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TMI Blog2013 (11) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... 011. - Review Pet.(C) No. 01 of 2013 - - - Dated:- 10-5-2013 - CJ, Pius Chakkalayil Kuriakose And S. P. Wangdi,JJ. For the Petitioners : Mr. A. K. Upadhyaya, Senior Advocate with Ms. Binita Chhetri and Ms. Dawa J. Sherpa, Advocates. For the Respondents : Mr. B. K. Gupta, Advocate. Mr. J. B. Pradhan, Additional Advocate General with Mr. Karma Thinlay Namgyal, Senior Government Advocate and Mr. S. K. Chettri, Assistant Government Advocate. ORDER Wangdi, J. These two Review Petitions are taken up together as the Petitioners in both the cases seek to review the judgment of this Court dated 29-11-2012 by which the Writ Petitions being WP(C) Nos.23 of 2011 and 36 of 2011 were disposed of. It is relevant to note that one of us (Wangdi, J.) was a part of the Division Bench that rendered the judgment under review. 2. In those Writ Petitions, the Petitioners had challenged the constitutional validity of Sub-Clause (zzzzn) of Clause (105) of Section 65 of the Finance Act, 1994, as inserted by the Finance Act, 2010, on the ground, inter alia, that the Parliament lacked necessary legislative competence to levy tax on sale of lotteries as service in the light of Entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Entry 62, List II to Seventh Schedule of Constitution of India, the State Legislature alone is competent to levy any tax on such activity under Entry 62. (iv) The Parliament has the competence and jurisdiction to levy taxes on any subject matter including service tax under Entry 97, List I, read with Article 248 of the Constitution of India except where such powers are traceable to any of the entries in List II and III to Seventh Schedule of Constitution of India. (v) Power to tax the activity of betting and gambling as explained above being within the exclusive domain of State Legislature under Entry 62, List II, the Parliament in exercise of its residuary power under Entry 97, List I to Seventh Schedule of Constitution of India lacks legislative competence to impose any tax including service tax on such activity. 4. Upon our above findings, the impugned Sub- Clause (zzzzn) of Clause (105) of Section 65 of the Finance Act, 1994, as introduced by the Finance Act, 2010, and all consequent actions of the Respondents taken in pursuance thereto were struck down, inter alia, as being ultra vires the Constitution of India being in contravention to Entry 97, List I to Seventh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as being inapplicable in the case of the Petitioners on the very finding of this Court that (i) the Petitioners had not received any consideration whatsoever from the State Government; (ii) no consideration whatsoever flowed from the Government of Sikkim towards service tax as it is only the Petitioners who are making payment to the State Government; (iii) in the very judgment under review it has been noted that the Petitioners had paid service tax under Notification No.49/2010-ST under which service tax is paid on the bulk of lottery tickets printed by State Government irrespective of the fact that tickets may remain unsold by the Petitioners; (iv) as held in State of Rajasthan and Others vs. Hindustan Copper Ltd. : (1998) 9 SCC 708 when the prices are fixed by a State functionary then by necessary implication it is to be accepted that the burden of tax is being borne by the party at its own expense thereby making the principle of unjust enrichment inapplicable; and (v) when the levy is held to be unconstitutional and is not recovered from the client, then refund cannot be denied on the ground of unjust enrichment. On this, reliance was placed upon Deputy Commissioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lined to agree with Mr. Rao that there is no embargo upon us in law in reviewing our decision as the power of review is inherent in us as a Writ Court. In any case, Rule 113 of the Sikkim High Court (Practice and Procedure) Rules, 2011 prescribes that in all matters for which no provision is made by these rules, the provisions of the Code of Civil Procedure, 1908, shall apply mutatis mutandis, in so far as they are not inconsistent with these rules thereby vesting this Court with the powers under Order XLVII of the Code of Civil Procedure, 1908. 12. Having held so on the question of jurisdiction, we may proceed to consider on the merit of the Review Petitions. 13. We find that the primary question for determination in these cases is as to whether there was an error committed by us in the judgment as contended which is apparent on the face of the record. 14. As alluded earlier, the error apparent on the face of the record as pointed out by Mr. Rao is limited only to paragraph 21 of the judgment, which as per him, would be evident from the pleadings, records of the case and what had been orally argued on behalf of the Petitioner. 15. It is pertinent to note that Mr. A. R. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inserted by the Finance Act 2010 in abeyance. A copy thereof was also sent to Respondent No. 2, 3 and 4 by a separate Notice. The aforesaid notice was duly received by the Respondent No. 1, 2, 3 and 4; but there is no response from the side of the Respondents till the filing of the present Writ Petition. Copies of the notice demanding justice dated 06.05.2011 and 28.5.2011 is annexed herewith and collectively marked as ANNEXURE P-12 (Colly) (iii) It also appears that this Court had specifically noted this in paragraph 9 of the judgment dated 29-11- 2012 in WP(C) Nos.36 of 2011 and 23 of 2011 which we may also reproduce: 9. The petitioners got themselves registered under the provision of the amended Act. It is alleged that this registration is under mistaken fact and they are paying service tax since then under protest. It is further alleged that now the petitioners have realised that no service tax is payable on the activity undertaken by them in terms of the amended clause (zzzzn) to Section 65(105) of the Finance Act, 1994 and have challenged the same in these petitions before us. (iv) In the letter dated 12-07-2011 filed as Annexure 8 to WP(C) No.36 of 2011 it had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turegaming.in (v) In WP(C) No.23 of 2011 wherein the very provision of the Finance Act, 1994, was under challenge as in WP(C) No.36 of 2011, an interim order in the following nature was passed:- By this writ petition, the petitioners seek the challenge the constitutional validity of sub-clause (zzzzn) of Clause (105) of Section 65 of the Finance Act, 1994, as inserted by the Finance Act, 2010, on the ground that the Parliament does not posses the necessary legislative competence to pass such Legislation in view of Entry 