Civil Appeal No 477 of 1976
Appeal by Special Leave from the Judgment and Order dated 11 4 1975 of the Kerala High Court in TRC No 59 of 1973
P A Francis and N Sudhakaran for the Appellant
Exparte against the Respondent
The Judgment of the Court was delivered by TULZAPURKAR J
The short question raised in this appeal by special leave is whether the Appellate Tribunal has power under section 391 of the Kerala General Sales Tax Act 1963 to enhance the assessment in the absence of any appeal or cross objections by the Revenue  The respondent firm Ms Vijaya Stores is a dealer in stationery having its head office at Cochin and branches at Ernakulam and Kottayam
For the assessment year 1965 66 the respondent firm returned a total turnover of Rs 255497458 and a net taxable turn over after claiming exemptions of Rs 129999649
The Sales Tax officer rejected the Book results on the basis of certain material gathered from a rough note book detected and seized by the Inspecting officer from the Head office at Cochin it was found that about 50 of the transactions recorded in that rough note book were not entered in the regular books maintained by the assessee the Sales Tax officer therefore made an addition of 10 Rs 4565473 to the admitted turnover of the Cochin shop and accordingly completed the assessment by his order dated January 16 1967
In an appeal preferred by the respondent firm to the Appellate Assistant Commissioner the assessee raised a two fold contention that the rejection of accounts was not justified and that the addition made on the basis of the rough note book was excessive and arbitrary
The Appellate Assistant Commissioner by his order dated November 1 1968 negatived the first contention and 18 526 SCI78 540 as regards the second he gave relief to the assessee by reducing and limiting the addition to 5 Rs 2282300 of the admitted turnover of the Cochin shop
Against the order of the Appellate Assistant Com missioner the respondent firm preferred a second appeal to the Appellate Tribunal challenging the addition of 5 to the taxable turnover
No appeal nor any cross objections were filed by the Revenue to the Tribunal against the said order of the appellate Assistant Commissioner
The Appellate Tribunal was of the view that the Sales Tax officer and the Appellate Assistant Commissioner had no reason to make addition at any figure less than Rs 8021822 as was seen from the detected rough note book the Tribunal therefore by invoking the power under section 394 of the Act issued notice to the assessee to show cause against the proposed enhancement of the turnover and after hearing the objections of the assessee by its order dated May 10 1973 directed an addition of a sum of Rs 8021822 to the taxable turnover
The respondent firm preferred a Tax Revision Petition being TRC 59 of 1973 to the Kerala High Court contesting that the Tribunal had no jurisdiction or power to enhance the assessment in the absence of an appeal or cross objections by the Department and prayed for quashing of the order
The Kerala High Court by its judgment and order dated April 111975 accepted the contention of the respondent firm and set aside the impugned order of the Tribunal and remanded the case for hearing the appeal of the assessee afresh in accordance with law and in the light of what it had said in its judgment in doing so the High Court relied upon two decisions of the Bombay High Court in Motor Union Insurance Co Ltd vs Commissioner of income Tax Bombayi and New India Life Assurance Co Ltd vs Commissioner of Income Tax Excess Profits Tax Bombay City2
The State of Kerala has come up in appeal to this Court
Counsel for the appellant raised two contentions in support of the appeal
He first contended that on a true construction of section 394 of the Act the Appellate Tribunal should be regarded as possessing the power to enhance the assessment in the absence of any appeal or cross objections by the Department against the Appellate Assistant Com missioner s order and that the only requirement before making such enhancement was to give a reasonable opportunity of being heard against the proposed enhancement which the Appellate Tribunal had done in this case secondly he contended that section 394 of the Kerala General Sales Tax Act 1963 was not in pari materia with section 334 of the Indian Income Tax Act 1922 and therefore the High Court ought not to have relied upon the decisions of the Bombay High Court 1 2 1957 31 l
TR 844
541 rendered under section 334 of the Indian Income Tax Act 1922
He A also pressed the contrary view taken by the Orissa High Court in the case of Commissioner of Sales Tax Orissa vs Chunilal Parameshwar Lall for our acceptance
For the reasons which we shall presently indicate it is not possible to accept either of these contentions urged by counsel for the appellant
B The question raised before us really turns upon the correct interpretation to be placed on section 394 of the Act but sub sections 1 2 3 and 4 of section 39 are material for our purposes which run thus 39
Appeal to the Appellate Tribunal
1 Any officer empowered by the Government in this behalf or any other person objecting to an order passed by the Appellate Assistant Commissioner under sub section 3 of section 34 and any person objecting to an order passed by the Deputy 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 appellant had sufficient cause tor not presenting the appeal within the said period
2 The officer authorised under sub section 1 or the person against whom an appeal has been preferred as the case may be on receipt of notice that an appeal against the order of the Appellate Assistant Commissioner has been preferred under sub section 1 by the other party may notwithstanding that he has not appealed against such order or any part thereof file within thirty days of the receipt of the notice 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 STC 677
19 526 SCI78 542 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 person other than an officer em powered by the Government under sub section 1 it shall be accompanied by such fee not exceeding one hundred rupees as may be prescribed
4 In disposing of an appeal the Appellate Tribunal may after giving the parties a reasonable opportunity of being head either in person or by a representative
a in the case of an order of assessment or penalty
