TMI Blog2019 (4) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Authority would remain bound by the finding of the Tribunal on the issue of eligibility to exemption available to the assessee on Forms-D issued by such purchasing dealers/institutions, on the reasoning they may not be the Central Government or a State Government. That finding having attained finality, no contrary conclusion is permissible to be drawn. Similarly, the Assessing Authority is bound to consider the claim of exemption/concession made by the assessee on the strength of Forms-C, D and F etc., that were submitted by the assessee before the Tribunal by way of additional evidence, at that evidence was admitted by the Tribunal. The Assessing Authority cannot be permitted to ignore that evidence or to refuse to verify the claim of exemption/concession made on the strength of such evidence. The Assessing Authority cannot be permitted to ignore that evidence or to refuse to verify the claim of exemption/concession made on the strength of such evidence. Also, the Assessing Authority cannot rake up the same grounds to doubt the correctness of the books of accounts of the assessee for A.Y. 2005-06 (U.P. & Central) and 2006-07 (Central), as had found favour with that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appellate authority. It is thus submitted that the Assessing Authority had no jurisdiction to look beyond that order of the Tribunal or to examine any other or further issue in the proceedings thus remanded to it. 4. Briefly, there existed a company namely M/s HCL Infosystems Ltd. (hereinafter referred to as the former company ) which was a wholly owned subsidiary of the petitioner that is an existing company. With effect from 1.4.2007, the former company amalgamated with the petitioner company. The present dispute pertains to the business of the former company, prior to its amalgamation with the petitioner company. 5. During the A.Y. 2004-05, 2005-06 and 2006-07, the former company engaged in trading in electronic goods, photocopier, cellular phone etc. It also performed interstate sales to various institutions. Those institutions claimed entitlement to concessional rate of tax on purchases made by them against Forms-D issued under the Central Sales Tax Act, 1956 (hereinafter referred to as the Central Act ). 6. In the regular assessment proceedings for the A.Y. 2004-05 (Central) the assessing authority of the former company categorically accepted the books of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner for the A.Ys. 2004-05 and 2006-07 by his separate orders dated 09.02.2011. Also, the first appellate authority rejected the petitioner s appeal for the A.Y. 2005-06 vide his order dated 11.2.2011. 11. The petitioner carried the matter in appeal to the Tribunal. The Tribunal decided the appeals filed by the petitioner by its order dated 16.10.2015. According to the petitioner, the Tribunal held the petitioner entitled to claim the concessional rate of tax on the basis of additional evidence led before the first appellate authority. Second, the Tribunal held it entitled to claim benefit of Forms-D submitted by it during the course of assessment proceedings with respect to sales made to certain institutions. Third, the Tribunal allowed the petitioner s appeals on the ground of rejection of books of accounts of the petitioner, for the A.Y 2005-06 (U.P. Central) and A.Y. 2006-07 (Central). 12. Thus, according to the petitioner, its appeals were allowed on the legal ground of availability of exemption against Forms-D and also admissibility of additional Forms-D filed during pendency of the first appeal. In this regard, learned counsel for the petitioner submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et. According to the learned counsel for the petitioner, it has bearing on the acceptance and or rejection of the books of accounts of the petitioner 19. With respect to the first issue, learned counsel for the petitioner contends that the said issue stands covered and decided in favour of the petitioner upon a categorical finding recorded by the Tribunal in its order dated 16.10.2015 that had attained finality. Since the department allowed the aforesaid order of the Tribunal to attain finality, it is no longer open to the assessing authority to re-examine it any further as it is not open to the Assessing Authority to go beyond the finding recorded by the Tribunal. 20. With respect to second issue raised in the aforesaid notice, it has been submitted that it was relevant only for the purpose of acceptance or rejection of the books of accounts of the petitioner. The books of accounts of the petitioner having been accepted by the assessing authority in the original assessment and the Tribunal having remanded the case on a limited issue as noted above, the assessing authority could not now open an inquiry to examine the books of accounts of the applicant. Hence, he could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ools, Colleges, Universities and Panchayats. First, it is stated that no reference has been made to any particular statutory form or transaction in respect whereto the notice has been issued by the assessing authority. Then it is also submitted that as in the A.Y. 2004-05, this issue had attained finality in the order of the Tribunal dated 16.10.2015 and it is no longer open to the assessing authority to re examine the same. 25. With respect to the notice issued for the A.Y. 2006-07 the first objection raised is to the query raised as to the closing stock. The notice states, while the petitioner had disclosed the closing stock ₹ 35.11 crores, but the petitioner i.e. the former company had merged with the petitioner company, in that year. A clarification has been sought whether upon merger the petitioner company had paid tax on the sale of closing stock of the former company. If the answer would be affirmative, then evidence of such tax payment has also been required to be produced. It has also been proposed that in absence of any evidence it may be assumed that the company had sold the said stock out of its books. 