9911796707
TMI Blog2008 (4) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... ) assailing the correctness of the judgment and order dated June 10, 1997 passed by the Trade Tax Tribunal, Bench-II, Ghaziabad, whereby it allowed the second appeal filed by the Department and restored the order passed by the assessing authority under section 22 of the Act. The dispute relates to the assessment year 1988-89. The original assessment order for the relevant assessment year was passed on April 29, 1991. The dealer had declared total taxable turnover as Rs. 1,15,68,248.50. The total tax liability determined in the original assessment order was Rs. 6,92,632.80. With regard to the inter-State sales made by the dealer without form C prior to September 30, 1988 tax at the rate of 12 per cent was charged. Whereas with regard to the Central sales made after October 1, 1988 till March 31, 1989 without form C tax at 13.2 per cent was charged which included the additional tax also. This distinction in the application of different rate of tax for different periods is not explained. As the dealer had already deposited Rs 6,76,382.60, demand for the balance amount of Rs. 16,250.20 was raised along with the interest at two per cent per month for the delayed period. Subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m section 3E was inserted in the U.P. Trade Tax Act whereby additional tax was sought to be imposed on a category of dealers who had a turnover of more than Rs. 10,00,000. Under the Central Act the tax which is applicable under the U.P. Act is also to be applied under the Central Act. However by means of a circular dated August 26, 1982 issued by the Commissioner of Trade Tax it was provided that while calculating the tax under the Central Act the additional tax will not be taken into consideration. It is further submitted that during the relevant assessment year and even at the time when the original assessment order was passed this circular was in force. According to him the circular was binding on the authorities and therefore, the assessing authority has rightly not applied the additional tax while calculating the liability under the Central Act. It has further been submitted by Sri Saxena that the apex court in the case of Aysha Hosiery [1992] 85 STC 106 (SC); [1992] UPTC 454 which related to the State of Kerala, the imposition of additional tax under the Kerala Additional Sales Tax Act was challenged wherein it was held that the additional tax would be applicable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner on the Department and secondly with regard to the scope of section 22 of the Act. It is not in dispute that during the relevant assessment year, i.e., 1988-89 and at the time when original assessment order was passed on April 29, 1991, the circular issued by the Commissioner of Trade Tax on August 26, 1982 providing that additional tax would not be leviable under the Central Act, was in existence. It is also well-settled in view of the decisions relied upon by the counsel for the dealer that even an erroneous circular or the circular contrary to the statutory provisions would be binding upon the authorities of the Department. Reference may be made to the recent decision of the apex court in the case of Arviva Industries [2007] 209 ELT 5 (SC) wherein the apex court in paragraph 5 has referred to and approved the principles laid down by the apex court in the case of Commissioner of Customs, Calcutta v. Indian Oil Corpn. Ltd. [2004] 3 SCC 488 which read as follows: 1. Although a circular is not binding on a court or an assessee, it is not open to the Revenue to raise a contention that is contrary to a binding circular by the Board. When a circular remains in opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this case had entered into an area which is earmarked for the Legislature/executive. In our view, the said circular grants administrative relief to the business. It was entitled to do so. Therefore, it cannot be said that the Board had acted beyond its authority in issuing the said circular. One more reason needs to be stated. Whenever such binding circulars are issued by the Board granting administrative relief(s) business arranges its affairs relying on such circulars. Therefore, as long as the circular remains in force, it is not open to the subordinate officers to contend that the circular is erroneous and not binding on them. This court in 1992 itself while dealing with the similar controversy arising out of the interpretation of the same circular dated August 26, 1982, in the case of U.P. Ceramics and Potteries Limited [1992] UPTC 1333 has held in so many words that the said circulars would be binding on the authorities during its period of currency. However it is only after its withdrawal that the additional tax could be levied under the Central Act from the date of such withdrawal only. Paragraph 7 of the said judgment reads as follows: However, in my opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. Authorities cannot extend the scope of section 22 of the Act for changing their opinion which may have occasioned on the ground of any subsequent development after the original assessment order was made. The apex court, recently in the case of Deva Metal Powders [2007] 10 VST 751 (SC); [2008] UPTC 242 (SC); [2008] 36 NTN 4 has reconsidered the scope of section 22 of the Act. According to the apex court only a mistake apparent from the record is rectifiable. Relevant part of paragraph 10 of the Report reads as follows: (at page 755) A bare look at section 22 of the Act makes it clear that a mistake apparent from the record is rectifiable. In order to attract the application of section 22, the mistake must exist and the same must be apparent from the record. The power to rectify the mistake, however, does not cover cases where a revision or review of the order is intended. 'Mistake' means to take or understand wrongly or inaccurately; to make an error in interpreting; it is an error, a fault, a misunderstanding, a misconception. 'Apparent' means visible; capable of being seen; obvious; plain. It means 'open to view, visible, evident, appears, appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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