M/S. DEVA METAL POWDERS PVT. LTD.versusCOMMISSIONER, TRADE TAX, U.P.

     (




                     MIS. DEVA METAL POWDERS PVT.LTD.                               A
                                     v.
                       COMMISSIONER, TRADE TAX, U.P.

                                 DECEMBER 4, 2007

-·            [DR. ARIJIT P ASAY AT AND P. SATHASIVAM, JJ.]
                                                                                    B



                UP. Sales Tax Act, 1948: s.22-Rectification ofmistake-When
         permissible-Held: Permissible when mistake is apparent and its
         discovery is not dependent on argument or elaboration-Where error          c
         is far from self-evident, it ceases to be apparent-Decision on debatable
         point of law or fact or failure to apply the law to set offacts which
         remains to be investigated cannot be corrected by way ofrectification.
t             Words and phrases: 'mistake ', 'apparent '-Meaning of
                                                                                    D
              Assessce was dealing with Aluminium powder. In the original
         assessment order, Aluminium powder was treated as metal and
         accordingly taxed@2.2%. Assessing Officer initiated proceedings
         under s.22 of the U.P. Sales Tax Act, 1948 on the ground that the
         Supreme Court had in Hindustan Aluminium Corporation*, E
         considered the entry' All kinds of minerals, ores, metals and alloys
         including sheets and circles' and held that under this entry only the
         primary metal is covered. Assessing officer accordingly rectified the
         assessment orders under s.22 and levied tax treating the Aluminium
         powder as an unclassified item.                                       F
               The first appellate authority held that s.22 had no application
         and the assessments were set aside. Tribunal dismissed the appeal
         filed by revenue. High Court held that action under s.22 was clearly
         sustainable.
                                                                                    G
              In appeal to this Court, the assessee contended that this is a
         case where s.22 had no application; that s.22 is only applicable to a
         case where the error is apparent on the face of the record and where
         a matter is disputable there can be no order under s.22 of the Act.
                                           893                                      H
    894           SUPREME COURT REPORTS                 [2007] 12 S.C.R.

