Retrospective tax amendment on old ornaments creates apparent error, making rectification maintainable and requiring fresh reconsideration.

A retrospective amendment to the notification governing taxability of bullion, specie and old ornaments omitted the limiting words that confined the entry to old ornaments meant for melting, with effect from 7 September 1981. The amendment meant that all old ornaments became liable to tax at the point of first purchase. Because the Tribunal's order rested on the pre-amendment legal position, the subsequent retrospective change created a clear inconsistency with the governing law. That inconsistency was treated as an error apparent on the record, so rectification under section 22 was maintainable and the matter required fresh reconsideration.

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Issues: Whether the Tribunal's order rejecting rectification under section 22 could be set aside in view of the retrospective amendment to the notification, and whether the resulting mistake was an error apparent on the record.

Analysis: The notification governing taxability of bullion and specie, including old ornaments, was retrospectively substituted by section 11 of the U.P. Sales Tax (Amendment and Validation) Ordinance, 1987 with effect from 7 September 1981, by omitting the qualifying words that had limited the entry to old ornaments meant for melting. As a result, all old ornaments became liable to tax at the point of first purchase. The Tribunal had proceeded on the basis of the pre-amendment position, and the retrospective change in law created a manifest inconsistency between the order and the law as subsequently amended. An order founded on the earlier legal position cannot survive when a retrospective amendment alters the governing legal basis, and such inconsistency is rectifiable as an apparent mistake.

Conclusion: The Tribunal's order could not be sustained, the rectification application was maintainable, and the matter required reconsideration afresh.

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