REED RELAYS AND ELECTRONICS INDIA LIMITED Vs. APPELLATE ASSISTANT COMMISSIONER COMMERCIAL TAXES KANCHEEPURAM

JUDGEMENT

(1.) AT the stage of admission, the learned Additional Government Pleader for Taxes has been directed to take notice. Accordingly, she has taken notice on behalf of the respondents, received instructions and secured records also. As the matter lies in a narrow compass, the appeal is admitted and it is heard for final disposal.

(2.) IN the writ petitions, the appellant-petitioner sought for quashing the orders dated October 28, 1993, passed by the Appellate Assistant Commissioner (C.T.), Kancheepuram, in Appeal Nos. 38/90/CST and 39/90/CST, dismissing them for default. The last date on which the appeals were posted for hearing was October 28, 1993. Before that date, the appeals were adjourned for a number of times. The orders dismissing the appeals for default state all those dates. Even on October 28, 1993, the appellant-petitioner did not turn up. Hence, the Appellate Assistant Commissioner took the view that there was no alternative but to dismiss the appeals. Thus, he did not go into the merits of the appeals and dismissed them on the ground that neither the appellant nor its counsel was present. The learned single Judge has rejected the writ petitions on the ground that the appellant-petitioner was well aware of the posting of the appeals for hearing as it was served with notices. Further, there was a delay in filing the writ petitions inasmuch as the appeals were dismissed on October 28, 1993, whereas the writ petitions were filed only on June 30, 1994.

(3.) WE are of the view that neither the Act nor the Rules specifically provide for dismissing the appeal for default in the event of non-appearance of the assessee either in person or through the representative. The power conferred under sub-section(3) of section31 of the Act upon the Appellate Assistant Commissioner is to decide the appeal on merits and in so deciding the appeal, he can confirm, reduce, enhance or annul the assessment or the penalty or both or remit the matter for fresh disposal. Sub-rule (5) of rule 27 of the Rules also does not enable the Appellate Assistant Commissioner to dismiss the appeal for default, but it only says that he shall after affording the appellant reasonable opportunity of being heard pass such order as he thinks fit. In our view, the matter is no more res integra. The Supreme Court in Commissioner of Income-tax v. S. Chenniappa Mudaliar considered the provisions contained in sub-section(4) of section33 of the Income-tax Act, 1922, as it stood then, and held, that the said provision did not provide for dismissal of the appeal for default and it only provided that the Appellate Tribunal may, after giving an opportunity of being heard, pass such order as it thinks fit and shall communicate any such orders to the assessee and to the Commissioner. This sub-section (4) of section33 of the Income-tax Act is similar to sub-rule (5) of rule 27 of the Rules. The Rules framed under the Income-tax Act, namely, Appellate Tribunal Rules, 1946, enabled the Tribunal to dismiss the appeal for default. The Supreme Court in Chenniappa Mudaliar's case held that the said rule was ultra vires of the provisions contained in sub-section(4) of section33 of the Act and the Appellate Tribunal could not dismiss the appeal for default. The relevant portion of the judgment is as follows :