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TMI Blog1972 (9) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... g authority for fresh disposal after verification. On further appeal by the assessee to the Sales Tax Appellate Tribunal in respect of the inclusion of the first two items in the total turnover, the Tribunal by its order dated 27th May, 1961, remanded the matter to the first appellate authority to dispose of the matter afresh after affording an opportunity to the dealer-assessee to cross-examine the ryot in so far as the purchase of paddy for Rs. 12,600-0-0 and to prove that he was a second dealer in respect of the turnover of Rs. 10,947-5-6. The first appellate authority in its turn, by its order dated 8th December, 1963, remanded the case to the assessing authority with a direction to examine afresh both the items of dispute on the lines directed by the Tribunal and make the fresh assessment that may be called for in respect of the two disputed additions by 15th February, 1964. The Commercial Tax Officer passed the revised orders of final assessment on 9th May, 1967, determining the total taxable turnover at Rs. 1,19,051-7-0. The assessee thereupon preferred an appeal to the Assistant Commissioner, Commercial Taxes, Nellore, questioning the validity of the inclusion of the turnov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia that the doctrine of merger has no application to the present case, that liability accrued the moment the sales have taken place though not quantified and the dealer is not entitled for refund of any tax paid on admitted turnover, even if the assessment is barred by limitation. According to the respondent, the subject-matter of the appeals is related to the disputed items of turnover only and the assessee is not entitled to claim refund of tax paid by him in respect of the admitted turnover or the turnover in respect of which no appeal had been preferred by him. Upon the facts and the respective contentions of the parties, the following question arises for decision: "Whether, on the facts and in the circumstances, the assessee is entitled to claim refund of the sales tax paid by him in respect of the turnover of Rs. 94,229-1-3, which was either admitted or not appealed against?" In order to appreciate the scope of the respective contentions, it is profitable and necessary to briefly refer to the scheme of the Act relating to accrual of liability to pay tax and assessment and refund of tax. Sections 5, 5(a), 6 and 7 of the Act are the charging sections whereunder every dealer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioning the correctness of any assessment or other matter decided, which has become final and conclusive, or seeking a review in respect thereof. The latter part of that section makes it abundantly clear that the assessee is not entitled to any relief except the refund of tax or licence fee wrongly paid in excess. This in short is the scheme of the Act pertaining to the levy, ascertainment and refund of tax. We shall now examine the pleas advanced on behalf of the assessee that (i) the obligation to pay tax under the Act is a contingent one and does not arise until it is ascertained and levied on the dealer by making a valid assessment and raising a demand therefor, and (ii) that the sales tax like income-tax is an indivisible and integrated whole and a part of the assessment cannot be in time, if the other portion is found to be barred by limitation. It is well-settled that liability to pay tax, either income-tax or sales tax, is founded on the charging sections of the respective Acts, although quantification of the amount of tax is made in the assessment proceedings in accordance with the machinery provided under the relevant Acts. However, under the Indian Income-tax Act, the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at liability cannot be enforced till the quantification is effected by assessment proceedings, the liability for payment of tax is independent of the assessment." See also State of Madhya Pradesh v. Shyama Charan Shuka[1972] 29 S.T.C. 215 (S.C.). As the liability of every dealer having a taxable turnover to pay sales tax for each year under the charging sections at the rate or rates specified arises at the point of time of completion of the sale or purchase without waiting for the passing of an order of assessment, we are of the firm opinion that the charging sections and other provisions of the Act thereunder and the schedules would not lend support to the view that it is an yearly tax and it is an indivisible and integrated whole. As observed by the Full Bench of this Court in State of Andhra Pradesh v. Murali Cafe[1971] 28 S.T.C. 399 at 410., a tax is levied yearly only in the sense that it is quantified at the end of the year and collected accordingly. We are unable to persuade ourselves to agree with Sri Dasaratharama Reddi that the obligation to pay tax created by the charging sections in the Act is contingent one and does not arise until it is ascertained and levied on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without any further enquiry. Where the assessing authority after due enquiry and opportunity to the dealer adds to the returned turnover and finally determines the total taxable turnover, the dealer is entitled to prefer an appeal in respect of the disputed Items of turnover. The right of appeal provided under section 19 is against any order passed or proceedings recorded by any assessing authority. Where the correctness of a portion of the order of assessment is in dispute, the dealer can prefer an appeal only in respect of the items objected to by him. Section 19(2) makes it abundantly clear that the appeal has to be preferred In a prescribed form and accompanied by a fee calculated at the rate of 1 per cent. of the tax under dispute subject to a maximum of Rs. 50. The prescribed form requires the dealer objecting to any order including the order of assessment or a portion thereof to specifically indicate the disputed items of turnover which only can be called to be the subjectmatter of the appeal. The right to prefer an appeal is against any order passed or proceedings recorded. No appeal can be filed by any dealer in respect of a portion of the assessment order with which he h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration must be deemed to have merged in the appellate order preferred against the composite order of assessment. The decision in Seghu Buchiah Setty's case[1964] 52 I.T.R. 538 (S.C.). also does not, in our considered opinion, advance the plea of the petitioner herein. Therein, the question that fell for consideration was, whether the recovery proceedings passed on the certificate issued pursuant to an order of assessment, which was reduced in appeal, were or were not valid. The demand originally raised on the basis of the assessment order had to be revised in view of the appellate orders reducing tax liability of the assessee. In those circumstances, it was held by the majority that "on the assessment order being revised in appeal, the default based on it and all consequential proceedings must be taken to have been superseded and fresh proceedings have to be started to realise the dues as found by the revised order ". Hence the aforesaid decision is distinguishable from the facts of the present case. The application of the-doctrine of supersession or merger turns upon the scope of the statutory provisions conferring appellate or revisional jurisdiction and the nature of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e subject-matter of the appeals and the subject-matter of the appeals was confined only to the two disputed items. Applying the principle enunciated by the Supreme Court in State of Madras v. Madurai Mills Co. Ltd.