TMI Blog1990 (12) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... ner, the sales tax payable on this material is 4% with a surcharge of 10% thereon. Accordingly accepting the claim of the petitioner for this item with respect to the Assessment Year 1986-87, the Assistant Commissioner (Assessment), vide his order dated February 28, 1989, assessed the petitioner's turnover and determined the total amount of tax payable on SBE at ₹ 82,933.33. As, however, the Assessing Authority had not accepted the petitioner's claim with regard to the items of acid oil and iron drums, the petitioner filed an appeal before the Commissioner (Appeals), Sales Tax, Ghaziabad Region. The appellant claimed that these items too were assessable at 4% and not 8%. The appeal was allowed by the Deputy Commissioner (Appeals), Sales Tax, by his order dated January 6, 1990 holding that the items of iron drums and acid oil were assessable at the rate of 4%. Thereafter the Assistant Commissioner (Assessment), Sales Tax issued the impugned notice dated September 19, 1990 to the petitioner stating that the petitioner's turnover with regard to the item of Spent Bleaching Earth was wrongly assessed at 4% when legally it was liable to be assessed as an unclassified it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the order of assessment passed by the Income Tax Officer having merged in the appellate order passed by the Appellate Assistant Commissioner, the Commissioner of Income Tax was not competent to revise the decision of the Income Tax Officer even though the attempt of the Assistant Commissioner to reopen the assessment order was with respect to a matter which was not the subject-matter of appeal before the Appellate Assistant Commissioner. What had happened was that the J. K. Synthetics had claimed to be a petro-chemical industry, to which Section 33 (i) (b) (B) (i) of the Income Tax Act was applicable. Asserting that it was a priority industry, the Company claimed that it was entitled to depreciation under Section 80-E of the Act. The Income Tax Officer, however, disallowed certain deductions claimed by the petitioner against which the Company filed an appeal which was partly allowed by the Appellate Assistant Commissioner with the result that the assessment was modified. 7. Thereafter the Additional Commissioner of Income Tax issued the impugned notice to the Company under Section 263 of the I. T. Act intimating that he intended to revise the order of the Income Tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Commissioner of Income Tax, reported in (1957) 31 ITR 909 at page 919 as under : It is clear that the Appellate Assistant Commissioner has been constituted a revising authority against the decisions of the Income Tax Officer : a revising authority not in the narrow sense of revising what is the subject-matter of the appeal, nor in the sense of revising those matters about which the assessee makes a grievance, but a revising authority in the sense that once the appeal is before him he can revise not only the ultimate computation arrived at by the Income Tax Officer but he can revise every process which led to the ultimate computation or assessment. In other words, what he can revise is not merely the ultimate amount which is liable to tax, but he is entitled to revise the various decisions given by the Income Tax Officer in the course of the assessment and also the various income or deductions which came in for consideration of the Income Tax Officer. 9. The Division Bench in J. K. Synthetics (Supra) extensively quoted from the decision of the Supreme Court in the case of Commissioner of Income Tax v. Rai Bahadur Hardutroy Motiial Chamaria, reported in (1967) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority as may be prescribed : Provided that where the disputed amount of tax, fee or penalty does not exceed one thousand rupees, the appellant may, at his option, request the Appellate Authority in writing for summary disposal of his appeal, whereupon the Appellate Authority may decide the appeal accordingly. (1-A) . . (1-B) . .. . (2) .. .. .. (3) The Appellate Authority may, after calling for and examining the relevant records and after giving the appellant and the Commissioner of Sales Tax a reasonable opportunity of being heard or as the case may be, after following the procedure prescribed under sub- Section (1-A) - (a) in the case of an order of assessment and penalty - i. confirm or annul such order ; or ii. vary such order by reducing or enhancing the amount of assessment or penalty, as the case may be, whether such reduction or enhancement arises from a point raised in the grounds of appeal or otherwise ; or 12. It will thus be seen that the jurisdiction of the Appellate Authority under Section 9 (3) is of the widest possible amplitude. The Appellate Authority cannot only con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Authority right up to the stage of Tribunal, could be corrected by the Tribunal under Section 22 of the U. P. Sales Tax Act. The learned Judge answered the issue in the negative holding that even though the order of the Assessing Authority had merged in the order of the Tribunal passed in Second Appeal, the mistake arising in the order o f the Assessing Officer could not be shifted to the order of the Tribunal , and, consequently the same was not capable of being corrected under Section 22. 16. The learned Judge was clearly in error in taking that view. Once it is accepted that the order of the Assessing Officer merges in the appellate order it must follow as a necessary corollary that the operative order would be that passed by the appellate authority as ruled by their Lordships of the Supreme Court in the case of Commissioner of Income tax v. Amritial Bhogilal Co., reported in 34 ITR 130 (SC). Following that decision the Division Bench observed at pp. 347 in J. K. Synthetics that if ihe appellate authority modifies or reverses the decision of the Tribunal, it is obvious that it is the appellate decision that is effective and can be enforced and further t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Niwar Lace Manufacturing Co (Supra) hence cannot be held to be correct. The decision cited in K. Synthetics, was directly attracted to the facts of the case and the learned Single Judge wrongly distinguished that decision. 19. The view expressed by a learned Single Judge in Commissioner of Sales Tax, U. P. v. M/s Sterling Machine Tools, Agra reported in 1979 U. P. Tax Cases page 684 is equally unsustainable in law in view of the law laid down by this Court in J. K. Synthetics. The attention of the learned Single Judge was not drawn to the principle governing the doctrine of merger spelled out in J. K. Synthetics. 20. To sum up, we hold that the order of assessment having merged in the order passed in appeal, the impugned notice must be held to be wholly without jurisdiction. In the view that we are taking on the question of jurisdiction of the Assistant Commissioner (Assessment) to issue the impugned notice under Section 22, it is not necessary to pronounce on the alternative ground urged in support of this petition, namely, that there was no error apparent on the facr; of the record so as to warrant exercise of jurisdiction under Section 22. 21. For t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
