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Judgment
Hon''ble Dr. Justice Vineet Kothari
1.The Revenue has filed these revision petitions against the order of the Tax Board, Ajmer dated 23.09.2008 passed in 14 appeals, whereby the appeals filed by the Assessee/s Pawan Kumar Agarwal and Subhash Chand, were allowed, and the Tax Board held that the order of Deputy Commissioner (Appeals) Bikaner dated 02.06.2004 remanding the case back to the Assessing Authority was illegal since it was a second remand by the Deputy Commissioner (Appeals); and the Assessing Authority had failed to pass appropriate assessment order after due enquiry in pursuance of earlier remand order of the Deputy Commissioner (Appeals) dated 13.08.1999.
The case appears to have a chequered history of the assessments including best judgment assesment and remands by the appellate authorities in assessment proceedings against one firm known as ''M/s Mamraj Jagdish Kumar, 354, Vinoba Basti, Sriganganagar'' for assessment year 1994-95 (01.04.1994 to 31.03.1995). The Assessing Authority found that real persons behind the persons, who were said to be running the said partnership firm, were different and included S/Sh. Pawan Kumar Agarwal S/o Mohan Lal, and Subhash Chand S/o Pratap Singh. The enquries made by the Assessing Authority also resulted in certain reports by the different officials of the Commercial Taxes Department that some more persons were behind the said concern known as M/s Mamraj Jagdish Kumar. Earlier, the assessment order dated 27.03.1997 was challenged before the learned Deputy Commissioner (Appeals) by which the learned Deputy Commissioner (Appeals) remanded the case back vide the order dated 13.08.1999 to the Assessing Authority. Upon such remand, a fresh assessment order was passed by the Assessing Authority for the said period on 08.02.2002 vide Annex-1 and in the said best judgment assessment, determining the taxable turnover of the said firm at Rs. 3 crores, a demand of Rs. 42,45,020/- was raised against the Assessee for which various persons were held liable to pay as named in the said order as they were found to be the real partners and ten such names have been given at page 2 of the assessment order like Jagdish Kumar, Dinesh Kumar, Chandan Singh, M/s Sohan Lal Rakesh Kumar, M/s Bhakhda Agro Industries, Pawan Kumar Gawdia, Anil Kumar, Pawan Kumar Agarwal, Subhash Chand and Kishan Kumar etc.
These persons challenged the said assessment order dated 08.02.2002 before the learned Deputy Commissioner (Appeals), again who vide his order dated 02.06.2004 partly allowed these 14 appeals and again remanded the case back to the Assessing Authority as the said appellate authority felt that the Assessing Authority had not fully complied with the directions given in the earlier remand order of Deputy Commissioner (Appeals) dated 13.08.1999. The order of the Deputy Commissioner (Appeals) dated 02.06.2004 is Annex-2 in the present revision petition.
Being aggrieved of the same, the said Pawan Kumar Agarwal and Subhash Chand filed appeals before the Tax Board, which batch of 14 appeals came to be decided by the Division Bench of Tax Board, Ajmer on 23.09.2008 quashing the order of the Deputy Commissioner (Appeals) dated 02.06.2004. The learned Tax Board held that the Deputy Commissioner (Appeals) was not justified in again remanding the case back to the Assessing Authority if the enquiry was not held by the Assessing Authority in terms of earlier remand order dated 13.08.1999.
Being aggrieved by the said order of Tax Board, the Revenue has filed these revision petitions before this Court u/s 86 of the RST Act, 1994.
