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M/s Ambuja Cement Ltd. Versus State of Punjab And Another

2016 (1) TMI 142 - PUNJAB & HARYANA HIGH COURT

Whether the first appellate authority was justified and within its jurisdiction to remand the matter for passing fresh assessment order after considering the issues which were not assailed by the assessee - Held that:- Court that under the HGST Act, the appellate authority i.e. the DETC(A) had not been vested with the powers to act on his own motion. Only when an appeal was filed under Section 39 of the Act, did the appellate authority adjudicate upon the specific issues raised in the grounds of .....

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, the DETC(A) was not held to be competent to go into the matters not raised in the appeal and set aside the order of the assessing authority. - Appellate authority was not justified in remanding the matter for fresh assessment for considering those issues which were not subject matter of appeal before it. Consequently, the impugned order dated 30.3.2015 passed by the Tribunal as well as order dated 17.7.2014 passed by the DETC(A) for remanding the matter for fresh assessment are set aside .....

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as according to the learned counsel for the parties, the issue involved in all these appeals is identical. However, the facts are being extracted from VATAP No.11 of 2015. 2. VATAP No.11 of 2015 has been filed by the revenue under Section 9(2) of the Central Sales Tax Act, 1956 (in short, the CST Act) read with Section 68 of the Punjab Value Added Tax Act, 2005 (in short, the PVAT Act) against the order dated 30.3.2015, Annexure A.6 passed by the Punjab Tribunal (constituted under the Punjab Va .....

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wered to decide those issues which have not been raised in the grounds of appeal and no appeal has been filed by the revenue? 3. A few facts relevant for the decision of the controversy involved as narrated in VATAP No.11 of 2015 may be noticed. The assessee is a dealer who is engaged in the manufacturing and sale of cement having its manufacturing units at Ropar and Bathinda in Punjab. The Ropar unit is exempted under the provisions of the Punjab General Sales Tax (Deferment and Exemption) Rule .....

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urns filed by the appellant in VAT 20. In the reruns filed by the appellant, it had calculated notional tax liability on the stock transfers made by it to its own branches in other States for subsequent sale as per the value of goods at the time of dispatch derived by adding margin and primary freight upto the destination in the cost of the goods and some portion of gross profit so as to arrive at the correct value of stock transfer. The value so determined was considered as the estimated value .....

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the rate of 4% and was reduced from the total overall exemption limit of the assessee which was available to it at the beginning of the year 2009-10. For the assessment years 2005-06 and 2006-07, similar methodology had been adopted by the appellant and was being accepted by the respondents. Before the Assistant Excise and Taxation Commissioner, detailed submissions had been made by the assessee to the effect that only the value of goods at factory gate and primary freight can be considered to .....

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mponents, the value of goods could not be included in any other manner. Feeling aggrieved, the assessee filed appeal before the Deputy Excise and Taxation Commissioner (Appeals) [DETC(A)]. The DETC (A) recorded the version of the Excise and Taxation Inspector in detail to the effect that the impugned order was illegal and needed to be set aside as fresh orders were required to be made since the stock transfer price had been determined on the lower side and therefore, the case needed reconsiderat .....

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first appellate authority. The assessee approached this Court by filing CWP No.18476 of 2014. This court allowed the assessment proceedings to continue but directed that draft order shall be produced before the court on the next date of hearing. The assessee approached the Apex Court by filing SLP(C) No.26831 of 2014. The Apex Court granted liberty to the assessee to raise the issues before this court. In pursuance to the aforesaid order, this Court relegated the assessee to appear before the V .....

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rd learned counsel for the parties. 5. The primary issue that arises for consideration in this appeal is whether the first appellate authority was justified and within its jurisdiction to remand the matter for passing fresh assessment order after considering the issues which were not assailed by the assessee. Support was drawn from judgments in State of Haryana vs. Frick India limited, (1990) 76 STC 148 (P&H), Global Business India Pvt. Limited vs. State of Haryana (2013) 45 PHT 439 (P&H .....

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s but had dropped them in the light of the order of the first appellate authority. Thus, a prayer was made for revival of the revisional proceedings. 7. The matter is no longer res integra. In State of Haryana vs. Frick India Limited, (1990) 76 STC 148, the question for consideration was whether the appellate authority was competent to go into the matters which were not raised in appeal and direct examination of the fresh issues by the assessing authority which the appellate authority considered .....

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ic issues raised in the grounds of appeal or upon those which were urged before it at the time of hearing. The respondent was also given an opportunity to be heard and to reply to the points raised by the appellant. However, the appellate authority while deciding an appeal filed by a party could not take up issues on merit which had not been raised by the appellant. The respondent in the appeal could not invite the appellate authority to take up on merits points or issues not raised,pleaded or u .....

