2015 (1) TMI 1283 - HC - Service Tax

Rectification of alleged mistake - Section 74(2) of the Finance Act, 1994 - Collection of Service tax - Petitioner claimed that by inadvertence and due to a typographical error, the amount was shown as ₹ 41,14,69,442/- instead of ₹ 4,14,69,442/- in his communications with the Revenue. Held that - the power of rectification is available to the original authority as regards any issue, as long as it has not been considered and decided in appeal or revision. In so far as the quantum of service tax payable by the petitioner is concerned, his appeal before the Tribunal is still pending consideration. The issue is therefore still open and it has not yet been considered and decided. In that view of the matter, the understanding of the Revenue that the power of rectification of a mistake under Section 74(2) of the Finance Act, 1994 cannot be exercised during the pendency of the appeal before the Tribunal cannot be countenanced. The Order dated 05.06.2014 holding to this effect is unsustainable and is therefore, set aside. There shall be a consequential direction to the respondents to consider the application of the petitioner for rectification of the mistake, under Section 74(2) of the Finance Act, 1994, on its own merits in accordance with law and pass a reasoned order thereon. An opportunity shall be afforded to the petitioner to make good his claim of the alleged typographical error. - Decided in favour of petitioner

Summary

Issues:
Petitioner aggrieved by refusal to rectify mistake under Section 74(2) of Finance Act, 1994.

Analysis:
The petitioner was aggrieved by an order passed by the Joint Commissioner, refusing to rectify an alleged mistake in the amount of service tax shown in communications with the Revenue. The petitioner claimed that a typographical error led to the amount being shown as Rs. 41,14,69,442 instead of Rs. 4,14,69,442. The Tribunal had assessed the service tax liability at Rs. 59,02,61,437, and the petitioner sought rectification under Section 74(2) of the Finance Act, 1994. The Revenue rejected the rectification application citing that the matter was under consideration before the Tribunal.

The relevant provision, Section 74 of the Finance Act, 1994, allows for rectification of mistakes apparent from the record. It states that if any matter has been considered and decided in an appeal or revision, the Central Excise Officer may still amend the order in relation to any matter not considered and decided. In this case, the issue of the quantum of service tax payable by the petitioner was still pending before the Tribunal, indicating that it had not been considered and decided. Therefore, the Revenue's understanding that rectification under Section 74(2) cannot be done during the pendency of the appeal was deemed incorrect.

The court set aside the order refusing rectification and directed the respondents to consider the petitioner's application for rectification under Section 74(2) on its merits. The petitioner was to be given an opportunity to rectify the alleged typographical error, with the entire process to be completed within eight weeks. The writ petition was allowed, and pending petitions were closed without any order as to costs.