee/appellant to withdraw his appeal, it is seen, the proviso though does not expressly over ride the main part of the Section 55(5) of the Act, however, it preserves the power of the appeal authority to allow the assessee to withdraw his appeal at any stage and that power is not precluded by any part of the main sub-section 5 of Section 55 of the Act. Here, it may be relevant to extract Section 55(5) of the VAT Act. 36. Section 55(5) of the VAT Act is held as below: Section 55(5). The appellate authority may, after calling for and examining the relevant records and after giving a reasonable opportunity of being heard to the appellant and the Commissioner (a) in the case of an 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his appeal, even though part hearing may have taken place in the appeal. 39. Also, in the facts of the present case, it remains undisputed that though the appeal had been heard on 29.12.2016 and perhaps on 10.04.2017, no notice proposing to make enhancement was issued prior to 20.06.2017. Though I am not inclined to accept the submission advanced by learned counsel for the assessee that the notice dated 20.06.2017 was a nullity since it referred to non-existent section under which it had been issued, however, assuming the same to be the first notice proposing to make enhancement as may be referable to subsection 5 of Section 55(a)(ii) of the Act, at the same time, it is undisputed that the assessee had filed his application to withdraw the appeal on 13.06.2017, earlier in time. Therefore, in view of the conclusion 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 applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led an application to withdraw his appeal and there was no request made by the Commissioner to examine the legality or propriety of the order under appeal. 44. The only course that survived with the appeal authority was to have dismissed the appeal as withdrawn with such observations as it may have deemed fit. For the consequences of those provisions to arise, the provisions of Section 29(9) of the Act provides for limitation. However, by virtue of Section 29(9) of the Act existing on the statute book, no fresh or other power arises to the appeal authority to pass any order, to either set aside the assessment order under appeal or to provide for fresh inquiry in any manner with respect to that assessment. That provision only provides for limitation. The powers of the appeal authority are governed by the provisions of Section 55 of the 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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