1. In respect of the assessment year 1962-63, the assessees, who are dealers in electric and electro medical goods, submitted return in form I under the Tamil Nadu General Sales Tax Act, 1959, reporting a total and taxable turnover of Rs. 75,56,894.89 and Rs. 32,55,691.66 respectively. The gross turnover of Rs. 75,56,894.89 reported by the assessees included the turnover of Rs. 24,54,389.12, which represented import transactions. In the return they did not claim any exemption in respect of this turnover on any ground or that it represented the sales in the course of import. The assessing authority disallowing certain other turnovers which were not included in the taxable turnover determined the taxable turnover at Rs. 57,77,434.12. The assessees preferred an appeal to the Appellate Assistant Commissioner disputing the liability to tax the turnover of Rs. 24,76,195, which was disallowed by the assessing authority, but did not raise any dispute relating to the turnover of Rs. 24,54,389.12, which represented certain transactions in the course of import. When the appeal was pending before the Appellate Assistant Commissioner, the Supreme Court rendered the decision in Khosla & Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes [1966] 17 S.T.C. 473 (S.C.) on 18th January, 1966 and this decision was reported in the Law Journals on 1st May, 1966. Thereafter, after collecting materials relating to the transactions, the assessees filed a petition on 27th June, 1966, for permission to raise additional grounds in respect of the turnover of Rs. 24,54,389.12 claiming that this turnover which was not disputed by them before the assessing authority and not included in the grounds of appeal represented the sales in the course of import on the basis of the decision in Khosla & Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes [1966] 17 S.T.C. 473 (S.C.) and that therefore, they are not liable to pay any tax on the same. The Appellate Assistant Commissioner dismissed this petition and proceeded to consider only the turnover that was disputed in the grounds as originally filed. It may be mentioned that the Appellate Assistant Commissioner did give certain reliefs in respect of the turnover disputed by the assessees in the original grounds of appeal. The assessees preferred a further appeal to the Tribunal in which they had raised a contention that the Appellate Assistant Commissioner, in the circumstances of the case, ought to have entertained the additional reliefs asked for and considered the question of liability of the turnover of Rs. 24,54,389.12 also on merits. The Tribunal considered that the position of law relating to sales in the course of import was not quite clear prior to the decision of the Supreme Court in Khosla & Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes [1966] 17 S.T.C. 473 (S.C.) and that prior to that judgment the decision of the Madras High Court was against the claim of exemption. The assessees had therefore not claimed exemption at the time when they filed the appeal before the Appellate Assistant Commissioner. When the Supreme Court clarified the position and reversed the decision of the Madras High Court, the assessees considered that the said turnover was not liable to tax as sales in the course of import and wanted to claim exemption by filing a petition to raise the additional grounds. The Tribunal also considered that there was no want of diligence on the part of the assessees and that there was reasonable cause for the delay. In this view, the Tribunal held that the Appellate Assistant Commissioner ought to have permitted the assessees to raise additional grounds and adjudicated upon on the merits of the claim. The Tribunal accordingly remanded the appeal to the Appellate Assistant Commissioner for the consideration of the claim in respect of Rs. 24,54,389.12 on the basis of the documents produced. It is questioning this direction of the Tribunal the State has filed this revision petition.

2. The learned counsel for the revenue contended that the Appellate Assistant Commissioner could not have permitted the assessees to raise the additional grounds in respect of the turnover, which was not included at the time when the appeal was originally filed even if he was satisfied that there was reasonable ground for the delay and that, therefore, the Tribunal could not have directed the Appellate Assistant Commissioner to consider the additional grounds.

3. The appeal to the Appellate Assistant Commissioner against the order of assessment is provided under Section 31 of the Tamil Nadu General Sales Tax Act, 1959. That provision reads as follows :

Section 31(1) Any person objecting to an order passed by the appropriate authority under Section 12, Section 14, Section 15, Sub-sections (1) and (2) of Section 16, Section 18, Section 23, Section 27, Sub-section (4) of Section 41, or Sub-section (3) of Section 42, may, within a period of thirty days from the date on which the order was served on him in the manner prescribed, appeal against such order to the Appellate Assistant Commissioner:

Provided that the Appellate Assistant Commissioner may admit an appeal presented after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting the appeal within the said period :

Provided further that in the case of an order under Section 12, Section 14, Section 15 or Sub-sections (1) and (2) of Section 16, no appeal shall be entertained under this sub-section unless it is accompanied by satisfactory proof of the payment of the tax admitted by the appellant to be due or of such instalments thereof as might have become payable, as the case may be.

