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TMI Blog2015 (8) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... In order to attract section 22, mistake must exist and same must be apparent from record – Power to rectify mistake, however, does not cover cases where revision or review of order was intended – Revision hereby allowed – Decided in favour of Assesse. - Sales/Trade Tax Revision No. 431 of 2014 - - - Dated:- 24-7-2014 - SURYA PRAKASH KESARWANI, J. Suyash Agarwal for the petitioner. B. K. Pandey, Standing Counsel, for the respondent. JUDGEMENT Heard Sri Suyash Agarwal, learned counsel for the applicant and Sri B. K. Pandey, learned standing counsel for the respondent. 2. This revision relates to the assessment year 2005-06. 3. The revision is admitted on the following questions of law:- Whether the Tribunal was correct to hold that the rectification application was not maintainable on the facts and circumstances of the case as there was no mistake apparent on the face of the record? 4. With the consent of learned counsel for the parties this revision is being finally heard. 5. Briefly stated the facts of the present case are that the applicant is a registered dealer engaged in fabrication/manufacturing of iron doors and windows (blacksmithy). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licant which were undisputedly exempted from tax up to a turnover of ₹ 50 lacs. However, the application under section 22 was rejected by the assessing officer even though the fact that the applicant's unit is certified by the Uttar Pradesh Khadi and Gram Udyog Board was not disputed. Aggrieved with the aforesaid order, the applicant filed first appeal under section 9 of the U. P. Trade Tax Act, 1948 which was rejected by the Additional Commissioner, Grade-II (Appeal) IIIrd, Commercial Tax, Allahabad by order dated September 12, 2012 on the ground that the alleged mistake of not granting exemption is outside the scope of section 22 of the Act. Against this order the applicant filed Second Appeal No. 142 of 2013 before the Member, Commercial Tax Tribunal, Allahabad Bench-II, Allahabad which was rejected by the Tribunal by order dated February 28, 2014 merely observing that the assessing officer cannot rectify such an order. Aggrieved with the order of the Tribunal the applicant has filed the present revision. 8. Sri Suyash Agarwal, submits that not allowing exemption to the applicant in the ex parte assessment order with respect to turnover of blacksmithy items, namely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... September 30, 2004. The assessment order for the assessment year in question, i.e., assessment year 2005-06 was passed ex parte by the same assessing officer whereby tax on sale turnover of ₹ 20 lacs of black-smithy items, namely, iron doors and windows, etc., was levied despite the fact that the applicant-unit was certified by the Uttar Pradesh Khadi and Gram Udyog Board, Lucknow. The assessment order for the assessment year 2005-06 was passed under rule 41(8) of the U. P. Trade Tax Rules, 1948 which provides as under:- 8. Upon the expiry of the assessment year, the assessing authority shall, after such enquiry, as he may deem necessary determine the turnover of sales or of purchases, or both, as the case may be, of the dealer in respect of the assessment year and shall assess the tax payable thereon:- Provided that in the case of a dealer to whom sub-section (1) of section 18 applies or owner or incharge of the vehicle to whom subsection (1) of section 28B applies, the assessing authority may make an assessment order and assess the tax payable thereon before the expiry of the assessment year:- Provided further that, before determining the turnover of the dealer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the mistake was apparent on record and must have been rectified and on rectification there shall be no liability of tax of the applicant. 17. Section 22 of the Act reads as follows:- (1) Any officer or authority, or the Tribunal or the High Court may, on its own motion or on the application of dealer or any other interested person rectify any mistake in any order passed by him or it under this Act apparent on the record within three years from the date of the order sought to be rectified:- Provided that where an application under this sub-section has been made within such period of three years, it may be disposed of even beyond such period:- Provided further that no such rectification, as has the effect of enhancing the assessment, penalty, fees or other dues shall be made unless reasonable opportunity of being heard has been given to the dealer or other person likely to be affected by such enhancement. (2) Where such rectification has the effect of enhancing the assessment, the assessing authority concerned shall serve on the dealer a revised notice of demand in the prescribed form and therefrom all the provisions of the Act and the rules framed thereunder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served thus (pages 755 and 756 in 10 VST):- 9. An error apparent on the face of the record for acquiring jurisdiction to effect rectification must be such an error which may strike one on a mere looking at the record and would not require any long drawn process of reasoning. The following observations in connection with an error apparent on the face of the record in the case of Satya-narayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale AIR 1960 SC 137 need to be noted:- '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. Where an alleged error is far from self-evident and if it can be established, it has to be established, by lengthy and complicated arguments, such an error cannot be cured by a writ of certiorari according to the rule governing the powers of the superior court to issue such a writ.' 10. 