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TMI Blog2021 (6) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... ent distinguishable on facts, for the Apex Court was dealing with a case as is evident from paragraph 16 of the report where under the order of remand, the authority did not take any step for completing the proceedings. No proceedings assailing the very same order of remand were pending before any Higher Authority. The order passed under Section 20(1) (a) of the Act imposing a levy of penalty cannot be illegal and invalid given the bar of limitation stipulated under Section 24 of the Act - petition disposed off. - HONOURABLE CHIEF JUSTICE SANJAY KAROL, AND HONOURABLE MR. JUSTICE S. KUMAR Appearance : For the Petitioner/s : Mr. D. V. Pathy, Advocate Mr. Rohitabh Das, Advocate For the Respondent/s : Mr. Vikash Kumar, SC 11 C.A.V. JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) The following question of law arises for consideration in the present case:- Whether the order passed under Section 20(1) (a) of the Bihar Finance Act, 1981 (Referred to as the Act) imposing a levy of penalty is illegal and invalid given the bar of limitation stipulated under Section 24 of the said Act or not? 2. Petitioner prayed for the following reliefs:- A. To quash (Annexure-3) being the fresh penalty order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority is empowered to assess the amount of tax due to such a return. 12. Further, under Section 19, wherever the authority based upon information and satisfaction of existence of reasonable grounds of belief, the turnover of the assessee, inter alia, has escaped assessment, can carry out proceedings of assessment/reassessment for determining the amount of tax due. 13. Additionally, under Section 20, upon satisfaction that a person falling within the purview of the Act has concealed any sales or purchases, intending to reduce the amount of tax or furnished inter alia, incorrect statement of turnover, then in addition to payment of tax the prescribed authority may determine the amount of penalty liable to be paid by the defaulter. 14. Since the impugned order stands passed under Section 20, we deem it appropriate to reproduce the said provision as under:- 20. Escaped turnover detected before assessment.- (1) If the prescribed authority in the course of any proceeding or otherwise under this part is satisfied that any registered dealer or a dealer to whom grant of registration certificate has been refused under the third proviso to sub-section (2) of Section 14- (a) has concealed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein would also apply to proceedings initiated under Section 20 of the Act or not is an issue that is neither argued nor do we choose to decide and leave it open to be considered in an appropriate case. But then it has to be within reasonable period, depending upon facts and circumstances of each case. However, accounting for the period of limitation to be four/two years, as the prescribed case therein maybe, we proceed to decide the writ petition in the attending facts and circumstances. 18. The issue at hand concerns the assessment year 1997-98. 19. The Assessing Officer vide order dated 23.08.2001 completed the proceedings under Section 17(3) of the Act (Annexure P/11, page 102 of the paper book). The Appellate Authority vide its order dated 05.04.2002 (Annexure P-12, page 114 of the paper book) while setting aside such an order of assessment, remanded the matter for re-assessment to be carried out by the Assessing Officer. Significantly, assailing the very same order passed by the Appellate Authority, the petitioner itself preferred a petition for revision under Section 46 of the Act, which also stood dismissed by the Tribunal, i.e. the Commercial Taxes Tribunal, Bihar, Patna v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the period for which order of penalty relates cannot be sustained. 7. In view of the above facts and circumstances of the case, the appellate order is modified accordingly in light of the observations made above. 8. This revision petition is allowed to the extent of above modification and remitted to Assessing authority to pass fresh order as per the provisions of the Act. 22. After the Tribunal passed this order, the Prescribed Authority under Section 20 of the Act has now passed a fresh order dated 30.03.2019 (Annexure-3), impugned herein. 23. Section 24 of the Act itself accounts for the orders passed in an appeal, revision, reference, or a review petition. The period of four years prescribed therein is subject to the proviso stipulating such proceedings to be concluded within two years from the date of communication of such order to the Assessing Authority. 24. It is not the petitioner's case that commencing from the date of the passing of the order of remittance by the Tribunal; the Assessing Authority did not conclude the proceedings within a period of two years. 25. Having assailed the very same order remitting the matter to the assessing authority, it would not lie in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, under an appellate jurisdiction would lie to the Supreme Court. 28. Yet again, the apex court in Union of India v. West Coast Paper Mills Ltd., (2004) 2 SCC 747, dealing with the issue as also the principle that an appeal is a continuation of the suit, clarified that under the ordinary civil law, the judgment of the appellate court alone could be put to execution having regard to the doctrine of the merger as per the principles laid down by the Constitution Bench (Five-Judge Bench) of the Apex Court in S.S. Rathore v. State of M.P., (1989) 4 SCC 582. 29. However, while dealing with the issue of revisional jurisdiction, not under Section 115 of the Code of Civil Procedure, but a specified particular statute about tenancy laws, the Apex Court in Hindustan Petroleum Corpn. Ltd. v. Dilbahar Singh (2014) 9 SCC 78, clarified that while exercising power in examining the legality or the propriety of the order passed by the authority below, including the appellate authority, the revisional Court does not function and exercise its power as the second Court of the first appeal. 30. The revisional jurisdiction is distinct and separate from that of appellate jurisdiction, and continuation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Court in Commissioner of Income Tax, Chennai v. Alagendran Finance Ltd., (2007) 7 SCC 215 observed that where the subject matter of re-assessment and subject matter of assessment was not the same, the doctrine of merger would not apply. 33. In Khemka Co. (Agencies) (P) Ltd. v. State of Maharashtra, (1975) 2 SCC 22 , the Apex Court observed as under:- 25. Penalty is not merely sanction. It is not merely adjunct to assessment. It is not merely consequential to assessment. It is not merely machinery. Penalty is in addition to tax and is a liability under the Act. Reference may be made to Section 28 of the Indian Income Tax Act, 1922 where penalty is provided for concealment of income. Penalty is in addition to the amount of income tax. This Court in Jain Brothers v. Union of India [(1970) 77 ITR 107: (1969) 3 SCC 311 ] said that penalty is not a continuation of assessment proceedings and that penalty partakes of the character of additional tax. 34. The principles mentioned earlier are applied to the attending facts and circumstances. We have already returned our findings in paragraphs 23, 24 and 25 supra, which we elaborate hereinunder. 35. In the instant case, the petitioner alone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt with the smooth working of the system which the statute purports to be regulating; and that alternative is to be rejected which will introduce uncertainty, friction or confusion into the working of the system . 39. We are taking note of Section 24 of the Act and applying the principles of interpretation as reproduced immediately hereinabove, we are of the considered view that the period of limitation applicable would not be four but two years, commencing from the date of communication to the assessing authority of the order passed by the revisional authority. 40. We clarify that the Statute, i.e. Proviso to Section 24 itself, is very clear. It includes an order passed in a revision, in addition to an order passed in any appeal, reference or review. 41. Reliance on the decision of Hon ble the Apex Court in Vlotas Ltd., East Singhbhum (supra) is misconceived, and in any event distinguishable on facts, for the Apex Court was dealing with a case as is evident from paragraph 16 of the report where under the order of remand, the authority did not take any step for completing the proceedings. No proceedings assailing the very same order of remand were pending before any Higher Authorit ..... 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