(2) The appeal shall be in the prescribed form and shall be verified in the prescribed manner.

(3) In disposing of an appeal, the Appellate Assistant Commissioner may, after giving the appellant a reasonable opportunity of being heard,

(a) in the case of an order of assessment-

(i) confirm, reduce, enhance or annul the assessment or the penalty or both;

(ii) set aside the assessment and direct the assessing authority to make a fresh assessment after such further inquiry as may be directed ; or

(iii) pass such other orders as he may think fit; or

(b) in the case of any other order, confirm, cancel, or vary such order :

Provided that at the hearing of any appeal against an order of the assessing authority, the assessing authority shall have the right to be heard either in person or by a representative.

4. Form I is the form prescribed in respect of the appeal to the Appellate Assistant Commissioner. Columns 6 and 7 of form I, which are relevant for purposes of our case is as follows :

6 Relief claimed in appeal-

(a) Turnover determined by the assessing authority.

(b) If turnover is disputed-

(i) Disputed turnover.

(ii) Tax due on the disputed turnover.

(c) If the rate of tax is disputed-

(i) Turnover involved.

(ii) Amount of tax disputed.

(d) Any other relief claimed.

7 Grounds of appeal, etc.

5. It was contended by the learned counsel for the revenue that under the first proviso to Clause (1) of Section 31 of the Tamil Nadu General Sales Tax Act, 1959, the Appellate Assistant Commissioner had power only to excuse the delay in filing an appeal itself and if a turnover was not disputed in the form of appeal preferred by the assessee, the Appellate Assistant Commissioner could not permit the raising of any dispute with reference to a turnover not disputed in the original memorandum of appeal itself. The learned counsel for the assessees, on the other hand, contended that when an appeal is preferred, though the assessee had referred only a particular turnover as the disputed turnover, the entire assessment order was before the Appellate Assistant Commissioner and he could either confirm, reduce, enhance or annul the assessment or set aside and direct the assessing authority to make a fresh assessment or may pass such other orders as he may think fit as provided under Sub-clause (3) of Section 31 of the Tamil Nadu General Sales Tax Act, 1959. Since the Appellate Assistant Commissioner is entitled to confirm, reduce, enhance or annul an assessment itself, he has the jurisdiction to permit additional grounds to be raised even in respect of a turnover which was not originally disputed by the assessees before the assessing authority or in the ground of appeal filed by the assessee.

