9911796707
TMI Blog2021 (12) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... or A.Y. 2008-09 (U.P., Central and, Entry Tax)] suffered from a mistake apparent on the face of record. The order dated 21.06.2017 has been challenged through amendment made to this writ petition. It may be noted, by composite order dated 18.07.2014 the third ex-parte assessment order had been framed against the petitioner. That ex-parte order had been recalled by the order dated 03.10.2015. Thus, at present, the second composite ex-parte assessment order dated 18.09.2013, framed in the case of the petitioner for A.Y. 2008- 09 (U.P., Central and, Entry Tax), has been revived. 3. Briefly, the petitioner is a duly incorporated company. It is a registered dealer engaged in executing works contracts, mainly for the Indian Railways. For the A.Y. 2008-09, it was first subjected to ex-parte assessment orders, all dated 30.6.2012, framed under the Act, the Central Sales Tax Act, 1956 (hereinafter referred to as the "Central Act") and the Uttar Pradesh Tax on Entry of Goods Act, 2007 (hereinafter referred to as the "Entry Tax Act"). The petitioner filed applications under Section 32 of the Act, to set aside the aforesaid first ex-parte assessment orders dated 30.06.2012. Those applications ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was allowed vide order dated 21.2.2017. For ready reference that order is quoted below: "We have heard Sri Nishant Mishra, learned counsel for the petitioner and Sri C.B. Tripathi, the special counsel for the State. An ex parte assessment order was passed on 18.09.2013 for the year 200809. The said ex parte assessment order was set aside by the order dated 22.02.2014, on the ground that it was an ex parte order and no notice was given to the petitioner. Subsequently, assessment order of 18.07.2014 the petitioner again moved recall application which was allowed and the ex parte assessment order dated 18.07.2014 was set aside by an order dated 03.10.2015. Subsequently, the Assessing Authority passed ex parte two orders dated 16.08.2016. One of them is purported to an order under Section 31 of the U.P Vat Act, 2008 modifying the earlier order. In paragraph 41 of the writ petition, it has been stated that the impugned orders passed under Section 31 & 32 are ex parte orders without issuing any notice to the petitioner and without giving any opportunity of hearing. Sri C.B. Tripathi, learned counsel for the State upon instructions received to him and upon a perusal of the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pass any order under Section 31 of the Act, beyond the original period of limitation that expired on 22.02.2017. In the context of suo moto exercise of power, the limitation of three years must be computed from the date 22.02.2014 when the order sought to be rectified was passed. In absence of consent or waiver by the petitioner, such limitation did not exist/survive. Therefore, the order dated 21.06.2017 is wholly time barred, for reason of it being passed after the date 22.02.2017. 8. Reliance has been placed on a division bench decision of this Court in the case of CST Vs. Sukhlal Ice & Cold Storage Co., 2008 NTN (Vol. 36) 30, wherein, a co-ordinate bench had, in the context of pari materia provisions of Section 22 of the U.P. Trade Tax Act, 1948, held - power to rectify any order could be exercised suo-motu, by the competent authority/Court within a period of three years from the date of such order being passed. 9. Next, reliance has also been placed on a five-Judge Constitution bench decision of the Supreme Court in Padma Sundara Rao (Dead) & Ors. Vs. State of T.N. & Ors., (2002) 3 SCC 533 to submit, a Writ Court could not, and, in the present facts, it did not create any f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire gamut of law, the division bench applied the law laid down by the Constitution bench of the Supreme Court, in Padma Sundara Rao (supra) and distinguished the ratio arising from the decision of the Supreme Court in Director of Inspection of Income Tax Vs. Pooran Mal (supra) and the division bench decision of this Court in S.K. Traders (supra). 16. Further, it has been submitted, even otherwise, the order dated 22.02.2014 did not suffer from any mistake apparent from the face of record. Reliance has been placed on a decision of the Supreme Court in Deva Metal Powders (P) Ltd. Vs. CTT (2008) 2 SCC 439 to submit, a debatable question cannot be subjected to proceedings to rectify a mistake apparent from the face of record. 17. Last, it has been submitted, the limitation to frame the third and all subsequent assessment order/s in consequence of order/s passed under Section 32 of the Act, would be the same as prescribed to frame the second assessment order, under Section 29(6) of the Act read with the first and the second provisos thereto. The order to set-aside the first ex-parte orders (dated 30.06.2012) was passed on 11.01.2013. Therefore, the limitation to frame the fresh/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e such order. That mistake was clearly a mistake apparent on the face of record. 20. Having heard learned counsel for the parties and having perused the record, as to the first limb of submission advanced by learned counsel for the petitioner, it is true, there was no express consent given or waiver granted by the petitioner and no such consent or waiver may be inferred from a plain reading of the order dated 21.02.2017 passed in Writ Tax No. 97 of 2017. Therefore, that part of the ratio of the decision of the Supreme Court in Director of Inspection of Income Tax Vs. Pooran Mal & Sons (supra) is inapplicable to the facts of the present case. However, this reasoning was taken note of in Grindlays Bank Limited Vs. ITO (supra). It may be discussed a little later. 