R.L. Gulati, J.
1. This is a reference under Section 11(3) of the U.P. Sales Tax Act read with Section 9 of the Central Sales Tax Act, 1956, submitted by the Judge (Revisions) Sales Tax, Lucknow, at the instance of the Commissioner of Sales Tax, Lucknow.
2. The assessee runs a rice and dal mill at Kanpur. The assessee was assessed to Central sales tax in respect of the assessment year 1958-59, which is the year in dispute. There is no controversy about the turnover. The controversy relates to the rate of tax. It appears that the assessee had submitted 'C' forms in respect of sales amounting to Rs. 33,089.03, but did not submit 'C' forms with regard to the remaining turnover of inter-State sales. The Sales Tax Officer assessed the turnover covered by the 'C' forms at the concessional rate of one per cent, under Section 8(1) of the Central Sales Tax Act and the remaining turnover at the rate of 6 per cent, which was the rate with regard to such turnover at the material time. It appears that the assesaee had made a request at the time of the assessment for the grant of further time for filing the remaining 'C' forms. The assessee appears to have been granted some time which, however, was not sufficient and the assessee could not produce the requisite 'C' forms before the assessment order was passed. The assessee went in appeal before the Judge (Appeals) and put forward the grievance that sufficient opportunity had not been granted to it by the Sales Tax Officer for filing the 'C' forms. It was stated before him that the remaining 'C' forms had in fact been filed in the office of the Sales Tax Officer just a day or two after the assessment order had been passed. This plea of the assessee found favour with the Judge (Appeals), who apparently was of the opinion that adequate opportunity had not been granted to the assessee for filing the remaining 'C' forms. Since the 'C' forms had already been filed, he verified them himself and found them to be in order. He, therefore, allowed relief to the assessee after taking into consideration the 'C' forms subsequently filed by the assessee. The Commissioner of Sales Tax was not satisfied with this order of the Judge (Appeals) and he accordingly applied in revision.
3. It was contended before the revising authority that under Rule 5-A of the Central Sales Tax (Uttar Pradesh) Rules, 1957, 'C' forms could be filed latest by the date of the assessment. Any 'C' forms filed thereafter could not be taken cognizance of. On this reasoning it was contended that the Judge (Appeals) had no jurisdiction to entertain the 'C' forms filed by the assessee after the date of the assessment order. The Judge (Revisions) did not agree with this contention of the Commissioner. He was of the opinion that the Judge (Appeals) could very well have set aside the assessment order with a direction to the Sales Tax Officer to make the assessment afresh, if he was satisfied that another opportunity should have been granted to the assessee to file the wanting 'C' forms. In such an event the Sales Tax Officer would have been obliged to take into consideration the 'C' forms which had already come on the record and the assessee would have naturally got the relief. The Judge (Revisions) thought that such being the position, the appellate authority could himself have taken into consideration the 'C' forms, as indeed he did in the instant case, and granted the necessary relief to the assessee. In other words, the view of the Judge (Revisions) was that if an appellate authority could bring about a result indirectly, he could do so directly also. He, therefore, refused to interfere with the order of the Judge (Appeals). The department is aggrieved and has brought this reference before us for our opinion on the following question of law :
Whether in the circumstances of this case the 'C' forms filed after the passing of the assessment when insufficient time had been allowed could have been considered by the appellate authority.
4. Before we answer this question, it is necessary to refer to some of the relevant provisions of law.
5. Under Section 8(1) of the Central Sales Tax Act, a dealer, who, in the course of inter-State trade or commerce, sells goods to another registered dealer, is liable to pay tax at the concessional rate of one per cent, on his turnover, provided he submits a declaration from the purchasing dealer in the prescribed form 'C' in accordance with the provisions of Section 8(4)(a) of the Act which requires the declaration to be duly filled and signed by the registered dealer to whom the goods are sold in a prescribed form. The declarations in form 'C' under Rule 8 of the U.P. Sales Tax Rules (sic) have to be attached by the selling dealer to his returns. Rule 5 prescribes the time for filing the returns which is the same as provided in Rule 41 of the U.P. Sales Tax Rules. According to Rule 41, returns have to be filed within one month of the end of each quarter of the assessment year. Rule 5-A which was added on 6th September, 1958, provides that a dealer may file a revised return at any time before the assessment is made, if he discovers any omission or wrong statement in the returns already filed by him. A combined reading of these provisions shows that 'C' forms may be filed at any time before the assessment is made. This indeed is the view which has been taken by the sales tax authorities in the instant case. We find that the same is correct.
