Holding

Section 6(3) cannot be exercised for a newly constructed building; an order made without jurisdiction may be rectified under Section 15(1) when the mistake is apparent on the record.

Summary

The appellant, M. Ahamedkuty Haji, constructed a shopping complex in 1987 and was assessed building tax by the assessing authority under Section 6(3) of the Kerala Building Tax Act, 1975 on 15‑Feb‑1988. After the local authority later fixed the capital value, the assessing authority invoked Section 15(1) to rectify the earlier assessment, directing a higher tax on 5‑Feb‑1991. The appellant challenged the validity of both the original assessment and its rectification, arguing that Section 6(3) could not be applied to a newly constructed building and that Section 15(1) could not be used to revise the assessment. The Supreme Court held that Section 6(3) is limited to repairs, improvements or additions to an existing building and therefore could not be exercised for a new building; consequently the original order was without jurisdiction. The Court further held that the assessing authority was justified in invoking Section 15(1) to rectify the jurisdictional error, as the mistake was apparent on the record. The appeal was dismissed.

Issues considered

The applicability of Section 6(3) of the Kerala Building Tax Act, 1975 to a newly constructed building
Whether an order passed under Section 6(3) can be rectified under Section 15(1) for a mistake apparent on the record
Whether Section 16(1) bars revision of an assessment made under Section 6(2) or 6(3)
The scope and meaning of "mistake apparent on the record" under Section 15(1)

Legislation cited

Kerala Building Tax Act, 1975s. 15(1), s. 16(1), s. 5(1), s. 5(2), s. 5(3), s. 5(4), s. 6(1), s. 6(2), s. 6(3)

Subjects

building taxKerala Building Tax ActSection 6(3)Section 15(1)mistake apparent on the recordjurisdictionrectificationnewly constructed buildingassessment revision

Judgment

M. AHAMMEDKUTTY HAJI A
v.
TAHSILDAR, KOZHIKODE KERALA AND ORS.

FEB RU ARY 18, 2005

[RUMA PAL AND C.K. THAKKER, JJ.] B

Kera/a Building Tax Act, 1975-Sections 6(3) and 15(1)-Building tax-
levy of-On newly constructed building-Initial assessment by invqking Section
6(3)-'-Subsequent order invoking Section 15(1) for rectification ofthe previous C
order-Assessment u/s. 15(/) upheld by the Revenue Authority, Single Judge
and Division Bench of High Court-On appeal, held: Since the building in
question was new, Section 6(3) could not have been invoked as the same is
applicable only in cases covered u/s 5(2),(3) or (4) to a building already in
existence-Hence, order invoking Section 15(/) for rectifying the mistake
apparent on the record was justified D
Expression "Any mistake apparent from the record"-Ambit and scope
of
Appellant filed return under Kerala Building Tax Act, 1975 for
assessment of building tax in respect of a building newly constructed in E
the year 1987. The assessing authority by its order dated 15.2.1988 assessed
the building tax exercising its power u/s. 6(3) of the Act. Subsequently after
fixation of capital value by the local authority, proceedings were initiated
~ u/s.15(1) by the assessing authority for rectification of mistake in
assessment order dated 15.2.1988. After affording an opportunity of
hearing to the appellant, by order dated 5.2.1991 appellant was directed F
to pay building tax on the basis of valuation fixed by the local authority.
The revised assessment was upheld by District Collector and Single Judge
as well as Division Bench of High Court.

In appeal to this Court, appellant contended that the order u/s 6(3) G
by the assessing authority being legal and valid could not have been
rectified u/s.15(1) and hence there was an error of law and of jurisdiction;
that Section 16(1) bars revision of assessment made u/s 6(2) or (3); that
Section 6(3) is not limited in its application to cases falling u/s.5(2), (3) or
(4).
167 H
168 SUPREME COURT REPORTS (2005] 2 S.C.R.

