2010 (7) TMI 927 - HC - VAT and Sales Tax

Whether the order in revision suffers from an error of fact or law ? Held that - The Sales Tax Appellate Tribunal has neither passed any orders on the merits nor has it examined whether or not the petitioner is entitled to have the tax computed at 2, 11, 45, 852 x 12/112 instead of 2, 11, 45, 852 x 12/ 100. The Sales Tax Appellate Tribunal has rejected the petitioner s appeal on two grounds. Firstly that the application filed by the petitioner does not fall within the ambit of rule 50 of the Andhra Pradesh General Sales Tax Rules. Secondly that an appeal does not lie to it under section 21(1) of the Act against the endorsement of the Deputy Commissioner refusing to entertain an application filed under rule 50 of the Andhra Pradesh General Sales Tax Rules for rectification of an alleged mistake in the order under revision. The Sales Tax Appellate Tribunal has not examined the petitioner s appeal on the merits. Leaving it open to the petitioner to avail of such other remedies as are available to them in law to question the order in revision passed by the Deputy Commissioner dated July 7 2008 the writ petition fails and is accordingly dismissed.

Summary

Issues Involved:
1. Legality of the Deputy Commissioner's revision order and endorsement.
2. Maintainability of the application for rectification under Rule 50.
3. Jurisdiction of the Sales Tax Appellate Tribunal (STAT) to entertain the appeal.
4. Applicability of Section 38A of the Andhra Pradesh General Sales Tax Act.
5. Scope and limitations of Rule 50 for rectification of clerical or arithmetical mistakes.

Detailed Analysis:

1. Legality of the Deputy Commissioner's Revision Order and Endorsement:
The petitioner challenged the revision order dated July 7, 2008, issued by the Deputy Commissioner (CT), which revised the tax rate from 8% to 12% on a turnover of Rs. 31,53,116 for the assessment year 2004-05. The petitioner contended that the revisional authority did not follow the correct formula for tax computation, resulting in an increased tax liability. The Deputy Commissioner, in his endorsement dated December 29, 2009, rejected the petitioner's application for rectification of this alleged mistake under Rule 50, stating that there was no arithmetical mistake in the original order.

2. Maintainability of the Application for Rectification under Rule 50:
The petitioner argued that the Deputy Commissioner should have entertained the rectification application under Rule 50, which allows for the correction of clerical or arithmetical mistakes apparent from the record. However, the Deputy Commissioner and the STAT held that the error claimed by the petitioner was not a clerical or arithmetical mistake but a substantive error, which cannot be rectified under Rule 50. The court concurred, stating that Rule 50 is intended for correcting unintentional mistakes and not for reconsidering the merits of the case.

3. Jurisdiction of the Sales Tax Appellate Tribunal (STAT) to Entertain the Appeal:
The STAT held that it lacked jurisdiction to entertain the appeal against the Deputy Commissioner's endorsement under Rule 50, as Section 21 of the Andhra Pradesh General Sales Tax Act does not provide for an appeal against such endorsements. The court agreed, noting that appeals to the STAT are limited to orders passed under Sections 14, 19, and 20(2) of the Act, and not under Rule 50.

4. Applicability of Section 38A of the Andhra Pradesh General Sales Tax Act:
The petitioner argued that Section 38A, which deals with defective or irregular proceedings, entitled them to file an application under Rule 50. The court clarified that Section 38A is not a source of power for the Deputy Commissioner to review his own orders. It only restricts the STAT from setting aside orders due to procedural defects unless they cause material hardship or failure of justice. Hence, Section 38A does not enable the petitioner to seek rectification under Rule 50.

5. Scope and Limitations of Rule 50 for Rectification of Clerical or Arithmetical Mistakes:
Rule 50 allows for the rectification of clerical or arithmetical mistakes apparent from the record within four years of the order. The court emphasized that this rule is limited to correcting unintentional mistakes and does not encompass substantive errors or allow for a review of the merits of the case. The court cited several precedents to support this interpretation, noting that the power under Rule 50 cannot be equated with the power of review and is confined to correcting mistakes that are obvious and do not require elaborate arguments or re-arguments.

Conclusion:
The court dismissed the writ petition, agreeing with the STAT's decision that the appeal was not maintainable under Section 21 and that the alleged mistake did not fall within the scope of Rule 50. The petitioner was advised to seek other legal remedies to challenge the revision order dated July 7, 2008. The court's decision highlighted the limitations of Rule 50 and clarified the jurisdictional boundaries of the STAT in such matters.