21. At the same time, the five-Judge Constitution bench decision of the Supreme Court in the case of Padma Sundara Rao (Dead) Vs. State of Tamil Nadu and Ors. (supra) had arisen on different facts and law. There, an issue had arisen, whether upon the High Court having set aside the earlier declaration made under Section 6 of the Land Acquisition Act 1894, any fresh or further period of limitation existed or could be claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Income Tax Act, a power existed to remit a case to the original authority or, for a fresh order to be passed. Thus, besides the distinction arising on account of lack of consent or waiver granted by the petitioner (in that case), it was recognized, even otherwise, the period of limitation may survive in the context of a proceeding under Section 132 (5) of the Income Tax Act. Thus, it was observed as under: "Learned counsel for the respondents referred to some observations in Pooran Mal case [(1975) 4 SCC 568 : 1975 SCC (Tax) 346 : (1975) 2 SCR 104] which form the foundation for decisions relied upon by him. It has to be noted that Pooran Mal case [(1975) 4 SCC 568 : 1975 SCC (Tax) 346 : (1975) 2 SCR 104] was decided on entirely different factual and legal backgrounds. The Court noticed that the assessee who wanted the Court to strike down the action of the Revenue Authorities on the ground of limitation had himself conceded to the passing of an order by the Authorities. The Court, therefore, held that the assessee cannot take undue advantage of his own action. Additionally, it was noticed that the time-limit was to be reckoned with reference to the period prescribed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f justice require that any undeserved or unfair advantage gained by a party invoking the jurisdiction of the court, by the mere circumstance that it has initiated a proceeding in the court, must be neutralised. The simple fact of the institution of litigation by itself should not be permitted to confer an advantage on the party responsible for it. The present case goes further. The appellant would not have enjoyed the advantage of the bar of limitation if, notwithstanding his immediate grievance against the notice under s. 142(1) of the Income Tax Act, he had permitted the assessment proceeding to go on after registering his protest before the Income Tax Officer, and allowed an assessment order to be made in the normal course. In an application under section 146 against the assessment order, it would have been open to him to urge that the notice was unreasonable and invalid and he was prevented by sufficient cause from complying with it and therefore the assessment order should be cancelled. In that event, the fresh assessment made under section 146 would not be fettered by the bar of limitation. Section 153(3)(i) removes the bar. But the appellant preferred the constitutional juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority to deal with it again irrespective of the merits of the case." The point was considered by the Calcutta High Court in Cachar plywood Ltd. v. Income Tax Officer and the High court, after considering the provisions of section 153 of the Income Tax Act, considered it appropriate, while deposing of the writ petition, to issue a direction to the Income Tax Officer to complete the assessment which, but for the direction of the High court, would have been barred by limitation." (emphasis supplied) 24. Therefore, the distinction drawn by the five-Judge Constitution bench decision of the Supreme Court in Padma Sundar Rao (Dead) Vs St. of Tamil Nadu (supra) is material and pertinent to the facts of the present case, as well. In the context of an order passed under Section 32 of the Act, there clearly existed a remedy of appeal under Section 55 of that Act. In such appeal (where preferred), by virtue of Section 55 (5)(b) (ii) of the Act, the appellate authority would be vested with jurisdiction and power to set aside the order impugned before it and to direct the assessing authority to pass a fresh order, after conducting such inquiry as may be specified by the appeal authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er ; or (ii)vary such order by reducing or enhancing the amount of assessment or penalty, as the case may be, whether such reduction or enhancement arises from a point raised in the grounds of appeal or otherwise ; or (iii) set aside the order and direct the assessing authority to pass a fresh order after such inquiry as may be specified; or (iv) direct the assessing authority to make such inquiry and to submit its report within such time as may be specified in the direction or within such extended time as it may allow from time to time, and on the expiration of such time the appellate authority may, whether the report has been submitted or not decide the appeal in accordance with the provisions of the preceding sub-clauses; or (b) in the case of any other order (i) confirm, cancel or vary such order; or (ii) set aside the order and direct the assessing authority to pass a fresh order after such inquiry as may be specified: Provided that nothing in this subsection shall preclude the appellate authority from dismissing the appeal at any stage with such observations as it deems fit where the appellant applies for withdrawal of the same and no request for examination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Constitution of India against the order dated 16.08.2016, it can never be said, the petitioner was entitled to any better or other relief or rights. 