6. However, the question arises as to whether it is open to the appellate authority to entertain 'C' forms in an appeal filed by an assessee. It is not disputed that if the appellate authority finds that sufficient opportunity had not been granted to an assessee to file 'C' forms, he may set aside the assessment and direct the Sales Tax Officer to make a fresh assessment after affording anothes opportunity to the assessee to file 'C' forms. Likewise, if an assessee files. 'C' forms after the assessment and the revising authority is of the opinion that the assessee was not able to file them before the assessment for sufficient reason, he may set aside the assessment and direct the Sales Tax Officer to make a fresh assessment in which case he would be bound to take into consideration the revised form filed by the assessee after the assessment. That being the position we really see no rational reason, why the appellate authority may not itself entertain the 'C' forms which have been filed after the assessment has been made, if it is satisfied that sufficient opportunity had not been granted to the assessee by the Sales Tax Officer during the assessment proceedings. What an appellate authority can do indirectly, can certainly be done by him directly also. That is plain common sense.
7. An appellate authority exercises powers which, in my opinion, are co-extensive with the powers of the Sales Tax Officer so far as the assessments are concerned. An assessment is the final act of assessing the tax and includes, in my opinion, all processes leading to the assessment. Section 9(3) of the U.P. Sales Tax Act enumerates the powers of an appellate authority which includes the powers
(a) to confirm, reduce, enhance or annul the assessment, or
(b) to set aside the assessment and direct the assessing authority to pass a fresh order after such further enquiry as may be directed.
8. These powers are sufficiently large to include the power to set aside an assessment in order to enable the assessee to submit a revised return or furnish 'C' forms which he could not do at the time of the original assessment. The powers of an appellate authority as contained in Section 9(3) of the U.P. Sales Tax Act are in part materia with the powers of an Assistant Appellate Commissioner under Section 31 of the Income-tax Act, 1922, as is evident from Section 31(3) of the Income-tax Act, the material portion whereof is as under :
31. (3) In disposing of an appeal the Appellate Assistant Commissioner may, in the case of an order of assessment,-
(a) confirm, reduce, enhance or annul the assessment, or
(b) set aside the assessment and direct the Income-tax Officer to make a fresh assessment after making such further enquiry as the Income-tax Officer thinks fit or the Appellate Assistant Commissioner may direct, and the Income-tax Officer shall thereupon proceed to make such fresh assessment, and determine where necessary the amount of tax payable on the basis of such fresh assessment.
9. The Supreme Court had an occasion to consider the scope of the powers of an Appellate Assistant Commissioner in Commissioner of Income tax v. McMillan & Co. [1958] 33 I.T.R. 182 There the question arose as to whether the Appellate Assistant Commissioner of Income-tax while dealing with an appeal of an assessee against an assessment under the Income-tax Act could for the first time apply the proviso to Section 13 of the Income-tax Act which reads as under :-
13. Income, profits and gains shall be computed, for the purposes of Sections 10 and 12, in accordance with the method of accounting regularly employed by the assessee :
Provided that, if no method of accounting has been regularly employed, or if the method employed is such that, in the opinion of the Income-tax Officer, the income, profits and gains cannot properly be deduced therefrom, then the computation shall be made upon such basis and in such manner as the Income-tax Officer may determine.
10. Because of the language in which the proviso to Section 13 is couched. it was contended that the powers contemplated by the proviso were within the exclusive jurisdiction of the Income-tax Officer and if he did not invoke that proviso, the Appellate Assistant Commissioner could do so in appeal. Repelling this contention the Supreme Court held that the powers of the Appellate Assistant Commissioner of Income-tax were co-extensive with the powers of the Income-lax Officer and he could, therefore, invoke the proviso to Section 13 for the first time, if it had not been applied by the Income-tax Officer or he could set aside the order of the Income-tax Officer if the latter had wrongly invoked the proviso. In this connection their Lordships cited with approval the following observations of Chagla, C. J., in Narrondas Manordass v. Commissioner of Income-tax [1957] 31 I.T.R. 909:
It is clear that the Appellate Assistant Commissioner has been constituted a revising authority against the decisions of the Income-tax Officer; a revising authority not in the narrow sense of revising what is the subject-matter of the appeal, not in the sense of revising those matters about which the assessee makes a grievance, but a revising authority in the sense that once the appeal is before him he can revise not only the ultimate computation arrived at by the Income-tax Officer but he can revise every process which led to the ultimate computation or assessment. In other words, what he can revise is not merely the ultimate amount which is liable to tax, but he is entitled to revise the various decisions given by the Income-tax Officer in the course of the assessment and also the various incomes or deductions which came in for consideration of the Income-tax Officer.
