JUDGMENT M.C. Agarwal, J.
1. By this revision petition under Section 11 of the U.P. Trade Tax Act, the dealer revisionist challenges an order dated December 9, 1994, passed by the Trade Tax Tribunal, Meerut, whereby it partly allowed the dealer's second appeal and reduced the assessed turnover.
2. I have heard Sri R.R. Agarwal. learned counsel for the revisionist, and Sri C.S, Singh, learned Standing Counsel for the Commissioner.
3. The revisionist deals in purchase and sale of shoes. During the year under consideration, the dealer had shown sales for Rs. 25,700 of shoes purchased from the registered dealers and it was claimed that the sale was exempt from tax. The books of account were not accepted by the assessing officer, who estimated the turnover at Rs. 1,35,000 out of which he estimated the sales to the extent of Rs. 1,15,000 representing the sale of shoes out of tax-paid U.P. purchases and sales worth Rs. 20,000 were held to be taxable. The dealer appealed to the Assistant Commissioner (Judicial), who upheld the estimated turnover and dismissed the appeal. Exercising the power of enhancement, he held that since the sales of tax-paid U.P. goods were shown at Rs. 25,700 only, the balance should have been treated as taxable sales and he, therefore, held that the turnover to the extent of Rs. 1,09,300 was taxable. The assessee appealed to the Tribunal contending, inter alia, that the enhancement was made without any notice to the dealer. The Tribunal has held that no notice was necessary because the order passed by the Assistant Commissioner (Judicial) was of the nature of rectification.
4. As is evident, the order of the Assistant Commissioner (Judicial) puts the appellant before him in a worse position. It is true that the first appellate authority under the U.P. Trade Tax Act has the power of enhancement, but this power cannot be exercised in violation of the principles of natural justice. In this case, the order passed by the Assistant Commissioner (Judicial) does not state, directly or indirectly, that the appellant was put to notice of his intention to disturb the estimate of turnover of the dealer. A written notice to be served on the appellant may not be necessary, but, certainly, it is necessary for the appellate authority, while exercising the powers of enhancement, to open its mind and tell the appellant or its counsel of his intention to enhance the turnover and the reasons therefor and give the appellant an opportunity of making its submissions. In the present case, this was not done and the view taken by the Tribunal, that no notice was necessary because the order was of a rectificatory in nature is also untenable. Section 22 of the Act which deals with rectification of mistakes also specifically provides that no rectification that has the effect of enhanced assessment shall be made unless a reasonable opportunity of being heard has been given to the dealer. Thus, the order passed by the learned Assistant Commissioner (Judicial) is wholly erroneous inasmuch as he did not put the dealer to notice of his intention to enhance the turnover and, therefore, the Tribunal's order upholding the same is also not legally sustainable.
5. The revision petition is, accordingly, allowed and setting aside the Tribunal's order dated December 9, 1994, it is ordered that the dealer's second appeal No. 778 of 1992 for the assessment year 1986-87 stands allowed by the Assistant Commissioner (Judicial) is set aside and the matter is remanded back to the Assistant Commissioner (Judicial) for disposing of the dealer's appeal No. 378 of 1989 for the assessment year 1986-87 afresh in accordance with law.