A Respondents contended that since the. power u/s 6(3) could be
exercised only in the cases covered by Section 5(2), (3) or (4) the same
could not have been applied in case of newly constructed building; that
Section 15(1) was rightly invoked; that the subsequent order passed by
invoking Section 15(1) was legal and valid as it was passed after affording
B opportunity of hearing to the appellant.

Dismissing the appeal, the Court

HELD : 1. The action of the local authority as also of the assessing
authority was legal, valid and within the powers conferred on them by
the statut~. A conjoint reading of sub-sections (2), (3) and (4) of Section 5
C of Kerala Building Tax Act, 1975 and sub-section (3) of Section 6 makes
it clear that power of assessing authority is limited to the cases of repair,
improvement, construction, additions or combination of a building already
in existence and it does not extend to a totally new building or a building
constructed for the first time an~ to which the Act applies. (174-D; G-HJ
D
2. It cannot be said that Section 6(J) is not llmited in its application
to cases falling under sub-sections (2), (3) or (4) of Section 5 but also to
any construction of a building. A court of law cannot rewrite a statutory
provision ~nd holding contrary to that would be destructive to the scheme
of the Act making Section 6(1) nugatory. The interpretation sought to be
E suggested by the appellant virtually deprives the statutory power of the
local authority of determining
.
capital value of 'la building
'
situate
. -
within
the area of such local authority. 1175-C, El ·

4. The assessing authority was wholly justifie-d in -invoking -Section
15 of the Act and in exercising the power of 'rectification of mis.take
F apparent on the record. The expression "any mistake apparent from the
record" used in sub-section (1) of Section 15 of the Act cannot be defined
scientifically, precisely or exhaustively and should be determined in the
light of t~e facts and circumstances of each case. An error can be said to
be an error apparent on the face of the record, if it is patent, manifest or
G self evident. If one has to travel beyond the record to see whether the
judgment or order is correct or not, the e~ror cannot bl! described as an
error apparent on the face of the record. f175-F, G-H; 176-A)
----
3. As the order passed under Section 6(3) by the·assessing authority
was without jurisdiction, it was open to the said authority to exercise the
H power of rectification of mistake on the' basis of determination of capital
-
M.A. HAJJ v. T AHSILDAR [THAKKER . .I.] 169

value by the local authority and the action was taken in compliance with A
proviso to sub-section (I) of Section 15 of the Act after observing the
principles of natural justice by giving reasonable opportunity of being
heard to the appellant-assessee in the matter. The action taken by the
assessing authority cannot be said to be illegal or unlawful. Neither the
District Collector nor the High Court could be said to have exceeded the
jurisdiction in confirming the order passed by the assessing authority. B
1180-C, D-EI

Hari Vishnu Karnath v. Ahmad /shaque, (19551 1 SCR 1104; Syed
Yakoob v. Radha Krishnan, (19641 5 SCR 64; M.K. Venkatachalam, I. TO.
and Anr. v. Bombay Dyeing and Manufacturing Co. Ltd., 119591 SCR 703; C
Master Construction Co. (P) Ltd. v. State of Orissa and Anr., (199613 SCR
v.
99 and T.S. Balaram Vo/kart Brothers, Bombay, (19721 1 SCR 30, relied
on.

Aradhana Lodge v. Tahsildar, (1990) 1 KLT 33; Yousef v. State of
Kera/a, (1993) 2 KLT 59; Kurian George v. Tehsildar, (1995) 2 KLT 457 D
and Karunakaran Nair v. Tehsildar, (2000) 2 KL T 705, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeat No. 1307 of 2005.

- From the Judgment and Order dated 3.11.2003 of the Kerala High
Court in W.A. No. 2575 of 1999. E
S.N. Bhat for the Appellant.

K.R. Sasiprabhu for the Respondents.

The Judgment of the Court was delivered by
F
THAKKER, J. Leave granted.

The present appeal is filed by the appellant against the judgment and
order passed by the Division Bench of the High Court of Kerala in Writ
Appeal No. 2575 of 1999 dated on 3rd November, 2003. By the said order, G
the Division Bench confirmed the orders passed by the assessing authority,
confirmed by the District Collector, Kozhikode and also confirmed by a
single Judge of the High Court ofKerala in O.P. No. 14720of1994 on 15th
October, 1999.