11. The filing of 'C' forms in an assessment under the Central Sales Tax Act is indeed a vital matter inasmuch as in the absence of such 'C' forms, an assessee would be liable to pay tax at a much higher rate. The existence or non-existence of 'C' forms is, therefore, a very serious matter. If a Sales Tax Officer wrongly rejects 'C' forms or wrongly refuses to allow sufficient time to an assessee to file such forms, in case he has not been able to procure them, the assessee would be entitled to seek redress from an appellate authority and the appellate authority would be within its jurisdiction to grant him the necessary relief. The manner in which the appellate authority grants the relief would depend upon his discretion. He may set aside the assessment and remand the case to the Sales Tax Officer for fresh assessment with a direction to entertain the 'C' forms which the assessee had not not been able to file at the time of the original assessment or he may himself entertain the 'C' forms and allow the assessee the necessary relief. Essentially there is no difference between the two. If the matter requires further investigation, the proper course for the appellate authority would be to set aside the assessment with a direction to the Sales Tax Officer to make further investigation, but if the matter can be disposed of without any further enquiry, he may dispose it of himself. Under Rule 75 of the U.P. Sales Tax Rules, an appellate authority has been invested with the powers of a civil court trying a suit in the matter of (a) enforcing the attendance of a person and examining him on oath, (b) compelling the production of documents, and (c) issuing commissions for the examination of witnesses etc. This provision points to the inference that even if it becomes necessary for an appellate authority to institute some sort of enquiry before disposing of an appeal, he has been armed with the necessary powers of a civil court for that purpose. These powers have been conferred simultaneously upon the Sales Tax Officer and some sales tax authorities.
12. In the State of Orissa v. Babu Lal Chappolia [1966] 18 S.T.C. 17, the Supreme Court had to deal with the powers of an appellate authority under the Orissa Sales Tax Act. In that case the assessee in an appeal before the Assistant Commissioner of Sales Tax filed a fresh return and raised a fresh point which he had not raised before the Sales Tax Officer that he worked as an agent and earned commission and was not a dealer liable to sales tax. The Assistant Commissioner entertained the revised return and allowed to the assessee the relief based upon the fresh contention raised by him without even issuing a notice to the Sales Tax Officer. It was contended that the Assistant Commissioner had acted beyond jurisdiction. The Supreme Court repelled that contention holding that if the appellate authority had the power to allow a new ground to be taken, it did not matter how it allowed it to be taken. The Supreme Court expressed the further view that in the absence of a provision for a notice of an appeal being issued to the Sales Tax Officer, the Assistant Commissioner enjoyed the same powers as were enjoyed by the Sales Tax Officer.
13. In the U.P. Sales Tax Act also we find a provision that an appellate authority has the power to entertain fresh and new grounds not connected with the return. Rule 66(3) points in that direction. That rule, however, provides that an Assistant Commissioner (Judicial) shall not rest a decision on any ground other than the one set forth in the memorandum of appeal or taken by leave of the Assistant Commissioner, unless the party who may be affected thereby had a sufficient opportunity to contest the case on that count. Then Rule 68 provides specially for the issue of a notice of the date of hearing of an appeal to the Sales Tax Officer, who passed the order appealed against.
14. On the authority of the above-mentioned Supreme Court case of State of Orissa v. Babu Lal Chappolia [1966] 18 S.T.C. 17, an assessee can claim relief on the basis of 'C' forms not previously filed by him by way of additional or a new ground. The appellate authority would be justified in entertaining the same and granting the necessary relief to the assessee, if otherwise satisfied on the merits of the case.
