1997 (2) TMI 523 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to order of Joint Excise and Taxation Commissioner under Punjab General Sales Tax Act, 1948 regarding imposition of tax rate on purchase of cotton.

Analysis:
The petitioner, a registered dealer manufacturing cotton, challenged the order of the Joint Excise and Taxation Commissioner regarding the imposition of tax on the purchase of cotton. The petitioner contended that a mistake was made by the Assessing Authority in imposing tax at four per cent, whereas the correct rate during the relevant period was three per cent, as per a subsequent notification. The Joint Excise and Taxation Commissioner rejected the petitioner's application for rectification, citing lack of right to invoke revisional jurisdiction under section 21 of the Act.

The High Court analyzed the relevant legal provisions, including section 21 of the Act, which empowers the Commissioner to call for records and pass orders to ensure legality and propriety of proceedings. Referring to a Supreme Court decision, the High Court emphasized that it is within the Commissioner's jurisdiction to correct mistakes brought to their notice by either the assessee or the Revenue. The High Court held that the Commissioner failed to exercise his suo motu revisional powers despite the mistake being evident, as the tax rate was enhanced to four per cent only from March 29, 1976.

It was established that the correct tax rate on the purchase of cotton during the relevant period was three per cent, and the Assessing Authority erred in imposing tax at four per cent. The High Court deemed this error as patent on the admitted facts and directed the Assessing Authority to correct the assessment order and impose purchase tax at the correct rate of three per cent. The High Court allowed the writ petition, highlighting the Assessing Authority's failure to rectify the mistake without necessitating court intervention, thereby saving unnecessary expenses for the petitioner.