Shiveshwar Prasad Sinha, J.:— The Commercial Taxes Tribunal, Bihar, Patna, has under section 25(1) of the Bihar Sales Tax Act, 1947, asked for this Court's opinion on the undermentioned question:

“Whether, in the facts and circumstances of the case, the Tribunal was justified in law to hold that the order dated 4th July, 1963, of the Deputy Commissioner merged in the order dated 28th May, 1965, of the Tribunal and that the Commissioner of Commercial Taxes, Bihar, had no jurisdiction to revise the said order under section 24(4) of the Bihar Sales Tax Act, 1947?”

2. This question has arisen on the facts as stated below:

In fact, virtually the same question and on similar facts had been referred to this Court for its opinion in the case of Commissioner of Commercial Taxes, Bihar, Patna v. Rameshwar Das Panna Lal [1974] 34 S.T.C 296.. This Court answered the question in the affirmative and against the department. The said decision has since been reported in [1974] 34 S.T.C 296. There should not, therefore, have been a further occasion to ask for this Court's opinion on virtually the same question arising on similar facts. Since, however, once again opinion of this Court has b;en sought, it has to be answered.

3. In this judgment, the Commissioner of Commercial Taxes shall be referred to as the “department” and the respondent-opposite party shall be referred to as the “dealer”. The dealer returned a gross turnover of Rs. 12,42,36,362 for the period 1958-59. Out of this gross turnover a sum of Rs. 6,52,613 was claimed as deduction on account of sales of vanaspati outside Bihar on consignment basis. The dealer's claim was rejected by the assessing officer on the ground that the sales had been effected in pursuance of a contract for sale and, therefore, the sale was in the nature of inter-State sale. On appeal, the Deputy Commissioner of Commercial Taxes, being satisfied that out of the said sum of Rs. 6,52,613, goods worth Rs. 5,07,431 had been despatched on self-consignment basis outside Bihar, accepted the dealer's claim to that extent by his order dated 4th July, 1963. Thus, in effect, the dealer's claim of the balance amount of Rs. 1,45,182 remained unaccepted. The dealer then filed a revision application before the Board of Revenue, which revision application, on constitution of the Commercial Taxes Tribunal, was transferred to the Tribunal for disposal. The Tribunal by its order dated 28th May, 1965, remanded the proceeding to the assessing officer for detailed examination with regard to the claim of exemption of the aforesaid sum of Rs. 1,45,182. In regard to the deduction of Rs. 5,07,431, which had been admitted by the Deputy Commissioner of Commercial Taxes, the Tribunal observed: “As this point is not specifically (sic) for consideration before us, we refrain from making any observation on the finding of the Deputy Commissioner on this point.”

4. On 2nd February, 1966, the Commissioner of Commercial Taxes, Bihar, Patna, issued a notice to the dealer asking him to show cause why the order dated 4th July, 1963, passed by the Deputy Commissioner of Commercial Taxes should not be revised by him under section 24(4) of the Bihar Sales Tax Act, 1947. The dealer, by way of preliminary objection, contested the jurisdiction of the Commissioner of Commercial Taxes to proceed to revise the said order of the Deputy Commissioner, on the ground, inter alia, that the order of the Deputy Commissioner of Commercial Taxes had merged in the order dated 28th May, 1965, passed by the Commercial Taxes Tribunal. The Commissioner of Commercial Taxes by his order dated 6th August, 1968, rejected the said preliminary objection. The dealer then filed a revision application to the Commercial Taxes Tribunal. The Tribunal relying upon one of its earlier decisions in Revision Case No. 217 of 1966 (out of which the decision* of this Court, reported in [1974] 34 S.T.C 296 arose) accepted the dealer's plea and held that the order of the Deputy Commissioner had merged in the order of the Tribunal and, therefore, the Commissioner of Commercial Taxes had no jurisdiction to revise the order of the Deputy Commissioner under section 24(4) of the Bihar Sales Tax Act, 1947.

