RAMANUJAM, J.

The only question in this tax case is, whether the turnover exempted by the assessing authority and which was not disputed before the first appellate authority could form the subject-matter of an enhancement petition for the first time before the Sales Tax Appellate Tribunal.

The Tribunal, following the decisions in Central Camera Co. (P.) Ltd. v. Government of Madras, Easun Engineering Company Ltd. v. Joint Commercial Tax Officer, State of Madras v. Spencer and Company Ltd. and Nagaraja Overseas Traders v. State of Mysore, held that the enhancement petition could not be admitted, as the subject-matter of the enhancement petition was not before the first appellate authority; nor was it canvassed by the Revenue before it. Therefore the question involves the determination of the scope and ambit of the power of the Tribunal under section 36(3)(a)(i) of the Tamil Nadu General Sales Tax Act, 1959, hereinafter referred to as the Act.

Section 36(3) of the Act so far as it is relevant is extracted below :

"36. (3) In disposing of an appeal, the Appellate Tribunal 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 penalty or both;

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

(iii) pass such other orders as it 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 Appellate Assistant Commissioner or the Deputy Commissioner, the assessing authority shall have the right to be heard either in person or by a representative :rovided further that, if the appeal in involves a question of law on which the Appellate Tribunal has previously given its decision in another appeal and either a revision petition in the High Court against such decision or an appeal in the Supreme Court against the order of the High Court thereon is pending, the Appellate Tribunal may defer the hearing of the appeal before it, till such revision petition in the High Court or the appeal in the Supreme Court is disposed of." *

The above sub-section expressly enables the Tribunal in an appeal relating to an order of assessment to confirm, reduce, enhance or annual the assessment or penalty or both. Thus the Tribunal has been conferred by sub-section (3) of section 36 of the Act the power to directly deal with the assessment and confirm, reduce, enhance or annul the assessment. It also enables the Tribunal to set aside the assessment and direct the assessing authority to make a fresh assessment after such further enquiry as may be directed. The said sub-section does not in terms limit the power of the Appellate Tribunal to deal with the order of the appellate authority alone. Thus the above provision contemplates a case where the Tribunal can enhance the assessment, if the Revenue files an application for enhancement and if enhancement is called on on the facts and circumstances of the particular case.

The scope of section 36(3)(a) of the Act came up for consideration before a Division Bench of this Court in Deputy Commissioner of Commercial Taxes v. Panayappan Leather Industries. In that case this Court has held that under section 36(3)(a)(i) of the Act in an appeal preferred by the assessee, the Appellate Tribunal has got the power to decide the appeal prejudicial to the assessee in the sense, not only by way of dismissing the appeal but also by way of enhancing the assessment or penalty. It is also held that section 36(3)(a)(ii) under which power is given to the Tribunal to set aside the assessment itself and direct the assessing authority to make a fresh assessment after such further enquiry as may be directed also indicates that the power of the Tribunal is not confined to the order of the Appellate Assistant Commissioner in appeal or