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of <h1>Writ rejected: Section 74 correction deemed not genuine rectification and cannot reopen adjudicated issues via improper forum</h1> <h3>M/s. Suman Construction Versus Union or India, The Commissioner CGST Central Excise, Aurangabad, Joint Commissioner, CGST & Central Excise, Aurangabad, The Additional Commissioner, CGST & CEX, Nagpur-1, The Assistant/Deputy Commissioner (R & T), CGST & Central Excise, Aurangabad., The Superintendent, CGST & Central Excise, Aurangabad.</h3> HC dismissed the writ petition, holding the application under Section 74 was not a genuine rectification but an attempt to reopen adjudicated issues via ... Maintainability of writ petiiton - availability of alternate statutory remedy of appeal - Exemption from service tax - orks of construction of roads executed for government departments - rejection of application for rectification of mistake u/s 74 of the Act - invocation of doctrine of merger - HELD THAT:- Section 74 of the Act empowers an Adjudicating Authority to amend or rectify its order to correct a mistake apparent from the record within two years of passing the original order. The phrase “mistake apparent from the record” has been judicially interpreted to mean a manifest, obvious or self-evident error, error that does not require elaborate reasoning or long-drawn arguments. Applying the aforesaid scope of section 74 of the Act which is confined to correction of patent errors which may be clerical, arithmetical or legal and has to be noticed from the face of the record and it is not intended to reopen concluded findings or enable substitution of one view for another - section 74 sub-clause 3 of the Act expressly provides that rectification must be undertaken by the very authority which passed the order sought to be rectified. In the present case, the impugned order dated 20.03.2023 was passed by the Additional Commissioner, CGST and CEX, Nagpur-1. The argument of the petitioner invoking the doctrine of merger also cannot aid him at this stage. The appellate order dated 26.07.2024 admittedly pertained to an earlier adjudication for Financial Year 2015-16. The impugned order of 20.03.2023 covers both Financial Year 2015-16 and Financial Year 2016-17 and arises from a separate proceedings. Whether both proceedings relate to identical issues or distinct taxable services would require factual verification, which is beyond the limited scope of rectification or writ jurisdiction under Article 226 when an efficacious appellate remedy exists - Even after applying his mind to the order of the Appellate Authority, he has come to a conclusion that it is not possible for him to under Section 74 of the Act to hold that though the computation of service tax is for the common period but whether the issues involved in both the orders are same or different. On this basis, he has come to a conclusion that as the order has been passed by the Additional Commissioner, CGST, he is not in a position to consider the application under Section 74 of the Act and rectify or modify the order passed by another authority. This Court is of the considered opinion that the petitioner's application dated 02.02.2025, was not a genuine rectification application under Section 74 of the Act but rather an attempt to reopen adjudicated issues through an improper forum. The Joint Commissioner, CGST and Central Excise, Aurangabad has rightly observed that he is not able to rectify an order passed by the Additional Commissioner, Nagpur-1. The impugned order dated 19.03.2025 does not suffer from any illegality, perversity or violation of natural justice warranting interference under Article 226 of the Constitution of India. Petition dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether an application styled as one under Section 74 of the Finance Act, 1994 (rectification for mistake apparent from record) can be entertained where it impermissibly seeks re-adjudication of substantive liability already contested. 2. What is the scope and ambit of Section 74 of the Finance Act, 1994 - i.e., the meaning of 'mistake apparent from the record' and whether it permits reopening of concluded findings or substitution of one view for another. 3. Whether the authority deciding a rectification application must be the same authority which passed the original order, and whether a Joint Commissioner may rectify an order passed by an Additional Commissioner. 4. Whether the doctrine of merger (finality of adjudication upon conclusion of appellate proceedings) prevents subsequent re-imposition of tax for the same period where an earlier adjudication attained finality. 5. Whether writ jurisdiction under Articles 226/227 is maintainable where an efficacious statutory appeal remedy (Section 85) exists and no clear violation of natural justice or jurisdiction is shown. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Validity of application under Section 74 when it seeks substantive re-adjudication Legal framework: Section 74 empowers an Adjudicating Authority to amend or rectify its order to correct a mistake apparent from the record within two years; it is not a vehicle for re-deciding disputed substantive issues. Precedent Treatment: The Court relied on established judicial interpretation that 'mistake apparent from the record' denotes a manifest, obvious or self-evident error not requiring elaborate argumentation. Interpretation and reasoning: The Court examined the application and found it raised substantive grounds (claim of exemption under Notification No.25/2012 and alleged lack of notice and earlier final adjudication), which are not clerical, arithmetical or patent legal errors. The Court held such contentions amount to appeal/revision in substance, not rectification. Ratio vs. Obiter: Ratio - Section 74 cannot be used to reopen concluded factual or substantive findings; an application that effectively seeks re-adjudication is not maintainable as a rectification petition. Obiter - none identified beyond explanation of examples of patent errors. Conclusion: The application was not a genuine rectification under Section 74 but an attempt to reopen adjudicated issues; Section 74 relief was not available. Issue 2 - Scope of 'mistake apparent from the record' under Section 74 Legal framework: The phrase requires an error that is manifest on the face of the record and does not permit reconsideration that involves elaborate reasoning, factual re-examination or rival inferences. Precedent Treatment: The Court applied the established narrow construction of Section 74 as confined to patent clerical, arithmetical or legal errors observable from the record itself. Interpretation and reasoning: The Court reiterated that rectification is confined to correction of patent errors and is not intended to substitute one view for another or to reopen concluded findings. Matters requiring factual verification or detailed argument are beyond Section 74. Ratio vs. Obiter: Ratio - the correct ambit of Section 74 is narrow and excludes substantive re-adjudication; Obiter - illustrative characterisation of patent errors (clerical/arithmetical/legal) as falling within Section 74. Conclusion: Section 74 is limited to patent, facial errors; the petitioner's grounds did not meet this threshold. Issue 3 - Authority competent to rectify: necessity of same authority under Section 74 Legal framework: Section 74(3) requires that rectification be undertaken by the authority which passed the original order. Precedent Treatment: The Court invoked the statutory provision and applied its plain meaning to bar rectification by a different authority. Interpretation and reasoning: The impugned order sought to be rectified was passed by the Additional Commissioner, Nagpur-1. The petitioner addressed multiple authorities; the application was decided by the Joint Commissioner, Aurangabad, who lacked jurisdiction to rectify an order of another adjudicating authority. The Joint Commissioner correctly held he could not modify the Additional Commissioner's order. Ratio vs. Obiter: Ratio - rectification under Section 74 must be carried out by the authority which passed the original order; an authority without such jurisdiction cannot entertain a rectification application aimed at another authority's order. Conclusion: The Joint Commissioner correctly declined rectification; the application was incompetent before him. Issue 4 - Doctrine of merger and re-imposition of liability after appellate finality Legal framework: The doctrine of merger recognizes finality of adjudication upon conclusion of appellate proceedings and bars reopening unless distinct proceedings legitimately justify a fresh demand. Precedent Treatment: The petitioner invoked Supreme Court authorities recognizing merger; the Court considered that doctrine but emphasized limits where separate proceedings or distinct issues are involved. Interpretation and reasoning: The earlier appellate order concerned Financial Year 2015-16; the later order covered both 2015-16 and 2016-17 and arose from separate proceedings. Determining whether the issues are identical or distinct requires factual enquiry beyond rectification or ordinary writ jurisdiction. The Court held the doctrine of merger could not be determinatively applied without factual verification and thus could not sustain the rectification application. Ratio vs. Obiter: Ratio - invocation of merger does not obviate the need for proper forum and factual determination; merger cannot be used to bypass statutory appellate remedy where distinct proceedings exist. Obiter - recognition that merger principles apply where proceedings are truly identical and finality has been achieved. Conclusion: The merger argument did not justify rectification in the present proceedings; factual verification via appropriate appellate process is required. Issue 5 - Maintainability of writ jurisdiction in presence of alternative statutory remedy (Section 85) Legal framework: Writ jurisdiction under Articles 226/227 is discretionary and ordinarily withheld where an efficacious statutory remedy exists, absent proof of jurisdictional defect or clear breach of natural justice. Precedent Treatment: The Court applied the established principle that alternative statutory remedies must be availed unless extraordinary circumstances exist. Interpretation and reasoning: The Court found an efficacious remedy by way of appeal under Section 85 was available against the Additional Commissioner's order. The petitioner did not establish lack of jurisdiction or breach of natural justice to warrant invocation of writ jurisdiction. The Court therefore declined to exercise discretionary writ relief to circumvent the statutory appellate process. Ratio vs. Obiter: Ratio - writ relief is inappropriate when an adequate statutory appeal lies and no exceptional circumstances are made out; Obiter - none beyond reinforcement of the general doctrine. Conclusion: Writ petition dismissed as alternate remedy exists; petitioner free to pursue statutory appeal.
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