Few facts for the purpose of deciding the controversy raised in the H
170 SUPREME COURT REPORTS [2005] 2 S.C.R.

A present appeal may now be stated. The appellant herein constructed a Shopping
Complex bearing Door Nos. 6/499 to 6/537 in Kozhikode Corporation in the
year 1987. The appellant filed return under the Kerala Building Tax Act,
1975 (hereinafter referred to as 'the Act') for assessment of building tax for
the said building. The assessing authority quantified capital value at· Rs.
B 12,32,820 and determined building tax payable by the appellant at Rs. 97,032
by an order dated 15th February, 1988. The said assessmemt was made on
an assumed rental basis submitted by the appellant. The order stated that as
per the return in Form II submitted by the appellant, and on enquiries conducted
by the assessing authority it had been shown that the building had been
constructed by the appellant after 1st April, 1973. According to the assessing
C authority, the appellant was required to pay building tax of Rs. 97,032. He
was, therefore, asked to pay the said amount of tax as per details mentioned
in the schedule to the 'Notice of Demand'. The case of the appellant is that
he had paid the said amount. Subsequently, however, the local authority
fixed capital value of building at Rs. 42,84,000 and annual value at
Rs.4,28,400. Proceedings were, therefore, initiated under sub-section (I) of
D Section 15 of the said Act by the assessing authority for rectification of
mistake in the assessment order dated 15th February, 1988. The appellant
was called upon to show-cause as to why the rectification of mistake should
not be made and after affording opportunity of hearing to the appellant, an
order was passed on 5th February, 1991 and he was asked to pay Rs. 4,02, 150
E as building tax on the basis of the valuation fixed by the local authority.
Being aggrieved by the said order, the appellant filed revision before the
District Collector. Since the revision was not disposed of by the District
Collector, the appellant filed O.P. No. 3443 of 1991 in the High Court of
Kerala. The High Court directed the District Collectbr to decide the revision.
The revision was then dismissed by the Collector upholding the revised
F assessment order. Against the order, the appellant filed O.P. 14 720 of ·1994
which came up before the single Judge of the High Court of Kerala. After
considering the contentions raised by the appellant as well as the respondent,
the learned single Judge dismissed the petition. ·Further appeal before the
Division Bench also met with the same fate. The final order has been
G challenged by the appellant in this Court.

We have heard learned counsel· for the parties: The learned counsel for
the appellant contended that an order of assessment passed by the first
respondent on 5th February, 1991 fixing capital value at Rs.42,84,000 and
annual value at Rs. 4,28,400 and directing the appellant to pay tax of Rs.
H 4,02, 150 is clearly wrong and unsustainable. It was urged that the initial
M.A. HA.II v. TAHSILDAR [THAKKER . .I.] 171
order dt. 15th February, 1988 passed by the assessing authority under sub- A
section (3) of Section 6 of the Act was legal and valid and in accordance with
law. The said order could not, therefore, have been rectified under sub-
section (I) of Section 15 of the Act and all proceedings were illegal. It was
also urged by the learned counsel that since the capital value of the building
was not determined by the local authority under sub-section (I) of Section 6
of the Act, exercise undertaken by the assessing authority under sub-section B
(3) ofSecton 6 of the Act by no means could be said to be without jurisdiction.
The counsel submitted that an error of law and of jurisdiction had been
committed by the first respondent in invoking Section 15 of the Act. Section
15, the counsel submitted, has limited application for rectification of mistakes.
It does not permit the authorities to re-fix annual value on the basis of C
different mode. Since there was no mistake, much less a mistake apparent on
the face of the record, resort to Section 15 of the Act was uncalled for and
the order passed by the assessing authority and confirmed by the District
Collector and the High Court are liable to be set aside.

