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2015 (8) TMI 683 - HC - VAT and Sales TaxRectification of Mistake AO granted the exemption from sales tax wrongly beyond the prescribed limit - Applicant was granted exemption from tax under entry-3 of notification no. 7037 by AO in respect of turnover of blacksmithy itemsfor assessment year 2003-04 and 2004-05 However, for assessment year 2005-06 ex parte assessment order was passed whereby tax at 10% was imposed on items manufactured by applicant Whether Tribunal was correct to hold that rectification application was not maintainable as there was no mistake apparent on face of record Held that - It was not completely deniable by respondents that as per documents available on record turnover of blacksmithy items was exempted up to specified limit Assessing officer was bound to grant benefit of exemption if it was available in accordance with law to assessee, so as to determine his liability of tax Tribunal and authorities have committed manifest error of law to hold that mistake as sought to be rectified by applicant, was not mistake apparent on record In order to attract section 22, mistake must exist and same must be apparent from record Power to rectify mistake, however, does not cover cases where revision or review of order was intended Revision hereby allowed Decided in favour of Assesse.
Issues Involved:
1. Whether the Tribunal was correct to hold that the rectification application was not maintainable as there was no mistake apparent on the face of the record. Detailed Analysis: Issue 1: Maintainability of Rectification Application The primary issue revolves around whether the Tribunal was correct in holding that the rectification application was not maintainable due to the absence of a mistake apparent on the face of the record. Facts and Background: The applicant, a registered dealer engaged in the fabrication/manufacturing of iron doors and windows, was certified by the Uttar Pradesh Khadi and Gram Udyog Board. The relevant notification exempted the sales of certain goods, including "blacksmithy" items, from sales tax. For the assessment years 2003-04 and 2004-05, the applicant was granted exemption on the turnover of iron doors and windows. However, for the assessment year 2005-06, an ex parte assessment order was passed, imposing a tax of Rs. 2 lacs on a turnover of Rs. 20 lacs, despite the applicant being eligible for exemption. Applicant's Argument: The applicant argued that the non-grant of exemption was a mistake apparent on the record and thus rectifiable under section 22 of the U.P. Trade Tax Act, 1948. The same assessing officer had granted exemptions for previous years based on the same certificate and notifications. Respondent's Argument: The respondent contended that the Tribunal correctly denied the rectification application, asserting that the impugned orders did not suffer from any infirmity. Court's Analysis: The court noted the following: - The applicant's unit was certified by the Uttar Pradesh Khadi and Gram Udyog Board, and the certificate was valid during the relevant period. - The turnover of iron doors and windows was exempt from tax up to Rs. 50 lacs as per the notifications. - The assessing officer, who had granted exemptions in previous years, failed to do so for the assessment year 2005-06, which constituted a mistake apparent on the record. Legal Provisions: - Section 22 of the U.P. Trade Tax Act, 1948: Allows rectification of any mistake apparent on the record in any order passed under the Act. - Notification No. 7037 (January 31, 1985) and Notification No. 2792 (September 30, 2004): Exempted the sales of blacksmithy items manufactured by units certified by the Uttar Pradesh Khadi and Gram Udyog Board. Judicial Precedents: - Deva Metal Powders Pvt. Ltd. v. Commissioner, Trade Tax, U.P.: Clarified that a mistake apparent on the face of the record must be an error that strikes one on merely looking at the record and does not require elaborate reasoning. - Assistant Commissioner of Income-tax, Rajkot v. Saurashtra Kutch Stock Exchange Ltd.: Held that non-consideration of a decision of a jurisdictional court or the Supreme Court is a mistake apparent from the record. - Amar Deep Oil Extraction v. Sales Tax Officer: Affirmed that non-imposition of tax due to oversight is a mistake apparent on the record and rectifiable under section 22. Conclusion: The court concluded that the non-grant of exemption to the applicant was a mistake apparent on the record and thus rectifiable under section 22 of the Act. The Tribunal and lower authorities committed a manifest error in rejecting the rectification application. The question of law was answered in favor of the assessee-applicant, and the impugned order of the Tribunal was set aside. The revision was allowed with no order as to costs.
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