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1991 (8) TMI 309 - HC - VAT and Sales Tax
Issues Involved
1. Maintainability of the rectification application under Section 21-A of the Punjab General Sales Tax Act, 1948. 2. Whether the order of the Sales Tax Tribunal dated August 12, 1975, suffers from a mistake of law apparent on record needing rectification. Issue-wise Detailed Analysis Issue 1: Maintainability of the Rectification Application The first issue concerns whether the State can apply for rectification under Section 21-A of the Punjab General Sales Tax Act, 1948. The court examined whether the term "person affected" includes the Assessing Authority/State of Punjab. The court concluded that the Assessing Authority is indeed a "person affected" as it is responsible for ensuring the correct assessment and recovery of tax within its jurisdiction. The law permits rectification even suo motu, making the source of the rectification motion immaterial. Therefore, the application for rectification filed by the State was deemed maintainable. The court answered this question in the affirmative, in favor of the State and against the assessee. Issue 2: Mistake of Law Apparent on Record The second issue pertains to whether the order of the Sales Tax Tribunal dated August 12, 1975, suffers from a mistake of law apparent on record. The Tribunal had interpreted the second proviso to Section 5(2)(a)(ii) of the Act to apply only to the contingency of goods used by the purchasing dealer in manufacture, excluding other contingencies like resale without manufacture. This interpretation was contrary to the decision in Fancy Nets and Fabrics v. State of Punjab [1971] 28 STC 433, which held that the second proviso would be attracted to any of the four eventualities mentioned in the section. The State of Punjab filed an application for rectification, arguing that the Tribunal's order was at variance with the law laid down in Fancy Nets and Fabrics' case. The court found that the Tribunal's order did indeed suffer from a mistake of law apparent on the record, as it failed to align with the established precedent. The court held that the Tribunal's failure to take notice of a binding decision constitutes a mistake apparent on the face of the record, which can be rectified under Section 21-A(2) of the Act. The court referenced its earlier decision in Jagatjit Distilling and Allied Industries Limited v. Assessing Authority [1978] 42 STC 233, which supported the rectification of such mistakes. In conclusion, the court held that the order of the Tribunal dated August 12, 1975, suffered from a mistake of law apparent on the record and required rectification. The court answered this question in the affirmative, in favor of the Revenue and against the assessee. No costs were awarded. Conclusion Both questions referred to the court were answered in the affirmative, favoring the State and against the assessee. The court held that the rectification application was maintainable and that the Tribunal's order did suffer from a mistake of law apparent on the record needing rectification.
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