2017 (8) TMI 50 - HC - VAT and Sales Tax

Power to rectify any error apparent on the face of the record - how an application under Section 55 of the TNGST Act should be considered by the first respondent or that matter, the Assessing Officer or the Appellate Authority? - Held that - A reading of the impugned order would show that the first respondent had very serious reservations about the order passed by the first respondent dated 02.05.2007. However, the first respondent, while exercising its jurisdiction under Section 55 of the Act cannot act as an appellate authority or a reviewing authority over the earlier order and the power is confined only to see whether the order requires a rectification. Thus, without noting this subtle, but very important legal distinction, the first respondent has made certain observations and did not go into the specific aspect raised by the petitioner with reference to the provision of the Additional Sales Tax Act. Therefore, the order passed by the first respondent calls for interference. The first respondent was required to consider only whether there was an error apparent on the face of the record and the error pointed out by the petitioner was not an error apparent on the face of the record. Unfortunately, the first respondent proceeded to re-examine the entire matter and opined that the earlier order, dated 02.05.2007, was not tenable, but thought fit to make an observation that they at this stage, cannot go into the merits of the case. Petition allowed - decided in favor of petitioner.

Summary

Issues:
Interpretation of Section 55 of the Tamil Nadu General Sales Tax Act, 1959 regarding rectification of errors apparent on the face of the record.

Analysis:
The judgment by the Madras High Court delves into the interpretation and application of Section 55 of the TNGST Act, which empowers the assessing authority or appellate authority to rectify any error apparent on the face of the record within a specified time frame of five years from the date of the order. The court emphasizes that errors rectifiable under this provision are those that are obvious, glaring, and self-evident, not requiring detailed investigation or debate. Errors that necessitate extensive reasoning or are debatable points of law are not rectifiable under this section. The only recourse for aggrieved parties in such cases is to file an appeal or revision under the Act.

The case in question involves an appeal disposed of by the first respondent, where it was held that the taxable turnover for a specific period should be taxed at a lower rate based on the turnover amount. The petitioner subsequently filed an application for rectification, arguing that the additional sales tax should be calculated differently, taking into account certain deductions as per the Additional Sales Tax Act. The petitioner contended that the error in the original order was not apparent on the face of the record and requested a revision under Section 55 of the Act.

The court found that the first respondent erred in re-examining the entire matter instead of focusing solely on whether there was an error apparent on the face of the record. The court clarified that the power under Section 55 is limited to rectifying errors, not acting as an appellate or reviewing authority over the original order. As such, the court set aside the impugned order and remanded the matter to the first respondent for fresh consideration, emphasizing the need to adhere to the legal distinction and address the specific issue raised by the petitioner regarding the Additional Sales Tax Act.

In conclusion, the court allowed the writ petition, set aside the impugned order, and directed the first respondent to reconsider the rectification application in accordance with the legal principles outlined in the judgment, without acting beyond the scope of Section 55 of the TNGST Act.