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TMI Blog2003 (2) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... S). (LINEAR ALKYL BENZENE FEED STOCK) ordinarily known as kerosene and sells the same to various parties. The said kerosene manufactured by BPCL contains N-paraffin. The Reliance Industries Limited ("RIL", for short) has a petro chemical plant at Patalganga wherein petro chemical products are manufactured. RIL requires Nparaffin for use in its plant. 4.. Pursuant to a contract dated August 24, 1992 entered into by and in-between BPCL and RIL, BPCL was to supply kerosene containing N-paraffin through a pipeline from BPCL's refinery at Mahur to the plant of RIL at Patalganga. RIL extracted N-paraffin from the said kerosene and returned balance kerosene to BPCL in the return stream. RIL retained 5 per cent of the kerosene in the form of Nparaffin and residual kerosene of 95 per cent is returned by RIL to BPCL. 5.. Section 2(35) and (36) of the BST Act read with rule 4 of the BST Rules, 1959 provides that the goods returned by a purchaser or a seller to the dealer within the time stipulated therein is not to be taken into account for determining the turnover of purchase or turnover of sales, as the case may be. In the instant case, there was a dispute as to whether the kerosene ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id exemption notification. 3.. Sale of kerosene (without N-paraffin) by BPCL to third parties is also not liable to tax, as per the aforesaid exemption notification. Thus, the Commissioner, held that all the above three transactions were sale transactions, but sale of kerosene being exempt under entry No. 160 of notification issued under section 41 of the BST Act, there would be no requirement to pay sales tax. 8.. Being aggrieved by the above adjudication order of the Commissioner of Sales Tax pertaining to question No. 2, BPCL, filed an appeal before the Tribunal under section 55 of the BST Act. There being no dispute regarding the determination of questions Nos. 1 and 3, the appeal filed by the BPCL was restricted to the determination pertaining to question No. 2 only. The Tribunal after hearing BPCL passed an order on April 21, 2001 confirming the order of the Commissioner of Sales Tax by holding that the kerosene returned by RIL to BPCL cannot be said to be "goods returned" within the meaning of rule 4 of the BST Rules. The Tribunal held that in view of the admission on the part of BPCL that an important ingredient, namely, N-paraffin is extracted by RIL from the kerosen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion application of RIL was allowed, the Commissioner of Sales Tax has filed the aforesaid Writ Petition No. 2599 of 2002, whereas, BPCL has filed Writ Petition No. 3198 of 2002, challenging the order of the Tribunal also dated April 16, 2002 wherein the Rectification Application No. 41 of 2001 as well as the Reference Application No. 95 of 2001, filed by BPCL have been dismissed as infructuous. 11.. Mr. Barucha, learned Senior Counsel appearing on behalf of the Commissioner of Sales Tax, at the outset, fairly stated that in the present case, the Commissioner of Sales Tax is not averse to hearing RIL, however, the anxiety on the part of the Commissioner of Sales Tax was that if the power of the Tribunal to rectify its own order under section 62 of the BST Act is construed widely, so as to permit the Tribunal to recall its own order and pass fresh order on merits after rehearing the parties, then it will open the flood gate and large number of applications would be filed by persons claiming that they are the affected persons and seek recall of the original order of the Tribunal, thereby frustrating the very object and purpose of section 62 of the BST Act. He submitted that the sco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act where an advance ruling given by the authority under section 245R of the I.T. Act binds only the applicant and the I.T. Department, under the BST Act the decision of the Commissioner of Sales Tax under section 52 of the BST Act on interpretation of a provision of the BST Act or decision on a question based on certain facts placed before the Commissioner, not only binds the applicant and the authorities below the rank of Commissioner, but also binds all persons, whose facts are identical. Once a question is determined by the Commissioner, same question cannot be again referred to the Commissioner but can be challenged in appeal or revision as provided under section 52(3) of the BST Act. Against an order passed by the Commissioner under section 52, an appeal is provided under section 55 of the BST Act. 15.. Ordinarily rectification of an order passed by an authority can be sought for only by the parties before that authority and not by any other person. However, under section 62 of the BST Act any person affected by the order passed by the Commissioner/appellate authority/Sales Tax Tribunal can file rectification application before the respective authority and seek rectificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 55 as they apply to the rectification of a mistake by the Commissioner." Thus, under section 62, rectification of a mistake apparent on the face of the record can be done suo motu by the authority who passed the order or, on an application made by any person affected by such order. 