6. It may be mentioned that while the assessee is given a right of appeal under Section 31 of the Tamil Nadu General Sales Tax Act, 1959, to the Appellate Assistant Commissioner and a further right of appeal against the order of the Appellate Assistant Commissioner to the Tribunal under Section 36, the department has no such right of appeal either to the Appellate Assistant Commissioner or from his order to the Tribunal. But a power is given to the Deputy Commissioner under Section 32 of the Tamil Nadu General Sales Tax Act, 1959, to suo motu revise the assessment order in respect of which an appeal had not been preferred to the Appellate Assistant Commissioner. In the case of an order made by the Appellate Assistant Commissioner, a similar power of suo motu revision is given to the Board of Revenue under Section 34 of the Tamil Nadu General Sales Tax Act. Only a right to file a petition for review of the Appellate Tribunal's orders and a right to file a revision to the High Court are given to the department. Section 31 of the Tamil Nadu General Sales Tax Act, 1959, in our opinion, therefore, confers a jurisdiction on the Appellate Assistant Commissioner to enhance the taxable tunover when the matter comes before him by way of appeal by the assessee. But for this specific power given to him to enhance the taxable turnover, the Appellate Assistant Commissioner's jurisdiction would be circumscribed by the dispute raised by the assessee in the appeal grounds. Therefore, while confirming, reducing or annulling the assessment, the Appellate Assistant Commissioner could do so only with reference to the turnover disputed in the ground in form I filed before him originally. He has no inherent power to annul or reduce the taxable turnover. It was contended by the learned counsel for the assessees that if the appeal was in time, instead of raising additional grounds, he could have withdrawn the appeal and filed a fresh appeal including some more turnover in the disputed turnover. Instead of doing so, he could have filed an additional ground and requested the Appellate Assistant Commissioner to read the original ground and the additional ground as one document of appeal, as withdrawing the appeal and filing a fresh consolidated appeal would be a mere technicality, which could be dispensed with at the discretion of the Appellate Assistant Commissioner. If that is so, he could have also raised the same additional ground even after the expiry of the period prescribed for filing the appeal and requested the Appellate Assistant Commissioner to treat the additional ground raised as part of the original ground itself. Alternatively, the learned counsel contended that the additional grounds themselves may be treated as an appeal though they were not in the prescribed form and if the Appellate Assistant Commissioner considers that there was justifiable reason for not raising the grounds earlier, he could treat it as if it were an independent appeal and dispose of both the original and the additional grounds by a common order. The learned counsel for the revenue demurred this argument and contended that the provisions do not contemplate the filing of two appeals or the acceptance of additional grounds raising the dispute with reference to a turnover not included in the original grounds of appeal. We are of the view that the learned counsel for the revenue is well-founded in his contention.

7. Section 31 of the Tamil Nadu General Sales Tax Act, 1959, does not contemplate the filing of two appeals. In fact, we are of the view that even within the prescribed time an assessee could not prefer separate appeals in respect of each item of disputed turnover. If the provisions were to be construed as concerning a right to prefer more than one appeal, it will lead to certain anomalous results. One of the appeals may be disposed of separately in which case the order of the original authority would merge with the order of the appellate authority and the appellate authority will not be entitled to deal with the other appeal filed by the assessee. Similarly, if an assessee could raise additional grounds relating to a different turnover at any time, he must be able to raise it or file an independent appeal even after the disposal of the appeal, which could not have been contemplated under Section 31, Clause (3), of the Tamil Nadu General Sales Tax Act, 1959. Thus, when an assessee goes up in appeal though he exposes the assessment order in its entirety to the scrutiny and enhancement by the Appellate Assistant Commissioner, so far as the assessee is concerned, the Appellate Assistant Commissioner could not give any relief apart from the one, which he had claimed in column 6 of form I set out above. A similar view was taken by this court in State of Madras v. Voltas Ltd.: No. 2 [1963] 14 S.T.C. 861, with reference to a revision petition filed under Section 38 of the Tamil Nadu General Sales Tax Act, 1959. When the revenue sought to raise a dispute with reference to a turnover which was not originally covered in the revision petition filed by them under Section 38 of the Tamil Nadu General Sales Tax Act, 1959, in this court, in rejecting the petition to admit additional grounds, this court observed as follows:

There is a clear indication in the Act and the rules set out above that a memorandum of revision petition by the aggrieved party, whether it be the State or the assessee, is not a general challenge of all the adverse findings against the State or the assessee, but is only a limited attack in regard to the matters set out in columns 5 and 6 in form VI. The scope of the revision petition is necessarily restricted to the questions raised in the memorandum. Where the order of the Tribunal deals with different sets of taxable turnovers, each independent of the other or others, it is open to the aggrieved party, the State or the assessee, to question one or more of the points decided adversely by filing a revision petition. Once a revision petition is filed and that embraces only some of the points decided against the petitioner, it would not be unjust or improper to infer that the petitioner has waived or abandoned his rights to challenge other portions of the impugned order which are against the party. In our opinion, there cannot be a challenge of a particular turnover not included in the original memorandum of revision petition under the guise of permission to raise additional grounds. The conception of urging additional or supplemental grounds is possible only with reference to matters already forming the subject-matter of revision. This is nothing but common sense and we are unable to say that there is any warrant in the provisions of the Sales Tax Act or any other law to deflect this plain and common place view that additional grounds are just further props to maintain the points raised and not an enlargement of the scope of the revision petition. It is impossible to view a memorandum of revision petition as a mere structural framework, elastic and expansive, capable of allowing the petitioner to raise questions of law relating to aspects not comprised in the original petition and conveniently discovered before the revision petition is actually disposed of. We can understand and appreciate a position in which a particular turnover of the assessee manifests several questions of law. For example, an assessee might contend that purchase of cotton was exempt from tax as it was in the course of import and he might also contend that even if it was a local purchase he was not the first purchaser in the State liable to tax. In such a case, if in the original memorandum of revision petition he has raised only one question, namely, that it was an import sale within the constitutional ban of Article 286 of the Constitution, it may perhaps be legitimate to seek permission to raise a further question of law in regard to the same matter, namely, that he is not the first purchaser. Whatever that be, we are unable to hold that in a case where there are different turnovers totally unconnected with one another it would be possible for an assessee or the State to challenge a part in the first instance and then challenge other parts without filing an independent revision petition, by merely seeking permission of the court under a miscellaneous petition.

