JUDGMENT
Dr. B.P. Saraf, J.
1. By this reference under section 61(1) of the Bombay Sales Tax Act, 1959, made at the instance of the assessee, the Maharashtra Sales Tax Tribunal has referred the following two questions of law to this Court for opinion :
“1. Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the applicant, M/s. Ranchhoddas Bhaichand and Rentio Foods, Navapur, could not challenge levy of tax by way of additional grounds raised after the period of limitation of 60 days prescribed to file appeal under section 55(4) of the Bombay Sales Tax Act, 1959, in the appeal they had already filed before the Assistant Commissioner of Sales Tax, wherein, were only challenged penalty imposed under section 36(2)(c), Explanation (1) and interest imposed under section 36(3)(b) of the said Act by the Sales Tax Officer ?
2. If question No. 1 is answered in the affirmative, whether it was not necessary in law for the Tribunal to go into the question as to whether the applicant, M/s. Ranchhoddas Bhaichand and Rentio Foods, had shown sufficient cause for not preferring the additional grounds within the period of limitation of 60 days prescribed to file an appeal under section 55(4) of the said Act ?”
2. The assessee, who is the proprietor of two concerns run under the name and style of “Ranchhoddas Bhaichand’ and “Rentio Foods”, Navapur, in the district of Dhule, in the State of Maharashtra, is registered as a dealer under the Bombay Sales Tax Act, 1959 (“the Act”). It manufactures all kinds of pulses in “Ranchhoddas Bhaichand” and imports ready pulses for sale in “Rentio Food”. The assessee was assessed by the Sales Tax Officer, Dhule, under section 33(3) of the Act for the Period November 3, 1986 to October 20, 1987, by his order of assessment dated August 28, 1989. Consequent to the above order, a demand of Rs. 36,041 was raised against the assessee, which comprised of Rs. 19,003 on account of tax and Rs. 17,038 on account of penalty under section 36(2)(c) and interest under section 36(3)(b) of the Act. The order imposing penalty and interest was incorporated in the order of assessment itself.
3. Against the above order of the Sales Tax Officer, the assessee preferred appeal to the Assistant Commissioner of Sales Tax (Appeals), Nasik (“the appellate authority”), under section 55(1)(a) of the Act. In the said appeal, the assessee challenged the imposition of penalty and interest amounting to Rs. 17,038 under section 36(2)(c) and section 36(3)(b) of the Act. During the pendency of the appeal, the assessee filed an application before the appellate authority raising additional grounds challenging the levy of tax amounting to Rs. 19,003. The Assistant Commissioner registered the said application as a separate appeal and took up both, the original appeals filed by the assessee and the above application raising additional grounds, which was registered as an appeal, together for hearing. The application of the assessee for raising additional grounds of appeal was rejected by the Assistant Commissioner on the ground that it was filed beyond the period of limitation prescribed for filing of an appeal. The original appeal filed by the assessee was allowed partly and the amount of penalty was reduced. The assessee went in further appeal against both the orders of the Assistant Commissioner of Sales Tax (Appeals) to the Maharashtra Sales Tax Tribunal (“the Tribunal”). Before the Tribunal, the assessee challenged, inter alia, the order of the Assistant Commissioner (Appeals), rejecting its application raising additional grounds of appeal as an appeal barred by limitation. According to the assessee, it was not a separate appeal but an application filed in the original appeal under section 55(1) of the Act against the order of the Sales Tax Officer for raising additional grounds of appeal and hence the question of registering it as a separate appeal and rejecting the same on the ground of limitation did not arise. The assessee also challenged the order of the Assistant Commissioner confirming the levy of penalty under section 36(2)(c) of the Act. The Tribunal allowed the appeal in regard to imposition of penalty partly by reducing the amount of penalty from Rs. 9,000 to Rs. 4,500. It however dismissed the other appeal against the order of the Assistant Commissioner rejecting the application of the assessee for raising additional grounds of appeal on the ground that it was a separate appeal which was barred by limitation. Aggrieved by the above order of the Tribunal, which pertains to the rejection of the application of the assessee for raising additional grounds of appeal by treating it as a separate appeal and dismissing it on the ground of limitation, the assessee applied for reference of the question of law arising out of it to this Court under section 61(1) of the Act, which the Tribunal has done by the present reference.