i confirm reduce enhance or annul the assessment or penalty or both ii set aside the assessment and direct the asses sing authority to make a fresh assessment after such further enquiry as may be directed or iiipass 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 s4 which indicates what things the Appellate Tribunal may do while disposing of an appeal and in particular it was pointed out that under sub s4ai the Appellate Tribunal has been given power to enhance the assessment while disposing of an appeal against an order of assessment after giving the party a reasonable opportunity of being heard and it was 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
4ai would amount to ignoring the scheme of section 39
Sub section
1 provides for an appeal being preferred against an assessment order passed by the Appellate Assistant Commissioner under section 343 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 it were an appeal
Then comes sub section
4 which enumerates the various powers conferred upon 543 the Appellate Tribunal while disposing of such appeals including cross objections and the power conferred upon the Appellate Tribunal under section 4a 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 relief against a rival party in an appeal preferred by the latter has not been deviated from in sub s4ai above
In other words in the absence of an appeal or cross objections by the Department against the Appellate Assistant Commissioner s order the Appellate Tribunal will have no jurisdiction or power to enhance the assessment
Further to accept the construction placed by the counsel for the appellant on sub section
4ai 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 of sub section
4 a i of section 39 the Tribunal has no jurisdiction or power to enhance the assessment in the absence of an appeal or cross objections by the Department
It is true that the two Bombay decisions reported in and supra on which the High Court has relied have been rendered in relation to section 334 of Indian Income Tax Act 1922 but in our view the said provisions of Income Tax Act is in pari materia with the provision of s394 of the Kerala General Sales Tax Act 1963
Moreover the Bombay High Court has pointed out in those decisions that section 334 merely enacted what was the elementary principle to be found in Civil Procedure Code that the respondent who has neither preferred his own appeal nor filed cross objections in the appeal preferred by the appellant must be deemed to be satisfied with the decision of the lower authority and he will not be entitled to seek relief against a rival party in an appeal preferred by the latter
In the first mentioned case the elementary principle is stated at page 282 of the report thus Apart from statute it is elementary that if a party appeals he is the party who comes before the Appellate Tribunal to redress a grievance alleged by him
If the other side has any grievance he has a right to file a cross appeal 544 or cross objections
But if no such thing is done the other party in law is deemed to be satisfied with the decision
He is of course entitled to support the judgment of the first officer on any ground open to him but he is not entitled to raise a ground so as to work adversely to the appellant and in his favour
 As regards the decision of the Orissa High Court in Commissioner of Sales Tax Orissa vs Chunnilal Parmeshwar Lal supra the same cannot avail the appellant for the decision in that case was rendered on a concession made by the assessee s counsel
In the result we are clearly of the opinion that the High Court was right in the view it took and the appeal
therefore fails and is dismissed
Since the respondent has not appeared there is no question of any costs NVK Appeal dismissed


Summary:
On the ground that 50 of the transactions recorded in a rough note book detected and seized by the Inspecting officer from the Head office of the firm were not entered in the regular books of accounts maintained by the assessee the Sales Tax officer made an addition of 10 to the admitted turnover and completed the assessment
In an appeal the Appellate Assistant Commissioner reduced the addition to 5 of the admitted turnover
The respondents preferred a second appeal before the Appellate Tribunal
But the Department neither filed an appeal against the order of the Appellate Assistant Commissioner nor raised any cross objections in the assessee s appeal After issuing a show cause notice to the assessee the Tribunal under section 394 of the Kerala General Sales Tax Act 1963 directed the addition of a certain amount to the taxable turnover
In its Tax Revision Petition the respondent contended before the High Court that the order of the Tribunal was wrong in that it had no jurisdiction or power to enhance the assessment in the absence of an appeal or cross objections by the Department
Setting aside the impugned order of the Tribunal the High Court remanded the case for hearing the appeal afresh
In appeal to this Court the appellant Department contended that on a true construction of section 394 of the Act the Appellate Tribunal should be regarded as possessing the power to enhance the assessment even in the absence of any appeal or cross objections by the Department against the Appellate Assistant Commissioner s order
Dismissing the appeal  Held 1 The Tribunal has no jurisdiction or power to enhance the assessment in the absense of an appeal or
cross objections by the Department
543 E 2 To accept the construction placed by the counsel for the appellant on sub section 4ai would be really rendering sub section 2 of section 39 otiose for if in an appeal preferred by the assesses 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
1543 D 539 3 The elementary principle found in the Code of Civil Procedure that the respondent who has neither preferred his own appeal nor filed cross objections in the appeal preferred by the appellant must be deemed to be satisfied with the decision of the lower authority and that he will not be entitled to seek relief against a rival party in an appeal preferred by the latter is equally applicable to revenue proceedings543 G Motor Union Insurance Co Ltd vs Commissioner of Income Tax Bombay and New India Life Assurance Co vs Commissioner of Income Tax Excess Profits Tax Bombay City
approved
Commissioner of Sales Tax orissa vs Chunnilal Parmeshwar Lal 1961 12 STC 677 distinguished