Learned counsel for the respondents, on the other hand, supported the D
order passed by the assessing authority and confirmed by the District Collector
as well as by the High Court. It was submitted that no assessment could have
been made under sub-section (3) of Section 6 of the Act by the assessing
authority. The said provision had no application to the facts of the case as the
building was newly constructed one and the Corporation (local authority) E
was required to fix annual value for the first time. The power of assessing
authority under sub-section (3) of Section 6 of the Act was limited and cou Id
be exercised only in the cases covered by sub-section (2), sub-section (3), or
sub-section (4) of Section 5 of the Act. The cases did not relate to newly
constructed buildings but applied to repair, improvement or additional
construction of the buildings already in existence. Since the building in question F
was newly constructed in 1987, i.e. after 1st April, 1973, the assessing authority
could not have invoked sub-section (3) of Section 6 of the Act. Section 15
of the Act had been rightly invoked for rectification of the mistake. The
appellant had been given an opportunity of hearing and only thereafter the
order was passed by the first respondent on 5th February, 1991 ordering him G
to pay building tax on the basis of fixation of capital value and annual value
by the local authority. The said order was thus legal, valid and in accordance
with law. The order passed by the assessing authority was rightly confirmed
by the District Collector and by the High Court and no interference is
warranted.
H
172 SUPREME COURT REPORTS [2005) 2 S.C.R.

A Having considered the rival contentions of the parties, .we are of'the
opinion that the order of assessing authority, con finned by the District Collector
as well as by the High Court do not deserve interference.

We have been taken to the relevant provisions of the Act by the learned
counsel for the parties. Section 2 is a definition clause.· Clause (g) thereof
B defines ''local authority' which_ includes Municipal Corporation. In clause
(d), "assessing authority' is defined as an authority appointed under Section
4 of the Act. "Capital value' of a building is defined in clause (t) as the value
arrived at by multiplying the annual value of a building by sixteen. (It was
stated that originally the multiplier was 16 but it was reduced to 10 by
C amendment in 1981). "Annual Value' of a building is defined in clause (a)
as "the gross annual rent at which the building may at the tim~ o(completion
be expected to let from month to.month or from year to year.'

Section .5 is the charging section. The relevant part thereof reads as
under:
D
5. Charge of building tax. - (1/ Subject to. other' provisions
contained in this Act; there shall be charged a tax (hereinafter referred
to as "building tax') at the rat~ specified in the Schedule in respect
of every building the construction ·of which is completed on or after
the 1st day of April, 1973, and the capital value of which exceeds
E twenty thousand rupees. ·

(2) Every major repair of, or improvement to, a building
constructed before the Ist day. of April, 1973, made on or after that
date shall be liable to the building tax at the rate referred to in sub-
section (I) on the difference between the capital value of the building
F before effecting the major repair or improvement, as the case may be,
and the capital value of the building after effecting the major repair'
or improvement.

(3) A building the construction of which is completed on or after
the 1st day of April, 1973, and which i; not liable to be taxed under
G the provisions of this Act on account of its having a capital value of
not more than twenty thousand rupees, shall become liable to be so
taxed if the capital value of the building subsequently increased to
more than twenty thousand rupees by new constructions or additions
or combinations or as a result of repairs or improvements to the
buildings.
H
M.A. HAJI v. TAHSILDAR [THAKKER, J.] 173
(4) Where the capital value of a building which has already been A
taxed under this Act is subsequently increased by more than ten
thousand rupees by new constructions or additions or combinations
or as a result of repairs or improvements, building tax shall be
computed on the capital value of the building including that of the
new constructions or additions or combinations or, as the case may B

- be, of the building as so repaired or improved, and credit shall be
given to the tax already levied.

Section 6 lays down method of determination of capital value. Sub-
sections (I) to (3) are relevant and may be reproduced :

Determination of capital value - (I) For determining the capital C
value for the purpose of this Act, the annual value of a building shall
be the annual value fixed for that building in the assessment books
of the local authority within whose area the building is situate.

(2) Notwithstanding anything contained in sub-section (1 ), if the
assessing authority is of opinion that the annual value fixed for a D
building in the assessment books of the local authority is too low, it
may, after giving the person or persons affected thereby an opportunity
of being heard, fix the annual value of the building.

