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2019 (3) TMI 235

..... 13.06.2017 moved by the revisionist for its withdrawal and without there being any request made by the department for enhancement of assessment is contrary to the provisions of Section 55 of the U.P. VAT Act? - Held that:- The nature of the right given to the assessee was examined by this Court in the case of R.R. Brick Factory Vs. Commissioner Of Sales Tax [2004 (5) TMI 537 - ALLAHABAD HIGH COURT]. Though it is true, in that case, the Court had the occasion to consider the language of the proviso to Section 9(3)(b) of the U.P. Sales Tax Act, 1948, however, it cannot be denied that the language of proviso to Section 55(5) of the Act is pari materia in material aspect i.e. as to the effect of a proper application filed to Section 9(3)(b) of the U.P. Sales Tax Act, 1948. - The first difference in the language of two provisions appears to be, under the Central Act, the person/authority who could make the 'request' and defeat the right of the assessee to withdraw his appeal was not specified. It could be made by any authority. Only requirement was it (request), had to exist for the purpose of making the enhancement of tax or penalty as the case may be whereas under the VAT Act .....

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..... vour that may further allow the appeal authority to issue any directions for the purpose of conduct of a fresh inquiry for the purpose of making fresh assessment - the appeal authority had no jurisdiction surviving in him to pass any order referable to Section 55(5)(iii) of the Act after the assessee had filed an application to withdraw his appeal and there was no request made by the Commissioner to examine the legality or propriety of the order under appeal. - Appeal allowed - decided in favor of assessee. - Sales/Trade Tax Revision No. - 277 of 2018 - 1-3-2019 - Saumitra Dayal Singh,J. For the Applicant : Rahul Agarwal For the Opposite Party : C.S.C. ORDER SAUMITRA DAYAL SINGH,J. 1. The present revision has been filed by the assessee for the A.Y. 2012-13 under Section 58 of the U.P. Value Added Tax Act, 2008 (hereinafter referred to as the Act ). 2. The following questions of law are involved in the present revision: (i) Whether the order of the Tribunal below in sustaining the remand of the matters for A.Y. 2012-13 (U.P.) by the first appellate authority despite the application dated 13.06.2017 moved by the revisionist for its withdrawal and without there being any request m .....

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..... (on four points to determine whether the assessee had been underassessed to tax), before any order may be passed on its application to withdraw the aforesaid appeal. The points on which the assessee was required to show cause are relevant to facts discovered by the SIB during the survey dated 21.01.2013. 5. At that stage, the assessee filed a second application on 05.12.2017, again praying to dismiss its appeal as withdrawn. In that application, it was also stated that the notice dated 20.06.2017 was not referable to any provision of law as there did not exist on the statute book, Section 55(5)(2)(ii). 6. Apparently, after receipt of such reply, the first appeal authority issued another notice dated 07.12.2017, describing it to be one under Section 55(5)(a)(ii) of the Act. The substance of the notice and its purpose remained the same as noted above, with respect to the earlier notice dated 20.06.2017. 7. In the meantime, the assessing authority responded to the earlier notice issued by the appeal authority dated 20.06.2017. By his reply dated 05.12.2017, the assessing authority stated, additions had been made in the original assessment in the case of the assessee on the basis of fa .....

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..... er, the appeal authority specifically referred to point no.3 of the notice issued under Section 55(5) of the Act being 'Parcha' no.4 with reference to seized Exhibit no.2 pertaining to transportation of 220 packings of bicycle spokes from Delhi to Vallabhgarh. The appeal authority noted that the said transaction had been accepted in the assessment proceedings for the A.Y. 2012-13 (Central) and that respect to which, there was no appeal filed by the assessee. In such fact, the appeal authority specifically recorded its finding that such transaction represented undisclosed Central sale made by the assessee and to that extent, there was under-assessment of Central Sales Tax. 12. The first appeal authority further observed, the assessee had not furnished any reply on the above count and the assessing authority had desired an opportunity to re-examine the issue. Therefore, referring to provisions of Section 29(9) of the Act, a direction was issued to the assessing authority to initiate proceedings under Section 29(9) under the Central Act for A.Y. 2012-13 (Central). However, with respect to the A.Y. 2012-13 (U.P.), the appeal authority allowed the assessee's appeal and remit .....

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..... e assessee submits, in the first place, once the assessee had filed an application on 13.06.2017, the appeal authority had to allow that application inasmuch as on that date, there was no request pending before it by the Commissioner/competent departmental authority, to examine the legality or propriety of the assessment order that was under appeal before the first appeal authority. 17. Heavy reliance has been placed on the provisions of Section 55(5) of the Act to submit, option given to the assessee/appellant to withdraw his first appeal was nearly absolute and it was subject only to one limitation being, on the date of the application to withdraw the appeal being filed, there should not be found pending before the first appeal authority any request made on behalf of the competent departmental authority to examine the legality or propriety of the order under appeal. 18. Alternatively, it has been submitted, the first appeal was for the A.Y. 2012-13 (U.P.) and admittedly, no appeal had been preferred by the assessee for the A.Y. 2012-13 (Central). In absence of categorical finding being recorded, the order passed by the first appeal authority cannot be described as one referable t .....

