Binding departmental circulars and debatable exemption issues bar rectification of assessment orders on the face of the record.

Sales to Military Canteens/Canteen Stores Department were treated as generally exempt under a Government decision and a Commissioner's circular, and that circular was binding on revenue authorities. A tax assessment granting exemption could not be rectified as an apparent mistake merely because the exemption under the Central Sales Tax framework was later disputed. Where the exemption issue depends on debatable interpretation of the notification and the legal effect of the circular, rectification is not permissible on the face of the record. The revenue could not ignore the circular to levy tax on the turnover in question.

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Issues: Whether the assessment order granting exemption on inter-State sales to Military Canteens/Canteen Stores Department could be rectified under section 22 of the U.P. Trade Tax Act on the ground that the exemption was not available under section 8(2-A) of the Central Sales Tax Act, despite the departmental circular treating such sales as generally exempt.

Analysis: The exemption in question was supported by a Government decision and the Commissioner's circular dated 23rd July, 1987, which treated sales to Military Canteens/Canteen Stores Department as generally exempt for the purpose of section 8(2-A). A circular issued by the tax administration is binding on the revenue authorities, and they cannot take a view contrary to the interpretation adopted in the circular. The question whether the notification-based exemption was generally available, or only conditional, was not a matter that could be treated as an obvious and self-evident error. To overturn the exemption view already adopted by the Assessing Authority would require fresh examination of the notification and reconsideration of the legal effect of the circular, which made the matter debatable rather than apparent on the face of the record.

Conclusion: Rectification under section 22 was not permissible on the facts, and the revenue could not disregard the binding circular to levy tax on the impugned turnover.

Final Conclusion: The revision succeeded, the Tribunal's order was set aside, and the assessee's claim to exemption was effectively restored.

Ratio Decidendi: A tax order cannot be rectified as a mistake apparent on the face of the record where the issue turns on a debatable interpretation of exemption provisions and a binding departmental circular in force at the relevant time supports the assessee's position.

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