1977 (12) TMI 120 - HC - VAT and Sales Tax

Issues Involved:
1. Assessability of turnover of steel trunks to sales tax at 3% or 2%.
2. Jurisdiction of the Deputy Commissioner of Sales Tax to revise orders concerning the exemption of sales of rexine cloth.
3. Determination of whether there was a "mistake apparent from the record" in the orders of the Assistant Commissioner of Sales Tax.
4. Applicability of the Bombay Sales Tax Laws (Special Exemptions) Act, 1957, to sales of rexine cloth.

Issue-Wise Detailed Analysis:

1. Assessability of Turnover of Steel Trunks to Sales Tax at 3% or 2%:
The court addressed whether the turnover of steel trunks was assessable to sales tax at 3% or 2%. The liability to 3% would have been appropriate if steel trunks were classified under the entry "wares made of any metal." The term "wares" denotes utensils, and the Hindi version of the notification uses the word "bartan" for "wares." The court held that steel trunks do not answer the description of "wares" or "bartan." Therefore, steel trunks are not covered by the entry "wares made of any metal." The court referenced the decision in Commissioner of Sales Tax v. Aftab Husain Imdad Husain [1970] 25 S.T.C. 471, which held that steel trunks are not hardwares, and this decision is binding. Consequently, the turnover of steel trunks was not taxable at 3%, and the revising authority was justified in holding them taxable at 2%.

2. Jurisdiction of the Deputy Commissioner of Sales Tax to Revise Orders Concerning the Exemption of Sales of Rexine Cloth:
The respondents were registered dealers under both the Bombay Sales Tax Act, 1953, and the Central Sales Tax Act, 1956, and carried on business as manufacturers of rexine cloth and bookbinding cloth. The Sales Tax Officer rejected the claim for exemption of sales of rexine cloth but accepted the exemption for bookbinding cloth. The Assistant Commissioner of Sales Tax allowed the respondents' appeals regarding rexine cloth, granting the exemption claimed. However, the Deputy Commissioner of Sales Tax issued notices under section 31(1) of the Bombay Sales Tax Act, 1953, to revise the orders granting exemptions. The Deputy Commissioner revised the orders, holding that the decisions referred to by the Assistant Commissioner did not apply and that the sales were taxable under the residuary entry, entry 80 of Schedule B to the Bombay Sales Tax Act, 1953. The Tribunal held that the Deputy Commissioner had no jurisdiction to revise the orders concerning bookbinding cloth and that the proper authority to rectify mistakes apparent from the records was the Assistant Commissioner of Sales Tax under section 35 of the Bombay Sales Tax Act, 1953.

3. Determination of Whether There Was a "Mistake Apparent from the Record" in the Orders of the Assistant Commissioner of Sales Tax:
The first question was whether there was a mistake apparent from the record. It is well-settled that mistakes apparent from the record which can be rectified are both mistakes of law and fact, but in the case of a mistake of law, it must be a glaring and obvious mistake. The court examined whether this was a case of a glaring and obvious mistake or one that involved long and elaborate arguments. The court referenced various statutory provisions and decisions, including the Bombay Sales Tax Laws (Special Exemptions) Act, 1957, and the definitions of "coarse cloth," "medium cloth," and "cotton cloth." The court found that the question was highly arguable and not free from doubt, indicating that it was not a mistake apparent from the record. Therefore, the Deputy Commissioner of Sales Tax had no jurisdiction to revise the order under section 31(1) of the Bombay Sales Tax Act, 1953.

4. Applicability of the Bombay Sales Tax Laws (Special Exemptions) Act, 1957, to Sales of Rexine Cloth:
The respondents contended that sales of rexine cloth were exempt under the Bombay Sales Tax Laws (Special Exemptions) Act, 1957. The Assistant Commissioner of Sales Tax relied on decisions of the Deputy Commissioner of Sales Tax and the Commissioner of Sales Tax, which held that certain processed cloths were covered by the exemption. However, the Deputy Commissioner of Sales Tax held that these decisions did not apply and relied on another decision of the Tribunal in the case of Messrs. Jaisinh Waterproof Works, which held that rubberised cloth was not exempt. The court found that the question was debatable and involved long and elaborate arguments, indicating that it was not a mistake apparent from the record. Therefore, the Deputy Commissioner of Sales Tax had no jurisdiction to revise the order.

Conclusion:
The court answered the questions referred to it in the affirmative, indicating that the Tribunal did not err in its conclusions. The Tribunal will now proceed to dispose of the cases in light of the court's judgment and after considering all other contentions urged by the respondents. Each party will bear its own costs of the references.

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