5. At the instance of the department, the Tribunal has referred the above-mentioned question for opinion of this Court.

6. The argument on behalf of the department is that the Deputy Commissioner's order dated 4th July, 1963, did not merge in the Tribunal's order dated 28th May, 1965, because the Commercial Taxes Tribunal had not only not applied its mind to that part of the Deputy Commissioner's order, wherein he had considered and allowed the dealer's claim for deduction to the extent of Rs. 5,07,431, but had pointedly observed that “as this point is not specifically (sic) for consideration before us, we refrain from making any observation on the finding of the Deputy Commissioner on this point”. In other words, according to the learned counsel for the department, the doctrine of “merger” would be applied only when the point dealt with by the lower tribunal was specifically considered by the higher tribunal. Since that point was left out of consideration by the higher tribunal, that part of the Deputy Commissioner's order did not merge in the order of the Commercial Taxes Tribunal. He has placed reliance on a decision of the Supreme Court in the case of State Of Madras v. Madurai Mills Co., Ltd. , confirming the decision of the Madras High Court in the case of Madura Mills Co. Ltd. v. State of Madras [1962] 13 S.T.C 124..

7. I think the argument is based on a misconception of the principles underlying the doctrine of merger. To my mind, the argument made on behalf of the department is erroneous. The expression “merger” means absorption of one into the other. The assessnent order can be said to have merged in an appellate or revisional order, where the appellate or the revisional authority being seized of the assessment order, either suo motu or through the filing of an appeal or revision, as the case may be, examines the whole process of the assessment and then either confirms or modifies or sets aside or enhances the assessment made. If the order is passed in appeal, the assessment gets merged in the appellate order; and if there is further revision against the appellate order the assessment order as also the appellate order, both get merged in the revisional order. The doctrine of merger can be best appreciated by looking at two of the decisions of the Supreme Court, one in the case of Collector of Customs, Calcutta v. East India Commercial Company Ltd., Calcutta, in which case the order passed by the inferior court has been held to have merged in the order passed by the superior court, and the other in the case relied upon by the learned counsel for the department, namely, in the case of State Of Madras v. Madurai Mills Co., Ltd. , in which case the order of the inferior court has been held not to have mergec in the order of the superior court. There are other decisions also of the Supreme Court dealing with the principle of “merger”, such as Commissioner Of Income Tax, Bombay v. Amritlal Bhogilal & Co. [1958] 34 I.T.R 130 S.C., but I have not thought it necessary to add to the list of cases dealing with this principle.

8. What then determines the question as to whether or not there has been a merger of the inferior tribunal's order in the superior tribunal's order? An assessment order, for the purposes of assessing sales tax, is a computation of the total taxable turnover after processing the various transactions entered into by a dealer and thereafter including such part of the transaction as are of taxable nature in such computation. The assessment order is composite and one whole. Under the Bihar Sales Tax Act, a dealer, if aggrieved by the assessment order, as a whole, or by any part of it, appeals to the Deputy Commissioner, the order passed on such appeal becomes the operative decision and the assessment order gets merged in it. As observed by the Supreme Court in the case of Amritlal Bhogilal & Co.:

“There can be no doubt that, if an appeal is provided against an order passed by a tribunal, the decision of the appellate authority is the operative decision in law. If the appellate authority modifies or reverses the decision of the tribunal, it is obvious that it is the appellate decision that is effective and can be enforced. In law the position would be just the same even if the appellate decision merely confirms the decision of the tribunal. As a result of the confirmation or affirmance of the decision of the tribunal by the appellate authority the original decision merges in the appellate decision and it is the appellate decision alone which subsists and is operative and capable of enforcement”

9. The above observation, carried to its logical end, will mean that if an order passed in appeal is carried further up in revision before a higher tribunal, the order passed in revision by such tribunal becomes the operative and enforceable order, the orders passed by the inferior tribunal getting merged in it.

10. This position is, however, true only in respect of appeals or revisions filed against such computations of taxable turnover, as have actually figured in the assessment order. The doctrine of “merger” has not to be understood as meaning that whenever there are two orders, one by the inferior tribunal and the other by a higher tribunal, the former merges in the latter. There cannot be such an universal rule, because merger depends upon the same subject-matter being traversed by the assessing authority, the appellate authority and the revisional authority. It is, however, immaterial as was observed by Chagla, C.J, in the case of Commissioner of Income-tax v. Tejaji Farasram Kharawala, whether the matter traversed in appeal or revision was in relation to the whole assessment order or even a part of it. His Lordship found it difficult “……on principle to distinguish a case where an appeal is heard by the Appellate Assistant Commissioner and the particular matter in respect of which the Commissioner makes an order under section 33-B is not dealt with in that appeal by the Appellate Assistant Commissioner and a case where that matter is dealt with by him……”

11. If the subject-matter dealt with by the superior tribunal is the order of assessment or any part of it, the latter order would merge in the order passed by the former. In other words, the identity of the latter will be lost and get merged in the former. The decision of the Supreme Court in the case of Collector of Customs v. East India Commercial Co. Ltd. visualises a situation like this one.

