2003 (2) TMI 461 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the Tribunal can recall its order passed under section 55 of the BST Act and rehear the matter on merits on a rectification application filed under section 62 of the BST Act by a third party not directly affected by the adjudication.
2. Whether the return of kerosene by RIL to BPCL can be considered as "goods returned" within the meaning of rule 4 of the BST Rules, 1959.
3. Whether the Tribunal's failure to hear RIL before passing the order constitutes an error apparent on the face of the record.

Issue-wise Detailed Analysis:

Issue 1: Tribunal's Power to Recall its Order
The primary issue is whether the Tribunal has the authority to recall its order passed under section 55 of the BST Act and rehear the matter on merits based on a rectification application filed by a third party under section 62 of the BST Act. The Commissioner of Sales Tax argued that the scope of section 62 is limited to correcting an error apparent on the face of the record and does not extend to recalling the order, which would amount to reviewing its own order. The court held that the power to rectify an order under section 62 of the BST Act is not restricted to merely amending the order but extends to eliminating the error on the face of the record. In appropriate cases, where the error goes to the root of the matter, the concerned authority is entitled to recall the order to eliminate the error, provided it is not used to review the order in the guise of rectification.

Issue 2: Return of Kerosene as "Goods Returned"
The dispute centered around whether the kerosene returned by RIL to BPCL after extracting N-paraffin could be considered as "goods returned" within the meaning of rule 4 of the BST Rules, 1959. The Commissioner of Sales Tax, based on BPCL's admission, held that the kerosene returned by RIL was not the same as the originally supplied kerosene due to the extraction of N-paraffin, thus constituting a separate sale transaction. The Tribunal confirmed this view. However, RIL filed a rectification application arguing that it was directly affected by this decision and was not heard, which was a violation of the principles of natural justice.

Issue 3: Error Apparent on the Face of the Record
The Tribunal found that not hearing RIL, a directly affected party, before passing the order under section 55 constituted an error apparent on the face of the record. The Tribunal recalled its original order to rectify this error and decided to pass a fresh order after hearing RIL. The court agreed that the failure to hear RIL, as required under rule 62 of the BST Rules, was an error apparent on the face of the record. The court emphasized that the statutory provisions under the BST Act and Rules mandate hearing any person likely to be affected adversely before passing an order.

Conclusion:
The court set aside the Tribunal's orders dated April 21, 2001, and April 16, 2002, and restored the matter to the Commissioner of Sales Tax to decide question No. 2 afresh after hearing both BPCL and RIL. The court allowed the parties to adduce evidence pertaining to the question if they chose to do so. The decisions of the Commissioner on questions Nos. 1 and 3 were not appealed and thus became final. Consequently, Writ Petition No. 3198 of 2002 was dismissed as infructuous, and both petitions were disposed of with no order as to costs.