18.. Now, turning to the facts of the present case, on an application made by BPCL under section 52, the Commissioner of Sales Tax on the basis of the admission made by BPCL held that the kerosene returned in return stream by RIL to BPCL is not "goods returned to dealer" within the meaning of rule 4 of the BST Rules. The Commissioner held that although the supply and return of kerosene was under a common transaction between BPCL and RIL, in view of the Act that admittedly N-paraffin was extracted by RIL from the kerosene supplied, the kerosene returned by RIL cannot be said to be return of the same goods, and it was sale of different goods. In other words, the Commissioner held that there were two sale transactions between BPCL and RIL, i.e., (1) sale of kerosene by BPCL to RIL and (2) sale of kerosene by RIL to BPCL. However, both sales being that of kerosene, the Commissioner held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments means correct an error and the expression 'amend the order' would mean correct the error in the order. Under section 154 power to rectify the error is to be exercised by correcting the error in the order and the correction must, therefore, extend to the elimination of the error. What the effect of the elimination of the error will be on the original order will depend upon each case. It may be that the elimination of the error may affect only a part of the order. It may also be that the error may be such as may go to the root of the order and its elimination may result in the whole order falling to the ground. In our opinion the Income-tax Officer will be able to amend or correct the order to the extent to which the correction is necessary for rectification of the error and such correction may extend either to the whole of the order or only to a part of it." The words "amend any order" contained in section 154 of the Income-tax Act are not there in section 62 of the BST Act. Thus, the power to rectify an order under section 62 of the BST Act is not restricted to amending the order but it extends to eliminating the error on the face of the record. Accordingly, we hold th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order in appeal which is likely to affect any person other than the appellant adversely, then the Tribunal shall serve upon such person a notice in form 40 and shall give him a reasonable opportunity of being heard. Thus, the statutory provisions under the Tamil Nadu General Sales Tax Act and under the Bombay Sales Tax Act being wholly different, the decision of the Madras High Court relied upon by the petitioner is wholly distinguishable on facts and do not apply to the facts of the present case. 21.. With all this background, the basic question now to be answered is, in the facts of the present case, whether RIL can be said to be directly, affected by the order of the Tribunal dated April 21, 2004 and if so, whether failure on the part of the Tribunal to hear RIL as per rule 62 of the BST Rules before passing the order under section 55 of the BST Act constitutes an error apparent on the face of the record which could be rectified under section 62 of the BST Act? In the present case, the order in original in the first instance was passed by the Commissioner of Sales Tax on the basis of the admission made by BPCL. BPCL admitted before the Commissioner that RIL returned kerosene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y RIL to BPCL is "goods returned" or was it a "sale" and no appeal was filed by BPCL against the decision of the Commissioner of Sales Tax on question Nos. 1 and 3. Therefore, the decisions of the Commissioner on question Nos. 1 and 3 have become final and the same cannot be disturbed. 22.. Under the circumstances, we set aside the order of the Tribunal dated April 21, 2001 as well as the order dated April 16, 2002 and restore the matter to the file of the Commissioner of Sales Tax to decide the question No. 2 set out in para 6 above afresh after hearing both BPCL and RIL. It will be open to the parties to lead evidence pertaining to the question No. 2 if they choose to do so. Writ Petition No. 3198 of 2002: 23.. In view of our decision in Writ Petition No. 2599 of 2002, nothing survives in this petition and hence it is dismissed as infructuous. 24.. Accordingly, both the petitions are disposed of in the above terms with no order as to costs. 25. Parties to act on an ordinary copy of the order duly authenticated by the associate of this Court. 26.. Issuance of certified copy is expedited. Writ petitions disposed of accordingly. - - TaxTMI - TMITax - CST, VAT & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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