1970 (4) TMI 155 - HC - VAT and Sales Tax

Court clarifies tax rate rectification procedure under Section 22, upholding notice validity.

The court held that a mistake in applying the tax rate can be rectified under Section 22, not Section 21. It emphasized that errors apparent on the face ... - Issues:Challenge to validity of notice under Section 22 U.P. Sales Tax Act.Analysis:The petitioner was initially assessed at 2% tax rate on its turnover of sodium silicate for three assessment years. Subsequently, the Sales Tax Officer issued notices under Section 21 proposing a tax rate of 7%, which were later canceled. The Sales Tax Officer then issued notices under Section 22 for rectification of the mistake in applying the tax rate. The petitioner challenged these notices, arguing that Section 22 does not apply to the mistake at hand.In the case of Commissioner of Sales Tax, U.P. v. Rohilkhand Glass & Syndicate Works, it was held that a mistake in applying the tax rate can be rectified under Section 22, not Section 21. The petitioner contended that a mistake apparent on the face of the record must be a clear error, not an error of judgment. The court referred to Concrete Spun Pipe Works v. Sales Tax Officer Sector V. Kanpur and Laxmi Narain Gauri Shanker v. Uttar Pradesh State to establish the criteria for rectification under Section 22.The court emphasized that an error apparent on the face of the record must not require detailed investigation or elaborate arguments for rectification. The petitioner's turnover declaration and the applicable tax rate were accepted without discussion by the Sales Tax Officer. Referring to Commissioner of Sales Tax v. Banaras Chemicals, the court held that the rectification of the tax rate for sodium silicate did not require further inquiry as it was already established by previous court decisions.The court cited legal precedents such as Walchand Nagar Industries Ltd. v. Gaitonde and Deen Chand Jain v. Board of Revenue to support the retroactive application of corrected legal interpretations. The court rejected the petitioner's reliance on Sarin Textiles Mills and Sayed Liaqat Husain cases, emphasizing that mistakes apparent on the face of the record are distinct from debatable points. The court also distinguished the case of Master Construction Co. Ltd. v. The State of Orissa, highlighting the requirement that errors under Section 22 must be apparent on the face of the record.Additionally, the court addressed the petitioner's reliance on R. K. B. One Mills v. State of U.P., clarifying that fresh material not present during the original assessment does not apply to the current situation. Ultimately, the court dismissed the petition, upholding the validity of the notices issued under Section 22 U.P. Sales Tax Act.