(3) Where the local authority has not fixed value of a building in
any case falling under sub-section (2) or sub-section (3) or sub-section E
(4) of Section 5 within a period of six months after completion of the
repair or improvement or the construction or addition or combinaton,
as the case may be, the assessing authority may, after giving the
person or persons affected thereby an opportunity of being heard and
after informing the local authority concerned, assess the annual value F
of the building:

Sub-section (4) of Section 6 requires the assessing authority to have
regard to the factors mentioned therein.

Section 15 (I) enables the appellate authority, revisional authority or G
assessing authority, as the case may be, to rectify any mistake appart!nt from
the record. The proviso to the said sub-section, however, provides for giving
reasonable opportunity of being heard to the assessee if such rectification
would result in either enhancement of assessment or reduction of refund.

Section 16 deals with cases of revision of building tax when annual H
174 SUPREME .COURT REPORTS [2005] 2 S.C.R. /
A value is revised by a local authority.

In the' case on hand, the first respondent authority had exercised power
under Section 15 of the Act. According to the respondents, the 1,1ction taken
and order passed by the assessing authority on 15th February, 1988 in fixing
capital value and annual value and directing the appellant to pay building tax
B on that basis in the exercise of power under sub-section (3) of Section 6 of
the Act was not warranted by Jaw and the mistake was required to be rectified
under Section 15. The counter argument of the appellant· is that _since the
local authority had not exercised power of determining capital value and
annual value under sub-section ( 1) of Section 6 of the _Act, the action taken
C by the assessing authority under sub-section (3) of Section 6 was legal, valid
and in consonance with law. The said action could not have been made
subject matter of Section 15 in the purported exercise of power ofrectification
of mistakes. The action of the ass~ssing authority was illegal and unlawful.
According to the appellant, proviso to sub-section (I) of Section 16 of the
Act bars revision of assessment made under sub-section (2) or sub-section (3)
D of Section 6 of the Act.

To us, it is clear that the action of the local authority as also of_ the
assessing authority was legal, valid and within the pow.ers conferred on tffem
by the statute. Whereas Section 5 is charging section, Section 6 deals with
determination of capital value. It is not in dispute ,that the building was
E completed in 1987 and the capital value excee.ded Rs. 20,000 and hence the
provisions of the Act would apply to the said building. For determining the
capital value, it is the local authority within whose area th~ buildi~g is situate
to fix annual value of the building under sub-section (I) of Section 6 of the
Act. Sub-section (2) of the said Section enacts that notwithstanding anything
F contained in sub-section (1), if the assessing authority is of the opinion that
the annual value fixed for the building in the assessment books of the local
authority is too low, it may fix annual value of the building after affording
opportunity to the person or persons affected thereby. Sub-section (3) of
Section 6, in our opinion, would apply only to those cases where the local
authority has not fixed the annual value of the building in any case falling
G under sub-section (2), sub-section (3) or sub-section (4) of Section 5 within
a period of six months after the completion of repair, improvement,
construction, addition or combination as the case may be: A conjoint reading
of sub-sections (2), (3) and (4) of Section 5 and sub-section (3) of Section
6 makes it clear that power of assessing authority is limited to the cases of
H repair, improvement, construction, additions or combina:tion of a building
<j • •
M.A.'HAJI v. TAHSILDAR [THAKKER . .I.] 175
already in existence and it does not extend to a totally new building or a A
building constructed for the first time and to which the- Act applies. In our
view, the submission of the respondents is well founded that in cases of
newly constructed buildings, the assessing authority cannot exercise power
under sub-section (3) of Section 6 of the Act and hence, the order passed by
the assessing authority i.e. Tehsildar, Kozhikode on 15th February, 1988 was
wholly without jurisdiction. If it is so, rectification of mistake by the assessing B
-
' authority in exercise of power under Section 15 of the Act on the basis of the
action of the local authority under sub-section (I) of Section 6 of the Act
would be legal and lawful.