15. Apart from that, it is a well settled principle of law that an appeal is merely the continuation of the original proceedings and unless some fetters are placed upon the powers of the appellate authority by express words, he exercises the same powers as does the original court or authority.
16. Learned counsel for the department has placed reliance upon three cases all reported in [1962] 13 S.T.C. The first one is the case of Deputy Commissioner of Agricultural Income-tax and Sales Tax v. A. M. Abdul Wasigh and Brothers [1962] 13 S.T.C. 295, There the assessee had submitted a return and he was served with a notice on 27th January, 1959, stating that he would be taxed on a turnover at enhanced rate if objections were not filed and accounts were not produced on 31st January, 1959. The assessee did not ask for adjournments and did not file the 'C' forms on or before the appointed date, and the assessment order was passed on 31st January, 1959. The assessee stated that he had sent his objections on 30th January, 1959, and had also requested the officer to grant him time to file the 'C' forms and that prior to the receipt of the assessment order he had sent the 'C' forms which were received by the officer on 17th February, 1959. The Appellate Tribunal held that the delay in filing the 'C' forms should be condoned and directed the officer to make a fresh assessment. On revision the Madras High Court held that the Appellate Tribunal erred in condoning the delay or directing the officer to make a fresh assessment.
17. The next case is of the Madras High Court of Deputy Commissioner (Commercial Taxes) v. Parekutti Hajee Sons [1962] 13 S.T.C. 680. In that case the assessee did not submit 'C' forms along with the monthly returns as required by the Central Sales Tax (Madras) Rules, 1957, and he also did not furnish 'C' forms along with the last return for the year and not even at the time when the final assessment was made by the Deputy Commercial Tax Officer. It was held by the Madras High Court that it was not open to the departmental officers or the Tribunal to condone the delay in submission of the 'C' forms
18. The third case is again of the Madras High Court. It is the case of Deputy Commissioner of Commercial Taxes v. Manohar Brothers [1962] 13 S.T.C. 686. In this case the Madras High Court has followed its earlier decision reported at page 680.
19. All these three cases can be justified on their peculiar facts, but with respect we cannot agree to the general proposition of law that in no case it is open to an appellate authority to entertain 'C' forms not filed before the Sales Tax Officer even if the appellate authority is satisfied that the omission to file the 'C' forms was for good and sufficient reasons. Such a proposition of law would be contrary to the two Supreme Court cases relied upon by us. In the case before us it has been found as a fact that the assessee had made a request to the Sales Tax Officer during the assessment: proceedings for the grant' of further time to him to procure and file the wanting 'C' forms and that the time granted by the Sales Tax Officer was wholly insufficient. Indeed that aspect of the matter has been incorporated in the question itself. In such circumstances the assessment would be vitiated. We see no reason why it was not open to the appellate authority to set aside such an assessment. Instead of setting aside the assessment the appellate authority could have modified the assessment itself after verifying the 'C' forms, a result which would have inevitably followed if the appellate authority had set aside the assessment order and remanded the case to the Sales Tax Officer for a fresh assessment.
20. For all these reasons we answer the question referred to us in the affirmative in favour of the assessee and against the department. The assessee is entitled to his costs which we assess at Rs. 100. The fee of the learned counsel for the department is also assessed at the same figure.
R.S. Pathak, J.
21. I agree with my brother Gulati J., that the question referred must be answered in the affirmative.
22. The assessee was unable to furnish 'C' forms in respect of some of the inter-State sales before the Sales Tax Officer during the assessment proceeding, and it was only a day or two after the assessment order had been made that he did so. In appeal the assessee seems to have contended that he had not been afforded adequate opportunity by the Sales Tax Officer to furnish the 'C' forms, and the plea was accepted by the Judge (Appeals) Sales Tax, who examined the 'C' forms on the record filed after the assessment order had been made and accordingly reduced the tax liability of the assessee. His order was upheld by the Judge (Revisions) Sales Tax.
23. The short question in this reference is whether upon these facts the appellate authority is competent to consider and give effect to the 'C' forms filed by a dealer after the conclusion of the assessment proceeding.
