Statutory review and deemed first sale provisions require strict satisfaction of all conditions; quantity, not price, controls substantial part.

A statutory review power is confined to correcting an error apparent on the face of the record; a later Supreme Court decision on a different issue did not justify reopening the earlier appellate order. The deeming fiction in Explanation 1 to section 8(1) of the Assam General Sales Tax Act applies only when both statutory conditions are met: sale of a substantial part of the goods and resale above the prescribed percentage. "Substantial part of the goods" was construed by quantity, not by resale price alone, and sale of only 4.5% of production was insufficient. The second sale therefore could not be treated as the first sale.

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Issues: (i) Whether the Assam Board of Revenue could review its earlier appellate order under its statutory review power on the ground of error apparent on the record. (ii) Whether, for the deeming fiction in Explanation 1 to section 8(1) of the Assam General Sales Tax Act, 1993, the expression "a substantial part of the goods" is to be understood with reference to the quantity of goods and whether both conditions in the Explanation must be satisfied before the second sale can be treated as the first sale.

Issue (i): Whether the Assam Board of Revenue could review its earlier appellate order under its statutory review power on the ground of error apparent on the record.

Analysis: Section 7 of the Assam Board of Revenue Act, 1962 confers review power on the Board in relation to its own orders. That power is nevertheless confined to correction of an error apparent on the face of the record. The Board's review could therefore be sustained only if the earlier decision disclosed such an error in law or on facts. The judgment held that the later Supreme Court decision relied upon by the department dealt with a different issue and did not govern the controversy before the Board.

Conclusion: The review could not be sustained on the basis asserted by the department.

Issue (ii): Whether, for the deeming fiction in Explanation 1 to section 8(1) of the Assam General Sales Tax Act, 1993, the expression "a substantial part of the goods" is to be understood with reference to the quantity of goods and whether both conditions in the Explanation must be satisfied before the second sale can be treated as the first sale.

Analysis: The deeming provision applies only when a person sells a substantial part of the goods manufactured or imported by him and the re-sale price exceeds the prescribed percentage over the sale price. The expression "a substantial part of the goods" was held to refer to the quantity of goods, not the price realised. On the facts, only 4.5 per cent of the total production had been sold to the petitioner, which could not amount to a substantial part. Since that essential condition was not satisfied, the mere fact that the resale price exceeded 40 per cent of the purchase price was insufficient to attract the deeming fiction.

Conclusion: The deeming provision was not attracted and the second sale could not be treated as a first sale.

Final Conclusion: The challenge succeeded because the review order proceeded on an erroneous construction of the statutory deeming provision and on an inapplicable precedent, and the original appellate view stood restored.

Ratio Decidendi: A statutory deeming provision treating a resale as a first sale must be strictly satisfied in all its constituent conditions, and the phrase "substantial part of the goods" is to be construed by quantity where the statute so indicates, not by sale price alone.

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