1996 (11) TMI 428 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Rajasthan Tax Board to set aside the order of the Deputy Commissioner (Appeals) without an appeal by the department.
2. Power of the Rajasthan Tax Board to enhance assessment or penalty.
3. Validity of the remand order by the Rajasthan Tax Board.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Rajasthan Tax Board:
The primary issue was whether the Rajasthan Tax Board, Ajmer, had the jurisdiction to set aside the order of the Deputy Commissioner (Appeals) dated March 27, 1992, which had set aside certain amounts of tax, penalty, and interest, and remand the entire matter for fresh assessment despite no appeal being filed by the department. It was noted that no cross-objection was filed by the department as provided under section 14(4) of the Rajasthan Sales Tax Act, 1954.

2. Power to Enhance Assessment or Penalty:
The petitioner argued that section 14B of the Rajasthan Sales Tax Act, 1954, empowered the Rajasthan Tax Board to pass such orders as it thought fit but did not empower it to enhance the assessment or penalty. The petitioner relied on judicial precedents such as State of Kerala v. Vijaya Stores [1978] 42 STC 418 (SC) and Commissioner of Sales Tax, U.P. v. Vijai Int. Udyog [1985] 59 STC 49 (SC). Conversely, the non-petitioner contended that the Rajasthan Tax Board had the power to enhance assessment and penalty and remand the entire matter for re-examination, relying on State of Andhra Pradesh v. Hyderabad Asbestos Cement Production Ltd. [1994] 94 STC 410 (SC).

3. Validity of the Remand Order:
The Tribunal examined whether the Tax Board had jurisdiction to set aside the order of the Deputy Commissioner (Appeals) and remand the entire case without any appeal by the department. It was highlighted that section 14B of the Act did not provide the Tax Board with the power to enhance the assessment or penalty or set aside the order of the first appellate authority setting aside tax and penalty. The Tribunal noted that there was no such provision in section 14B akin to section 13(3)(a)(i) of the Act, which conferred specific powers to enhance assessment.

Conclusion:
The Tribunal concluded that the Rajasthan Tax Board did not have the jurisdiction to set aside the order of the Deputy Commissioner (Appeals) and remand the case in toto to the assessing authority on the appeal of the assessee himself. The Tribunal relied on the judgment in State of Kerala v. Vijaya Stores [1978] 42 STC 418 (SC), which established that in the absence of an appeal or cross-objections by the department, the appellate authority had no jurisdiction to enhance the assessment.

Final Judgment:
The application for revision was allowed with costs. The order of the Deputy Commissioner (Appeals) setting aside the amounts of tax of Rs. 96,211, interest of Rs. 73,120, and penalties of Rs. 4,50,000 and Rs. 20,000 was restored. The remand order by the Tribunal was modified to exclude the transactions involving the said amounts. The assessing authority was directed to examine all other transactions except those involving the specified amounts.

Petition allowed.