Mr. Lokesh Mathur appearing on behalf of Mr. V.K. Mathur, Learned Counsel for the Revenue urged that the Tax Board has committed gross error of law in holding that the Deputy Commissioner (Appeals) could not have again remanded the case back to the Assessing Authority, whereas such power clearly vests in the appellate authority u/s 84 (7) of the Act. He, therefore, submitted that since in pursuance of the enquiry held by the Assessing Authority, though various persons were summoned, but did not appear, therefore, the delay in concluding the said enquiry happened and again the Assessing Authority had to pass best judgment assessment on 08.02.2002 for assessment year 1994-95 on the basis of material available before the Assessing Authority. He further submitted that in the appeals filed by the aggrieved persons, if the learned Deputy Commissioner (Appeals) has again remanded the case back to the Assessing Authority vide order dated 02.06.2004, there was no illegality in the same and the A ssessee could not have in fact challenged such orders before the learned Tax Board.
Be that as it may, in the appeals filed by the Assessee, the learned Tax Board could not have quashed such remand order of Deputy Commissioner (Appeals) and closing the enquiry against the Assessee and real partners, who were transacting the business in the name of said Assessee firm, namely, M/s Mamraj Jagdish Kumar. A great amount of revenue loss has been caused and the tax liability under the assessment framed against such real persons/partners, can never be recovered, if the order of the Tax Board is allowed to sand. He also urged that powers u/s 85 (11) of the Act dealing with powers of Tax Board, which stipulates that Tax Board may pass such orders on appeals ''as it thinks fit'', does not empower the Tax Board to foreclose such enquiry during the course of assessment proceedings and, therefore, the impugned order of Tax Board dated 23.09.2008 deserves to be set aside.
On the other hand, Mr. Devendra Kumar, learned Counsel for the Respondents-Assessee submitted that the remand made by the Deputy Commissioner (Appeals) cannot be endlessly and repeatedly made to enable the Assessing Authority to undertake such enquiry. Since twice over the Assessing Authority failed to summon all the relevant witnesses in the matter before it and allowing the Assessee an opportunity to cross-examine such departmental witnesses, the blame for the same cannot be laid at the doors of the Assessee and the assessment could not have been framed against them. He also submitted that two of the persons sought to be described as real partners of the said firm, namely, Sh. Pawan Kumar Agarwal and Subhash Chand have not only appeared before the Assessing Authority in such proceedings, but they undertake to further also appear before him if order of Tax Board is held to be unsustainable, but the other witnesses have to be summoned by the concerned Assessing Authority, who has powers of civil court under Sections 94 and 95 of the RST Act and for enforcing their attendance, he can resort to relevant provisions of CPC if, however, that is not done, the Assessee cannot be fastened with such tax liability.
He also submitted that Tax Board was justified in holding that repeated remand could not be made in the matter. He also submitted that the subsequent assessment order made on 02.01.2007 for the assessment year 1995-96 in pursuance of the impugned order of Deputy Commissioner (Appeals) dated 02.06.2004 was not even produced before the learned Tax Board yet a contention was raised that the appeals before the Tax Board had become infructuous, in view of impugned order of the Deputy Commissioner (Appeals) having been complied with by the Assessing Authority; and even before this Court, a question of law to this effect, has been framed by the Revenue for consideration by this Court.
Having heard the learned Counsel for the Petitioner- Revenue and the Respondents-Assessee and upon perusal of material placed before this Court, this Court is of the opinion that the Tax Board has fallen into error in foreclosing the enqiury by the Assessing Authority in pursuance of the remand order dated 02.06.2004 passed by the Deputy Commissioner (Appeals). Even though it was a remand on the second occasion, the earlier order being 13.08.1999, the law does not prohibit such second remand, if the circumstances of the case calls for the same. The Deputy Commissioner (Appeals) in his order dated 02.06.2004 has clearly stated that earlier remand order of Deputy Commissioner (Appeals) dated 13.08.1999 was not followed in letter and spirit by the Assessing Authority and proper enquiry against the real partners of the said firm, which was treated as a "Benami" concern, was not made by the Assessing Authority and, therefore, the learned Deputy Commissioner (Appeals) felt that matter again deserves to be remanded back to the Assessing Authority. Section 84 (7) of the Act empower the appellate authority to either confirm, enhance, reduce or annual the assessment or to set aside the order of assessment and remand the case to Assessing Authority and direct the Assessing Authority to pass fresh order after such further enquiry, as may be directed.
