Case: State Of Kerala Vs. M/S. Vijaya Stores

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 memorandum 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)(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 empowered 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 heard 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 assessing authority to make a fresh assesment 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 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 AACs assessment order had been preferred by the assessee and not by the department. To place such a construction on sub-s. (4)(a)(i) would amount to ignoring the scheme of s. 39. Sub-s. (1) provides for an appeal being preferred against an assessment order passed by the AAC under s. 34(3) either by the assessee or by the department through an officer empowered by the Government in that behalf. Further, sub-s. (2) provides for filing 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 the Appellate Tribunal as if it were an appeal. Then comes sub-s. (4) which enumerates the various powers conferred upon the Appellate Tribunal while disposing of such appeals (including cross-objections) and the power conferred upon the Appellate Tribunal under sub-s. (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 relief against a rival party in an appeal preferred by the latter, has not been deviated from in sub-s. (4)(a)(i) above. In other words, in the absence of an appeal or cross-objections by the department against the AACs 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-s. (4)(a)(i) would be really rendering sub-s. (2) of s. 39 otiose, for if in an appeal preferred by the assessee against the AACs 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 s. 39, therefore, it is clear that on a true and proper construction of sub-s. (4)(a)(i) of s. 39 the Tribunal has no jurisdiction or power to enhance the assessment in the absence of an appeal or cross-objections by the departmentIt is true that the two Bombay decisions reported in [1945] 13 ITR 272 and [1957] 31 ITR 844 , on which the High Court has relied, have been rendered in relation to s. 33(4) of the Indian I.T. Act, 1922, but, in our view, the said provision of I.T. Act is in pari materia with the provision of s. 39(4) of the Kerala General Sales Tax Act, 1963. Moreover, the Bombay High Court has pointed out in those decisions that s. 33(4) merely enacted what was the elementary principle to be found in the 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 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."3. As regards the decision of the Orissa High Court in CST v. Chunilal Parameswar Lal [1961] 12 STC 677 , the same cannot avail the appellant, for the decision in that case was rendered on a concession made by the assessees counsel.4.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]For the reasons which we shall presently indicate it is not possible to accept either of these contentions urged by counsel for theplace such a construction on(4)(a)(i) would amount to ignoring the scheme of s. 39.(1) provides for an appeal being preferred against an assessment order passed by the AAC under s. 34(3) either by the assessee or by the department through an officer empowered by the Government in that behalf. Further,(2) provides for filing ofby a party, against whom an appeal has been preferred, notwithstanding that he has not himself appealed against the decision or any part thereof and suchare to be disposed of by the Appellate Tribunal as if it were an appeal. Then comes(4) which enumerates the various powers conferred upon the Appellate Tribunal while disposing of such appeals (includingand the power conferred upon the Appellate Tribunal under(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 orfiled 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(4)(a)(i) above. In other words, in the absence of an appeal orby the department against the AACs 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(4)(a)(i) would be really rendering(2) of s. 39 otiose, for if in an appeal preferred by the assessee against the AACs order, the Tribunal would have the power to enhance the assessment, a provision forby the department was really unnecessary. Having regard to the entire scheme of s. 39, therefore, it is clear that on a true and proper construction of(4)(a)(i) of s. 39 the Tribunal has no jurisdiction or power to enhance the assessment in the absence of an appeal orby the departmentIt is true that the two Bombay decisions reported in [1945] 13 ITR 272   and [1957] 31 ITR 844 , on which the High Court has relied, have been rendered in relation to s. 33(4) of the Indian I.T. Act, 1922, but, in our view, the said provision of I.T. Act is in pari materia with the provision of s. 39(4) of the Kerala General Sales Tax Act, 1963. Moreover, the Bombay High Court has pointed out in those decisions that s. 33(4) merely enacted what was the elementary principle to be found in the Civil Procedure Code that the respondent who has neither preferred his own appeal nor filedin 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 as. 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 hisregards the decision of the Orissa High Court in CST v. Chunilal Parameswar Lal [1961] 12 STC 677 , the same cannot avail the appellant, for the decision in that case was rendered on a concession made by the assessees counsel.