24. It is necessary to emphasise that this is a case where the appellate and the revisional authorities have found that the assessee was entitled to a further opportunity to furnish the 'C' forms and the refusal of the Sales Tax Officer to grant that opportunity had prejudiced the rights of the assessee. It seems to me necessary to emphasise this because it is in that context that I have come to the opinion expressed here. It seems to me that a dealer is bound to furnish the 'C' forms during the assessment proceeding and it is only when he is prevented from doing so for no fault of his but because of an error of the assessing authority that he may agitate the matter before the appellate authority and seek a further opportunity to furnish the 'C' forms. When he does so, it is not because he seeks to remedy an omission arising out of his own conduct but because he attempts to obtain relief against a wrongful deprivation of his right to furnish the 'C' forms before the assessing authority. In that event, upon proper grounds being made' out, the appellate authority will set aside the assessment and either direct the Sales Tax Officer to make a fresh assessment after taking into consideration the 'C' forms furnished by the dealer or itself entertain the 'C' forms and after verifying them grant relief to the dealer. The appellate authority constituted under the U.P. Sales Tax Act, in my opinion, has ample power to adopt either course. My learned brother has referred to the powers expressly conferred upon the appellate authority under the Act and the Rules, and I agree with him that the appellate authority possesses the jurisdiction to receive the 'C' forms and upon enquiry into them reduce the tax liability to the extent justified by the 'C' forms. That jurisdiction is found in Clause (a) of Sub-section (3) of Section 9 which empowers the appellate authority to reduce the assessment. Considered together with the power conferred by Rule 68(8) upon the appellate authority to take on the record material considered necessary to pronounce its judgment-and by that surely a true and correct judgment is intended-it is clear that the appellate authority can entertain the 'C' forms which the dealer could not file in the circumstances mentioned above. That the appellate authority enjoys the power to take additional evidence during an appeal is also apparent from Rule 75 which entitles it to the powers vested in a court under the Code of Civil Procedure, when trying a suit, in respect of enforcing the attendance of any person and examining him on oath or affirmation, compelling the production of documents and issuing commissions for the examination of witnesses.
25. Reference has been made on behalf of the revenue to Deputy Commissioner of Agricultural Income-tax and Sales Tax v. A. M. Abdul Wasigh and Bros [1962] 13 S.T.C. 295. In that case, the assessee did not file the 'C' forms on or before the date fixed for assessment and he did not also apply for time to do so. He filed the 'C' forms but not in time. They were received by the taxing officer some days after the assessment order had been completed. The Appellate Tribunal condoned the delay in filing the 'C' forms and directed the taxing officer to make a fresh assessment. The Kerala High Court did not approve of the course adopted by the Tribunal. It pointed out that the 'C' forms had been furnished after the assessment had been made. On the facts of the case it found nothing wrong in the taxing officer refusing to adjourn the case for receiving evidence. Similarly, in Deputy Commissioner of Commercial Taxes v. Parekutti Hajee Sons [1962] 13 S.T.C. 680, the 'C' forms were filed after the assessment order was made, and the Madras High Court held that it was not open to the Appellate Tribunal to condone the delay in the production of the 'C' forms. Here again, from the facts it does not appear that any attempt was made by the assessee to obtain an adjournment of the assessment proceedings so that he could file the 'C' forms before the assessment order was made. Now, without deciding whether the assessee was at fault in omitting to submit the 'C' forms before assessment the Tribunal condoned the delay merely on the view that as the 'C' forms had been submitted during the appeal against the assessment the 'C' forms should be accepted. The same Bench of the Madras High Court was called upon to consider a somewhat similar case in Deputy Commissioner of Commercial Taxes v. Manohar Brothers [1962] 13 S.T.C. 686 and the learned Judges pointed out that non-observance of the rule by the assessee in the matter of producing the 'C' forms would deprive the assessee of the benefit of the favourable rate of tax under Section 8(1) of the Central Sales Tax Act. They did not say that even if the assessee was deprived of the opportunity of filing the 'C' forms for no fault of his the appellate authority was not empowered to rectify the situation.
26. Upon these considerations, and upon the particular facts of this case, I answer the question referred in the affirmative.
27. The assessee is entitled to his costs which I assess at Rs. 100. Counsel's fee is also assessed in the same figure.
By the Court
28. For the reasons contained in our respective judgments we answer the question referred in the affirmative. The assessee is entitled to his costs which we assess at Rs. 100. The fee of counsel is also assessed in the same figure.