2020 (10) TMI 633 - HC - VAT and Sales Tax

Rectification of Mistake - error apparent on the face of record - it is the contention of the petitioner that the assessment was completed against him by making huge additions on account of non-filing of audit report in Form 13 13A - HELD THAT - The reasoning of the assessing authority in Ext.P7 order is legally flawed. While it may appear at first blush that what the petitioner was seeking was essentially a review of the assessment order, in the light Ext.P2 judgment that was passed by this Court as early as in 2014 and which has not been the subject matter of any appeal before the Supreme Court, the assessing authority has to be seen as having ignored a binding precedent while completing the assessment. The said mistake occasioned by the assessing authority has therefore to be seen as an error apparent on the face of the record, which could be corrected through a rectification of mistake application. This is more so because there is no lengthy argument to be advanced by the assessee for the purposes of pointing out the apparent mistake that was occasioned by the assessing authority. The writ petition by directing the 3rd respondent to pass fresh orders on merits in the rectification of mistake application, taking note of the observations in this judgment, and after hearing the petitioner, within two months from the date of receipt of a copy of this judgment.

Summary

Issues: Challenge to assessing authority's rejection of rectification of mistake application, legality of assessment additions, failure to consider binding precedent, assessing authority's view of rectification application as a review petition.

Analysis:
1. Rectification of Mistake Application: The petitioner challenged the assessing authority's rejection of his rectification of mistake application in response to Ext.P7 order. The petitioner contended that the assessment against him included significant additions due to the non-filing of audit reports in Form 13 & 13A. Despite filing the audited statements and the rectification application, the assessing authority rejected the rectification request, viewing it as a disguised review petition. The petitioner sought correction based on a previous judgment (Ext.P2) that prohibited such additions solely for non-filing of audit reports. The High Court acknowledged the petitioner's efforts and directed the assessing authority to reconsider the rectification application expeditiously.

2. Legal Flaw in Assessing Authority's Reasoning: Upon review, the High Court found the assessing authority's reasoning in the Ext.P7 order legally flawed. Despite initial impressions of the rectification application resembling a review petition, the High Court emphasized that the assessing authority disregarded a binding precedent (Ext.P2 judgment) while completing the assessment. This failure to consider the established legal position constituted an error apparent on the face of the record, warranting rectification. The High Court noted that the petitioner did not need to engage in lengthy arguments to highlight the assessing authority's mistake, as the error was evident. Consequently, the High Court quashed the Ext.P7 order and directed the assessing authority to reevaluate the rectification application, considering the court's observations and granting the petitioner a hearing within two months.

3. Judicial Direction and Disposition: In its judgment, the High Court emphasized the importance of upholding legal precedents and rectifying errors that are apparent on record. By instructing the assessing authority to reexamine the rectification application in light of the court's findings, the High Court ensured that the petitioner's rights were protected and that justice was served. The directive for a fresh assessment within a specified timeframe underscored the court's commitment to expeditious resolution and adherence to legal principles. The petitioner was further instructed to provide relevant documents to the assessing authority for further action based on the court's decision.