84 (7)- The appellate authority may, before disposing of any appeal make such further enquiry as it thinks fit, or may direct the assessing authority or the officer against whose order appeal has been preferred to make further enquiry and report the result of the same to the appellate authority and in disposing of the appeal the said authority may:
(a) In the case of an order of assessment, interest or penalty:
(i) confirm, enhance, reduce or annul the assessment, interest or penalty; or
(ii) set aside the order of assessment, interest or penalty and direct the assessing authority to pass fresh order after such further enquiry as may be directed; and
(b) In the case of any other order, confirm, cancel, very or remand such order.
These provisions, therefore, clearly empower the Deputy Commissioner (Appeals) to even direct a remand of the assessment proceedings. There is no prohibition in law against a second remand order. Therefore, per-se on a plain reading of the provisions, the second remand order dated 02.06.2004 of the learned Deputy Commissioner (Appeals), could not be held to be illegal or contrary to the provisions of the Act. In fact, the impugned order the Tax Board dated 23.09.2008 towards the end of the order, appears to be a take a ''U'' turn and while discussing the assessment made in pursuance of the earlier remand order, and the delay caused therein, resulting into second remand by the impugned order dated 02.06.2004 and observing that the Assessing Authority had not made complete enquiry into the matter, suddenly the Tax Board directs in last four lines of the order that the Deputy Commissioner (Appeals) instead of remanding the case back to the Assessing Authority vide order dated 02.06.2004 ought to have quashed the same and giving of second inning to the Assessing Authority was not justified. Why or under which provision of law such second remand was not justified, is not even discussed by the learned Tax Board in the impugned order. Such a stand on the part of the Division Bench of the Tax Board obviously cannot be sustained being apparently contrary to the clear and unambiguous language of the provision of Section 84 (7) of the Act, quoted above.
Even otherwise, it appears to this Court that present case appears to have a long and chequered case history. The nature of enquiry envisaged in these kind of matters, where somebody else has to be treated to be the real owners/ partners of the firm, which is prima-facie, found to be a "Benami" concern is a difficult terrain of enquiry and it might take quite some time for the Assessing Authority to compile the necessary adverse material against the real owners and confront them with the same after establishing that real partners of the said firm, where other persons claim to be the partners and, which could take its own time.
At the same time, it cannot be said that such enquiry could be endless or half-hearted on the part of the Assessing Authority. When such Assessing Authority has all the powers of a civil court including the powers u/s 32 of Code of Civil Procedure, which empowers him to compel the attendance of any person, to whom summons have been issued and for that purpose (a) he may even issue a warrant of arrest; (b) attach and sell the property, (c) impose fine upon him up to Rs. 5,000/-; and (d) order him to furnish security for his appearance and in default commit by him to civil prison read with Order 16 Rule 12 Code of Civil Procedure, it cannot be said that the Assessing Authority is powerless or can express his helplessness to ensure the attendance of the relevant departmental witnesses, which have to be cross-examined by the Assessee upon whom the tax liability is sought to be fastened.
Hence, while holding that the Tax Board has erred in quashing the second remand order of Deputy Commissioner (Appeals) dated 02.06.2004, and the impugned order of the Tax Board dated 23.09.2008 is required to be set aside, at the same time, this Court would direct the Assessing Authority to pass fresh orders in pursuance of the said remand order dated 02.06.2004 after holding due and proper enquiry fully in compliance with the letter and spirit of the second remand order dated 02.06.2004. A period of one year from today is accordingly allowed to the said Assessing Authority to complete such enquiry in accordance with law and pass fresh assessment order.
In the result, the revision petitions filed by Revenue are allowed. The order passed by the Tax Board on 23.09.2000 is set aside. No costs.