26. Learned counsel for the petitioner submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der having attained finality, the Assessing Authority could only compute the quantum of exemption that may be available on such statutory Forms as may have been filed by the petitioner, upto or during pendency of the appeals. However, the issue of eligibility to exemption on Forms-D stood decided in favour of the assessee. 31. As to the other points sought to be raised by means of impugned notices being with respect to the production of balance sheet, examination of facts relevant to determine whether the books of accounts of the assessee may be accepted and; all other issues noted above are such as had not been permitted or required to be gone into in the proceedings in remand. Therefore, the same may not be permitted to be examined. 32. Principally, it has been submitted that the order dated 16.10.2015 was an order of limited remand passed by the Tribunal and, therefore, it was not open to the Assessing Authority to raise any new, fresh or other issue. Reliance has been placed on various decisions of the Supreme Court and this Court in support of the submissions so advanced. First reliance has been placed on the decision of the constitution bench of the Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal, yet held that no manifest injustice resulted from such refusal. 34. Then reliance has been placed on another decision of the Supreme Court in the case of Union of India Vs. Kamlakshmi Finance Co. Ltd., 1991 (55) ELT 433 SC , wherein it was held as below: The position now, therefore, is that,if any order passed by an Assistant Collector or Collector is adverse to the interests of the Revenue, the immediately higher administrative authority has the power to have the matter satisfactorily resolved by taking up the issue to the Appellate Collector or the Appellate Tribunal as the case may be. In the light of these amended provisions, there can be no justification for any Assistant Collector or Collector refusing to follow the order of the Appellate Collector or the Appellate Tribunal, as the case may be, even where he may have some reservations on its correctness. He has to follow the order of the higher appellate authority. This may instantly cause some prejudice to the Revenue but the remedy is also in the hands of the same officer.He has only to bring the matter to the notice of the Board or the Collector so as to enable appropriate proceedings being taken under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing been decided by the High Court could not appropriately be made the subject-matter of a fresh trial. Further, as pointed out by the High Court, any suit on such pleas is already time-barred and it would be unfair to the plaintiff-respondents to allow these pleas to be raised by amendment of the written statement at this late stage. In the order, the High Court has stated that the judgments and decrees and findings of both the lower courts were being set aside and the case was being remanded to the trial Court for a fresh decision on merits with advertence to the remarks in the judgment of the High Court. It was argued by learned Counsel that, in making this order, the High Court has set aside all findings recorded on all issues by the trial Court and the first appellate Court. This is not a correct interpretation of the order. Obviously, in directing that findings of both courts are set aside, the High Court was referring to the. points which the High Court considered and on which the High Court differed from the lower courts. Findings on other issues, which the High Court was not called upon to consider, cannot be deemed to be set aside by this order. Similarly, in permitting a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the Forms-D being relied upon by the petitioner were valid. The question of eligibility to exemption on the basis of such forms (if found valid), was no longer an issue left open by the Tribunal. The department having not challenged the order of the Tribunal, the Assessing Officer could not have enlarged the controversy either by opening up new or other issues that had not been permitted by the Tribunal or to re-agitate the issue of eligibility to exemption on the strength of Forms-D issued by certain educational institutions etc., that according to the Assessing Officer were non-government entities. 42. Shri C.B. Tripathi, learned Special Counsel for the State respondents has submitted, under Section 10(5) of the Act, the Tribunal had ample powers to either confirm, acknowledge or vary the order under the appeal or to set aside the order and direct the assessee or the Appellate Authority etc. to pass a fresh order after such further enquiry, if any, as may be specified or order the amount of tax, if any, or penalty etc. to be refunded. These powers were similar to those as were existing under Section 9(3) of the U.P. Sales Tax Act, 1948. Reliance has been placed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been given to the Revising Authority that may not have been available to the Appeal Authority and that in exercise of such powers, the revising authority could remand a case to the Assessing Authority to pass a fresh assessment order in accordance with the direction given by it. While doing so, the revising authority could inhibit the scope and ambit of the proceedings in remand. However, such power was not found existing with the Appeal