26. It would have been one thing if while quashing the order dated 16.08.2016, this Court had found, the said order suffered from an inherent lack of jurisdiction. In that case, there would be no question or occasion for any further proceedings to arise. That is not the case here. On the contrary, the order dated 21.02.2017 passed by this Court distinctly records - the order dated 16.08.2016 was laconic on account of non-compliance of the rules of natural justice. Logically therefore, that order was found competent in jurisdiction, but defective on procedural aspects. 27. Looked in that light, the further direction issued by the Court requiring the assessing authority to conduct fresh proceeding in accordance with law clearly is an order that drew on the inherent powers of this Court, consistent to the statutory scheme arising from the plain language of Section 55 (5)(b)(ii) of the Act. Therefore, that further direction would inhere in and it would automatically attach to the order passed by the Writ Court. The rule of expiry of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the abutting owners who petitioned for the improvement under the Act, actively participated in carrying out the work, recognized the justice of the assessments from time to time during its progress, and signed a statement for the purpose of inducing the issuance and purchase of country improvement bonds to the effect that the work had been properly done. In the American decision the work was done at the instance and request of the owners. The Court found an implied contract arising from facts that the party at whose request and for whose benefit the work had been done would pay for it in the manner provided for by the Act under which the work was done. 30. It is against principle to suggest that the appellants did anything wrong or, they are taking advantage of anything wrong Jessel, M.R. In Re. Hallett's Estate Knatchbull v. Hallett said: Now, first upon principle, nothing can be better settled, either in our own law, or, I suppose, the law of all civilised countries, than this, that where a man does an act which may be rightfully performed, he cannot say that act was intentionally and in fact done wrongly. The respondents were entitled to impeach the statue under w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f learned counsel for the petitioner, there can be no two opinions on the issue. A disputed or debatable question cannot be gone into in a proceeding seeking to rectify a mistake apparent on the face of record. Such a mistake or error must be glaring or self-apparent and not one that may be established upon elaborate argument or debate. This principle was recognized and applied in the context of taxation laws in Thungabhadra Industries Ltd. Vs. The Government of Andhra Pradesh, AIR 1964 SC 1372. It has been consistently followed and applied in T.S. Balram Vs. Volkart Bros. (1971) 2 SCC 526 (SC) and CIT Vs. Hero Cycles Pvt. Ltd. (1997) 8 SCC 502, amongst others. Applying that rule, we now consider the reasoning adopted by the assessing authority - the limitation to pass the order to recall the second composite ex-parte order would be the balance period of limitation that survived upon the second-composite ex-parte assessment order being passed on 18.09.2013 i.e., up to 30.09.2013 only. Here, it would be apposite to take note of the language of Section 29(6) and Section 32(1) of the Act. For ready reference, Section 32(1) of the Act reads as under: "Section 32. Power to set aside e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2013. However, by virtue of the first proviso to Section 29(6), that limitation stood extended up to 30.09.2013. It was so because of the language of the first proviso to Section 29(6) of the Act and the fact the order dated 11.01.2013 was passed after the cut-off date 1st October day of the A.Y. 2013-14, prescribed under Sub-Section (6) of Section 29 of the Act. 36. The second proviso to Section 29(6) of the Act is only clarificatory. It enforces that rule of limitation as exists under Section 29(6) of the Act read with the first proviso thereto, to all the subsequent assessment orders that may be passed, upon further orders to set aside any/all subsequent or successive exparte assessment order/s. Thus, the limitation to pass the fresh assessment order/s after setting aside the second, third, fourth or any other subsequent ex-parte assessment order would be determined applying the rule contained in Section 29(6) of the Act read with the first proviso thereto. The second proviso to Section 29(6) of the Act does not prescribe a new or different period of limitation. 37. Thus, as explained above, if the second or any subsequent ex-parte assessment order was set aside (under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parte order. 41. There is nothing in the language of Section 32 and/or Section 29(6) of the of the Act as may be read to introduce a time limit on the power of the assessing authority to deal with and/or allow an otherwise validly filed application. In the instant case, it is not even alleged by the revenue that the application filed by the petitioner to recall the ex parte order dated 18.09.2013 was filed beyond thirty (30) days of that order being served. Therefore, it may be safely assumed that that application was filed in time. Consequently, it had to be dealt with and decided on its own merits, unaffected by any other or further consideration of limitation to frame a fresh assessment order. That stage had not yet arrived. That limitation would arise under Section 29(6) of the Act, only in the event and at the stage of the application filed under Section 32 being allowed. It would be governed by Section 29(6) (read with the first proviso thereto), of the Act. 42. Thus, both for reason of grammar as also to keep the provision workable, the interpretation made by the assessing authority and as canvassed by the learned Standing Counsel cannot be accepted. An interpretation tha ..... 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