1. Heard Sri S.D. Singh, learned senior counsel, assisted by Sri Harsh Vardhan Gupta, learned counsel for the petitioner and Sri B.K. Pandey learned standing counsel for the respondents.
2. This writ petition has been filed challenging the order dated 26th June, 2014 passed by the Member, Commercial Tax Tribunal, Kanpur Bench-3, Kanpur in Misc. Appeal No. 06 of 2014 year 2013-14 under Section 31 whereby the application of the petitioner for rectification of mistake in the order of the Tribunal dated 15th March, 2014 passed in Appeal No. 96 of 2014 was rejected. The Tribunal passed the order dated 15th March, 2014 in appeal arising from the order passed under Section 48 (7) of the U.P. Vat Act, 2008 (hereinafter referred to as 'the Act') observing that the goods in question are covered by the entry plastic footwear liable to tax @ 4% which was found being imported without form 38. Tribunal took a liberal view and directed release of goods on furnishing cash security equal to the amount of tax payable on the goods in question. The Tribunal also considered a decision of a coordinate Bench.
3. Thereafter the petitioner filed an application under Section 31 of the Act on the ground that the Agra Bench of the Tribunal has considered a decision of Hon'ble Bombay High Court in the case of CST Vs. Dev Enterprises Ltd and held similar commodity to be plastic footwear. On these facts the Tribunal rejected the application under Section 31 of the Act by the impugned order dated 26.6.2014.
4. Sri S.D. Singh, learned senior counsel submits that the controversy before the Agra Bench of the Tribunal was as to whether similar type of commodity was taxable @ 4% under entry 'plastic footwear' or as unclassified goods. He submits that in that case the stand of the department was that the goods in question were unclassified goods whereas dealer's stand was that the goods were 'plastic footwear'. The question of exemption was not in issue before the Agra Bench of the Tribunal. He, therefore, submits that the Tribunal was wrong to follow the decision of Agra Bench of the Tribunal while rejecting the appeal of the petitioner and thus there was mistake apparent on record.
5. Sri B.K. Pandey, learned standing counsel submits that under Section 31 of the Act any officer, authority, Tribunal or the High Curt may on its own motion or on the application of the dealer or any interested person rectify any mistake apparent on the face of record, in any order, passed by him under this Act, within three years from the date of the orders sought to be rectified. He submits that phrase 'mistake apparent on the face of record' does not include the circumstances as involved in the present set of facts. The question whether the goods are covered by entry 'plastic footwear' is a matter of interpretation of relevant notification and after hearing the arguments of the assessees, the Tribunal as a matter of fact has found that the goods in question are covered by the entry 'plastic footwear'. He submits that TTR No. 310 of 2014 filed by the applicant against the order of the Tribunal in appeal No. 96 of 2014 was dismissed by this Court on 10th April 2014 observing as under:
"2. It is contended that Tribunal has taken a view that if upper and lower of a footwear, both made of Plastic, only then it can be treated to be "Plastic footwear" and not otherwise. In the present case, Tribunal ought not to have taken a contrary view since earlier judgment is binding.
3. From the judgment dated 26.12.2013 passed in appeal No. 522 of 2013 in the case of M/s Sahaj Traders Vs. Commissioner Commercial Taxes, I find that there Tribunal found that lower of was made of plastic and upper was made of fabricated niwad and therefore it was not a plastic footwear but in the present case Tribunal has found that besides the fact that lower was made of Plastic, upper consisted of a coated fabrics, of which external layer was of rubber and plastic, both. It is in these circumstances, having found lower made of plastic and upper made of rubber and plastic both, the Tribunal in the present case has taken a different view that goods in question are liable to be treated as 'Plastic footwear'. The distinction from the earlier judgment is apparent and, therefore, it cannot be said that Tribunal was bound by earlier judgment when there is distinguishing features.
4. Sri Bharat Ji Agarwal, learned counsel for the revisionist however submitted that this Court may not determine this issue at this stage whether goods in question, constitute a 'plastic footwear' or not, since that issue may be left to be decided finally in regular proceedings, hence, since he has not pressed this question, I am not proceeding further to consider on this aspect."
