2004 (11) TMI 542 - HC - VAT and Sales Tax

Issues Involved:
1. Applicability of Section 3-AAAA of the U.P. Trade Tax Act, 1948.
2. Validity of the Tribunal's rejection of the application under Section 22 of the Act on the grounds of limitation.
3. Rectification of the Tribunal's order dated October 25, 1994, under Section 22 of the Act.

Issue-Wise Detailed Analysis:

1. Applicability of Section 3-AAAA of the U.P. Trade Tax Act, 1948:
The applicant was engaged in the business of manufacturing crushed bone from raw bones, which were liable to tax at the point of sale to the consumer. The applicant purchased raw bones from unregistered dealers, leading the assessing authority to levy tax on the purchase turnover of raw bones under Section 3-AAAA for the assessment years 1979-80, 1980-81, 1981-82, and 1982-83. The Tribunal initially deleted the tax levied under Section 3-AAAA based on the division bench's decision in Pioneer Tanneries & Glue Works, Kanpur v. State of Uttar Pradesh, which declared Section 3-AAAA ultra vires. However, the Supreme Court in Hotel Balaji v. State of Andhra Pradesh overruled this decision, validating Section 3-AAAA both before and after its amendment. Consequently, the Tribunal restored the levy of tax under Section 3-AAAA, considering the Supreme Court's ruling and the reintroduction of Section 3-AAAA by Act No. 8 of 1992 with retrospective effect from April 1, 1974.

2. Validity of the Tribunal's Rejection of the Application under Section 22 on the Grounds of Limitation:
The Tribunal rejected the application under Section 22 of the Act on October 25, 1994, citing that it was barred by limitation as per Section 17(2) of Act No. 8 of 1992, which required applications for review to be filed by September 30, 1992. The Commissioner of Trade Tax argued that Section 17(2) was subject to Section 17(3), which allowed rectification within one year from the commencement of the section or within the period specified in Section 22, whichever was later. The Tribunal acknowledged the error in not considering the limitation under Section 17(3) and Section 22, thus rectifying its earlier order and holding that the application dated August 20, 1993, was within the permissible time frame.

3. Rectification of the Tribunal's Order Dated October 25, 1994, under Section 22 of the Act:
The Tribunal's order dated October 25, 1994, was rectified on the basis that the rejection of the application as time-barred was a patent error. The Tribunal initially treated the applications under Section 22 as review applications under Section 17(2) and rejected them for being filed after the stipulated date. However, the Tribunal later recognized that the applications were indeed filed under Section 22, which allows rectification of mistakes apparent on the face of the record within three years from the date of the order sought to be rectified. Since the applications were filed within the three-year period, the Tribunal's initial rejection was erroneous. The Tribunal's rectification of its order was deemed appropriate, and the applications under Section 22 were considered timely.

Conclusion:
The High Court upheld the Tribunal's decision to restore the levy of tax under Section 3-AAAA, recognizing the validity of the section post-amendment and the Supreme Court's ruling in Hotel Balaji. The Tribunal's rectification of its earlier order rejecting the applications under Section 22 was also upheld, as the applications were filed within the permissible time frame. Consequently, all four revisions were dismissed, and the petitions failed.

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