12. If, however, the subject-matter differs at different stages, there can be no merger of one order in the other. If such items of transactions, which have not figured in the assessment order, are processed afresh, either by the appellate authority or, by the revisional authority, to the extent of such fresh subject-matter, there can be no merger of the one order in the other. The decision of the Supreme Court in the case of Madurai Mills Co. Ltd. is of this type. In this case, the Board of Revenue wanted to include a certain transaction, which had not been the subject-matter of assessment, in the dealer's taxable turnover. The step sought to be, taken by the Board was challenged by the dealer on grounds of limitation. The Board took the plea of merger of the assessment order in the later revisional order, which would have saved action sought to be taken by the Board from being barred by limitation. A question having been referred to the High Court, as to whether there was a mfcrger of the assessment order in the revisional order, the High Court answered it in the negative (reported in [1962] 13 S.T.C 124), which the Supreme Court affirmed, vide its decision reported in [1967] 19 S.T.C 144 (S.C). While affirming the decision of the Madras High Court, the Supreme Court observed:

“……But the doctrine of merger is not a doctrine of rigid and universal application and it cannot be said that wherever there are two orders, one by the inferior tribunal and the other by a superior tribunal, passed in an appeal or revision, there is a fusion or merger of two orders irrespective of the subject-matter of the appellate or revisional order and the scope of the appeal or revision contemplated by the particular statute. In our opinion, the application of the doctrine depends or the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisd iction”

13. Dealing with the facts of the case, their Lordships observed:

“……In the circumstances of the present case, it cannot be said that there was a merger of the order of assessment made by the Deputy Commercial Tax Officer dated the 28th November, 1952, with the order of the Deputy Commissioner of Commercial Taxes dated the 21st August, 1954, because the question of exemption on the value of yarn purchased from outside the State of Madras was not the subjct-matter of revision before the Deputy Commissioner of Commercial Taxes. The only point that was urged before the Deputy Commissioner was that the sum of Rs. 6,57,971-4-9 collected by the respondent by way of tax should not be included in the taxable turnover. This was the only point raised before the Deputy Commissioner and was rejected by him in the revision proceedings. On the contrary, the question before the Board of Revenue was whether the Deputy Commercial Tax Officer, Madurai, was right in excluding from the net taxable turnover of the respondent the sum of Rs. 7,74,62,706-1-6, which was the value of cotton purchased by the respondent from outside the State of Madras………”

14. In the instant case, admittedly, the transaction in question has been the subject-matter of the assessment order as also of the appellate order of the Deputy Commissioner and of the revisional order of the Commercial Taxes Tribunal. May be, that the Commercial Taxes Tribunal did not apply its mind to a part of the item in question, but even so, the order of assessment does merge in the order of the Deputy Commissioner of Commercial Taxes dated 4th July, 1963, which in its turn gets merged in the revisional order of the Commercial Taxes Tribunal dated 28th May, 1965. The position in the instant case is the on 3 as envisaged in the decision of the Supreme Court in the case of Collector of Customs v. East India Commercial Company Ltd., in which their Lordships held:

“…It is obvious that when an appeal is made, the appellate authority can do one of the three things, namely, (i) it may reverse the order under appeal, (ii) it may modify that order, and (iii) it may merely dismiss the appeal and thus confirm the order without my modification……In all these three cases after the appellate authority has disposed of the appeal, the operative order is the order of the appellate authority, whether it has reversed the original order or modified it or confirmed it. In law, the appellate order of confirmation is quite as efficacious as an operative order as an appellate order of reversal or modification………”

15. That being the position in law, on the facts and in the circumstances of the instant case, the Commissioner of Commercial Taxes has no jurisdiction to revise the order passed by the Deputy Commissioner of Commercial Taxes dated 4th July, 1963, in exercise of his revisional power under section 24(4) of the Bihar Sales Tax Act, 1947, inasmuch as the said order of the Deputy Commissioner of Commercial Taxes had merged in the order dated 28th May, 1965, passed by the Commercial Taxes Tribunal. The question is answered in the affirmative and against the department. The respondent will be entitled to costs. Hearing fee Rs. 250.

S. Sarwar Ali, J.:— I agree.

16. Reference answered in the affirmative.