STATE OF KERALA versus M/S. VIJAYA STORES

Citation: [1979] 1 S.C.R. 538 · Decided: 01-09-1978 · Supreme Court of India · Bench: P.N. BHAGWATI · Disposal: Dismissed

Judgment (excerpt)

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538 
STATE OF KERALA 
v. 
M/S. VIJAYA STORES 
September 1, 1978 
[P. N. BHAGWATI, V. D. TULZAPURKAR AND R. S. PATHAK, JJ.] 
Kera/a General Sales Tax Act 1963-Section 39(4)-Scope of-Appellate 
Tribunal-if possesses jurfadic:ion ur power to enhance assessment in 
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absence of an appeal or cross-objection by one of the parties. 
Section 39(4)(a)(i) of the Kerala General Sales Tax Act 1963 provides 
that in disposing of an appeal, the Appellate Tribunal, may, after giving the 
parties a reasonable opportunity of being heard either in person or by a repre-
sentative, confirm, reduce, enhance or annul the assessment or penalty or bDth. 
On the ground that 50% of the transactions recorded in 1> rough note-book 
detected and seized by the Inspecting Officer from the Head Office of the firm 
were not entered in the regular books of accounts maintained by the assessee,_ 
the Sales Tax Officer made an addition of 10% to the admitted turnover and 
completed the assessment. 
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In an appea~, the Appellate Assistant Commissioner, reduced the additiori t<> 
5% of the admitted turnover. 
The respondents preferred a second appeal before the Appellate Tribunal. 
But the Department neither filed an appeal against the Order of the Appellate 
Assistant Comniissioner nor raised any cross-objections in the assessee's appe:W. 
After issuing a show-cause notice to the assessee, the Tribunal, under section 
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39(4) of the Kerala General Sales Tax Act 1963, directed the addition of a 
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certain amount to the taxhble tum over. 
In its Tax Revision Petition, the respondent contended before the High Court 
that the Order of the Tribunal was wrong in that it had no jurisdiction or power 
to enhance the assessment in the absence of an appeal or cross-objections by the 
Department. Setting aside the impugned Order of the Tribunal the High Court 
remanded the cllse for hearing the appeal afresh. 
In apeal to this Court, the appellant (Department) contended that on a true 
construction of section 39(4) of the Act, the Appellate Tribunal should be 
regarded as possessing the power to enhance the assessment even in the absence 
of any appenl or cross-objections by the Department against the Appellate Assis-
tant Commissioner's Order. 
Dismissing the appeal held : 
( 1) The Tribunal has no jurisdiction or power to enhance the assessment 
in the absense of an appeal or cross-objections by the Department. 
[543 E) 
(2) To accept the construction placed by the counsel for the appell"'1t 
oo sub .. ection (4)(a)(i) would be really rendering sub-section (2) 
of section 39 otiose, for if in an appeal preferred by the assessee 
against, the Appellate Assistant Commissioner's Order, the tribunal 
would have the power to enhance the assessment, a provision for 
cross-objections by the Department was really unnecessary. [543 DJ 
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v' 
KERALA v. VIJAYA STORES 
(Tulzapurkar, J.) 
5 39 
(3) The elementary principle found in the Code of Civil Procedure that 
the· respondent who bas neither preferred his own appeal nor filed 
cross-objections in the appeal preferred by the appellant must be 
deemed to be satisfied with the decision of the lower authority and 
that he will not be entitled to seek relief against a rivbl party in an 
appeal preferred 
by the latter, is equally 
applicable to revenue 
proceedings. (543 G] 
Motor Union Insurance Co. Ltd. vs. Conunissioner of Income Tax Bo1nboy 
(1945) 13 ITR 2i2 and New India 
Life 
A.o,surance 
C'o. 
vs. 
Co1n111issioner 
of Income Tax, 
Excess 
Profits Tax, Bombay City. 
(1957) 31 
ITR 844 
approved. 
Con1rnissioner of Sales Tax, Orissa vs. Clzunnilal Parmeshwar Lal (1961) 12 
STC 677 distinguished. 
C1wt APPELLATE JURISDICTION : Civil Appeal No. 477 of 1976. 
Appeal by Special Leave from the Judgment and 
O'der dated 
11-4-1975 of the Kerala High Court in T.R.C. No. 59 of 1973. 
P. A. Franc:is and N. Sudhakaran for the Appellant. 
Ex parte against the Respondent. 
The Judgment of the Court was delivered by 
TULZAPURKAR, J.-The short question raised in this appeal 
by 
special leave is whether the Appellate Tribunal has power under s. 
39(4) of the Kerafa General Sales Tax Act, 1963 to enhance the assess-
ment in the absence of any appeal or cross-objections by the Revenue? 
The respondent firm (M/s. Vijaya Stores) is a dealer in stationery 
having fts head office at Cochin and 
branches at Ernakulam and 
Kottayam. 
For the assessment year 1965-66 the 
respondent firm 
returned a total 

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