R.N.MISRA, J. -
(1.) THIS is an application by the State of Orissa under S. 24(2)(b) of the Orissa ST Act (hereinafter referred to as the 'Act') for a direction to the Tribunal to state a case and refer the following
question for opinion of the Court.
"Whether on the facts and in the circumstances of the case, the Member, Additional Tribunal is right in declining to enhance the assessments on the ground that no cross -objection was filed by the Commissioner and the assessee had no notice of it?"
(2.) THREE applicants were filed in this Court and were registered as S.J. Cs. 132, 133 and 134 of 1975 but on account of non compliance of peremptory order, S.J. Cs. 133 and 134 of 1975 have been dismissed. No steps have been taken for revival of these cases. Learned Standing Counsel
says that this application is confined to the year 1967 -68.
Assessee is a dealer in stationery articles, patent medicines and other articles of similar type and
runs his business near -about the temple of Lord Jagannath at Puri. Until the end of 1969 -70,
assessee has been permitted to pay tax by composition. Upon receiving information that the
assessee was abusing the privilege of composition, the Asstt. CST, Puri Range, cancelled the
compounding licence with retrospective effect from 1st April, 1967. Indisputably, action was taken
early in 1970 to give effect to cancellation of the licence retrospectively w.e.f. 1st April, 1967.
Thereupon assessment for 1967 -68 was completed under S. 12(8) of the Act and for the other two
years assessment followed under S. 12(4) thereof. The gross turnover for these three years was
determined at Rs. 1,58,850/ - by the AO.
Assessee's first appeal was dismissed. While second appeal of the assessee was being heard, on behalf of the State, it was contended that the determination of turnover for the three years (1967 -
68 to 1969 -70) by the AO was low. As against Rs. 1,58,850/ - as determined by the AO, the proper determination should have been Rs. 1,94,985.61 and thus there had been an escapement in
respect of turnover of of Rs. 36,13,5.61. The total sale of Rs. 1,94,985.61 was arrived at on the
basis of the pending stock on 1st April, 1967 and purchased during the three year. Out of it the
closing stock as on 31st March, 1967 was deducted and after purchase price was arrived at, an
addition of fifteen per cent towards profit was made. The Additional Tribunal, was pressed upon to
accept this figure for determining the turnover. In second appeal, the learned Member, Additional
Tribunal, refused to do so as he was of the view that in the absence of a cross -objection as
provided under S. 23(3) of the Act and the relevant Rule, the State could not ask for enhancement
of the tax demand.
(3.) WE have no difficulty in agreeing with the learned Standing Counsel that the view taken by the learned Member is erroneous because this is not a case where there had been any relief granted in
first appeal which could be got rectified by filing of a cross -objection. Sec. 23(3) of the Act which
deals with the provision of appeal and cross -objection before the Tribunal may now be dealt with.
The provision runs thus: -
"(3)(a) Any dealer or as the case may be, the State Government, dissatisfied with an appellate order made under Sub -S. (2)may within sixty days from the date of receipt of such order prefer an appeal in the prescribed manner to the Tribunal against such order. Provided that...... (b)The dealer or the State Government as the case may be, on receipt of notice that an appeal has been preferred under cl. (a) may, notwithstanding that the said dealer or the State Government may not have appealed against such order or any part thereof, within thirty days of the service of the notice file a memorandum of cross -objections and such memorandum shall be disposed of by the Tribunal or Additional Tribunal, as the case may be, as if it were an appeal presented within time under cl. (a) (c)..... ..."
The right to prefer an appeal or the right to prefer memorandum of cross -objection as contemplated in cls. (a) and (b) of S. 23(3) of the Orissa ST Act is based upon and connected with the proceeding before the first appellate authority. The cause to be aggrieved against the order of the first Appellate Authority would arise on the basis of relief withheld or granted at the first appellate stage. The instant case is not a case one where the first appellate Authority so far as the State of Orissa is concerned granted any relief. Therefore there was no occasion for the State of Orissa to contemplate filing of a memorandum of cross -objection. If any such cross -objection was filed, it was liable to be dismissed as not maintainable. Therefore, the reasoning given by the Member, Additional Tribunal, not to accept the contention of the State of Orissa was not justified. Yet, we do not think, this is a case where interference at our level is called for. Besides, with the dismissal of the two connected reference applications, it is no more possible to examine the point raised on merit as the submission was a common one taking the three years together. To meet such a situation, specific power has been conferred by statute under S. 12(8) of the Act on the STO. ;