2022 (3) TMI 929 - HC - VAT and Sales Tax

Rectification of mistake - error apparent on the face of record - it is alleged that the impugned order is perverse and is issued in violation of the principles of natural justice - HELD THAT - When an error is not self-evident, it ceases to be an error apparent. As observed by the Courts, an error that is apparent from the record should be one which is not dependent for its discovery on elaborate arguments on questions of fact or law. An appreciation of the impugned order reveals that the same is not a cryptic order. The assessing officer has considered the various contentions raised by the assessee in the application for rectification. The correctness or otherwise of the conclusions of the assessing officer in the rectification order cannot be gone into in this jurisdiction under Article 226 of the Constitution of India. Those are matters for consideration under the statutory remedies available - The statutory prescription for grant of an opportunity of hearing is only when the rectification has the effect of enhancing an assessment or penalty. In the instant case, there is no scope for any enhancement of assessment or penalty, as the rectification application was attempted by the assessee itself. However, had the assessee sought for an opportunity of hearing, the situation could have been viewed differently. Since the assessee itself did not seek an opportunity of hearing, it cannot be said that the impugned order was issued in violation of the principles of natural justice. This Court had interfered with the impugned orders on facts that were peculiar therein or for not granting an opportunity of hearing even after requesting for such a hearing. In the instant case, as already mentioned, an opportunity for hearing was never requested and further, the impugned order had considered the points raised by the petitioner in the rectification application. The question whether the findings in the order declining rectification is correct or not cannot be gone into in this jurisdiction under Article 226 of the Constitution. The observations in this judgment are not based on specific factual consideration of issues arising in the instant case. Since the petitioner has an alternative statutory remedy against the order of rectification, the observations made in this judgment shall not be treated as a finding on the merits of the rectification petition. If any statutory remedy is invoked, the same shall be considered untrammelled by any of the observations in this judgment. Petition dismissed.

Issues:
Challenge to order of rectification under section 66 of the Kerala Value Added Tax Act, 2003 for assessment year 2016-17, alleging perversity and violation of natural justice principles.

Detailed Analysis:

Issue 1: Challenge to Rectification Order
The petitioner challenged an order of rectification under section 66 of the Act, invoking the jurisdiction of the High Court under Article 226 of the Constitution. The petitioner, an assessee under the Act, had an order of penalty imposed against them for the assessment year 2016-17. Instead of appealing the assessment order, the petitioner opted for a rectification petition under section 66, pointing out specific errors related to turnover suppression and assessing officer's conclusions.

Issue 2: Contentions Raised in Rectification Petition
The petitioner's contentions in the rectification petition included arguments regarding forensic examination of manipulated documents, the treatment of job work charges, non-accounting of transactions, and the failure to consider binding decisions of higher courts. The petitioner did not request a personal hearing in the rectification petition.

Issue 3: Assessment Officer's Rejection of Rectification Petition
The assessing officer rejected the rectification petition, stating that debatable issues cannot be rectified under section 66 and errors must be evident on the face of the record. The petitioner argued that the assessing officer failed to address specific issues raised in the rectification petition, which could have altered the turnover assumed by the assessing officer.

Issue 4: Legal Principles Governing Rectification
The judgment referred to legal precedents regarding rectification powers under section 66, emphasizing that errors must be apparent on the face of the record and not require lengthy arguments for establishment. The court highlighted the limited scope of rectification and the distinction between rectifying mistakes and revising decisions.

Issue 5: Judicial Interpretation of "Error Apparent on the Face of the Record"
The judgment cited various court decisions to explain the concept of "error apparent on the face of the record," emphasizing that errors should not depend on elaborate arguments for discovery. The courts have consistently held that rectification is not meant to correct debatable issues or illegal decisions.

Issue 6: Dismissal of the Writ Petition
The court dismissed the writ petition, noting that the assessing officer's order was not cryptic and had considered the petitioner's contentions. The court found no violation of natural justice principles as the petitioner did not request a hearing, and there was no scope for enhancing assessment or penalty. The judgment distinguished previous cases where orders were interfered with due to specific circumstances not present in the current case.

Conclusion:
The High Court dismissed the writ petition challenging the rectification order, emphasizing that the statutory remedy against the order was available to the petitioner. The judgment clarified the limited scope of rectification under section 66 and highlighted the importance of errors being self-evident for rectification. The decision underscored that the court's observations did not imply a finding on the merits of the rectification petition.

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