Limitation for suo motu rectification under sales tax law must be completed within three years, not merely initiated by notice.

Section 22(1) of the U.P. Sales Tax Act, 1948 permits rectification of a mistake apparent on the record within three years from the date of the order sought to be rectified. The proviso extends time only where a dealer or other interested person files a rectification application within that period, allowing disposal after three years. On this construction, the saving proviso does not apply to suo motu rectification by the authority, which must itself be completed within the three-year limit. A notice issued within time was therefore not enough to validate action taken after expiry of the limitation period, and the contrary view was rejected.

---

---

Issues: Whether, under Section 22(1) of the U.P. Sales Tax Act, 1948, a suo motu rectification of an assessment order could be made after three years from the date of the order sought to be rectified, or whether the proviso extending time applied only where a dealer or other interested person had filed an application within the prescribed period.

Analysis: The main part of Section 22(1) authorises rectification of a mistake apparent on the record within three years from the date of the order sought to be rectified. The first proviso creates a limited exception where an application for rectification is made within that period, in which event the application may be disposed of even after three years. The structure of the provision shows that the exception is confined to application-based rectification and does not extend to suo motu action. The reasoned construction adopted was that the legislature intentionally treated these two situations differently, and that the period of limitation continues to govern rectification initiated on the authority's own motion. The contrary view, treating mere issuance of notice within three years as sufficient, was rejected.

Conclusion: Suo motu rectification under Section 22(1) had to be completed within three years, and the rectification order passed beyond that period was barred by limitation.

Ratio Decidendi: Where the statute permits rectification of an apparent mistake within three years but separately saves only application-based proceedings filed within that period, the saving proviso cannot be extended to suo motu rectification, which must itself culminate within the prescribed limitation.

---