8. The learned counsel for the assessees tried to distinguish this decision on the ground that the powers of revision of this court under Section 38(4) of the Tamil Nadu General Sales Tax Act, 1959, is narrower and restricted than the appellate power of the Appellate Assistant Commissioner, under Section 31 of the Tamil Nadu General Sales Tax Act, 1959. Under Section 38(4) of the Tamil Nadu General Sales Tax Act, 1959, this court can either reverse, affirm or amend the order against which the petition was preferred. To the extent that it did not give the power to enhance the assessment there is a restriction. That was because there is no right of appeal to the department to the Appellate Assistant Commissioner but a right of revision is given to the department under Section 38 of the Tamil Nadu General Sales Tax Act, 1959. Therefore, if the department is aggrieved by the order of the Tribunal they would have to prefer a revision petition and raise a dispute in that revision. The right to reverse, affirm or amend the order in Section 38 would, in our view, include a power to confirm, reduce or annul the assessment, according to the subject-matter of revision. We are, therefore, of the view that the ratio of the decision is applicable even for consideration of the powers of the Appellate Assistant Commissioner under Section 31 of the Tamil Nadu General Sales Tax Act, 1959.

9. The learned counsel for the revenue relied on the decisions in Thippama Rayappa v. Government of Andhra [1937] 8 S.T.C. 660, in State of Orissa v. Balm Lal Chappolia [1966] 18 S.T.C. 17 (S.C.) and in T.V.S. Iyengar & Sons (P.) Ltd. v. State of Madras [1970] 25 S.T.C. 160 and some of the decisions rendered under the provisions of the Income-tax Act. In all these cases, it was held that even in respect of a turnover which was not disputed by the assessee before the assessing authority he could file an appeal before the Appellate Assistant Commissioner. We are in entire agreement with every one of these decisions. Merely on the ground that the assessee voluntarily reported the turnover as taxable or did not dispute at the time when the assessment order was made, he could not be prevented from filing an appeal if he considers that either his return as taxable turnover was a mistake or that the assessing authority had made a mistake in assessing the turnover though he did not object. The assessecs are taxed and liable to be taxed on the sales only by virtue of the provisions of and under the Act and not by reason of or under the return. Therefore, even if an assessee had not disputed before the assessing authority he could raise that dispute for the first time in the appeal before the Appellate Assistant Commissioner. But that does not mean that when he had failed to raise that dispute originally in the grounds of appeal he could raise the same at any time before the appeal was disposed of by the Appellate Assistant Commissioner. We may also mention that Clause (5) of Section 250 of the Income-tax Act, 1961, permits the Appellate Assistant Commissioner to allow the appellant to go into any ground of appeal not specified in the grounds of appeal, if he is satisfied that the omission of that ground from the form of appeal was not wilful or unreasonable.

