Rectification notice for apparent mistake upheld, with computation objections left to the statutory authority.

A rectification notice under section 13 of the Companies (Profits) Surtax Act, 1964, was treated as legally permissible where the authority considered there to be a mistake apparent from the record in the assessment order. The Madras HC declined to examine the correctness of the capital-base computation under rule 1(iii) of the Second Schedule in writ jurisdiction, holding that such objections should ordinarily be raised before the statutory authority. The notice was therefore upheld as within jurisdiction, and the merits of the computation were left to the statutory process.

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Issues: Whether the notice issued under section 13 of the Companies (Profits) Surtax Act, 1964, proposing rectification on the basis of an apparent mistake in the assessment order, was without jurisdiction.

Analysis: The notice was founded on the authority's view that the assessment had proceeded on an computation of the capital base under rule 1(iii) of the Second Schedule. The Court declined to enter into the correctness of the computation on merits in writ jurisdiction, noting that the petitioner could place its objections before the statutory authority. The Court found that where the authority considers a mistake apparent from the record to have occurred, issuance of a notice calling for explanation is legally permissible.

Conclusion: The notice was held to be legally valid and within jurisdiction.

Ratio Decidendi: A rectification notice may validly be issued where the authority perceives a mistake apparent from the record, and the merits of the computation should ordinarily be urged before the statutory authority rather than decided in writ proceedings at the threshold.

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