TaxTMI 
TaxTMI 
2007 (11) TMI 553
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.... sale of ice. For the assessment year 1979-80, the opposite party disclosed the taxable sales of Rs. 3,08,380. The Sales Tax Officer, Ward 2, Jhansi vide order dated May 30, 1981 passed under rule 41(7) of the U.P. Sales Tax Rules, 1948, hereinafter referred to as "the Rules ", completed the original assessment by accepting the disclosed turnover. He, however, imposed a tax of Rs. 18,502.80 at the rate of six per cent on the sale of ice. Thereafter it transpired that the tax on the sale of ice has been imposed at a lesser rate and it ought to have been eight per cent instead of six per cent resulting in tax of Rs. 6,167.60 being short levied. The proceedings under section 22 of the Act were initiated by issuance of notice dated November 2, 1982 seeking rectification of the mistake which was apparent on the record. However, actual rectification was made vide order dated September 4, 1984 wherein tax on sale of ice at the rate of eight per cent and interest was also imposed. Feeling aggrieved the opposite party preferred an appeal under section 9 of the Act before the Assistant Commissioner (Judicial), Sales Tax, Jhansi Region, Jhansi, who vide order dated September 20, 1985 had rej....
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....the assessing authority to bypass the period of limitation provided in the main part of sub-section (1) of section 22 of the Act. He submitted that the view taken by this court in the case of Karam Chand Thapar [1975] UPTC 11 (All) is the correct view and the same view should be taken. We have given our anxious consideration to the various pleas raised by the learned counsel for the parties. Provisions of law: The relevant provision of sub-section (1) of section 22 of the Act reads as under: "(1) Any officer or authority, or the Tribunal or the High Court may, on its own motion or on the application of dealer or any other interested person, rectify any mistake in any order passed by him or it under this Act apparent on the record within three years from the date of the order sought to be rectified: Provided that where an application under this sub-section has been made within such period of three years, it may be disposed of even beyond such period: Provided further that no such rectification, as has the effect of enhancing the assessment, penalty, fees or other dues shall be made unless reasonable opportunity of being heard has been given to the dealer or other person ....
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.... of limitation. The order has to be passed three years from the date of the order sought to be rectified. But the proviso carves out an exception and lifts the bar of limitation if the application has been filed within three years. There is however a significant omission. A plain reading of it indicates that it applies only in those cases where an application under section 22 for rectification has been made. The rectification under the amended section can be done both on its own motion and on the application of dealer or any other interested person. As the words 'on its own motion' are not included in the proviso the conclusion is inescapable that the Legislature intended to limit the extension of period beyond three years only in those cases where the application was filed by any dealer or any other interested person. It may be that the words 'interested person' may include Commissioner of Sales Tax as well but it cannot be accepted that the proviso can apply to proceedings which were initiated on its own motion. In other words, in suo motu action the order has still to be passed within three years. As the three years expired on August 1, 1974 the assessing authori....
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....appellate or revisional authority may at any time within three years from the date of any order proceed to rectify any mistake apparent on face of the record. Thus construed it will mean that where a notice in exercise of power under section 22 of the Act has been issued within three years of an order, the authority concerned has proceeded to rectify the order within limitation and actual rectification made after three years would not be defective. This view was expressed on the basis of the Karnataka High Court decision in the case of Sha Vajeshankar Vasudeva and Company [1974] 34 STC 257. The Division Bench did not go into the question as to whether Karnataka High Court has correctly interpreted the decision of the apex court or not. (4) Sudarsanam Iyengar & Sons [1970] 25 STC 252 (SC). In this case the apex court was considering the provisions of rule 33 of the Travancore-Cochin General Sales Tax Rules, 1950 in respect of the assessment year 1962-63, which was to the following effect (at page 254 of STC): "Rule 33 (1). If for any reason the whole or any part of the turnover of business of a dealer or licensee has escaped assessment to tax in any year or if the licence fee ha....
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....an application has been made within the period of three years. The intention of the Legislature is, therefore, clear that where suo motu action is being taken for rectification of any mistake in an order it should be done within a period of three years whereas in cases where the proceedings having been started upon an application having been made within three years from the date of the order, the mistake can be rectified even beyond the period of three years. Thus the decision of the apex court in the case of Sudarsanam Iyengar & Sons [1970] 25 STC 252 would not be applicable to the present case. (5) Sha Vajeshankar Vasudeva and Company [1974] 34 STC 257 (Karn). In this case the Karnataka High Court has followed the decision of the apex court in the case of Sudarsanam Iyengar & Sons [1970] 25 STC 252 and has held that there is difference between the power of limitation and reassessment. It has held as follows (page 262): ". . . I am of the view that even in the case of a rectification of a mistake in the order of assessment, a notice issued by the assessing authority to the assessee asking the assessee to show cause as to why the order of assessment should not be rectified should....