Case: State of Orissa Vs. Babu Lal Chappolia

2. It is not necessary to give the facts relevant to all the three quarters. It will be sufficient if we set out the facts relevant to first quarter, i.e., quarter ending June 30, 1954. The Sales Tax Officer, Cuttack I Circle, by his order dated October 29, 1956, assessed the respondent Babu Lal Chhapolia, hereinafter referred to as the assessee, in respect of a turnover of Rs. 2, 46, 995. The assessee had sold the cloth imported from outside the State and he claimed deduction under old rule 64 but the Sales Tax Officer disallowed the claim as the assessee was deemed to have effected the first point of sale in Orissa. The assessee filed an appeal before the Assistant Commissioner of Sales Tax, Cuttack Range.The learned counsel for the State, Mr. A. V. Viswanatha Sastri, states that the appeal was heard on April 16, 1957, and order was reserved but somehow the appellate authority did not pass any order. The appeal was heard again on May 12, 1959, and by order dated September 17, 1959, the Assistant Commissioner allowed the appeal, and as a result the assessment was reduced to the figures returned by the assessee. The learned counsel for the appellant states that a fresh return was taken by the Assistant Commissioner and the assessee filed a copy of the agreement between the assessee and Ram Prasad Tormal and raised a fresh point before the Assistant Commissioner that the assessee had worked as an agent of Ram Prasad Tormal to do certain service for him to facilitate the latters business and in lieu thereof he earned commission at 1 1/2% and that he was not a seller or a purchaser. The Assistant Commissioner accepted thismay be noted here that the Sales Tax Officer was not represented before the Assistant Commissioner. The Sales Tax filed an appeal against this order and the Sales Tax Tribunal allowed the appeal. The appellate order is a short order and it reads as follows :"For the reasons mentioned in the order passed in second appeal No. 416 ofdisposed of today this appeal is allowed."3. But the order in the second appeal No. 416 has not been printed in the paper book. The assessee thereupon filed an application under section 24(1) of the Act to the Tribunal requesting that the statement of the case be drawn up and referred to the High Court. In this application in para 6 it is stated :"... opposite party preferred second appeal Nos. 572 to 577 ofThese appeals were posted for hearing on several dates when the State of Orissa took adjournments. When the appeasl were posted to January 6, 1962, on the day before, i.e., 5th of January, 1962, the petitioners counsel asked for an adjournment and the learned Member had consented thereto. The adjournment was asked for in the presence of the learned State Representative."On January 6, 1962, however, the appeals were taken up for disposal ex parte and the learned Member allowed the appeals filed by the State without going into the merits thereof.In para 9 the assessee suggested four questions of law but by order dated May 19, 1962, the Sales Tax Tribunal referred two questions, which have already been set out. In this order reference is made to the orders passed in reference case No. 89 ofbut these orders are not printed in the paper book.The High Court after giving the facts considered the question whether in exercise of its appellate powers the Sales Tax Tribunal was justified in saying that the Assistant Commissioner committed an error of law in allowing a new question to be raised for the first time, which was not mentioned in the original return at the time of assessment. The High Court held that in view of section 23(2) of the Act, and rule 50 of the Orissa Sales Tax Rules, the question was ultimately one of discretion conferred on the Assistant Commissioner and no limitation could be placed on that discretion. It further observed :"It was open to the Member, Sales Tax Tribunal, while hearing the second appeal to examine the propriety of the order of the Assistant Commissioner on the materials available and also on the additional material that he may care to admit and then to set aside that order on other ground, if he chose, but he should not have held that the order was illegal."In the result the High Court answered the questions as follows :"(1) The Tribunal was not right in saying that in disposing of an appeal under section 23(2) of the Orissa Sales Tax Act, the Assistant Commissioner (first appellate authority) was not entitled to take into consideration additional grounds of appeal different from those taken in the memorandum of appeal.(2) The order of the Tribunal could not therefore be maintained as valid in law.

Reasoning:
5. The first point does not seem to have been raised before the High Court. Further the questions referred do not raise the problem whether a revised return can be filed or not. The only point raised with respect to a revised return is whether it can be taken into consideration. If the appellate authority has the power to allow a new ground to be taken, does it matter in what manner it allows it to be taken ? Instead of a revised return it could have taken a written statement containing the new ground. Therefore, we do not consider it necessary to deal with the point whether it is competent for the appellate authority to accept a revised return or not.There is no express provision for making the Sales Tax Officer a party to the appeal or requiring the appellate authorty to issue a notice to the Sales Tax Officer. There is no such provision as exists in section 31(1) of the IndianAct, 1922, requiring that "at the hearing of an appeal against an order of thetax Officer shall have a right to be heard either in person or by a representative." In view of the absence of such a provision it seems to us that the appellate authority is virtually in the same position as the Sales Tax Officer and the Act and the Rules do not contemplate that a notice should be issued to the Sales Tax Officer. Before the Tribunal, which is the second appellate authority, there are two parties and rules 58 requires that a notice should be issued to the opposite party. We are, therefore, of the opinion that there is no substance in point No. 2 raised by Mr. Sastri.8. Regarding the third point we are of the opinion that it is not open to Mr. Sastri to raise this point before us. This point was not raised before the High Court and at any rate we do not see how this point is germane to the questions referred to the High Court.It is clear from this passage that the Sales Tax Tribunal did not go into the merits of the case at all, i.e., whether it is established that the assessee was an agent or not and if an agent, was assessable or not as a dealer.10. The next point raised is again not germane to the questions referred to the High Court. It is for the Tribunal to act in accordance with section 24(5) of the Act and to dispose of the case according to the judgment of the High Court or of this Court. Neither the High Court nor this Court can give directions to the Tribunal, while dealing with a reference, regarding the manner of disposal of a case after the receipt of the judgment on the reference.In the end Mr. Sastri contends that the answer to question No. 2 should be modified because as it stands now it may indicate to the Tribunal that the order was completely void. We think there is some reason for the apprehension of the learned counsel and we will make it clear that what the High Court and what we are saying is that the Tribunal was in error in reversing the order of the Assistant Commissioner on the ground that the Assistant Commissioner had no authority to permit an entirely new question to be raised for the first time before him, or as the Tribunal put it "that it was not permissible for him to raise a question which would conflict with the return filed by the