According to the appellant, sub-section (3) of Section 6 is not limited C
in its application to cases falling under sub-section (2), (3) or (4) of Section
5 but also applies to any construction of a building. The appellant submitted
that Section 6 (3) should be read thus;

"Where the local authority has not fixed the annual value of a
building........ within a period of six months after the completion of D
the ........... construction ......... the assessing authority may, after giving
the person or persons affected thereby an opportunity of being heard
and after informing the local authority concerned assess the annual
value of the building"

We. must frankly admit that we are unable to agree with the above E
submission. Apart from the fact that a court of law cannot rewrite a statutory
provision, acceptance of the argument of the appellant would be destructiv'!
to the scheme of the Act making sub-section (I) of Section 6 nugatory. The
interpretation sought to be suggested by the appellant virtually deprives the
statutory power of the local authority of determining capital value of a building
situate within the area of such local authority. The CQntention is, therefore, F
rejected.

We are equally satisfied that the assessing authority was wholly justified
in invoking Section 15 of the Act and in exercising the power of rectificatioil
of mistake apparent on the record. G.
The .expression "any mistake apparent from the record" used in sub-
section (I) of Section 15 of the Act cannot be defined scientifically, precisely
or exhaustively and should be determined in the light of the facts and
circumstarices of each. case. It is, however, well settled that an error can be
said to be an error apparent on the face of the record, if it is patent, manifest H
176 SUPREME COURT REPORTS [2005] 2 S.C.R.

A or self evident. If one has to travel beyond the record to see whether the
judgment or order is correct or not, the error cannot be <;lescribed as an error
apparent on the face of the record.

As observed by this Court in Hari Vishnu Kamath v. Ahmad /shaque,
[1955] 1 SCR 1104, an error apparent on the record must be one which is
B manifest on the face of the record. But the Court proceeded to state that the
real difficulty is not so much in the statement of principle as in its application
to the facts of a particular case.
-
'

Again, in Syed Yakoob v. Radha Krishnan, [1964] 5 SCR 64, this Court
C stated that it is neither possible nor desirable to attempt either to define or to
describe adequately cases of errors which can appropriately be described as
errors of law apparent on the face of the record. Whether or not an impugned
error is an error of law apparent on the face of the record must always
depends on the fact and circumstances of each case and upon the nature and
scope of legal provision which is alleged to have· been misconstrued or
D contravened.

In M.K. Venkatachalam, /.T.O. and Anr. v. Bombay Dyeing and
Manufacturing Co. ltd, [1959] SCR 703, the Income Tax Officer passed an
order of assessment on Oct0ber 09, 1952, and assessed the respondent under
the Income Tax Act 1922. By the said assessment order, respondent was
E given credit for certain amount. The Act was thereafter amended and was
give retrospective effect from April 0 I, 1952. Under the said amendment the
respondent was entitled to a lesser amount. A notice was, therefore, issued to'
the respondent to refund a part of the amount by rectifying the mistake in the
order of assessment allowed earlier. Aggrieved by the notice, the respondent
F filed a petition in the High Court of Bombay under Article 226 of the
Constitution prohibiting the Income Tax Authorities from enforcing the
rectified order and demanding the amount. According to the High Court, the
mistake was not a mistake apparent on the face of the order and hence, could
not have been rectified. The Revenue approached this Court.

G Observing that the retrospective operation of the Act resulted in recovery
of a part of the amount and the demand by the Revenue was legal and valid,
this Court held that the demand could not be said to be illegal or unlawful.
The Court observed that if a mistake of fact apparent from the record from
the assessment order could be rectified, there was no reason why a mistake
of law which was glaring and obvious could not similarly be rectified. ' 'Prima
H
M.A. HAJI v. TAHSILDAR [THAKKER . .I.] 177
facie it may appear somewhat strange that an order which was good and valid A
when it was made should be treated as patently invalid and wrong by virtue
of the retrospective operation of the Amendment Act. But such a result was
necessarily involved in the legal fiction about the retrospective operation of
the Amendment Act." A notice issued by the Income Tax Officer calling
upon the respondent to pay a part of the amount was hence legal and could
not have been quashed by the High Court. B

In Master Construction Co. (P) ltd. v. State of Orissa and Anr., [1996]
3 SCR 99, this Court had an occasion to consider the ambit and scope of Rule
83 of the Orissa Sales Tax Ru Jes, 1947 which enabled the Commissioner ofi
Sales Tax to correct an arithmetical or clerical mistake or any error apparent C
on the face of the record.

