2015 (6) TMI 15 - HC - VAT and Sales Tax

High Court affirms Sales Tax Tribunal's power to rectify orders under Section 62

The High Court upheld the Sales Tax Tribunal's authority to allow rectification applications under Section 62 of the Bombay Sales Tax Act. The Tribunal's ... Rectification of mistake - Whether the Tribunal has committed an error or not in exercising the powers under Section 62 of the said Act which are analogous to Section 22 of the U.P. Trade Tax - Held that:- Rectification of an order does not mean obliteration of the order originally passed and its substitution by a new order - Tribunal while deciding the Second Appeal proceeds on a footing that the assessment in question was made under Section 33(3) of the said Act. However, the assessments were made in fact under Section 33(2) of the said Act. It could further be seen that even the lawyer who was representing the petitioner before the learned Tribunal in the rectification application, himself admitted that the original assessments were made under Section 33(2) and not under Section 33(3) of the said Act - Tribunal is very much justified in directing its earlier order to be recalled and directing the appeals to be heard after their restoration in accordance with the basis of accurately recorded facts. No doubt, as held by the Division Bench, the power of recall cannot be resorted to review the order in the garb of rectification. However, if the learned Tribunal has passed the order on the basis of incorrect factual position, the learned Tribunal can very well pass the order after recording the correct factual position. - Decided against assessee. Issues Involved:1. Legality of the Sales Tax Tribunal's order allowing rectification applications.2. Scope and limitations of rectification under Section 62 of the Bombay Sales Tax Act.3. Whether the Tribunal's decision was based on erroneous factual assumptions.4. The Tribunal's authority to recall its order in rectification proceedings.Detailed Analysis:1. Legality of the Sales Tax Tribunal's order allowing rectification applications:The petition challenges the order passed by the Sales Tax Tribunal dated 4.6.2007, which allowed the rectification applications filed by the Revenue. The Tribunal had initially allowed the appeals against the Revenue's reassessment orders but later allowed the rectification applications, leading to the present petition.2. Scope and limitations of rectification under Section 62 of the Bombay Sales Tax Act:The petitioner's counsel argued that the scope of rectification under Section 62 is very limited and should only address mistakes apparent from the record. He cited the Supreme Court's judgment in Deva Metal Powders Pvt. Ltd. vs. Commissioner, Trade Tax, U.P., which states that rectification should not involve a retrial or a decision on debatable points of law or fact. The Revenue's counsel countered that the Tribunal had correctly identified an error apparent on the face of the record, justifying the rectification.3. Whether the Tribunal's decision was based on erroneous factual assumptions:The Tribunal's original decision was based on the incorrect assumption that the assessments for the years in question were made under Section 33(3) of the Bombay Sales Tax Act, whereas they were actually made under Section 33(2). This factual inaccuracy was acknowledged by both parties during the rectification proceedings. The Tribunal's rectification was thus based on correcting these factual errors, which were apparent and did not require elaborate arguments or a complicated process of investigation.4. The Tribunal's authority to recall its order in rectification proceedings:The Tribunal's authority to recall its order was upheld, as it was necessary to correct an error that went to the root of the matter. The Division Bench of the High Court in Commissioner of Sales Tax, Mumbai vs. Maharashtra Sales Tax Tribunal, Mumbai held that the power of recall could be exercised to eliminate an error apparent on the face of the record. The Tribunal's action was not seen as a review in disguise but as a legitimate rectification of factual inaccuracies.Conclusion:The High Court found that the Tribunal acted within its jurisdiction under Section 62 of the Bombay Sales Tax Act. The errors corrected by the Tribunal were apparent from the record and did not involve debatable points of law or fact. The Tribunal was justified in recalling its earlier order to ensure the accuracy of the facts. Consequently, the petition was dismissed, and the rule was discharged.