1972 (7) TMI 90 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of the provisions of the Tamil Nadu General Sales Tax Act regarding the taxation of raw hides and skins.
2. Application of the power of rectification under section 55 of the Act.
3. Impact of judicial pronouncements on rectification of assessment orders.

Analysis:
1. The petitioner contested the assessment of taxable turnover, arguing that raw hides and skins purchased locally should be taxed differently from dressed hides and skins sold during the year. The Appellate Assistant Commissioner included the entire purchase turnover of raw hides and skins in the assessable turnover under item 7(a) of the Second Schedule to the Act. The petitioner sought rectification based on a subsequent judicial pronouncement clarifying the taxation of such goods. The court held that the power to rectify errors apparent on the face of the record must be exercised in the interest of justice. The petitioner's application for rectification should have been entertained, as subsequent judicial decisions can render a levy illegal, justifying rectification.

2. The court analyzed the scope of the power of rectification under section 55 of the Act, emphasizing that it is not merely discretionary but a duty vested in authorities to avoid injustice in taxation matters. The power should be exercised when a mistake apparent from the record is brought to the authority's notice. The court cited a Supreme Court judgment to support the view that rectification is justified when a levy is found to be illegal based on subsequent court decisions. Therefore, the application for rectification made by the petitioner should have been considered by the authority, and the failure to do so amounted to an avoidance of public duty.

3. The court highlighted that subsequent judicial pronouncements can impact the rectification of assessment orders, contrary to the argument that such judgments cannot form the basis for rectification. Citing a case where a levy was deemed illegal based on a court decision, the court established that rectification is warranted when a levy becomes illegal due to a court ruling. The petitioner was directed to provide material consistent with the court's previous decision and satisfy the authorities that the earlier appellate order resulted in an illegal levy. The authority was instructed to process the rectification application in accordance with the principles outlined in the judgment and the relevant judicial pronouncement.

In conclusion, the court allowed one writ petition for the issue of a writ of mandamus directing the authority to entertain the rectification application, emphasizing the duty to avoid injustice in taxation matters. The court dismissed another writ petition challenging an administrative order, highlighting the distinction between administrative and quasi-judicial orders. The petitioner was directed to provide necessary material to support the rectification application, which should be processed in line with the court's guidance and relevant judicial decisions.