4. We have heard Mr. P. V. Surte, learned counsel for the assessee, who submits that the Assistant Commissioner of Sales Tax (Appeals) as well as the Tribunal proceeded on an erroneous assumption that the application filed by the assessee raising additional grounds of appeal was a separate appeal. According to the learned counsel, it is clear from the language of section 55(1)(a) of the Act that there can be only one appeal against the order passed by the Sales Tax Officer to the Assistant Commissioner. It does not contemplate more than one appeal against the very same order. As such, if an assessee, who has filed an appeal against the order of assessment proposes to raise additional grounds, the only remedy available to him is to make an application in the original appeal to the appellate authority for permitting him to raise additional grounds of appeal, which according to him, can be made at any time during the pendency of the appeal. The Assistant Commissioner of Sales Tax (Appeals) and the Tribunal, according to him, committed error of law in the present case in registering the application of the assessee as a separate appeal and rejecting the same on the ground of limitation.
5. Mr. R. V. Desai, learned counsel for the Revenue, on the other hand, submits that though penalty and interest were imposed in the very same order of assessment, the imposition was under sections 36(2) and 36(3) of the Act. Hence there were two orders though embodied in a single order and hence the assessee having filed appeal only against the levy of penalty cannot challenge the assessment of tax or levy of interest, if not challenged in the original appeal filed by it. Having filed an appeal against the order of the Sales Tax Officer challenging only the levy of penalty, the only course open to the assessee, if he wanted to challenge the assessment of turnover or determination of the tax also, was to file a separate appeal and in that view of the matter, according to the learned counsel for the Revenue, the Assistant Commissioner of Sales Tax (Appeals) rightly registered the application of the assessee as a separate appeal and dismissed the same on the ground of limitation and the Tribunal rightly upheld the above order.
6. We have carefully considered the rival submissions. There is no dispute about the fact that the appeal filed by the assessee before the Assistant Commissioner was against an order of the Sales Tax Officer dated August 28, 1989, by which he had assessed the tax due from the assessee for the period November 3, 1986 to October 20, 1987 and also levied penalty and interest. In the memorandum of appeal, the assessee did not challenge the determination of tax. The challenge was confined to imposition of penalty and interest. It was during the pendency of the appeal that the assessee filed an application before the Assistant Commissioner seeking permission to raise additional grounds in the above appeal to challenge the determination of tax also. It is this application which was treated by the Assistant Commissioner as a separate appeal against a part of the very same order which was already subject-matter of appeal before him and dismissed the are as barred by limitation. The sole question that falls for determination is whether the Assistant Commissioner was justified in doing so.
7. Section 55(1) provides for appeal against original orders passed under the Act or the Rules made thereunder by different authorities. An appeal against such order made by the Sales Tax Officer lies to the Assistant Commissioner. On such appeal being filed, the Assistant Commissioner can confirm, reduce, enhance or annul the assessment and confirm or cancel the order of penalty or vary it so as either to enhance or reduce the penalty. The powers of the Assistant Commissioner in an appeal under section 55 of the Act are thus very wide. His powers are not confined to consider only the points raised by the assessee in the grounds of appeal or urged at the time of hearing of the appeal. It is open to him to correct the Sales Tax Officer not only with regard to the matter raised by the assessee in the memorandum of appeal, but also with regard to a matter which has been considered by the Sales Tax Officer and decided in course of the said order. The only limitation upon his powers is the subject-matter of order appealed against. The appellate authority has thus plenary powers in disposing of an appeal under section 55(1) of the Act. The scope of his power is co-terminous with that of the assessing officer. He can do what the assessing officer can do.
8. In the present case the subject-matter of appeal before the appellate authority was an order of assessment passed by the Sales Tax Officer in form 30. It is clear from a perusal of form 30 that the order in the above form contains both determination of tax and imposition of penalty, etc. This is obvious from item 15 thereof which is in the following terms :
“(15)(A) Balance of tax due/refund, if any
Add :
(B) Penalty under section…..
Penalty under section…..
Penalty under section…..
Penalty under section…..
Penalty under section…..
(C) Amount forfeited being the sum collected in contravention of section 46.
(D) Amount forfeited being the sum collected in contravention of section 15A-1(2).”
Moreover rule 36 of the Rules, which prescribes form 30 as the form of order of assessment, also specifically provides that an order imposing a penalty under section 36 or an order of forfeiture with or without penalty under section 37 in respect of any period might be incorporated in the order of assessment relating to that period.
9. The admitted position in the present case is that the order of assessment, which was subject-matter of appeal before the Assistant Commissioner contained the determination of tax as well as imposition of penalty and interest. The Assistant Commissioner was required to dispose of the appeal against the said order. It was in this appeal that the assessee wanted to raise additional grounds to challenge the determination of turnover, which he had not done in the memorandum of appeal. This application cannot be treated as a separate appeal because the entire order of the Sales Tax Officer being the subject-matter of appeal, there was nothing further to be appealed against. It was, in fact, an application in the pending appeal seeking leave to raise additional grounds of appeal or to challenge the order on grounds not originally urged. The appellate authority committed manifest error of law in treating the said application as a separate appeal and dismissing the same as barred by limitation. The Tribunal was equally wrong in confirming the above action of the Assistant Commissioner.