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 apparen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. It is something which a duly and judiciously instructed mind can find out from the record. In order to attract the power to rectify under section 22, it is not sufficient if there is merely a mistake in the order sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on a debatable point of law or a disputed question of fact is not a mistake apparent from the record. The plain meaning of the word 'apparent is that it must be something which appears to be so ex facie and it is incapable of argument or debate. It, therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectifications. 23. In the case of Assistant Commissioner of Income-tax, Rajkot v. Saurash-tra Kutch Stock Exchange Ltd.[2008] 305 ITR 227 (SC);[2010] 18 STR 84 (SC), the honourable Supreme Court considered the scope of rectification of mistake with reference to the provisions of section 254(2) of the Income-tax Act and held as under (pages 239 to 241 in 305 ITR):- 37. In our judgment, therefore, a patent, manifest and self-evident er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not as inflexible in administrative law as in public law. Even the law bends before justice. Entire concept of writ jurisdiction exercised by the higher courts is founded on equity and fairness. If the court finds that the order was passed under a mistake and it would not have exercised the jurisdiction but for the erroneous assumption which in fact did not exist and its perpetration shall result in miscarriage of justice then it cannot on any principle be precluded from rectifying the error. Mistake is accepted as valid reason to recall an order. Difference lies in the nature of mistake and scope of rectification, depending on if it is of fact or law. But the root from which the power flows is the anxiety to avoid injustice. It is either statutory or inherent. The latter is available where the mistake is of the court. In administrative law, the scope is still wider. Technicalities apart if the court is satisfied of the injustice then it is its constitutional and legal obligation to set it right by recalling its order.' 47. In the present case, according to the assessee, the Tribunal decided the matter on October 27, 2000. Hiralal Bhagwati[2000] 246 ITR 188 (Guj) was de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Chetmani Abhushan Bhandar[1970] UPTC 178, a Division Bench of this court following the earlier Division Bench judgment in the case of Commissioner, Sales Tax, Uttar Pradesh v. Rohilkhand Glass and Syndicate Works[1969] 24 STC 413 (All), held that where wrong rate of tax was applied, the same may be rectified under section 22 of the Act. Similar view was taken by another Division Bench of this court in the case of Narain Chemical Industries v. Sales Tax Officer, Moradabad[1970] UPTC 605. 26. In the case of Jeet Mai Ram Gopal v. Additional Judge (Revisions), Sales Tax[1975] 36 STC 305 (All) ;[1974] UPTC 555, a Division Bench of this court considered the scope of rectification of mistake under section 22 of the U. P. Sales Tax Act, 1948 and held as under (pages 307 and 308 in 36 STC):- 7. Section 22 authorises the assessing, appellate or revising authority to rectify any mistake apparent on the face of the record of assessment, appeal, revision or reference, as the case may be. The record of assessment would generally consist of all documents and material considered in the course of assessment proceedings. The return filed by the assessee and any other material or evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s apparent on the face of the record. In our opinion, the refusal to rectify should not be based merely on the ground that the alleged mistake could have been pointed out and corrected at the appellate or revisional stage. The account books were produced before the assessing authority, but unfortunately the alleged mistake remained undetected. It is also noticeable that section 22 is not confined to mistake of law alone ; it extends to mistake of facts as well. If the mistake is evident from the record it is capable of being rectified. In the present case the assessee alleges that a perusal of the account books would bring out the mistake in the return. He reinforces the submission by reference to the finding recorded by the judge (revisions) at the reference stage. Under the circumstances the case was prima facie within the purview of section 22 and the judge (revisions) ought to have gone into the merits of the mistake. 27. In view of the above discussions, the question of law as framed above, is answered in negative, i.e., in favour of the assessee-applicant and against the respondents. The impugned order of the Tribunal is set aside and the revision is allowed. 28. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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