[1967] 19 S.T.C. 144 (S.C.)., we have no hesitation to hold that the revised order of final assessment passed by the Commercial Tax Officer in 1967 must be construed to be one relating to the two disputed items. The assessing authority has no jurisdiction to reopen the assessment in respect of the admitted turnover of Rs. 04,229-1-3, which is now in dispute, when the matter was remanded to him for fresh enquiry and disposal according to law after affording reasonable opportunity to the assessee. The scope of the enquiry, pursuant to the remand order, is confined only to decide about the taxability or otherwise of the turnover relating to those two disputed items. The revised assessment should have been completed on or before 31st March, 1961, as indicated by the appellate authority. Hence the revised order passed by the assessing authority on 9th May, 1967, in respect of the two disputed items must be held to be barred by limitation. The invalidity of the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and pass appropriate orders to refund any excess tax collected by them on the turnover relating to the disputed items for which no valid assessment was made. The unreported judgment of our learned brother Vaidya, J., in Writ Petition No. 6149 of 1970, dated 25th February, 1972, on which strong reliance has been placed by Sri Dasaratharama Reddi is distinguishable from the facts of the present case. Therein, the entire turnover on some ground or other was in dispute before the appellate authority. The inclusion of a particular amount of turnover was disputed in appeal. With regard to the balance of turnover the rate of tax payable by the dealer was challenged. Hence the remand order in that case was construed to be in respect of the entire turnover which was the subject-matter of the appeal. That apart, it is represented by Sri Mahadev that the department is preferring an appeal to a Division Bench of this Court questioning the correctness of the view taken by the learned judge. The decisions of the Allahabad High Court in Durga Dutt Chunni Lal v. State of Uttar Pradesh[1969] 23 S.T.C. 432. and Ram Kishan Dass Brij Mohan Lal v. State of Uttar Pradesh[1971] 27 S.T.C. 312., cited o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rs. 100. Petition dismissed. Appendix [The judgment of the Division Bench of the Andhra Pradesh High Court consisting of GOPAL RAO EKBOTE and RAMACHANDRA RAJU, JJ., in G. Narsimhulu & Co. v. State of Andhra Pradesh and Others (Writ Petition No. 4001 of 1968) delivered on 11th November, 1970, is printed below: ] G. NARSIMHULU & CO. v. STATE OF ANDHRA PRADESH AND OTHERS The judgment of the court was delivered by GOPAL RAO EKBOTE, J.-This is an application filed under article 226 of the Constitution of India seeking the issue of a writ of mandamus directing the respondents to return to the petitioners the sum of Rs. 42,394.13 together with interest towards the tax provisionally paid for the assessment years 1956-57 and 1957-58. The relevant facts as we gather from the writ petition and the counter may briefly be stated. The petitioners are registered dealers carrying on business in groundnut oil and cake at Nandyal. During the assessment years 1956-57 and 1957-58, the petitioners filed monthly returns of the turnover as per rule 17 of the Rules made under the Andhra Pradesh General Sales Tax Act and provisionally paid the tax of Rs. 15,905 and Rs. 24,829. The Commercial Tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment orders made by the assessing authority in toto and, therefore, there is no assessment order which could be enforced against the petitioners and consequently the provisional payment which the petitioners have made ought to be refunded to the petitioners under the relevant rule. The department, however, contends that the orders of the appellate authority do not set aside the assessment order in their entirety. Since the scope of the appeal was confined to certain turnovers and certain transactions, it is only to that extent that the appeals would be deemed to have been allowed and the assessment orders set aside. The other portion of the assessment orders which was not carried in the appeal and which was not set aside by the appellate authority remains valid and intact. The tax which was provisionally paid originally was appropriated towards the final assessment order to that extent. The short question therefore is whether the orders of the appellate authority set aside the assessment orders in their entirety or only to a limited extent. Now in regard to the assessment relating to the 1956-57 the contention before the appellate authority was limited. We have already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant was a second dealer, but that investigation had to be made in respect of the turnover of Rs. 80,915-8-6. We are thus satisfied that in so far as 1956-57 is concerned the matter was remanded only for verifying the turnover of Rs. 80,915-8-6. Since no final assessment order to that extent was passed, this amount has to be deducted from the turnover found by the assessing authority. Similarly in regard to the second year, that is to say, 1957-58, on the same grounds the appellate authority had remanded the case. In that case also the order dated 17th July, 1962, makes it abundantly plain that the amount of relief claimed was confined to a turnover of Rs. 39,039-5-6. The same two contentions were raised and were allowed. The order makes it abundantly plain that the subject-matter of the appeal was confined to that turnover. The arguments advanced before the appellate authority were also confined only to that extent. The matter therefore was thus remanded only for the verification of the turnover of Rs. 39,039-5-6 and no other part of the assessment order was touched or set aside, and since no final assessment order even in regard to this year could be passed because of the li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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