TaxTMI 
TaxTMI 
TaxTMI 
2013 (11) TMI 1006
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....d by the Finance Act, 2010, on the ground, inter alia, that the Parliament lacked necessary legislative competence to levy tax on sale of lotteries as service in the light of Entry 34 of List II of the Seventh Schedule of the Constitution of India and that Entry 92C of List I of the Constitution of India has not yet been notified. For convenience, we may reproduce the prayers sought for in WP(C) No.36 of 2011 pari materia the ones in WP(C) No.23 of 2011 and which are as follows:- "(i) to Declare that sale of lottery tickets is not a service and consequently not liable to service tax under clause (zzzzn) of Section 65(105) of the Finance Act, 1994 (as amended by Finance Act, 2010); (ii) to Declare that the clause (zzzzn) of Section 65(105) of the Finance Act, 1994 (as amended by Finance Act, 2010) with effect from 01.07.2010 is ultra vires the Constitution of India; (iii) issue a Writ of Mandamus directing the Respondents to refund forthwith the amount of service tax collected from the Petitioner under clause (zzzzn) of Section 65(105) of the Finance Act, 1994 (as amended by Finance Act, 2010) with effect from 01.07.2010; (iv) issue a Writ of Prohibition or such other appropriat....
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....espondents taken in pursuance thereto were struck down, inter alia, as being ultra vires the Constitution of India being in contravention to Entry 97, List I to Seventh Schedule read with Article 248 of the Constitution of India. However, the judgment was held to be prospective in operation "since the petitioners secured registration and paid service tax under the impugned provision on their own". It is this portion of the judgment contained in paragraph 21 thereof that the Petitioners seek review in the present proceedings. 5. Since during the hearing of the original Writ Petitions substantive part of the argument had been advanced by Mr. A. R. Madhav Rao, Learned Advocate for the Petitioner, in WP(C) No.36 of 2011, in these proceedings also we requested him to address us first as both the cases involved identical issues leaving Mr. A. K. Upadhyaya, Learned Senior Advocate for the Petitioners in the other WP(C) No.23 of 2011, to supplement him. 6. It is submitted that the findings contained in paragraph 21 of the judgment are in conflict with and dehors the consideration of the Order dated 09-08-2011 read with Order dated 07-06-2011 in WP(C) No.23 of 2011, inter alia, directing ....
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....l and is not recovered from the client, then refund cannot be denied on the ground of unjust enrichment. On this, reliance was placed upon Deputy Commissioner, Andaman District, Port Blair vs. Consumer Cooperative Stores Ltd. : (1999) 1 SCC 507 and Commissioner of Central Excise, Calcutta vs. Panihati Rubber Ltd. : (2006) 10 SCC 129. 9. Before embarking upon the merits as contended in the Review Petitions and as urged before us by the Learned Counsels for the parties, the question for consideration by us at the threshold would be as to whether this Court has the necessary jurisdiction to review its own judgment. We may observe that there was no serious resistance to the Review Petitions on behalf of the Respondent-Union of India except to a limited extent to which we shall allude to at a later stage. 10. By drawing our attention to a decision of the Hon'ble Supreme Court in M. M. Thomas vs. State of Kerala and Another : (2000) 1 SCC 666, Mr. Rao urged that as a Court of record under Article 215 of the Constitution of India, power and duty to review its own judgment are inherent in every High Court and in exercise of such power it can correct any error apparent on the face of the ....
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....ent from the pleadings, records of the case and what had been orally argued on behalf of the Petitioner. 15. It is pertinent to note that Mr. A. R. Madhav Rao, Learned Counsel, brought to our notice that in Review Pet.(C) No.2 of 2013 that the Respondent-Union of India has filed Petitions for Special Leave to Appeal (Civil) Nos.11842-11843/2013 against our judgment dated 29- 11-2012 and, the Hon'ble Supreme Court has been pleased to grant leave. It was submitted that since there was no order of stay against our judgment impugned in the SLP there was no impediment for us to hear these Review Petitions. We have, therefore, proceeded to hear the matter which, needless to state, shall be subject to what the Hon'ble Supreme Court will finally hold in the Appeals. 16. Upon our careful and anxious consideration of the pleadings, the records and submissions made on behalf of the parties, we are inclined to agree with the submissions of Mr. Rao that there has arisen an error apparent on the face of the record in arriving at our finding contained in paragraph 21 of the impugned judgment for the reasons stated hereafter. (i) As it appears from a reading of that paragraph it is apparent tha....
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....ave challenged the same in these petitions before us." (iv) In the letter dated 12-07-2011 filed as Annexure 8 to WP(C) No.36 of 2011 it had been conveyed by the Petitioner to the Respondent No.3 that the payment of service tax was being made under protest. We may also reproduce the letter below for convenience: "Future Gaming Kazi Road, Gangtok, Sikkim - 737 101 Solutions India Private Ltd. Phone: 03592-209220 Fax: 03592-202053 Ref. No.: FGSIPL/SK/0030/11-12 Tuesday, July 12, 2011 To, The Superintendent, Central Excise and Service Tax, Gangtok Range, Gangtok Sir, Sub: Payment of service tax under protest. 1. Kindly refer to our application dated 10.12.2010 for registration under the provisions of service tax law under Finance Act, 1994 towards the service under Section 65(105)(zzzzn) notified with effect from 01.07.2010. In this respect please note that we are not engaged in the provision of service but are instead engaged in purchased (and then subsequent sale) of tickets organized by the various State Governments. Therefore no services are being rendered by us. However due to a mistaken understanding we got our self registered and have also paid service tax. 2. We fur....
