Rectification for mistake apparent from record upheld where duty demand increased and binding precedent controlled the issue.

An appeal was treated as maintainable against a rectification order under the Estate Duty Act where the order enhanced the estate duty liability and created an additional demand. On rectification, the majority held that correction was permissible because the original error was apparent from the record, including a mistaken assumption that the legal position had already been settled on the basis of an incorrect report. The majority also treated the binding jurisdictional precedent as controlling and held that inclusion of the lineal descendants' share was not a debatable issue for rectification purposes. A dissenting view considered the issue debatable and the rectification invalid.

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Issues: (i) Whether an appeal lay against the rectification order passed under section 61 of the Estate Duty Act, 1953. (ii) Whether the rectification order was valid because the alleged error was a mistake apparent from the record and not a debatable point of law.

Issue (i): Whether an appeal lay against the rectification order passed under section 61 of the Estate Duty Act, 1953.

Analysis: The rectification order enhanced the estate duty liability, so the order gave rise to an additional demand. On that footing, the appellate remedy was available under the relevant appellate provision governing orders resulting in extra duty demand.

Conclusion: The appeal was maintainable, in favour of the Revenue.

Issue (ii): Whether the rectification order was valid because the alleged error was a mistake apparent from the record and not a debatable point of law.

Analysis: The majority held that the error lay in treating an incorrect report of the legal position as if the law had been settled by the Supreme Court. Once the report itself was corrected, the premise for the earlier rectification disappeared. The majority also held, in the alternative, that the jurisdictional High Court view bound the authorities and that the inclusion of the lineal descendants' share was not a debatable issue for rectification purposes.

Conclusion: The rectification order was sustainable and the contrary view of the appellate authority was set aside, in favour of the Revenue.

Final Conclusion: The majority decision restored the rectification order and upheld the Revenue's position that the assessment could be corrected on the basis of a mistake apparent from the record.

Ratio Decidendi: A rectification is permissible where the error is patent from the record, including an erroneous assumption that the law has been settled by a misreported legal position, and a point governed by binding jurisdictional precedent is not rendered debatable merely because contrary views exist elsewhere.

Dissenting Opinion: The Judicial Member held that the controversy over inclusion of the lineal descendants' share was a debatable question of law, so no mistake apparent from the record existed and the rectification order was invalid.

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