Authority. Referring to the powers given to the Assessing Authority, it was observed , once the assessment is set aside in the appeal and the case is sent back to the Assessing Authority to pass a fresh assessment order, the original proceedings under Section 7 of the Sales Tax Act get revived. Consequently, the Assessing Authority passes a fresh assessment order in the original proceedings under Section 7 of that Act and the earlier assessment order does not survive. Ultimately, the full bench answered the question as under: Where an order of assessment is set aside by the Appellate Authority which remands the case to the assessing authority with certain directions for making a fresh assessment, the assessing authority has subject to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 55 , where a question arose whether the assessee could file fresh Forms-F at the stage of assessment proceedings in remand. The learned single Judge following the decision of the case in M/s Ram Dayal Harbilas (supra) opined that the entire assessment proceedings being open such a course was permissible. Then reliance has been placed on the division bench decision in Catalysts Vs. State of U.P. and others, 2014 NTN (Volume 55) 360 , the Assessing Officer had treated enzymes as unclassified items and taxed the same @ 10% during A.Y. 2006- 07. Upon an appeal, the same was allowed and the assessment order was setaside. Further the matter was remitted to the Assessing Officer to pass fresh assessment order. During pendency of such proceedings, reassessment notice was issued to the assessee which became the subject matter of challenge in the aforesaid case. Relying on the full bench decision in the case of M/s Ram Dayal Harbilas (supra) , the division bench opined once the original assessment proceedings became open as a consequence of the order of the assessment, no reassessment proceedings could have been initiated. At the same time, it cannot be said that any turnover had es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e into account the materials which existed on the date of the reassessment and was not confined to those materials which existed on the date of the original assessment orders. His finding arrived at in the original assessment proceedings that the income from the dividends shown in the return was correct might have been correct but fell with the assessment order itself and was neither operative nor binding in the reassessment proceeding. By the time he came to reassess the assessee he had the Section 23A orders before him under which the assessee was deemed to have received larger income from the dividends. 49. Therefore, it has been submitted by Shri C.B. Tripathi, learned Special Counsel for State respondents that though the Assessing Authority may remain bound by the order of remand passed by the Tribunal, however, there is no limitation on his powers to consider any other or further material. He has ample powers to examine the book of accounts of the assessee as also to raise such queries as may now arise since the original assessment order passed by him no longer exists, the same having been set aside. 50. In sum and substance, the submission advanced by Shri C.B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and large, the same. No material difference has arisen as to allow for any fruitful discussion in that regard. The ratio of the Full Bench is categorical and clear being - while carrying out the directions issued by a higher Appellate Authority, the original/Assessing Authority has the same powers as it originally had while making the assessment that was carried in appeal. 54. That being the principle, generally, upon remand being made by a higher Appellate Authority, all questions and issues would become open to be decided afresh or de novo. Therefore, in the first place, it has to be assumed that upon the order of the Tribunal dated 16.10.2015 being passed and the matter being remitted to the Assessing Authority, all issues, as have been raised in the impugned notices, could be raised. The fact that the Assessing Authority raised those issues in the impugned notices, may therefore, not suffer from any inherent lack of jurisdiction. 55. However, one logical and permissible exception exists to the above ratio drawn by the Full Bench. The exception being that the Assessing Authority may not be permitted to reopen or re-examine any issue that may have been specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our with that authority in the first innings of the assessment proceedings and which had been specifically disapproved by the Tribunal. It is so because these issues were squarely dealt with and decided by the Tribunal in its order dated 16.10.2015, arising from the first original assessment orders for A.Y. 2004-05 (Central), A.Y. 2005-06 (U.P. Central) and A.Y. 2006-07 (Central) and that order has long attained finality. 59. However, besides the above issues on which the Assessing Authority would remain bound by the findings and directions of the Tribunal contained in its order dated 16.10.2015, it would remain open to the Assessing Authority to raise such other and fresh questions and issues as may be found existing and relevant in the context of the fresh assessment orders to be passed upon the remand made by the Tribunal. In this context, with respect to the issue of rejection of books of accounts, if any issue had not been raised or examined in the first leg of assessment proceedings, the same may remain open to the Assessing Authority to be considered and decided after the remand order. At present, it cannot be said that the issues raised in the impugned notices are su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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