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..... oked by the appeal authority, the application, if any, filed by the assessee to withdraw his appeal would loose its significance. The assessee cannot have a right to defeat the jurisdiction and authority of the appeal authority, to enhance the assessment. 23. As to the submission advanced by learned counsel for the assessee that there is no finding of enhancement, therefore, the order passed by the appeal authority is not referable to Section 55(5)(a)(ii) of the Act and that the notice dated 20.06.2017 described it to be under Section 55(5)(2)(ii) of the Act is a nullity, it has been submitted, mere wrong description of a section in the notice would not invalidate the same. Insofar as the notice dated 20.06.2017 is clearly referable to the powers vested with the first appellate authority under Section 55(5)(a)(ii) of the Act and inasmuch as it clearly refers to enhancement proposed to be made, no benefit can be had by the assessee because of a typographical error in the description of section under which, the notice dated 20.06.2017 had been issued. 24. Then, with respect to the order passed by the first appeal authority, it has been submitted that though a notice was issued by the .....

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..... ' and defeat the right of the assessee to withdraw his appeal was not specified. It could be made by any authority. Only requirement was it (request), had to exist for the purpose of making the enhancement of tax or penalty as the case may be whereas under the VAT Act that request may be made by the Commissioner (as defined under the Act). It includes within its meaning officers of the rank of Joint Commissioner and above. Second, the request now required to be made not with respect to enhancement but to examine the legality or propriety of the order under appeal. However, as to the effect of the application being moved in absence of such request, the two provisions are pari materia. 29. In the case of R.R. Brick Factory Vs. Commissioner Of Sales Tax (supra), the assessee had filed an application to withdraw his appeal pending before the first appeal authority, which was opposed by the departmental representative on the ground - presumably it was a case of under-assessment and therefore, a further inquiry was initiated, which was also pending. Therefore, the department approached the appeal authority to decide the appeal on merits. In such fact, the appeal authority recorded a .....

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..... r the Act could oppose such application by requesting the appeal authority on the basis of any illegality or impropriety that may be pointed out in the order under appeal, but not otherwise. Therefore, the written request made by the assessing authority/Deputy Commissioner who was clearly of rank below the Joint Commissioner (to be permitted to review the assessment order), was not maintainable. It could not be relied to reject the withdrawal application filed by the assessee to withdraw his appeal. Therefore as a fact, there did not exist any request in terms of the proviso to Section 55(5) of the Act. The findings to the contrary are perverse and based on a complete misreading of the provision of law. 35. In the context of the right given to the assessee/appellant to withdraw his appeal, it is seen, the proviso though does not expressly over ride the main part of the Section 55(5) of the Act, however, it preserves the power of the appeal authority to allow the assessee to withdraw his appeal at any stage and that power is not precluded by any part of the main sub-section 5 of Section 55 of the Act. Here, it may be relevant to extract Section 55(5) of the VAT Act. 36. Section 55(5 .....

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..... ther clarified under the proviso that the option given to the assessee to withdraw is precluded by anything contained in the main part of sub-section (5) of Section 55 of the Act. Therefore, it has to be held, in absence of any request to examine the legality or propriety of the order under appeal (as contemplated under sub proviso to Section 55(5) of the Act), the appeal authority could only have dismissed the appeal filed by the assessee with such observation as may have been permissible in law. However, the appeal authority could not have rejected the application moved by the assessee to withdraw his appeal, even though part hearing may have taken place in the appeal. 39. Also, in the facts of the present case, it remains undisputed that though the appeal had been heard on 29.12.2016 and perhaps on 10.04.2017, no notice proposing to make enhancement was issued prior to 20.06.2017. Though I am not inclined to accept the submission advanced by learned counsel for the assessee that the notice dated 20.06.2017 was a nullity since it referred to non-existent section under which it had been issued, however, assuming the same to be the first notice proposing to make enhancement as may .....

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..... ct of a fresh inquiry for the purpose of making fresh assessment. To that extent, findings recorded in the earlier decision of this Court in the case of R.R. Brick Factory Vs. Commissioner Of Sales Tax (supra) is pertinent inasmuch as it had been held as below: In any view of the matter the order allowing the appeal against the wishes of the appellant cannot be sustained even by invoking the said proviso. 43. Therefore, the appeal authority had no jurisdiction surviving in him to pass any order referable to Section 55(5)(iii) of the Act after the assessee had filed an application to withdraw his appeal and there was no request made by the Commissioner to examine the legality or propriety of the order under appeal. 44. The only course that survived with the appeal authority was to have dismissed the appeal as withdrawn with such observations as it may have deemed fit. For the consequences of those provisions to arise, the provisions of Section 29(9) of the Act provides for limitation. However, by virtue of Section 29(9) of the Act existing on the statute book, no fresh or other power arises to the appeal authority to pass any order, to either set aside the assessment order under app .....

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