TMI Blog1993 (6) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... ers on the ground that these battery plates come within the purview of "batteries of motor vehicles and parts thereof" under entry 73-B of the Second Schedule to the Act and therefore the relevant turnover was taxable at 13 per cent. The Deputy Commissioner of Commercial Taxes opined that under entry 73-B, only the batteries are included, but not accessories or the component parts and that the battery plate sold by the assessee was neither a spare part nor the part of the battery; entry 73-B does not include the words "accessories or component parts". The above orders and the assessment orders were revised by the Commissioner of Commercial Taxes under section 22-A of the Act. The Commissioner held that the records show that the assessee "is, inter alia, a manufacturer of storage batteries of motor vehicles. Besides these motor vehicle batteries the dealer had also manufactured and sold lead battery plates. It is not disputable from the records that the lead battery plates were those used and usable in the motor vehicle batteries which are also manufactured by the dealer". Thereafter he proceeded to hold that these lead battery is an essential part of a battery and is part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice issued under section 22-A by the Commissioner, to the assessee, states that the assessment orders as well as SMR orders (orders made by the Deputy Commissioner) are erroneous and prejudicial to the interest of the Revenue and it was proposed to set aside the assessment orders and the SMR orders under section 22-A and to remand the cases for fresh disposal. If essentially it is a case of revising the SMR orders, there can be no doubt that proceedings under section 22-A were initiated within 4 years of the passing of the earlier SMR orders. However, if the limitation operates from the original orders of assessment, initiation of proceedings under section 22-A so far as it pertains to the years 1979-80, 1980-81 and 1981-82 would be barred by time; the only proceeding that would be within the bar of limitation would be of the year 1982-83. Re. First contention: Mr. Srinivasan contended that when suo motu proceedings to revise the assessment order (SMR) were initiated, original assessment orders ceased to exist; when the said SMR proceedings were dropped, there were no effective orders passed. Therefore in the eye of law no order existed capable of being revised by the Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..........once an assessment is reopened, the initial order for assessment ceases to be operative. The effect of reopening the assessment is to vacate or set aside the initial order for assessment and to substitute in its place the order made on reassessment. The initial order for reassessment cannot be said to survive, even partially, although the justification for reassessment arises because of turnover escaping assessment in a limited field or only with respect to a part of the matter covered by the initial assessment order. The result of reopening the assessment is that a fresh order for reassessment would have to be made including for those matters in respect of which there is no allegation of the turnover escaping assessment. As it is, we find that in the present case the assessment orders made under section 12-A were comprehensive orders and were not confined merely to matters which had escaped assessment earlier. In the circumstances, the only orders which could be the subject-matter of revision by the appellant were the orders made under section 12-A of the Act and not the initial assessment orders." The ratio should govern the proceedings under section 21 of the Act als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late or revisional order and the scope of the appeal or revision contemplated by the particular statute. In our opinion, the application of the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction." If the subject-matter of the appeal or revision is entirely different, the merger thereby is not applicable, as it happens when an order of assessment is actually a composite order, of which one aspect is not within the purview of the higher jurisdiction of revision or appeal. In the above Madurai Mills Co. case [1967] 19 STC 144; AIR 1967 SC 681, Deputy Commercial Tax Officer made an order of assessment; assessee filed an appeal to Commercial Tax Officer challenging the inclusion of two items in the turnover. The Commercial Tax Officer excluded one of the items from the turnover; consequently Deputy Commercial Tax Officer issued a revised order of assessment. Assessee filed a revision petition to Deputy Commissioner challenging the appellate order in respect of other items; this revision petition was dismissed. The Board of Revenue thereafter issued a notice propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or reverses the decision of the Tribunal, it is the appellate decision that is effective and can be enforced and in law the position would be just the same even if the appellate decision merely confirms the decision of the Tribunal. We have already noted that there can be no substantial distinction between an appellate or a revisional proceedings and the doctrine of merger would govern both sets of cases. In Commissioner of Income-tax v. Hindustan Aeronautics Ltd. [1986] 157 ITR 315; ILR 1986 Kar 1, a Full Bench of this Court had to consider the scope of merger under the provisions of the Income-tax Act. Speaking for the Full Bench, Hakeem, J., observed at page 323 of ITR; 12 of ILR: "From these decisions, it will be clear, that when an appellate authority has in fact dealt with an issue in its order, such matters are covered by the doctrine of merger. Similarly, if an appellate authority does not have the jurisdiction under the law to deal with an issue, the doctrine of merger does not operate in respect of that issue. These are now undisputed propositions. The controversy, however, is in relation to the application of the doctrine in each case depending upon the scope of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the revisional authority and while reading the latter order, everything which has merged into it shall have to be referred. Re. Second contention Original order of assessment discloses that the assessee had sold "automobile batteries as first dealer"; assessee also had sold "lead battery plates". During 1979-80, according to the assessee the turnover of automobile batteries was Rs. 63,597 and of "lead batteries" Rs. 2,44,781.25. The assessee had filed objections to the notice issued by the Commissioner under section 22-A. In the objections, assessee had not categorically asserted that the lead batteries dealt by the assessee were not meant for motor vehicle batteries; the stand taken by the assessee is not quite clear. In one para, the assessee stated: "The battery plates may be accessories to the batteries, they cannot be treated as parts since the battery plates are used other than the batteries of motor vehicles, also and therefore the same cannot be brought under schedule entry 73-B of the Second Schedule." In another part, assessee stated: "Thus the battery plates are also not a device which is essential or integrated part of motor vehicles but merely a supp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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