TMI Blog1987 (6) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... eals against these orders of assessment under section 34(1) of the Act before the Deputy Commissioner of Sales Tax (Appeals), Ernakulam, he being an Appellate Assistant Commissioner as defined in section 2(i). The assessing authority appears to have reported to the Deputy Commissioner that the assessee had not paid in full the tax admitted to be due as per the returns filed by them. The Deputy Commissioner was therefore of the view that the appeals were liable to be summarily rejected under the second proviso to section 34(1), which reads: "Provided further that in the case of an order under sub-section (2) or subsection (3) of section 17, sub-section (1), sub-section (2) or sub-section (3) of section 18 or sub-section (1) or sub-section (2) of section 19, no appeal shall be entertained under this sub-section unless it is accompanied by satisfactory proof of the payment of the tax or other amounts admitted by the appellant to be due or of such instalment thereof as might have become payable, as the case may be." He issued a notice dated March 28, 1984, pointing out the report of the assessing authority and directing the assessee to produce evidence, of having remitted the balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal would have no jurisdiction over an appeal against such an order of the first appellate authority. The Additional Deputy Commissioner (Appeals) has expressly specified in his order that the appeal petitions against the assessments for 1979-80 to 1982-83 are rejected as not maintainable under the second proviso to section 34(1) of the Kerala General Sales Tax Act, 1963. Section 39(1) provides for an appeal before the Tribunal against the order of the Appellate Assistant Commissioner under sub-section (3) of section 34 only as expressly specified under the section." The assessee is in revision before us against this common order. 7. We may at this point make reference to four original petitions filed by the assessee under article 226 of the Constitution to call for the records relating to the order of the Deputy Commissioner referred to in paragraph 4 herein above, and to quash the same as illegal, and to direct the Deputy Commissioner to consider the appeals filed before him on merits. These original petitions were also heard along with the tax revision cases. 8.. An order of assessment passed by the assessing authority is made appealable under section 34(1) to the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TC 463 (Ker); 1979 KLT 250 and Rajagiri Rubber Produce Co. Ltd. v. Additional Sales Tax Officer [1983] 53 STC 370 (Ker); 1983 KLT 475], or maybe, he can contend having regard to subsequent events or decisions of superior courts, that certain amounts which had been included in the returns as taxable were nevertheless exempt from levy, or liable to tax at reduced rates. Various situations like this can be visualised, which an assessee may be able to put forward in alleviation of the non-payment of amounts "admitted" by him to be due. These are not matters which will be apparent from a perusal of the records. The first appellate authority will be able to ascertain the facts and determine whether any admitted amount remains unpaid only after affording an opportunity to the assessee-appellant to put forward his case. The assessee has to be apprised of the proposal to reject the appeal for non-compliance with the second proviso to section 34(1), his objections called for, and the assessee heard before any order refusing to entertain the appeal is passed. An oral or personal hearing may not always be necessary, whether such a hearing should be afforded or not will depend on the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 34(1). As held by the Supreme Court in Lakshmiratan Engineering Works Ltd. v. Assistant Commissioner [1968] 21 STC 154 the direction in the proviso is that the Appellate Assistant Commissioner shall not proceed to admit to consideration an appeal which is not accompanied by satisfactory proof of payment of the admitted tax. What is barred, therefore, is the consideration of the appeal on merits. An appeal so filed and which is an appeal in the eye of law, has necessarily to be disposed of. The provision relating to disposal of an appeal is that contained in section 34(3). Any disposal of the appeal, whether on merits or on preliminary grounds like limitation, non-payment of admitted tax, irregularity in filing it or otherwise has necessarily to be referred to section 34(3). Any such order is therefore first an order on the appeal and second, one under section 34(3). It is therefore appealable under section 39. 12.. The matter can be viewed from another angle also. The order of rejection of the appeal for non-compliance with the second proviso to section 34(1) and refusing to entertain it on merits, is in substance one confirming the assessment. The only difference between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection was raised that the order passed by the Appellate Assistant Commissioner was one under section 30(2) and not under section 31 and hence it was not appealable to the Tribunal under section 33. The High Court accepted this contention; the assessee went up in appeal to the Supreme Court. The matter was dealt with exhaustively by the Supreme Court with reference to the provisions of the Act and various decided cases on the point. Inter alia, the court accepted the various decisions relied on by the assessee and held that to fall within the ambit of section 31, it was not necessary that the order should expressly address itself to, and decide on the merits of the assessment, and that it was sufficient that the effect of the order was to confirm the assessment, as when the appeal is dismissed on a preliminary point. The following observations of Justice Satyanarayana Rao in Commissioner of Income-tax v. Shahzadi Begum AIR 1952 Mad. 232 were approved in this context: "If the appeal is dismissed as incompetent or is rejected as it was filed out of time and no sufficient cause was established, it results in an affirmation of the order appealed against. " 15.. The following pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. An appeal against an order imposing penalty did not however lie unless the tax had been paid because of the proviso to the section which was in these terms: "Provided that no appeal shall lie against an order under sub-section (1) of section 46 unless the tax has been paid." The proviso and the right of second appeal have been the subject of consideration in the decisions to which we shall refer. 19, We may first refer to the decision in Commissioner of Income-tax v. Filmistan Ltd. [1961] 42 ITR 163, where the Supreme Court, dealing with the above proviso, observed: "The meaning of the words 'no appeal shall lie' in the first proviso to section 30(1) of the Income-tax Act is not that no memorandum of appeal can be presented. All that the proviso means is that the appeal will not be held to be properly filed until the tax has been paid. If, for instance, the memorandum of appeal is filed on the 20th day, i.e., 10 days before the period of limitation expires and the tax is paid within the rest of the 10 days, the appeal will be a proper appeal? it will be within time and no question of limitation will arise, but if the tax is paid after the period of limitation has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessments, which opens up the remedy of appeal for the aggrieved assessee to the Appellate Tribunal under section 39. 22.. The scope of the appeal before the Tribunal will however be limited to the question whether the non-entertainment of the appeal for non-compliance with the second proviso to section 34(1) of the Act was proper or not. Questions relating to the merits of the assessment are beyond the purview of this appeal [vide Bhubaneswar Flour Mills v. State of Orissa [1983] 52 STC 192 (Orissa)]. 23.. The Tribunal has not gone into the question whether the rejection of the appeals by the Deputy Commissioner was valid or not. The matters have therefore to go back to the Tribunal for fresh disposal. The Tribunal win take back the appeals on file and deal with the question whether the Deputy Commissioner was justified in rejecting the appeals in limine and whether he should have entertained the appeals on merits. 24.. The tax revision cases are disposed of as above. 25.. The writ petitions had been filed by the assessee challenging the validity of the second proviso of section 34(1) of the Act. Counsel states that these petitions are filed only in the alternative ..... X X X X Extracts X X X X X X X X Extracts X X X X
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