Binding later law can make a tax assessment a rectifiable mistake, but only if limitation for correction is still open.
A later binding Supreme Court ruling showed the turnover was not taxable, and the assessing order was therefore treated as a mistake apparent on the face of the record because no further factual inquiry was needed; rectification under rule 38 was accordingly available within the prescribed time. Delay under Article 226 was not automatically excused, and relief depended on timely pursuit of the rectification remedy. Petitions filed within the five-year period could be entertained even without a prior rectification application on the facts stated, but petitions brought after that period were dismissed or rejected, leaving no writ relief where limitation had expired.
Issues: (i) Whether a subsequent binding decision of the Supreme Court, showing that the turnover was not liable to tax, made the assessment order a mistake apparent on the face of the record so as to permit rectification under rule 38 of the Mysore Sales Tax Rules. (ii) Whether the writ petitions were barred by delay or limitation, and whether petitions filed within the five-year period under rule 38 could be entertained even without a prior rectification application.
Issue (i): Whether a subsequent binding decision of the Supreme Court, showing that the turnover was not liable to tax, made the assessment order a mistake apparent on the face of the record so as to permit rectification under rule 38 of the Mysore Sales Tax Rules.
Analysis: Rule 38 was treated as materially similar to section 35 of the Indian Income-tax Act, 1922. A mistake is apparent on the record when no further inquiry into facts is required and the existing order can be shown to be wrong by direct application of the declared law. The later Supreme Court decisions established that the turnover in question was not taxable under the Central Sales Tax Act, and on the facts already found by the assessing authority no further investigation was necessary. That brought the case within the scope of rectification.
Conclusion: The mistake was rectifiable under rule 38, and the petitioners were entitled to relief where the application for rectification was within time.
Issue (ii): Whether the writ petitions were barred by delay or limitation, and whether petitions filed within the five-year period under rule 38 could be entertained even without a prior rectification application.
Analysis: Delay under Article 226 was not treated as automatically excused merely because the assessment was ultimately shown to be wrong in law. However, where rectification had been sought within five years, the assessing authority was bound to correct the orders, and the writ court could quash those assessments and direct refund. Where more than five years had elapsed before the petitioners approached the court or the rectification remedy was otherwise unavailable, the petitions were dismissed or rejected. In the remaining petitions filed within time, the absence of a prior rectification application did not, on the facts, justify refusal of relief.
Conclusion: Relief was granted in the timely petitions, while the delayed petitions were dismissed or rejected.
Final Conclusion: The decision upheld rectification-based relief for assessments rendered erroneous by binding later law, but confined that relief to matters brought within the prescribed time and declined interference where delay or limitation defeated the claim.
Ratio Decidendi: When a binding judicial pronouncement establishes that an assessment was wrong in law and no further factual inquiry is needed, the resulting error is a mistake apparent on the face of the record and is amenable to rectification within the prescribed limitation period.
TaxTMI 
Join Channel
TaxTMI 
