2009 (12) TMI 902 - HC - VAT and Sales Tax

Rectification of the assessment under section 37(1) of the AGST Act - whether there was mistake of factual nature apparent from the records of the case? Held that - On examination of the show-cause notice dated September 11, 2003 issued by the Commissioner, the basis for alleging that the assessment order is erroneous and prejudicial to the interest of the Revenue is not discernible to the court. In the revisional order also, apart from making a bald assertion that the assessment order was erroneous and prejudicial to the interest of the Revenue, nothing is indicated as to the basis for reaching such conclusion by the revisional authority. Accordingly, having regard to the scope and ambit of the provisions of section 36 and also the decisions relied upon by the assessee, I am of the view that in the present case, the exercise of suo motu revisional power by the Joint Commissioner was not supported by law. W.P. allowed.

Summary

Issues:
Challenge to order under section 36(1) of the Assam General Sales Tax Act, 1993 for fresh assessment.

Analysis:
The judgment involves a challenge to an order passed under section 36(1) of the Assam General Sales Tax Act, 1993, where the Joint Commissioner of Taxes quashed an appellate order and ordered a fresh assessment for the year 1996-97. Initially, an assessment order was passed by the Superintendent of Taxes, followed by a rectification order under section 31(1) of the AGST Act. The Deputy Commissioner (Appeals) set aside the rectification order, restoring the original assessment. Subsequently, a show-cause notice was issued, alleging the appellate order was erroneous and prejudicial to the Revenue, leading to the impugned revisional order for a fresh assessment.

The petitioner argued that rectification under section 37(1) can only rectify arithmetical or factual mistakes apparent from records, and the appellate authority correctly held that the rectification order was unwarranted. The petitioner contended that the revisional power should be sparingly exercised, only for illegality, impropriety, or procedural irregularity. Conversely, the Revenue argued that revisional power is justified to correct manifest illegality and protect Revenue interests.

The court referred to judgments like Master Construction Co. v. State of Orissa, emphasizing that rectification powers are limited to correcting specific mistakes apparent on the face of records, not for re-arguments on facts or law. The court also cited Rawani Dal & Flour Mills v. Commissioner of Sales Tax, Orissa, highlighting the need for disclosing the basis of revision in show-cause notices. Additionally, B.B. Astekar v. Commissioner of Commercial Taxes, Mysore, and V. Ramasamy & Brothers v. State of Tamil Nadu were cited to emphasize that revisional power is for correcting illegality, impropriety, or procedural irregularity.

The court found that the rectification order was not justified as the mistake was not apparent from records, and the revisional authority failed to provide a basis for alleging the assessment was erroneous and prejudicial to Revenue. Consequently, the court held that the exercise of suo motu revisional power by the Joint Commissioner was not supported by law. The petitioner was granted relief, and the impugned revisional order was quashed, restoring the original assessment order passed by the Superintendent of Taxes.

In conclusion, the judgment delves into the scope and limitations of rectification and revisional powers under the AGST Act, emphasizing the need for specific mistakes apparent from records to justify rectification or revision. The court's analysis highlights the importance of disclosing the basis for revision in show-cause notices and the necessity of exercising revisional power only for correcting specific errors or irregularities, not for re-arguments on facts or law.