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TMI Blog2015 (6) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... re feet was found with 276 items whereas as per the books of accounts which was produced on the spot only silk carpet to the extent of 2280.750 square feet valued at Rs. 14,44,997 was found. A plea was raised on behalf of the assessee that out of 5517.375 square feet silk carpet found in excess, silk carpet to the extent of 2974 square feet had been received through approval memos, though the same needed verification and the approval memos so produced did not inspire confidence, nevertheless the authorized officer accepted that even if silk carpet to the extent of 2974 square feet is treated to be proved on the basis of the approval memos still silk carpet to the extent of 2543.375 square feet was excess and since the assessee did not produce any purchase bill or supporting material, authorized officer issued notice under section 77(6) of the RST Act holding that it is undisclosed stock and after applying a rate of Rs. 670 per square feet, held that stock to the tune of Rs. 17,04,061 was undisclosed and as to why penalty be not imposed under section 77(8) of the RST Act.An opportunity was granted by the authorized officer to the partner by issuing a show-cause notice f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessing officer rejected the contention of the assessee vide impugned order dated July 27, 1998 by holding that: "(1) There is no apparent mistake on record, viz., calculation mistake or other similar mistake. (2) Any decision taken by the authority has not been challenged, rather technical matters have been raised and that too after more than a year which need no elaboration in this order." Since the application filed under section 37, does not come in the meaning for which section 37 is applied and contains no force and rejected the application which is assailed in the present petition. Counsel for the petitioner contended that before the assessing officer in the rectification application under section 37 it was claimed that carpet was exempt, therefore, once an exempted item is found, then whatever has been found, character of it remain exempt and since there is no tax, whatever, had been found, was not liable to tax even though may be undisclosed. He further contended that the assessee was not made aware of the provisions of the Act, pressure was built on the assessee at the time of survey and whatever statements were recorded, were under pressure or duress and time wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfied about the goods having been received on approval basis of silk carpet to the extent of 2974 square feet but in the show-cause notice gave credit of the same and issued show-cause notice only for the balance, i.e., 2543.375 square feet and contended that the submission of the counsel for the petitioner is not proper, who has stated that even goods received on approval, has been treated as undisclosed. He further contended that a show-cause notice was given, allowing the assessee to produce the books of accounts and other material to justify that the stock was not undisclosed, was disclosed and to lead evidence and adequate time was granted, however the assessee himself came forward having come to know its short comings and moving an application on the spot requesting the authorized officer for composition (compounding) of the matter and voluntarily wrote a letter on the spot, in good spirit and letter is self explanatory, which states that he has understood the provisions of sections 77 and 72 and have been made aware of all the consequences and proceedings and even deposited the compounding fees immediately. He further contended that the order dated August 16, 1997 has bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 77(8) and section 37: "S. 72. (3) Notwithstanding anything contained in sub-sections (1) and (2) on an application by a person admitting the offence committed by him under sub-section (8) of section 77 or sub-section (5) or (6) of section 78, the assessing authority, the officer authorised under sub-section (4) of section 77, the officer empowered under sub-section (3) of section 78 or the incharge of a check-post, as the case may be, may accept composition money from such person in lieu of penalty or prosecution, which shall be equal to the amount of four times of the tax leviable on the goods involved or twenty five per cent. of the value of such goods, whichever is less. S. 77. (8) The assessing authority or the officer referred to in sub- section (6) may, after having given the dealer an opportunity of being heard and after having held such further enquiry as it may consider fit, impose on him, for the possession of goods not accounted for, whether seized or not under sub-section (6), a penalty equal to the amount of five times of the tax leviable on such goods or thirty per cent. of the value of such goods, whichever is less; and such authority or officer may release t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication under section 37 which in my view, is impermissible. Though the rectification application can be moved within a period of three years, but the question in the instant matter sought to be rectified, is entirely different as several new pleas have been raised which shows that matter was required to be reviewed which is impermissible under the Act. An allegation of pressure/duress is made after almost one year and that too by way of moving in the rectification application, which in my view, is wholly unjustified. During the course of arguments, counsel stated that immediately after the survey, an application was moved to the higher authorities about pressure tactics in the statements and pressure/duress but the counsel was unable to produce any letter in this regard and therefore, the feeble argument in this regard is discarded. Certainly, if pressure was built on the assessee (partner), it had to be brought to the knowledge of the higher authorities within a reasonable time but mentioning this fact that too in an application under section 37 after almost one year is not justified on the part of the assessee. The honourable apex court in the case of Assistant Commercial Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anappa Tirumala reported in [1960] 1 SCR 890 ruled that an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of record. The honourable apex court in the case of Master Construction Co. (P.) Ltd. v. State of Orissa reported in [1966] 17 STC 360 (SC) held under (page 366 in 17 STC): ". . . The wrong conclusion, if any, arrived at by the Commissioner in his earlier order, because of the fact that the said two arguments were not advanced before him, cannot be said to be errors apparent on the face of the record arising or occurring from an accidental slip or omission. The errors, if any, arose because the Department did not raise those points before the Commissioner. They were also errors not apparent on the face of the record for the decision depends upon consideration of arguable questions of limitation and construction ofdocuments. Indeed the Commissioner re-heard arguments and came to a conclusion different from that which he arrived on the earlier occasion. This is not permissible under rule 83 of the Rules." In my view, rectification implies the correct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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