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TMI Blog2007 (7) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... te, the order dated August 30, 2000 (P-7) was rectified on February 25, 2003 (P-8). The rectification application later on filed by the petitioner was dismissed on December 22, 2003 (P-9). Facts in brief are that the petitioner was registered as a dealer under the provisions of the 1948 Act and has later on been registered under the Punjab Value Added Tax Act, 2005 (for brevity, "the 2005 Act") after the repeal of the 1948 Act. For the year 1989-90, the assessment was framed by the Assistant Excise and Taxation Commissioner-cum-Assessing Authority, Ludhiana-III and a finding was recorded that the gunny bags (bardana) sold with sugar were liable to tax by virtue of amendment in item No. 65 of Schedule B of the 1948 Act. The Assessing Authority had placed reliance on a judgment of the honourable Supreme Court rendered in the case of Jamana Flour & Oil Mills (P) Ltd. v. State of Bihar [1987] 65 STC 462; [1987] 3 SCC 404, wherein it was held that it is a question of fact as to whether an implied agreement to sell the packing material along with product existed in the facts and circumstances of the case. Accordingly, the Assessing Authority ordered addition on the value of gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining the sugar purchased by him from the Jagraon Co-operative Sugar Mills Ltd., Jagraon and the Budhewal Co-operative Sugar Mills Ltd., Budhewal (Ludhiana) (the bills of sales issued by them to the appellant are on this file), is taxable or not. Bardana is taxable only if a person exclusively deals in bardana. Also undisputedly, the sale of bardana is taxable at the first stage. Neither it is the case of respondent that the aforesaid sugar mills are the manufacturers of the bardana nor they are. Therefore, the appellant cannot be deemed to be the first purchaser from the manufacturer of the bardana nor is he liable to pay tax on the sale thereof. In so far as the contention of learned Assistant Advocate-General regarding production of declarations in form ST XXII-A, it is not the appellant but the first purchaser(s) who had effected the purchases from the manufacturer(s), who could be required to produce such declarations. Since the appellant is not liable to pay tax on the sale of bardana, this appeal is accepted and the impugned orders creating and upholding the additional demand are set aside." The respondent-State of Punjab filed a rectification application, being Misc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -State was signed by the Excise and Taxation Officer alone on behalf of the State of Punjab without any express authority of the State Government was also rejected. Mr. K.L. Goel, learned counsel for the petitioner has argued that the order dated February 25, 2003, passed by the Tribunal on the rectification application filed by the respondent-State is not sustainable in the eyes of law because the successor presiding officer of the Tribunal has not exercised the rectification jurisdiction but has entered into merit of the controversy by rehearing the matter and deciding the same afresh. According to the learned counsel the scope of section 21A of the 1948 Act cannot be extended to such an extent so as to permit the successor presiding officer to reopen the matter, express opinion on a question decided by presuming that it was a mistake apparent on record because if that procedure is permitted then in all the cases the power of the Appellate Tribunal or Revisional Authority would be exercised while deciding the rectification application. In support of his submission, learned counsel has placed reliance on judgments of the honourable Supreme Court in the cases of T.S. Balaram, Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. According to the learned State Counsel it is for this reason that in the order dated February 25, 2003 (P-8), the Tribunal has granted permission to the petitioner to submit form XXII-A, which is the form prescribed. He has also drawn our attention to rule 29(xi) to buttress his stand based on the proviso appended to section 5(1A). He emphasised that in the absence of any such declaration it has to be implied that there was sale of gunny bags (bardana) as well. Learned counsel has also submitted that as to whether there is an element of sale or not is necessarily a question of fact which has to be decided by keeping in view the nature of the transaction and various attending circumstances. According to him in the present case the gunny bags (bardana) cannot be presumed to have lost its value after first use like any other packaging material, therefore, the element of sale can be implied. To support his contention, learned counsel has also placed reliance on entry 65 read with entry 105 of Schedule B read with section 6 of the 1948 Act. In support of his submission he has further placed reliance on the observations made in paras(1) 7, 8 and 9 of the judgment of the honourable S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax or reducing the amount of refund, unless the Commissioner or the Officer on whom powers of the Commissioner under sub-section (1) of section 21 have been conferred by the State Government has given notice in writing to such person of his intention to do so and has allowed such person a reasonable opportunity of being heard. (2) The provisions of sub-section (1) shall apply to the rectification of a mistake by a Tribunal as they apply to the rectification of a mistake by the Commissioner. (3) Where any such rectification has the effect of reducing the amount of the tax or penalty, the Commissioner shall in the prescribed manner order the refund of the amount so due to such person. (4) Where any such rectification has the effect of enhancing the amount of the tax or penalty or reducing the amount of the refund, the Commissioner shall order the recovery of the amount due from such person in the manner provided for in sections 11 and 11B." A perusal of sub-section (2) of section 21A of the 1948 Act would show that the Tribunal on its own motion, at any time within two years from the date of any order passed by it, rectify a mistake apparent from the record and shall withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this court while spelling out the scope of the power of a High Court under article 226 of the Constitution ruled that an error which has to be established by a long-drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on a debatable point of law is not a mistake apparent from the record--see Sidhramappa Andannappa Manvi v. Commissioner of Income-tax [1952] 21 ITR 333 (Bom). The power of the officers mentioned in section 154 of the Income-tax Act, 1961, to correct 'any mistake apparent from the record' is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of an 'error apparent on the face of the record.'. . . " The aforementioned view was applied and followed by the honourable Supreme Court in the case of Hero Cycles Pvt. Ltd. [1997] 228 ITR 463. When the principles laid down by the honourable Supreme Court in the aforementioned judgments are applied to the facts of the present case it becomes evident that the question of taxing gunny bags as packing material for packing sugar as against selling the same independently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te has not developed its case that the sugar mills who have sold sugar to the petitioner were the manufacturers of gunny bags (bardana), which, in fact, they were not and, therefore, the petitioner was not deemed to be the first purchaser from the manufacturer of gunny bags (bardana) in order to fasten tax liability on him. The Tribunal had also considered the argument concerning declaration in form ST XXII-A and rejected the same by stating that it is not the petitioner who has to do it and it was required to be done by the first purchaser who had effected the purchase from the manufacturer. Therefore, the controversy was settled on merit after considering various aspects. However, the Tribunal on February 25, 2003 by entertaining a rectification application filed by the respondent-State, set aside the order dated August 30, 2000 (P-7) and substituted the same by a new order dated February 25, 2003 (P-8) holding that there was an implied condition concerning sale of gunny bags (bardana). Once such is the controversy then it cannot be concluded that there was a mistake apparent from the record within the meaning of section 21A of the 1948 Act. The Tribunal, in fact, by passing an o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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