TMI Blog2011 (11) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 17-11-2011 - DR. SHRI D.Y.CHANDRACHUD SHRI A.A. SAYED, JJ Appearances by: Ms. Uma Palsuledesai AGP for the Applicant. Mr. P.V. Surte for the Respondent. ORAL JUDGMENT (PER DR.D.Y.CHANDRACHUD, J.) : 1. The present application is directed against an order dated 23 March 2011 passed by the Maharashtra Sales Tax Tribunal rejecting an application under Section 61 of the Bombay Sales Tax Act 1959 for a reference of the following questions of law for the decision of this Court : 1) Whether the Tribunal was justified in holding that the order of assessment did not merge in first appeal order since the appeal before first appellate authority was against imposition of penalty and interest particularly in view of the fact that appellant had reserved the right to add, alter, amend and delete any of the grounds of appeal. 2) Whether the Tribunal was justified in holding there was no merger of assessment order with the appeal order and the revision order was barred by limitation. 2. The Respondent is a registered dealer manufacturing engines and their spare parts, bearings of oil engines, auto parts, tractor spares and other products. As a dealer the Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Section 57(1)(a). The appeal filed by the dealer was accordingly allowed; the order passed by the Additional Commissioner of Sales Tax revising the assessment was set aside and the assessment order dated 31 March 1999 passed by the Assessing Officer was restored. The revenue thereupon filed an application under Section 61 for a reference to this Court of the questions of law as noted earlier. The Reference Application was dismissed by the impugned order dated 23 March 2011. 4. Counsel appearing on behalf of the Revenue submits that though the dealer had filed an appeal against the order of assessment dated 31 March 1999 only on the question of interest and penalty, the dealer had nonetheless reserved his right to add, alter or amend the grounds of appeal. According to the Revenue, the order of assessment which was passed on 31 March 1999 must be regarded as having merged with the order of the appellate authority dated 30 June 2000. Hence, the revisional order which was passed on 27 June 2005 was within a period of five years of the order passed by the Deputy Commissioner and was within limitation. 5. On the other hand, it was urged on behalf of the dealer that the doctrine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The first appellate authority allowed the appeal preferred by the dealer on 30 June 2000. Ex facie, the notice dated 27 August 2001 issued by the revisional authority would indicate that the revisional jurisdiction was sought to be exercised in respect of the order of assessment itself. That is not in dispute before this Court. The issue before the Court is as to whether the order of assessment dated 31 March 1999 had merged with the order of the first appellate authority dated 30 June 2000. Evidently as the record before the Court would indicate the order of assessment was challenged only by the dealer and that too on the two grounds alone viz. on the penalty and interest that were levied by the Assessing Officer. The rest of the order was not in challenge before the first appellate authority. Hence, in a situation such as the present, there would be no occasion to apply the doctrine of merger where the order of the Assessing Officer was subjected to only a limited challenge and that too at the behest of the registered dealer. 8. The doctrine of merger postulates that an order which is passed by a lower authority merges in an order passed by a higher forum before which the cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion on the value of yarn purchased from outside the state of Madras was not the subject matter of the revision before the Deputy Commissioner of Commercial Taxes. The only point that was urged before the Deputy Commissioner was that the sum calculated by the Respondent by way of tax should not be included in the taxable turnover. This was the only point raised before the Deputy Commissioner and was rejected by him in the revisional proceeding. On the contrary, the question before the Board of Revenue was whether the Deputy Commercial Tax Officer was right in excluding from the net taxable turnover, the sum representing the value of cotton purchased from outside the State. On these facts, which are similar to those of the present case, it was held that the doctrine of merger would not apply. The judgment of the Supreme Court is an authority for the following proposition : But the doctrine of merger is not a doctrine of rigid and universal application and it cannot be said that wherever there are two orders, one by the inferior tribunal and the other by a superior tribunal, passed in an appeal or revision, there is a fusion or merger of two orders irrespective of the subject mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjudicating authority was justified in disallowing deductions under the two heads and had no occasion to examine the admissibility of the deductions under the remaining six heads : Applying the above test to the case at hand the doctrine would have no application for the plain and simple reason that the subject matter of the appeal filed by the assessee against the adjudicating authority s order in original was limited to disallowance of two out of eight deductions claimed by the assessee. The Tribunal was in that appeal concerned only with the question whether the adjudicating authority was justified in disallowing deductions under the said two heads. It had no occasion to examine the admissibility of the deductions under the remaining six heads obviously because the assessee s appeal did not question the grant of such deductions. Admissibility of the said deductions could have been raised only by the Revenue which had lost its case qua those deductions before the adjudicating authority. Dismissal of the appeal filed by the assessee could consequently bring finality only to the question of admissibility of deductions under the two heads regarding which the appeal was filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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