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....islation under challenge shall be subject to the outcome of this writ petition." (vi) From the above Order, it is evident that this Court had made it clear that "any levy or payments made under the Legislation under challenge shall be subject to the outcome of this writ petition". In other words, the Respondents were aware that service tax collected by them under the impugned provision was subject to decision by this Court as to whether it was valid or ultra vires. (vii) In Assistant Commissioner, Income Tax, Rajkot vs. Saurashtra Kutch Stock Exchange Limited : (2008) 14 SCC 171 while dealing with the proposition "an error apparent on the face of the record" it was held as under:- "26. .................................. What is a "mistake apparent from the record"? Now, a similar expression "error apparent on the face of the record" came up for consideration before courts while exercising certiorari jurisdiction under Articles 32 and 226 of the Constitution. In T.S. Balaram v. Volkart Brothers this Court held that: (SCC p.529, para 5) "5. ........... 'any mistake apparent from the record' is undoubtedly not more than that of the High Court to entertain a writ petition on the ....
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.... record. As the above discussion of the rival contentions show the alleged error in the present case is far from self-evident and if it can be established, it has to be established, by lengthy and complicated arguments. We do not think such an error can be cured by a writ of certiorari according to the rule governing the powers of the superior court to issue such a writ." 30. In our judgment, therefore, a patent, manifest and self-evident error which does not require elaborate discussion of evidence or argument to establish it, can be said to be an error apparent on the face of the record and can be corrected while exercising certiorari jurisdiction. An error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is correct or not. An error apparent on the face of the record means an error which strikes on mere looking and does not need long-drawn-out process of reasoning on points where there may conceivably be two opinions. Such error should not require any extraneous matter to show its incorrectness. To put it differently, it should be so manifest and clear that no court would permit it to remain on record. If t....
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....laiming refund, to establish that the incidence of such duty was not passed to any other person. We may refer to the following portion of the decision: "108. .................................... (iii) A claim for refund, whether made under the provisions of the Act as contemplated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burde....
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....pose to direct that the declaration made by us today shall be applicable prospectively and with effect from 1-10-1992 alone." Some operators challenge the correctness of this. They are right, for the doctrine of prospective overruling cannot be utilised by the High Court. Once the High Court came to the conclusion, rightly, that the concerned provisions were invalid, it was obliged to so declare and, consequently, the collections made thereunder stood invalidated." [emphasis supplied] (xv) To lend support to his submissions of the Petitioner's entitlement for refund of the service tax paid under the impugned provision, Mr. A. R. Madhav Rao referred to paragraph 51 of the landmark decision of L. C. Golak Nath and Others vs. State of Punjab and Another : AIR 1967 SC 1643, and urged that the doctrine of prospective overruling can be invoked only in matters arising under our Constitution and that it can only be applied by the highest Court of the country, i.e., the Supreme Court of India, as it has the Constitutional jurisdiction to declare law binding on all Courts in India. This, no doubt is a law laid down by the Hon'ble Supreme Court and would be binding upon us. However, we find ....
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....d circumstances. It is not easy nor is it desirable to lay down any rule for universal application. It may however be stated as a general rule that if there has been unreasonable delay the court ought not ordinarily to lend its aid to a party by this extraordinary remedy of mandamus. ..........." [emphasis supplied] (xvii) In the present case, we find from the facts noted above that the Petitioners had been prompt in approaching this Court after having given notice to the Respondents that the impugned provisions were ultra vires the Constitution and that compliance thereto were under protest. These are facts that have remained undisputed and, therefore, in our view, delay cannot be attributed to the Petitioners in approaching this Court to deny them the consequential relief of refund of the tax collected under a law held by us as ultra vires. (xviii) The only contention raised rather feebly on behalf of the Respondent-Union of India represented by Mr. B. K. Gupta, Learned Counsel, was that operation of the judgment holding Legislation ultra vires had to be prospective and, therefore, there was no reason for this Court to interfere with the judgment as sought for on behalf of the ....
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....of an order stems from the fundamental principle that justice is above all. It is exercised to remove the error and to disturb the finality. 39. In S. Nagaraj v. State of Karnataka, Sahai, J. stated: (SCC p. 618, para 18) "18. Justice is a virtue which transcends all barriers. Neither the rules of procedure nor technicalities of law can stand in its way. The order of the Court should not be prejudicial to anyone. Rule of stare decisis is adhered for consistency but it is not as inflexible in Administrative law as in public law. Even the law bends before justice. Entire concept of writ jurisdiction exercised by the higher courts is founded on equity and fairness. If the court finds that the order was passed under a mistake and it would not have exercised the jurisdiction but for the erroneous assumption which in fact did not exist and its perpetration shall result in miscarriage of justice then it cannot on any principle be precluded from rectifying the error. Mistake is accepted as valid reason to recall an order. Difference lies in the nature of mistake and scope of rectification, depending on if it is of fact or law. But the root from which the power flows is the anxiety to avo....