92C of List I of the Constitution of India. Heard. Admit. No formal notices are necessary to be issued upon the respondents, as Mr. A. Moulik, learned Senior Counsel and Mr. J. B. Pradhan, learned Additional Advocate General, accept notices on behalf of the respondents no.1 2 and 3 4 respectively. Let counter-affidavits be filed by the respondents within 6 weeks and the petitioners may file their rejoinder, if any, 3 weeks thereafter. List on 09-08-2011 for final hearing. Needless to state that any levy or payments made under the Legislation under challenge shall be subject to the outcome of this writ petition. (vi) From the above Order, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But it is essential that it should be something more than a mere error; it must be one which must be manifest on the face of the record. The real difficulty with reference to this matter, however, is not so much in the statement of the principle as in its application to the facts of a particular case. When does an error cease to be mere error, and become an error apparent on the face of the record? Learned Counsel on either side were unable to suggest any clear-cut rule by which the boundary between the two classes of errors could be demarcated. (emphasis supplied) 28. In Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale this Court referring to Batuk K. Vyas and Hari Vishnu Kamath stated as to what cannot be said to be an error apparent on the face of the record. The Court observed: (Satyanarayan case, AIR p. 141, para 17) 17. An error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of the record. As the above discussion of the rival contentions show the alleged error in the present case is far from self-evident and if it can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs that they had got themselves registered under mistaken fact and were paying the service tax since then under protest. These are purely matters of fact which are apparent and, therefore, self-evident requiring no detailed deliberations to adjudicate as to whether the findings in paragraph 21 of the judgment is an error apparent on the face of the record or not. (xi) On the question of permissibility of refund of tax, one of the cardinal principles governing it is as to whether refund will result in unjust enrichment. The wellsettled principle in deciding permissibility of refund of tax is that the incidence of such tax should not have been passed on to any other person. In Mafatlal Industries Ltd. and Others vs. Union of India and Others : (1997) 5 SCC 536 after taking note of its earlier decisions, it has been held by the Hon ble Supreme Court that in every case of refund of duty, even if the same is on the ground of the provisions under which such duty was collected, having been declared unconstitutional, the duty would be on the person claiming refund, to establish that the incidence of such duty was not passed to any other person. We may refer to the following portion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the hardships are too great that retrospective operation is withheld." (xiii) In the case at hand, there is no dispute that the burden of tax has not been passed to any other person and that there is no incidence of the tax upon the State of Sikkim. For these reasons, the question of there being hardship caused to anyone, let alone the Union of India, would not arise at all. When we have held that the Legislation is bad for want of legislative competence, in the facts and circumstances, it has to be bad from its inception and all actions taken thereunder as indicated in our interim order dated 07-06-2011 have to be treated as non est, nugatory and erased. (xiv) In State of H. P. and Others vs. Nurpur Private Bus Operators Union and Others : (1999) 9 SCC 559 in which it was held as under: 10. The High Court, in the judgment aforementioned, held that the levy and realisation of tax on the basis which had been held to be invalid by it "for the period between 1-4-1991 and 30-9-1992 shall not stand invalidated We propose to direct that the declaration made by us today shall be applicable prospectively and with effect from 1-10-1992 alone." Some operators challenge the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce that the power to give relief under Art. 226 is a discretionary power. This is specially true in the case of power to issue writs in the nature of mandamus. Among the several matters which the High Courts rightly take into consideration in the exercise of that discretion is the delay made by the aggrieved party in seeking this special remedy and what excuse there is for it. Another is the nature of controversy of facts and law that may have to be decided as regards the availability of consequential relief. Thus, where, as in these cases, a person comes to the Court for relief under Art. 226 on the allegation that he has been assessed to tax under a void legislation and having paid it under a mistake is entitled to get it back, the court, if it finds that the assessment was void, being made under a void provision of law, and the payment was made mistake, is still not bound to exercise its discretion directing repayment. Whether repayment should be ordered in the exercise of this discretion will depend in each case on its own facts and circumstances. It is not easy nor is it desirable to lay down any rule for universal application. It may however be stated as a general rule that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. (xix) In our view, the above decisions quite apparently do not apply to the facts in the present case as those were rendered in the context of commencement of a provision of a Legislation having regard to the language used therein and the nature thereof. The issue before us is quite different on the facts already alluded to above which is as to whether effect of a judgment by which a law has been held to be ultra vires the Constitution would operate retrospectively from the date when the Legislation was introduced or from the date post the judgment. In any case, the contention appear to be inconsistent with the ratio laid down by the Apex Court thus far and, therefore, difficult for us to accept. 17. In our view if a manifest error has crept in on our part while rendering a judgment causing miscarriage of justice, it will be travesty to hold that such error cannot be rectified for the cause of justice. In the very case of Assistant Commissioner, Income Tax, Rajkot (supra) it has been held as under:- 38. Rectification of an order stems from the fundamental principle that justice is above all. It is exercised to remove the error and to disturb the finality. 39. In S. Na ..... X X X X Extracts X X X X X X X X Extracts X X X X
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