10. In our opinion, only one appeal can be filed against the order of the assessing officer. If after filing the appeal, the assessee seeks to amend the grounds of appeal and raise additional grounds, he may make an application to the appellate authority for that purpose and such an application cannot be regarded as a separate appeal filed by the assessee under section 55 of the Act. Such an application for raising additional grounds has to be treated as a miscellaneous application in a pending appeal and decided on its own merits. Somewhat similar controversy, arising under the Income-tax Act, 1961, came up before the Supreme Court in Jute Corporation of India Ltd. v. Commissioner of Income-tax [199l] 187 ITR 688 and before the Full Bench of this Court in Ahmedabad Electricity Co. Ltd. v. Commissioner of Income-tax [1993] 199 ITR 351. The controversy before the Supreme Court was whether additional grounds of appeal could be raised in an appeal before the Appellate Assistant Commissioner under section 251(1)(a) of the Income-tax Act, 1961. The Supreme Court held that the power of the Appellate Assistant Commissioner is co-terminous with that of the Income-tax Officer and, if that is so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income-tax Officer. It was observed (at page 83) as follows :
“…..No exception could be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power. Even otherwise, an appellate authority while hearing the appeal against the order of a subordinate authority, has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There appears to be no good reason and none was placed before us to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer.”
It was further observed :
“…..There may be several factors justifying the raising of such a new plea in appeal, and each case has to be considered on its own facts. If the Appellate Assistant Commissioner is satisfied, he would be acting within his jurisdiction in considering the question so raised in all is aspects. Of course, while permitting the assessee to raise an additional ground, the Appellate Assistant Commissioner should exercise his discretion in accordance with law and reason. He must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good masons. The satisfaction of the Appellate Assistant Commissioner depends upon the facts and circumstances of each case and no rigid principles or any hard and fast rule can be laid down for this purpose.”
The ratio of the above decision squarely applies to an appeal under section 55 of the Act, more so because section 55 is couched in very wide terms and unlike the Income-tax Act 1961, provides an appeal to the Appellate Assistant Commissioner of Sales Tax against “any order” passed by the Sales Tax Officer. It is the entire order of the Sales Tax Officer which is the subject-matter of the appeal, and not any part thereof.
11. The above decision of the Supreme Court was followed by the Full Bench of this Court in Ahmedabad Electricity Co. Ltd. v. Commissioner of Income-tax [1993] 199 ITR 351. In this case, the ratio of the decision of the Supreme Court was applied by this Court to decide the powers of the Income-tax Appellate Tribunal under section 254(1) of the Income-tax Act, 1961 and it was held that the powers of the Income-tax Appellate Tribunal were wide enough to permit any additional grounds of appeal, if in its discretion and for good reason, the Tribunal thinks it necessary or permissible to do so.
12. The ratio of the above two decisions squarely applies to the powers of the appellate authority under section 55 of the Bombay Sales Tax Act 1959. As stated earlier, section 55 of the said Act is couched in very wide terms and an appeal is provided under this section against “any order” passed by an officer subordinate to the appellate authority. It is, therefore, the entire order of the subordinate authority which is the subject-matter of an appeal. Hence if, for one reason or the other, the assessee fails to challenge any findings of the assessing authority on a particular point, he is not debarred from making an application to the appellate authority to permit him to raise additional grounds. If such an application is made, it has to be treated as an application in the original appeal filed by the assessee and the appellate authority has to decide the same in the light of the facts and circumstances of the case.
13. In the present case, though in the grounds of appeal the specific challenge was only to levy of penalty and interest and not to assessment of tax, in ground No. 3, it was stated : “Any other ground of appeal, if so raised at the time of hearing of the appeal, may be admitted”. That however is not very material in view of the well-settled legal position set out above that the appellate authority can permit the assessee to raise additional grounds at any time.
14. In view of the above, we are of the clear opinion that the Tribunal was not justified in holding that the assessee could not challenge the determination of tax in an appeal filed by it against an order of assessment made by the Sales Tax Officer in form 30 by way of additional ground. We, therefore, hold that the assessee is entitled to move the appellate authority for permission to raise additional grounds of appeal and when so moved, the appellate authority has to consider the same on merits.
15. In that view of the matter, we answer question No. 1 in the affirmative and in favour of the assessee.
16. In view of the above answer to question No. 1, question No. 2 does not survive. Hence, we decline to answer the same.
17. This reference is answered accordingly.
In the facts and circumstances of the case, we make no order as to costs.
18. Reference answered accordingly.