Speaking through Subba Rao, J. (as his Lordship then was), the Court
stated;

"An arithmetical mistake is a mistake of calculation; a clerical mistake D
is a mistake of writing or typing. An error arising out of or occurring
from an accidental slip or omission is an error due to a careless
mistake or omission unintentionally made. There is another
qualification, namely, such an error shall be apparent on the face of
the record, that is to say, it is not an error which depends for its
discovery, on elaborate arguments on questions of fact or law. The E
accidental slip or omission is an accidental slip omission made by the
court. The obvious instance is a slip or omission to embody in the
order something which the court in fact ordered to be done. This sis
sometimes described as a decretal order not being in accordance with
the judgment. But the slip or omission may be attributed to the Judge F
himself. He may say something or omit to say something which he
did not intend to say or omit. This is described as a slip or omission
in the judgment itself. The cause for such a slip or omission may be
t.he Judge's inadvertence or the advocate's mistake. But, however,
wide the said expressions are construed they cannot countenance a
re-argument on merits on questions of fact or law, or pennit a partly , G
to raise new arguments which he has not advanced at the first
instance.''

In TS. Balaram v. Vo/kart Brothers, Bombay, (1972] I SCR 30, while
interpreting Section 154 of Income Tax Act, 1961, this Court indicated that
a mistake apparent on the record must be an obvious and patent mistake and H
178 SUPREME COURT REPORTS [2005) 2 S.C.R.

A not something which can be established by a long drawn process of reasoning
on points on which there may conceivably be two opinions.

Our attention was also invited to certain decisions rendered by the High
Court of Kerala.

B In Aradhana Lodge v. Tahsildar, ( 1990) I KL T 33, a single Judge of
the High Court considered the ambit and scope of Section 15 of the Act. In _.,.
that case, the petitioner was initially assessee on the basis of capital value at
Rs.8,58,000 as against a returned figure of Rs. 4,50,000. In appeal by the
assessee, the order was set side and the matter was remanded for fresh
calculation of capital value. During the course .of fresh determination,
c additional material was sought to be relied upon. The High Court held that
scope of Section 15 was not 'unduly wide' and it had limited application.
Even if there was mistake in assessment and another view was possible, it
would not make the assessment vitiated so as to invoke Section 15 of the Act.
··~

Yousef v. State of Kera/a, (1993) 2 KLT 59 is of no help to the appellant.
D
There the High Court dealt with difference between reopening of an assessment
and rectification of mistake apparent from the record. Drawing the distinction
between the two, the High Court observed :

"The Act nowhere provides for the reopening of an order, and to
E substitute it with a fresh order on a different basis. There is no
provision in the Act akin to S. 147 of the Iii come Tax Act, 1961 or
S.19 of the Kerala General Sale Tax Act, 1963. Such a provision is
significant by its absence in the Act. S.15 which is invoked in this
case is analogous to S. 154 of the Income Tax Act, 1961 and S.43 of
the Kerala General Sales Tax Act, 1963. There is a distinct difference
F between the reopening of an assessment and the rectification of any
mistake in it, apparent from the record. The consequence of re-opening
an assessment is to set aside the original order of assessment and to
substitute it with another order of assessment, in accordance with
law: In the case of rectification of a mistake, the order which is
vitiated by the mistake continues to subsist, and operate, but with the
G
mistake in it rectified. A provision for re-opening an assessment has
to be specifically conferred as the finality whi~h. otherwise attaches
to it stands affected by the reopening. Ordinarily, the authority passing
the order becomesjimctus officio once the assessment is completed,
unless the .statute in question vests him with further power either to
H reopen it, or to rectify any mistake in it. Either way, he has to function
M.A. HA.II v. TAHSILDAR [THAKKER . .I.] 179