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der is made by the Deputy Excise and Taxation Commissioner, to the Commissioner and if the order is made by the Commissioner, to the Tribunal. 7. It is also clear from the language of Section 39 and has indeed been conceded by the learned counsel for the parties that both the assessee and the department can file appeals against the orders by which they are aggrieved. On an appeal filed, the appellate authority has been invested with powers to pass such orders as it may deem to be just and proper .....

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t or the Rules, may file an appeal against that order raising its grievances and pleas challenging the legality and propriety of the order. Whatever pleas are raised by a party in its appeal, are examined by the appellate authority and a decision is rendered thereon affirming by varying, amending or rescinding the impugned orders or remanding the case for fresh decision. This jurisdiction, however, can be invoked only on appeal filed by a party. The Deputy Excise and Taxation Commissioner in con .....

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ness India Pvt. Limited's case (supra), wherein it was recorded as under:- 11. The issue in respect of the power of the Tribunal to enhance the tax liability came up for consideration before the Supreme Court in State of Kerala v. Vijaya Stores, (1978) 4 SCC 41. The Court held that Kumar Vimal the Tribunal cannot enhance the Tax lability against the dealer in an 2013.04.26 12:24 I attest to the accuracy and integrity of this document Chandigarh VATAP Nos.123 & 122 of 2012 -7- appeal file .....

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s urged that such power could be exercised even when the appeal against the Appellate Assistant Commissioner's assessment order had been preferred by the assessee and not by the Department. To place such a construction on sub-section (4) (a)(i) would amount to ignoring the scheme of Section 39. Subsection (1) provides for an appeal being preferred against an assessment order passed by the Appellate Assistant Commissioner under Section 34(3) either by the assessee or by the Department through .....

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uding cross-objections) and the power conferred upon the Appellate Tribunal under Section 4(a) (i) is "to confirm, reduce, enhance or annul the assessment"; the power to enhance the assessment must be appropriately read as relatable to an appeal or cross-objections filed by the Department. The normal rule that a party not appealing from a decision must be deemed to be satisfied with the decision, must be taken to have acquiesced therein and be bound by it, and, therefore, cannot seek r .....

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t the construction placed by the counsel for the appellant on sub-section (4) (a) (i) would be really rendering sub-section (2) of Section 39 otiose, for if in an appeal preferred by the assessee against the Appellate Assistant Commissioner's order the tribunal would have the power to enhance the assessment, a provision for cross-objections by the Department was really unnecessary. Having regard to the entire scheme of Section 39, therefore, it is clear that on a true and proper construction .....

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td. case (supra). We may notice that the provisions under consideration in Vijaya Stores case (supra) were some what different. The Kerala Act contemplated filing of appeal and cross objections. Therefore, the court held that scheme of the Statue does not contemplate enhancement of Tax, without availing the remedy of appeal or cross objections. Though, in the Statue under consideration, there is no provision of filing of cross objections but that fact will not materially change the position of l .....

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p; 122 of 2012 -9- orders in accordance with the orders now passed by this court. However, the acceptance of these appeals will not preclude the Revenue to initiate such other proceedings as are permissible in law against the dealer in accordance with law. 8. Similarly in The State of Kerala vs. M/s Vijaya Stores, (1978) 4 SCC 41, enhancement of assessment by the Tribunal in the absence of cross appeal or cross objections by the department was held to be impermissible. It was observed by the Ape .....

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eputy Commissioner under subsection (1) of section 35, and any person objecting to an order passed by the inspecting Assistant Commissioner under clause (c) of sub-section (4) of section 28 may, within a period of sixty days from the date on which the order was served on him in the manner prescribed, appeal against such order to the Appellate Tribunal; Provided that the Appellate 'Tribunal may admit an appeal presented after the expiration of the said period if it is satisfied that the appel .....

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, a memo random of cross-objections, verified in the prescribed manner against any part of the appellate Assistant Commissioner, and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (1). [1961] 12 S.T.C. 677. 19-526 SCI/78542 (3) The appeal or the memorandum of cross-objections shall be in the prescribed form and shall be verified in the prescribed manner, and, in the case of an appeal preferred by any perso .....

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he asses sing authority to make a fresh assessment after such further enquiry as may be directed; or (iii) pass such other orders as it may think fit; or (b) in the case of any other order, confirm, cancel or vary such order." Considerable emphasis was laid by counsel for 'the appellant upon sub-s.(4) which indicates what things the Appellate Tribunal may do while disposing of an appeal and in particular it was pointed out that under 'sub-s.(4)(a)(i) the Appellate Tribunal has been .....

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eal being preferred against an assessment order passed by the Appellate Assistant Commissioner under s. 34(3) either by the assessee or by the Department through an officer empowered by the Government in that behalf. Further, sub-3. (2) provides for filling of cross-objections by a party, against whom an appeal has been preferred, notwithstanding that he has not himself appealed against the decision or any part thereof and such cross-objections are to be disposed of by Appellate Tribunal as if i .....

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