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2022 (9) TMI 427 - CST, VAT & Sales Tax
Scope of assessment order - claim made by an assessee which is not before the assessing officer - Disallowance of Respondent’s claim for concessional rate of tax in respect of transaction stated in ‘C’ forms - true and proper construction of Section 23(5) of Maharashtra Value Added Tax, 2002 - Consideration of claim of the Respondent which was not part of the Assessment Order - liberal interpretation and expansion of scope of the statutory provisions contained in Section 23(5) of the MVAT Act, 2002, when there is no ambiguity in the statute.
Whether an Appellate Authority has the power to consider a claim made by an assessee which is not before the Assessing Officer? - whether the Tribunal committed an error in allowing the Respondent-Dealer’s claim for concessional rate of tax with respect to the transactions stated in the ‘C’ forms issued by M/s. Varsha Controls Gear?
HELD THAT:- The Supreme Court in the case of Commissioner of Income Tax, U.P., Lucknow Vs. Kanpur Coal Syndicate, Kanpur [1964 (4) TMI 18 - SUPREME COURT], considering powers of an appellate authority under the Income Tax Act, 1961, observed that the Appellate Commissioner while disposing of an appeal against an order of an Income Tax Officer has plenary powers. The scope of his power is co-terminous with that of the Income Tax Officer. He can do all that Income Tax Officer can do and also direct him to do what he has failed to do. If the Income Tax Officer has the option to assess one or other of the entities in the alternative, the Appellate Assistant Commissioner can direct him to do what he should have done in the circumstances. The Apex Court observed that the Appellate Commissioner in disposing of such an Appeal could confirm, reduce, enhance or annul the assessment and he may also set aside the assessment and direct the Income Tax Officer to make a fresh assessment.
A Full Bench of Madras High Court in State of Tamil Nadu Vs. Arulmurugan and Company [1982 (11) TMI 143 - MADRAS HIGH COURT] had the occasion to consider a similar issue with respect to ‘C’ forms declaration. It was observed therein that though the expression ‘appeal’ and ‘assessment’ may be different, but the difference lies only in the particular stage of the proceeding and in the particular authority having jurisdiction in the two stages. The Court observed that basically an Appeal does not differ from an assessment. Just as is the case with any other appeal under our legal system, an appeal from a sales tax assessment is only a rehearing or a retrial and in the absence of any statutory inhibitions or restrictions, an Appellate Authority has the same powers exercisable in the same manner and to the same extent, as the assessing authority has in the first instance. If this were not the position, no Appellate Authority can effectively function while hearing and determining an appeal from an assessment.
The Appellate Authority including the Tribunal have discretion to consider fresh grounds on law as well as on facts. There is no reason why the Appellate Authority cannot modify the assessment order on an additional ground even if it is not raised before the assessing authority. The raising of an additional ground before the Appellate Authority is permissible even if the ground so raised was not raised when the return was filed or an assessment order was made or that the ground became available on account of change of circumstances or law - The jurisdiction of the Appellate authorities to consider a fresh or a new ground or a claim is not restricted to cases where such a ground did not exist when the return was filed and the assessment order was made. The Appellate Authorities have very wide powers while considering an appeal which may be filed by an assessee.
The Appellate Authority has very wide powers and can exercise its discretion to consider a claim or a ground not considered by the assessing authority for a sufficient cause. The Tribunal has accepted and considered the ‘C’ forms of M/s Varsha Controls Gear which could not have been furnished before the assessing authority, though the same undisputedly, pertain to the assessment year 2005-2006. There was sufficient cause to consider the ‘C’ forms by M/s Varsha Controls Gear as the same pertained to the transactions in relation to the business of the Respondent for the assessment period in question. It cannot therefore be said that the ‘C’ forms were not available when the return was filed.
The Appellate Authority has the power to consider a claim made by an assessee which is not before the assessing officer. The Tribunal has correctly and for sufficient cause exercised its discretion and directed the Appellate Authority to take into consideration the Respondent-Debtor’s claim for consessional rate of tax with respect to the transactions stated in the said ‘C’ forms issued by M/s Varsha Controls Gear. No fault can be found with the order of the Tribunal nor is there any perversity.