2024 (2) TMI 1298 - HC - VAT and Sales Tax

Tribunal must exercise Section 31 jurisdiction to rectify apparent mistakes in VAT orders

M/s Laxmi Doors Vill. Semra Chinhat District Lucknow Versus Commissioner Commercial Tax U.P. Gomti Nagar Lucknow

The Allahabad HC held that the Tribunal erred in refusing to exercise jurisdiction under Section 31 of the U.P. V.A.T. Act, 2008 for rectification of ... Rectification of mistake - Refusal to exercise the jurisdiction under Section 31 of the U.P. V.A.T. Act, 2008 - miscarriage of justice or not - failure to exercise a jurisdiction duly vested by the authority of law - HELD THAT:- Perusal of Section 31 of the U.P. V.A.T. Act, 2008 would indicate that there is no such restriction in the learned Tribunal exercising its power of rectifying the mistake in as much as Section 31 of the U.P. V.A.T. Act, 2008 does not provide that such power can only be exercised by learned Tribunal in exparte orders rather Section 31 of the Act 2008 goes to the extent of empowering any officer, authority, learned Tribunal or this Court on its own motion or on the application of the dealer or any other interested person to rectify any mistake apparent on the face of record in any order passed under the provisions of the Act, 2008. Once no such restriction is contained under the provisions of the Section 31 of the Act 2008 as such it is apparent that learned Tribunal has patently erred in law in rejecting the said application vide the order dated 16.04.2018. The matter is remitted to learned Tribunal to decide the application of the petitioner filed under Section 31 of the Act, 2008 in accordance with law - the revision is partly allowed. Issues involved:The judgment involves the interpretation of Section 31 of the U.P. Value Added Tax Act, 2008 regarding rectification of mistakes in an order passed by the Tribunal. The main issue is whether the Tribunal erred in rejecting an application for rectification of error when no ex-parte order was involved.Details of the Judgment:Issue 1: Rectification of Mistakes under Section 31 of the U.P. V.A.T. Act, 2008The revisionist filed a revision seeking to quash the judgment and order passed by the Commercial Tax Tribunal related to the failure to cancel the tax amount on purchases from an unregistered dealer. The Tribunal had given input tax credit for one year but failed to grant a reduction in tax for the subsequent year without providing reasons for the disparity. The revisionist filed an application for rectification of error under Section 31 of the Act, which the Tribunal rejected, citing the applicability of the provision only to ex-parte orders.Issue 2: Interpretation of Section 31 of the U.P. V.A.T. Act, 2008The revisionist argued that Section 31 does not restrict the power of the Tribunal to rectify mistakes only in ex-parte orders. The provision allows rectification of any mistake apparent on the face of the record by any officer, authority, Tribunal, or High Court. The Tribunal's reliance on a judgment related to a different Act was deemed erroneous, as the application was made under the provisions of the U.P. V.A.T. Act, 2008.Decision and OrderThe Court found that the Tribunal erred in law by rejecting the application for rectification of error based on the absence of an ex-parte order. The judgment was set aside, and the matter was remitted to the Tribunal to decide the application in accordance with the law within two months. The Court clarified that Section 31 does not impose restrictions on rectification only in ex-parte orders, empowering authorities to rectify mistakes in any order passed under the Act.This summary provides a detailed overview of the judgment, highlighting the issues involved and the Court's decision regarding the interpretation of Section 31 of the U.P. Value Added Tax Act, 2008.