JUDGMENT Sushil Harkauli and Sudhir Agarwal, JJ.
1. We have heard the learned Counsel for the petitioner and the learned Standing Counsel.
2. The original assessment order stands challenged in appeal. During the pendency of appeal the Assessing Authority discovered new material showing undisclosed turnover. Proceedings under Section 21 of the U.P. Trade Tax Act, 1948 were initiated culminating in the impugned order of the Assessing Authority. The said impugned order is undisputedly appealable under Section 9. Normally, in taxation matters, the statutory remedy of appeal should not be allowed to be bypassed and a writ petition should not be entertained straightway, as held by the Supreme Court in several cases, all referred in State of H.P. v. Gujrat Ambuja Cement.
3. However, where subsequent to the assessment order by the Assessing Authority, and during the pendency of appeal against that assessment order, new material is discovered indicating escaped turnover, it was submitted by the petitioner that in such cases, enhancement of assessment should be sought by the department by placing the fresh material before the Appellate Authority, and it would not be desirable for the Assessing Authority to proceed under Section 21.
4. We had asked the learned Counsel for the petitioner as well as the learned Standing Counsel by our last order dated 24.1.2008 to examine whether there was a right conferred upon the Assessing Authority or the Department to produce such fresh material before the Appellate Authority.
5. The learned Standing Counsel has relied upon Section 12-B of U.P. Trade Tax Act, which expressly prohibits even the assessee from adducing additional evidence in appeal as of right, except in very limited circumstances. The Department has not been given any right to adduce additional evidence in appeal.
6. The learned Counsel for the petitioner has argued that there is 'no bar' in the Statute for the department to adduce additional evidence. We find it difficult to persuade ourselves to accept such argument. It is not possible to hold that where the Statute expressly gives to the assessee only such a restricted right to adduce additional evidence, yet the department has an unrestricted right to adduce any additional evidence it deems fit, in appeal.
7. The learned Counsel for the petitioner has relied upon a decision of the learned Single Judge in the case of Saru Smelting Private Ltd. v. Commissioner of Sales Tax reported in 1997 U.P.T.C. 204 and the decision of the Supreme Court in the case of State of Andhra Pradesh and Ors. v. Hyderabad Asbestos Cement Production Ltd. and Ors. reported in 1994 U.P.T.C. 859.
8. The decisions merely say, what has been stated under Section 9(3) of the Act also, that the Appellate Authority is not confined to the grounds of appeal raised by the assessee but can also examine those parts of the assessment order which may be favourable to the assessee, for the purpose of enhancing assessment. However, neither any decision nor any provision in the Statute permits the Appellate Authority to travel outside the record which was available before the Assessing Authority, except in limited cases specified under Section 12-B of the Act.
9. We are therefore of the opinion that under the Statute the department has not been given any right to adduce the additional evidence and only the assessee has but a limited right to adduce additional evidence as given under Section 12-B. The re-assessment proceedings under Section 21 cannot therefore be faulted on the above ground. For the reasons given above, we dismiss the writ petition leaving it open to the petitioner to avail the alternative remedy of appeal.