strictly within the parameters of that power. Therefore, and in the A
absence of any provision in the Act to reopen an assessment, the
power which could be exercised by the statutory authorities is only
to rectify any mistake apparent from the record and not to reopen an
assessment changing the basis of it, or to substitute another assessment,
in its place. A mistake to be so rectified must be apparent from the
records, and not with reference to extraneous muteri~!s, and this is B
crucial in the exercise of the jurisdiction under S.15.'

In Kurian George v. Tehsildar, (l 995) 2 KL T 457, after referring to
several decisions of this Court as well as of the High Court of Kerala, the
Division Bench laid down certain principles applicable for exercise of power C
under Section 15 of the Act.

In Karunakaran Nair v. Tehsildar, (2000) 2 KLT 705, the High Court
observed that under guise of exercising power of rectification, the authority
cannot make a reassessment.
D
In our view, the authorities had not exercised power for reassessment
or had enhanced tax by adopting a different mode, method or manner. The
learned single Judge of the High Court had considered various decisions
which were ~ited before him and in paragraph 6 of the judgment, he observed:

"In the case on hand, admittedly the petitioner had constructed a new E
shopping complex. So, the charging provision that should be applied
in Section 5(1) and Section 5(2) and (4) have no application. If that
be so, sub-section ·(3) of Section 6 also cannot apply, for, sub-section
(3) as already stated, is with reference to the matters covered by sub-
section (2), (3) and (4) of Section 5 of the Act only. sub-section (2)
of Section 6 also cannot apply because first there is no assessment by F
the local authority and secondly the annual value of the building
fixed by the local authority is more than the amount determined as
annual value on rental basis. So, the only provision that should have
been applied by the local authority for determining the capital value
of the building is sub-section (I) of Section 6 of the Act. Since there G
was no assessment of the building by the local authority at the time
of original assessment proceedings, the assessing authority ought to
have waited for the annual value to be fixed by the local authority.
The adoption of the rental basis for completion of the original
assessment in the above circumstances is without jurisdiction and is
mistake apparent from the record of this case.' H
180 SUPREME COURT REPORTS [2005) 2 S.C.R.

A We are in agreement with what has been stated by the learned single
Judge. The said reasoning was confirmed by the Division Bench. Since the
case relates to a new building and as the local authority (Kozhikode
Corporation) had not determined the capital value in the assessment books of
the local authority under sub-section (I) of Section 6 of the. Act, the assessing
authority (Tehsildar, Kozhikode) could not have exercised the power under
B sub-section (3) of Sect"ion 6 of the Act. The said provision has limited
application to case covered by sub-sections (2), (3) or (4) of Section 5 to a
building already in existence and there was repair, improvement, construction,
addition or combination afterwards. The said provision does not enable or
empower the assessing authority to assess those buildings which are newly
C constructed and covered by sub-section ( l) of Section 6. of the Act as the
assessing authority had no power to deal with such new buildings. As the
order passed on 15th February, 1988 by the assessing authority was ~ithout
jurisdiction, it was open to the said authority to exercise the power of
rectification of mistake on the basis of determination of capital value by the.
local authori.ty and the action was taken in compliance with proviso to sub-
D section (I) of Section 15 of the Act after observing the principles of natural
justice by giving reasonable opportunity of being heard to the appellant
assessee in the matter. The action taken by the assessing authority cannot be
said to be illegal or unlawful. Neither the District Collector nor the High
Court could be said to have exceeded the jurisdiction in confirming the order
E passed by the assessing authority and we see no infirmity therein.

For the foregoing reasons, the appeal deserves to be dismissed and is
accordingly dismissed. Having regard to the facts and circumstances of the
case, however, there shall be no order as to costs.

K.K.T. Appeal dismissed.