The Present appeal under Section 78 of the Gujarat Value Added Tax Act, 2003 is directed against the order of the Tribunal dated 19.06.2008 in Second Appeal No. 31 of 2003 and order dated 14.10.2008 passed in Misc. Application No. 27 of 2008. By the impugned order, the Tribunal dismissed the appeal of the assessee affirming the orders dated 30.10.2002 and 20.01.2000 of the Assistant Commissioner, Sales Tax and the Sales Tax Officer respectively. A Misc. Application No. 27 of 2008 filed against the main order was also dismissed. 1.1 While admitting this appeal, this court formulated following substantial questions of law.
“1. Whether the Tribunal below committed substantial error of law in affirming the order of re-assessment under section 44 of the Gujarat Sales Tax Act by totally ignoring the penultimate proviso to the said section.”
“2. Whether the Tribunal below committed substantial error of law in affirming the order of re-assessment in terms of section 44 of the said Act notwithstanding the fact that at the relevant point of time, an appeal against the original order of assessment was pending.”
2. Heard learned Advocate Ms. Niyati K. Shah for the appellant and Assistant Government Pleader Mr. Kabir Hathi appearing for respondent.
3. The facts are that the respondent Sales Tax Officer by his order dated 27.09.1999 imposed penalty of Rs. 2000/- on the appellant under Section 46(2) of the Gujarat Sales Tax Act, 1969 (hereinafter referred to as “the Act” for sake of brevity). The appellant assessee filed appeal against that order and during the pendency of the appeal, the Sales Tax Officer issued a notice under Section 44 of the Act for reopening of the assessment. Pursuant to that reopening notice, assessment order was passed raising demand of total Rs. 13,94,024/- which included the tax, penalty and interest. That order of reassessment was challenged by the assessee before the Assistant Commissioner of Sales Tax, which appeal came to be dismissed on 30.10.2002. That was further carried in appeal before the Tribunal culminating into the impugned order. Against the Tribunal's order, a Miscellaneous Application was filed which came to be rejected. It may be stated to complete the narration of the facts that the Tribunal's order was challenged by filing a Writ Petition before this Court, which was withdrawn and thereupon the present statutory appeal was preferred.
4. The contention of the appellant is that since he had preferred First Appeal against the original assessment order which was pending, the Sales Tax Officer could not have passed the reassessment order under Section 44 of the Act in view of the second proviso to Section 44 of the Act.
4.1 Section 44 of the Act is in respect of reassessment of turnover which escape the assessment. The second proviso to section 44 of the Act reads as under.
“44. If the Commissioner has reason to believe that any turnover of sales or turnover of purchases of any goods chargeable to tax under this Act has not been assessed in respect of any period in an order of assessment made under section 41, then the Commissioner may -
(a) xx xx
(b) xx xx Provided further that where in respect of such assessment, proceedings are pending in appeal or revision, the appropriate appellate or revisional authority under this act may, on its own motion or on the report of the Commissioner after giving the dealer concerned a reasonable opportunity of being heard, pass such order as it deems fit.
Provided further that the provisions of all the provisos to sub-section (1) of section 42 shall mutatis mutandis apply to assessment proceedings under this section.”
5. Learned advocate for the appellant submitted that the question involved in this appeal was considered by a Division Bench of this Court in State of Gujarat v. Minakshi Metal Corporation being Sales Tax Reference No.13 of 1983 decided on 13.06.1991. In that judgment, it was observed and held as under:
“In view of this proviso, the appropriate officer or authority of the Sales Tax Department can make report to the superior forum before which appeal or revision may be pending. This proviso is abundantly clear. We are in agreement with the reasons given and the conclusion arrived at by the Tribunal. If other view is taken, there would be no end to the assessment proceedings. Every now and then the Sales Tax Officer or any other officer or authority would be in a position to intermeddle with the assessment proceedings. Such action may some times help the department, but in all probability it is likely to cause harassment to the assessee. There is no reason to adopt any other interpretation except the interpretation as canvassed on behalf of the assessee and which has been accepted by the Tribunal.”
Thus, the issue is no longer res integra. Learned A.G.P. appearing for the respondent could not dispute that position.
5.1 In Tel Utpadak Kendra Versus Deputy Commissioner of Sales Tax (1981), the Supreme Court dealing with provisions of Section 55(6) read with Section 57(1)(a) of the Bombay Sales Tax Act, 1959 observed as under :-
“When the appellate jurisdiction of a superior authority is involved against the order and that authority is seized of the case it is not permissible for a subordinate authority to claim to exercise jurisdiction to revise that very order. The Bombay Sales Tax Act, 1959, constitutes the Tribunal an appellate as well as a revisional authority over the Commissioner. The Tribunal is the supreme appellate and revisional authority under that Act. It cannot be divested of its jurisdiction to decide on the correctness of an order. It cannot be frustrated in the exercise of the jurisdiction merely because a subordinate authority, the Commissioner, has also been vested with jurisdiction over that order. It is not open to the Commissioner to improve his power under clause (a) of sub-section (1) of section 57 and summon the record of an order over which the Tribunal has already assumed appellate jurisdiction. The subordinate status of the Commissioner precludes that.
6. In the above view of the matter, as the appeal was pending against the first assessment order, the Sales Tax Officer could not have passed reassessment order as he was precluded by virtue of second proviso to section 44 of the Act.
7. Accordingly, it is held that the Tribunal committed an error in forming the assessment order dated 20.01.2000 since at the relevant point of time the appeal against the original assessment order was pending. The above two questions are accordingly answered in affirmative in favour of the assessee.
8. The Appeal is accordingly allowed.
(V.M. SAHAI, J.) (N.V. ANJARIA, J.)
(SN DEVU PPS)