2025 (9) TMI 467 - HC - GST

Section 161 cannot recall a decided appellate order; rectification limited to errors apparent on face of record

Opasil Pigments And Chemicals (P) Ltd., M/s Shyam Enterprises Versus State Of U.P. And 2 Others

Opasil Pigments And Chemicals (P) Ltd., M/s Shyam Enterprises Versus State Of U.P. And 2 Others - 2025:AHC:156782 1. ISSUES PRESENTED AND CONSIDERED 1. Whether an order passed by an appellate authority allowing an appeal can be recalled/rectified under Section 161 on the sole ground that a Special Leave Petition (SLP) was filed before the Apex Court, absent any interim order or stay by that Court. 2. Whether an application under the provision for rectification (Section 161) is competent where the impugned order was set aside on its merits and no 'error apparent on the face of the record' exists. 3. Whether the standard of 'error apparent on the face of the record' permits rectification that amounts to review, revision or substitution of an order decided on merits. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Competence of Section 161 to recall an appellate order merely because an SLP was filed Legal framework: Section 161 provides power to rectify mistakes apparent on the face of the record. The appellate authority's order is a statutory remedy under the Act, and higher court proceedings (e.g., filing of SLP) do not automatically stay or invalidate such orders unless the higher court grants an interim order or stay. Precedent treatment: The Court applies the settled principle from higher court authority that rectification jurisdiction is limited to patent errors visible on the record and cannot be used to reverse an order for reasons that require substantive reconsideration. Interpretation and reasoning: The mere filing of a SLP before the Apex Court is not a juridical event that vitiates or suspends the appellate authority's statutory power to decide appeals. In the present facts, no interim protection or stay was granted by the Apex Court. Consequently, recalling the appellate order solely because an SLP had been filed circumvented the prescribed statutory remedy and substituted a unilateral administrative recall for proper appellate/revisional processes. Ratio vs. Obiter: Ratio - Section 161 cannot be invoked to recall an appellate order merely because an SLP was filed in the absence of an interim direction by the higher court; such use of rectification power would improperly nullify statutory appellate adjudication. Obiter - procedural prudence suggests aggrieved parties should pursue available legal remedies rather than rectification where merits have been decided. Conclusion: The recall of the appellate order on the sole ground of filing an SLP was impermissible; Section 161 cannot be so employed. Issue 2 - Applicability of 'error apparent on the face of the record' where the appeal was decided on merits Legal framework: The rectification provision is limited to mistakes that are manifest, patent and discoverable on mere perusal of the record, not those requiring investigation, argument or elaborate reasoning. Rectification does not permit review, revision or substitution of an order decided on merits. Precedent treatment: The Court follows controlling pronouncements that define 'apparent error' as one that strikes on a mere looking at the record and excludes errors that require long-drawn reasoning or where two opinions are possible. Interpretation and reasoning: The appellate order under challenge was passed after hearing and on merits. The alleged grounds for rectification did not disclose any patent clerical or manifest error on the face of the record. Allowing the rectification application in such circumstances would effectively obliterate the original order and substitute a new decision - a function beyond the narrow remedial scope of Section 161. Ratio vs. Obiter: Ratio - A rectification application is maintainable only where the mistake is manifestly obvious from the record without recourse to argument or re-appraisal of evidence or law; it does not extend to correcting substantive decisions reached on merits. Obiter - Mistakes rectifiable under the provision are not confined to clerical errors but remain limited to patent errors not dependent on complex proof. Conclusion: The impugned rectification did not meet the statutory standard of an error apparent on the face of the record and therefore was not sustainable. Issue 3 - Proper remedy for aggrieved party and limits on administrative recall Legal framework: Statutory remedies provided by the Act (appeal, revision, or remedies before higher courts), and judicial principles limiting administrative powers to effect substantive reversal without following those remedies. Precedent treatment: The Court reiterates authority that rectification cannot be used as surrogate for review/revision; parties aggrieved by an appellate order must resort to the remedies specifically available under the statute or seek interim orders from higher courts. Interpretation and reasoning: Respondent's recourse to rectification (recall) bypassed available statutory remedies and changed the result of an appellate order decided on merits. Where a party is aggrieved, the correct course is to invoke appellate or higher court jurisdiction (including seeking interim relief), not to seek rectification that would amount to re-determination. Ratio vs. Obiter: Ratio - Aggrieved parties must pursue the statutory/regular remedies; administrative recall using rectification powers to set aside merits-based orders is impermissible. Obiter - Courts will restore merits decisions unlawfully recalled by rectification when the statutory threshold for rectification is not met. Conclusion: The respondent should have adopted the relevant statutory remedy rather than seek rectification; the rectification order was therefore wrongful. Final Disposition (linked conclusions) Where an appellate order has been allowed on merits and no interim order or stay is granted by a higher court, filing a SLP does not justify use of the rectification provision to recall that order. The standard for 'error apparent on the face of the record' is strict - limited to manifest mistakes detectable on mere perusal - and does not permit substitution or review of merits decisions. Consequently, the rectification/recall orders were quashed and the original order allowing the appeal was restored.