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2008 (8) TMI 865 - HC - VAT and Sales TaxWhether section 3AAAA has been declared ultra vires by this court, the order of remand to the assessing authority for determination of the liability in the light of observations made in the body of the judgment is incorrect? Held that - A feeble attempt was made by the learned counsel for the dealer that the order of the High Court merges with the order of the Tribunal. This argument is devoid of any merit. The High Court being a superior court its order will not merge with the order of the Tribunal, an inferior authority.The principle of merger applies when there are two orders, the order of the inferior court merges in the order of the superior court and not vice versa. In the result the applications under section 22 of the U.P. Sales Tax Act are allowed. The judgment of this court being inconsistent to the judgment of the Supreme Court given in the case of Hotel Balaji 1992 (10) TMI 240 - SUPREME COURT OF INDIA is rectified and the judgment is recalled. The revisions are restored to their original numbers for hearing on other points, if any.
Issues Involved:
1. Validity of Section 3AAAA of the U.P. Sales Tax Act. 2. Application of Section 17 of the U.P. Act No. 8 of 1992. 3. Power of rectification under Section 22 of the U.P. Sales Tax Act. 4. Jurisdiction and maintainability of the rectification application before the High Court. Issue-wise Detailed Analysis: 1. Validity of Section 3AAAA of the U.P. Sales Tax Act: The judgment dated November 13, 1991, quashed the orders of the Sales Tax Tribunal based on the Division Bench decision in Pioneer Tanneries & Glue Works v. State of Uttar Pradesh, which declared Section 3AAAA ultra vires. However, the Supreme Court in Hotel Balaji v. State of Andhra Pradesh held that Section 3AAAA, both before and after the 1992 amendment, was a valid piece of legislation. This Supreme Court ruling effectively overruled the earlier decision of the High Court, thus validating Section 3AAAA retrospectively. 2. Application of Section 17 of the U.P. Act No. 8 of 1992: Section 17 of the Amending Act provides for the validation of actions taken under the Principal Act as amended. Sub-section (2) allows for applications to review assessments or orders inconsistent with the amended Act, while Sub-section (3) provides for rectification by authorities within a specific period. The application in question was filed beyond the period specified in Sub-section (2), making it non-compliant with the time frame. However, the High Court held that the validation clause was not necessary since the Supreme Court had already validated the legislation. 3. Power of Rectification under Section 22 of the U.P. Sales Tax Act: Section 22 of the U.P. Sales Tax Act allows for rectification of mistakes apparent on the record within three years from the date of the order. The High Court concluded that the judgment dated November 13, 1991, could be rectified under Section 22 due to the Supreme Court's subsequent ruling in Hotel Balaji, which validated Section 3AAAA. The court emphasized that the rectification power includes correcting errors due to changes in the legal position established by higher courts. 4. Jurisdiction and Maintainability of the Rectification Application before the High Court: The dealer's counsel argued that the application should be filed before the Tribunal as the High Court's order merges with the Tribunal's order. However, the High Court rejected this argument, stating that the High Court's order does not merge with the Tribunal's order, as the High Court is a superior court. The High Court retains jurisdiction to rectify its orders under Section 22. The court also dismissed technical objections regarding the prayer in the application and maintained that the substance of the application allowed for appropriate relief. Conclusion: The High Court allowed the rectification applications under Section 22 of the U.P. Sales Tax Act, recalling the judgment dated November 13, 1991, and restoring the revisions for hearing on other points. This decision was based on the Supreme Court's validation of Section 3AAAA, making the previous High Court judgment inconsistent with the Supreme Court's ruling and thus subject to rectification.
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