6. I have carefully considered the submissions of the learned counsel for the parties.
7. It is undisputed that the goods were not found accompanied with form 38. An order under Section 48 (7) was passed against which the petitioner filed an application before the Joint Commissioner (SIB) Commercial Tax Kanpur Region-D, Kanpur which was rejected by order dated 12th March, 2014. The applicant challenged this order in appeal No. 96 of 2014 (2013-14), before the Member Commercial Tax Tribunal Kanpur Bench-2, Kanpur which was partly allowed by the Tribunal by order dated 15th March, 2014 observing that the goods in question are covered under entry 83 of schedule-2 part-A of the Act which are taxable @ 4% and as the goods are taxable goods, hence its import without form 38 is violation of provisions of Section 50 of the Act. So seizure of goods is justified. However, the goods were directed to be released on furnishing cash security equal to the tax payable on the goods in question. Against this order the petitioner filed Trade Tax Revision No. 310 of 2014 which was rejected by this Court by order dated 10th April, 2014. It appears that thereafter petitioner filed an application under Section 31 of the Act before the Tribunal which was numbered as Misc. Appeal No. 06 of 2014. This application has been rejected by the impugned order dated 26th June, 2014.
8. Section 31 of the Act provides for rectification of mistake as under:
"31. Rectification of mistakes- (1) Any officer, authority, the Tribunal or the High Court may on its own motion or on the application of the dealer or any other interested person rectify any mistake apparent on the face of record, in any order passed by him under this Act, 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 rectification which 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 shall serve on the dealer a revised notice of demand in the prescribed form and therefrom all the provisions of this Act shall apply as if such notice had been served in the first instance."
9. Apparently the scope of Section 31 of the Act is limited to the rectification of mistake apparent on the face of record in any order passed under the Act. The submission of learned counsel for the petitioner that non consideration of the judgment of Hon'ble Bombay High Court in the case of Dev Enterprises (supra) by the Tribunal was a mistake apparent on record, is wholly unsustainable and cannot be accepted. The Tribunal has referred to the order passed by Agra Bench in which similar commodity was held to be 'plastic footwear' liable to tax @ 4%.TTR No. 310 of 2014 filed by the applicant against the order of the Tribunal dated 15.3.2014 was dismissed by this Court by order dated 10.04.2014. In the circumstances, I do not find any error apparent on the face of record in the order of the Tribunal dated 15th March, 2014.
10. The scope of rectification of mistake, considering the similar provisions; was explained by Hon'ble Supreme Court in the case of Deva Metal Powders (P) Ltd. Vs. Commissioner Trade Tax, Uttar pradesh (2008) 2 SCC 439 and it was observed as under:
"9. The Deputy Commissioner (Appeal) held that Section 22 of the Act did not contemplate rectification of debatable issues and therefore, this was not a case where Section 22 of the Act applies. Similar was the view taken by the Tribunal. It has been submitted by the appellant that the notification considered in Hindustan Aluminium Corpn. case was dated 30.5.1975. Subsequently, there has been an amendment by Notification dated 7.9.1981 by which "scrap' has also been included in the entry. It is, therefore, submitted that the ratio in Hindustan Aluminium Corpn, case applied as scrap has always been produced as a result of processing of the original metal.
10. This Court in Thungabhadra Industries Ltd. V. Govt. of A.P. held as follows: (AIR p. 1373) "There is a distinction which is real, though it might not always be capable of exposition, between a mere erroneous decision and a decision which could be characterised as vitiated by 'error apparent'. A review is by no means an appeal in disguise whereby an erroneous decision is reheard and corrected, but lies only for patent error. Where withoug any elaborate argument one could point to the error any say here is a subtantial point of lw which stares one in theface, and there could reasonably be no two opinions entertained about it, a clear case of error apparent on the face of the record would be made out."
11. "17..... 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 connectionn with an error apparent on the face of the record in Satyanarayan Laxminarayan Hegd Vs. Mallikarjun Bhavanappa Tirumale. [need to be] noted: (AIR p. 137) '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.'
12. 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; evident, appears, appearing as real and true, conspicuous, meanifest, obvious, seeming". A mistake which can be rectified under Section 22 is one which is parent, which is obvious and whose discovery is not dependent on argument or elaboration.
13. In our view rectification of an order does not mean obliteration of the order originally passed and its substitution by a new order. What the Revenue intends to do in the present case is precisely the substitution of the order which according to us is not permissible under the provisions of Section 22 and, therefore, the High Court was not justified in holding that there was mistake apparent on the face of the record. In order to bring an application under Section 22, the mistake must be 'apparent' from the record. Section 22 does not enable an order to be reversed by revision or by review, but permits only some error which is apparent on the face of the record to be corrected. Where an error is far from self-evident, it ceases to be an apparent error. It is, no doubt, true tat a mistake capable of being rectified under Section 22 is not confined to clerical or arithmetical mistake. On the other hand, it does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof.