10. The learned counsel for the assessees then strongly relied on certain observations of this court in Easun Engineering Co. Ltd. v. Government of Madras [1974] 33 S.T.C. 350 and in State of Madras v. Spencer and Co. Ltd.[1974] 34 S.T.C. 249 to which one of us was a party. In Easun Engineering Co. Ltd. v. Government of Madras [1974] 33 S.T.C. 350, the facts were these. The assessee preferred an appeal challenging the assessment in so far as it related to a turnover of Rs. 2,38,472, which it claimed to be sales in the course of import and hence not taxable under the Central Sales Tax Act. Relying on the decision in Khosla & Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes [1966] 17 S.T.C. 473 (S.C.), the assessee wanted to dispute a further turnover of Rs. 30,00,000. When the petitioner approached the Appellate Assistant Commissioner, he was informed that final orders had been passed in the appeal. Therefore, the assessee was not able to file additional grounds of appeal before the Appellate Assistant Commissioner. The appeal was allowed on 24th November, 1966, in its entirety upholding the claim of the assessee for exemption on the turnover of Rs. 2,38,472. Thereafter, the assessee purported to file an appeal before the Tribunal questioning the assessment in respect of the turnover of Rs. 30,00,000, which is not the subject-matter before the appellate authority. The Tribunal entertained the appeal, but when it came up for the final disposal, on the objection of the department dismissed the appeal holding that the appeal was not maintainable. It was held that Section 36(1) of the Tamil Nadu General Sales Tax Act, 1959, enables an assessee to file an appeal before the Tribunal only against the order passed by the Appellate Assistant Commissioner under Section 31(3) of the Tamil Nadu General Sales Tax Act, 1959 and since the Appellate Assistant Commissioner had allowed the appeal filed by the assessee in its entirety, he could not have any objection to the order passed by the Appellate Assistant Commissioner as such. It was further held that if a turnover was not the subject-matter of appeal before the appellate authority, it could not be the subject-matter of appeal before the Tribunal as that would amount to an appeal against the original order of assessment and not against the appellate order of assessment. While holding so, this court made the following two observations :

(1) The Tribunal pertinently pointed out that, even though the judgment of the Supreme Court in Khosla & Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes [1966] 17 S.T.C. 473 (S.C.) was rendered in January, 1966, the assessee did not take any steps to file additional grounds of appeal before the appellate authority and call upon it to decide whether the said sum of Rs. 30,00,000 and odd represented sales in the course of import.

(2) If really the assessee was aggrieved against the assessment in respect of that turnover it should have included that turnover also in his appeal before the appellate authority, or should have taken the permission of the Appellate Assistant Commissioner to expand the appeal by including the disputed turnover of Rs. 30,00,000 and odd. But no such step was taken.

11. These observations were relied on by the learned counsel for the assessees as if this court had expressed a view that the Appellate Assistant Commissioner had the jurisdiction to include the turnover which was not originally disputed in the memorandum of grounds and enlarged the appeal itself. We are unable to agree with this contention of the learned counsel. Those observations were made as a factual position and not as a legal position arising under the provisions of Section 31 of the Tamil Nadu General Sales Tax Act, 1959. The observations relied on by the learned counsel in State of Madras v. Spencer and Co. Ltd. [1974] 34 S.T.C. 249 was also made in similar circumstances. There also the assessee, who did not dispute the turnover before the Appellate Assistant Commissioner, wanted to dispute the same before the Tribunal for the first time. This court observed that neither the memorandum of appeal before the Appellate Assistant Commissioner included the turnover relating to food and drinks nor any amendment of the grounds either by addition or otherwise was sought for or granted and that, therefore, the turnover relating to food and drinks was not properly before the Appellate Assistant Commissioner. This observation also was a reference to the factual position and not a considered view on the jurisdiction of the appellate authority to raise additional grounds under Section 31 of the Tamil Nadu General Sales Tax Act, 1959.

12. We are, therefore, of the view that there was no jurisdiction for the Appellate Assistant Commissioner to permit the raising of additional grounds in respect of the turnover which was not disputed in the original appeal filed in form I and that, therefore, the Tribunal erred in directing the Appellate Assistant Commissioner to decide the assessability of the additional turnover on merits.

13. This revision petition is accordingly allowed and the order of the Tribunal on this point is, therefore, set aside. The revenue will be entitled to its costs. Counsel's fee Rs. 250.