2014 (5) TMI 334 - HC - VAT and Sales Tax

Court upholds rectification validity under U.P. Trade Tax Act, finds withdrawal mistake justifiable. No violation of natural justice.

M/s Paswara Petrochem Ltd. Versus Deputy Commissioner, Commercial Tax And Another

The court upheld the validity of the rectification under Section 22 of the U.P. Trade Tax Act, finding the mistake in the withdrawal of the composite ... Validity of DC Order – u/s 22 r/w Section 21 of the U.P. Trade Tax Act and Section 9(2) of the CST Act - Whether order dated 25.11.2011 is beyond the scope of Section 22 – withdrawal of the notice - Held That:- Judgment in Deva Metal Powders (P) Ltd. Vs. Commissioner, Trade Tax, Uttar Pradesh [2007 (12) TMI 221 - SUPREME COURT OF INDIA] followed - Mistake which is rectifiable u/s 22 is the mistake which is apparent from the record - Similar view was taken in Mepco Industries Ltd. Vs. CIT and another [2009 (11) TMI 24 - SUPREME COURT] - Mistake apparent on the face of record - to attract the application of section 22, mistake must be apparent on the record and obvious mistake - Mistake existed since DC withdrew the notice for re-assessment both for Central and State by order dated 24.2.2011, whereas in the order dated 24.2.2011 only the re-assessment of provincial i.e. 27.4.2004 was considered and neither the facts, grounds given in the order dated 23.4.2004 for re-assessment of Central were adverted to nor the grounds given in the composite notice dated 20.11.2010 were adverted hence, the mistake was there and it was apparent on the record - Thus, no error was committed by DC in rectifying the mistake. Supply of SIB report – Violation of Natural Justice – Held that:- As the materials pertaining to inquiry and investigation of Forms-C and the result of inquiry were on the record of file, to which the petitioner was made aware, he cannot complain the violation of principle of natural justice - Although there is nothing on record to show as to whether any specific order has been passed on the said application, however, in view of the findings that the assessee was made aware of materials on record, the said complaint was substantially dealt with – Relying upon City Corner Vs. Personal Assistant to Collector and Addl. District Magistrate , Nellore, [1975 (9) TMI 169 - SUPREME COURT] - It is not always necessary that documents asked for to be furnished, provided substance of the document is furnished and summary is not misleading -Further in the counter affidavit filed by the State in writ petition Nos. 635(Tax) of 2004 and 636 (Tax) of 2004, all necessary correspondences received from tax authority of State and outside State were already brought on record, which were basis for issuing re-assessment proceedings thus, the petitioner was made well aware of the entire materials which have been utilised against him - Thus, petitioner's complaint that principle of natural justice has been violated, cannot be accepted. Availability of Statutory remedy – Held That: - The order of re-assessment for the year 2000-01 dated 15.12.2011, which was based on similar allegations, was challenged by the petitioner in this court by filing Writ Tax No. 257 of 2012 - The said writ petition was dismissed on 29.3.2012 - Against the order of re-assessment, assessee has statutory remedy of appeal and which was one of the grounds for dismissing the writ petition – Thus, the petitioner is not entitled for any relief in this writ petition – Decided against assessee. Issues Involved:1. Jurisdiction and scope of Section 22 of the U.P. Trade Tax Act.2. Violation of the principles of natural justice due to non-supply of the SIB report.3. Failure to decide on the petitioner's application for supplying documents and cross-examination.Detailed Analysis:1. Jurisdiction and Scope of Section 22 of the U.P. Trade Tax Act:The petitioner argued that the order dated 25.11.2011 was beyond the scope of Section 22 of the U.P. Trade Tax Act, which allows for rectification of only clerical or apparent mistakes. The court noted that two separate orders for re-assessment for the year 1999-2000 were issued by the Additional Commissioner on 23.4.2004 (Central) and 27.4.2004 (Provincial). The writ petitions challenging these orders were dismissed on 15.7.2010. A composite notice dated 20.11.2010 for re-assessment was issued, which was later withdrawn by the Deputy Commissioner on 24.2.2011. The court found that the withdrawal of the composite notice was a mistake since it did not consider the order dated 23.4.2004 related to Central re-assessment. The mistake was apparent on the record, and hence, the rectification under Section 22 was justified. The court cited Deva Metal Powders (P) Ltd. Vs. Commissioner, Trade Tax, Uttar Pradesh and Mepco Industries Ltd. Vs. Commissioner of Income-Tax to support its conclusion that the mistake was patent and obvious.2. Violation of Principles of Natural Justice:The petitioner contended that the re-assessment order was passed without supplying the SIB report, violating the principles of natural justice. The court observed that the petitioner was made aware of the grounds for re-assessment through the order dated 23.4.2004 and the detailed counter affidavits filed in earlier writ petitions. The court noted that the SIB report was a compilation of correspondences and verifications from outside the State, which were already on record and shown to the petitioner. The court found that the petitioner had substantial awareness of the materials against them, and thus, there was no violation of natural justice. The court distinguished the present case from M/s Vehalana Steels and Alloys Pvt. Ltd., Muzaffar Nagar Vs. State of U.P. and others, where the non-supply of the report was deemed unjustified.3. Failure to Decide on the Petitioner's Application:The petitioner argued that the assessing officer failed to decide on their application for supplying documents and permitting cross-examination. The court noted that although there was no specific order on the application, the petitioner was made aware of the materials on record. The court found that the complaint was substantially addressed, and the non-supply of the SIB report, which was a compilation of existing correspondences, was not fatal. The court cited City Corner Vs. Personal Assistant to Collector and Addl. District Magistrate, Nellore, emphasizing that the substance of documents is sufficient if the summary is not misleading.Conclusion:The court dismissed the writ petition, holding that the rectification under Section 22 was valid, there was no violation of natural justice, and the petitioner's complaints were substantially addressed. The court also noted that the petitioner had a statutory remedy of appeal against the re-assessment order, as observed in the dismissal of the writ petition for the re-assessment year 2000-01.