14. As observed by this Court in Master Construction Co. (P) Ltd. V. State of Orissa an error which is apparent from record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law.
15. "Mistake" is an ordinary word but in taxation laws, it has a special significance. It is not an arithmetical error which, after a judicious probe into the record from which it is supposed to emanate is discerned. The word "mistake" is inherently indefinite in scope, as to what may be a mistake for one may not be one for another. It is mostly subjective and the dividing ling in border areas is thin and indiscernible. 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."
(Emphasis supplied by me)
11. Hon'ble Supreme Court in the case of Assistant Commercial Taxes Officer Vs. Makkad Plastic Agencies (2011) 4 SCC 750 has considered the scope of rectification and review and has held as under:
"15. In CIT V. Ralson Industries Ltd. a similar situation arose for the interpretation of this Court regarding the scope and ambit of Section 154 of the Income TAx Act, 1961 vesting the power of rectification as against the power vested under Section 263 of the Income Tax Act, which is a power of revision. While examining the scope of the power of rectification under Section 154 as against the power of revision vested under Section 263 of the Income Tax Act, it was held by this Court as follows at SCC para 8: (SCC p. 330) ""8. The scope and ambit of a proceeding for rectification of an order under Section 154 and a proceeding for revision under Section 263 are distinct and different. Order of rectification can be passed in certain contingencies. It does not confer a power of review. If an order of assessment is rectified by the assessing officer in terms of Section 154 of the Act, the same itself may be a subject-matter of a proceeding under Section 263 of the Act. The power of revision under Section 263 is exercised by a higher authority. It is a special provision. The revisional jurisdiction is vested in the Commissioner. An order thereunder can be passed if it is found that the order of assessment is prejudicial to the Revenue. In such a proceeding, he may not only pass an appropriate order in exercise or the said jurisdiction but in order to enable him to do it, he may make such inquiry as he deems necessary in this behalf."
In para 12 of the said judgment it was also held that when different jurisdictions are conferred upon different authorities, to be exercised on different conditions, both may not be held to be overlapping with each other. While examining the scope and limitations of jurisdiction under Section 154 of the Income Tax Act, it was held that such a power of rectification could only be exercised when there is an error apparent on the face of the record and that it does not confer any power of review. It was further held that an order of assessment may or may not be rectified and if an order of rectification is passed by the assessing authority, the rectified order shall be given effect to.
16. We may also at this stage appropriately refer to yet another decision of this Court in CTT, U.P. V. Upper Dab Sugar Mills Ltd. in which the power and scope of rectification was considered and pitted against the scope of review. The aforesaid decision was in the context of Section 39 (2) of the U.P. Sales Tax (Amendment) Act, 1995 which provides the power of review. Section 22 of the said Act provides for rectification of mistake. In the said decision, it was held that when two specific and independent powers have been conferred upon the authorities, both powers can be exercised alternatively, but, it cannot be said that while exercising the power of rectification, the authority can simultaneously exercise the power of review.
17. Both the aforesaid two decisions which were rendered while considering taxation laws are squarely applicable to the facts of the present case. It is also now an established proposition of law that view is a creature of the statute and such an order of review could be passed only when an express power of review is provided in the statute. In the absence of any statutory provision for review, exercise of power of review under the garb of clarification/modification/correction is not permissible. In coming to the said conclusion we are fortified by the decision of this Court in Kalabharati Advertising V. Hemant Vimalnath Narichania.
18. Section 37 of the 1994 Act provides for a power to rectify any mistake apparent on the record. Such power is vested on the authority to rectify an obvious mistake which is apparent on the face of the record and for which a reappreciation of the entire records is neither possible nor called for. When the subsequent order dated 22.1.2009 passed by the Taxation Board is analysed and scrutinised it would be clear/apparent that the Taxation Board while passing that order exceeded its jurisdiction by reappreciating the evidence on record and holding that there was no mala fide intention on the part of the respondent assessee for tax evasion. Such reappreciation of the evidence to come to a contrary finding was not available under Section 37 of the 1994 Act while exercising the power of rectification of error apparent on the face of the record."
12. Considering the facts and circumstances of the case, the provisions of Section 31 of the Act and the law laid down by the Hon'ble Supreme Court in the aforementioned judgments, I do not find any infirmity in the impugned order of the Tribunal. The writ petition is wholly misconceived and is, therefore, dismissed.
Order Date :- 24.7.2014 MT**