Limitation on suo motu rectification under sales tax law: notice within time does not save an order passed after three years.

Under section 22(1) of the U.P. Sales Tax Act, 1948, suo motu rectification of a mistake apparent on the record must be completed within three years from the date of the order sought to be rectified. The proviso extending time applies only where an application for rectification is filed within that period, allowing disposal even after three years. That limited extension does not cover suo motu action by the authority, and mere issuance of notice within three years does not preserve a rectification order passed after the limitation period.

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Issues: Whether, under section 22(1) of the U.P. Sales Tax Act, 1948, a suo motu rectification of an assessment order could be made after expiry of three years from the date of the order sought to be rectified, merely because notice was issued within three years.

Analysis: The main part of section 22(1) permits rectification of a mistake apparent on the record only within three years from the date of the order sought to be rectified. The first proviso creates a limited exception only where an application for rectification is filed within that period, in which event the application may be disposed of even after three years. That proviso does not extend to suo motu action by the authority. The Court preferred the view that preserves the distinct treatment of application-based rectification and suo motu rectification, and held that issuance of notice within three years does not by itself save a suo motu rectification order passed after the limitation period.

Conclusion: Suo motu rectification beyond three years was barred by limitation, and the rectification order could not be sustained.

Ratio Decidendi: Under section 22(1) of the U.P. Sales Tax Act, 1948, suo motu rectification of an apparent mistake must be completed within three years from the date of the order sought to be rectified, and the proviso extending time applies only to applications filed within that period.

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