A         Allowing the appeal, the Court

         HELD: 1.1. A bare look at s.22 of the U.P. Sales Tax Act, 1948
   makes it clear that a mistake apparent from the record is rectifiable.
   In order to attract the application of s.22, the mistake must exist
B and the same must be apparent from the record. The power to rectify
   the mistake, however, does not cover cases where a revision or
   review of the order is intended. "Mistake" means to take or
   understand wrongly or inaccurately; to make an error in interpreting.
   It is an error, a fault, a misunderstanding, a misconception.
   "Apparent" means visible; capable of being seen, obvious; plain. It
C means "open to view, visible, evident, appears, appearing as real
   and true, conspicuous, manifest, obvious, seeming." A mistake which
   can be rectified under s.22 is one which is patent, which is obvious
   and its discovery is not dependent on argument or elaboration.
                                                (Para 10) (898-G; 899-AJ
D
        1.2. Rectification of an order does not mean obliteration of the
  order originally passed and its substitution by a new order. What the
  Revenue intended to do in the present case was precisely the
  substitution of the order which is not permissible under the provisions
E of s.22 and, therefore, the High Court was not justified in holding
  that there was mistake apparent on the face of the record. S.22 does
  not enable an order to be reversed by revision or by review, but
  permits only some error which is apparent on the face of the record
  to be corrected. Where an error is far from self-evident, it ceases
F to be an apparent error. It is, no doubt, true that a mistake capable
  of being rectified under s.22 is not confined to clerical or arithmetical
  mistake. On the other hand, it does not cover any mistake which may
  be discovered by a complicated process ofinvestigation, argument
  or proof. A decision on a debatable point of law or fact or failure to
G apply the law to a set of facts which remains to be investigated cannot
  be corrected by way of rectification. The High Court's order is
  clearly unsustainable. This Court has not expressed any opinion on
  the issue as to whether Aluminium powder can be regarded "metal
  in primary form" for the purpose of payment of tax. There is no need
  to adjudicate that aspect in view of the fact thatthe rectification done
H
         DEVAMETALPOWDERSPVT.LTD.v. COMMISSIONER, 895
                 TRADETAX,U.P.[PASAYAT,J.]
       in purported exercise of s.22 is clearly impermissible.         A
                     [Paras 10, 11and13) [899-B, C, D, G; 900-A, C, DJ
           Mis. Karam Chand Thapar and Bros. (Coal Sales) Ltd. v. State
       ofUttar Pradesh andAnr., [1976) 4 SCC 257, held inapplicable.
. ./         Hindustan Aluminium Corporation Ltd. v. State ofUttar Pradesh B
       and Anr., * [1981] 3 SCC 578; Mis. Thungabhadra Industries Ltd. (in
       all the Appeals) v. The Government ofAndhra Pradesh represented
       by the Deputy Commissioner of Commercial Taxes, Anantapur, AIR
       (1964) SC 1372; Satyanarayan Laxminarayan Hegde v. Mallikarjun
       Bhavanappa Tiruymale, AIR (1960) SC 137 and Master Construction c
       Co. (P) Ltd. v. State of Orissa, (1966) 17 STC 360, referred to.
           CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5607 of
       2007.
            From the Judgment and final Order dated 20.10.2005 of the High D
       Court of Judicature at Allahabad in Trade Tax Revision No. 1055 & 1070
       of 1998.
            Shail Kumar Dwivedi, AAG., T.L. Viswanath Iyer and Dinesh
       Dwivedi, Y. Raja Gopala Rao, Y. Ramesh, Y. Vismai Rao, B.V. Niren,
       Ritesh Agrawal, Vishwajit Singh, Vibha Dwivedi, Manoj Dwivedi and E
       Vandana Mishra for the Appearing parties.
            The Judgment of the Court was delivered by
            DR ARI.UT PASAYAT, J. 1. Leave granted.
                                                                                  F
             2. Challenge in this appeal is to the judgment of a Division Bench of
       the Allahabad High Court allowing the Trade Tax Revision Case Nos.
        1055 and 1070of1998 filed by the respondent. The two revisions were
       filed under Section 11 of the Uttar Pradesh Sales Tax Act, 1948 (in short
       the 'Act) and the Central Trade Tax Act, 1956 (in short the 'Central Act'). G
            3. Factual background in a nutshell is as follows:
             Appellant hereinafter also referred to as the Assessee was dealing
       with Aluminium powder. In the original assessment order passed under
       Section 7(3) of the Act and Section 9 of the Central Act, Aluminium H
    896            SUPREME COURT REPORTS                   [2007] 12 S.C.R.

A Powder was treated as metal and accordingly held liable to tax at the
  rate of2.2%. Assessing officer initiated proceedings under Section 22 of
  the Act on the ground that this Court had in Hindustan Aluminium
  Corporation Ltd. v. State of Uttar Pradesh and Anr., [1981] 3 SCC
  578 considered the entry "All kinds of minerals, ores, metals and alloys
B including sheets and circles" and held that under this entry only the primary
  metal is covered. It was also held that sheets and circle of Aluminium
  would not be covered under the entry "Metal" Assessing officer
  accordingly rectified the assessment orders under Section 22 and levied
  tax treating the Aluminium powder as an unclassified item. The First
c appellate authority in the appeals filed by the assessee held that Section
  22 of the Act had no application and the assessments were set aside.
  The present respondent filed appeals before the Sales Tax Tribunal,
  Varanasi Bench (in short the 'Tribunal') which were also dismissed. In
  the revision petitions filed, as noted above, the High Court held that action
D under Section 22 of the Act is clearly sustainable. It referred to a decision
  of this Court in Mis. Karam Chand Thapar & Bros. (Coal Sales) Ltd.
  v. State of Uttar Pradesh & Anr., [1976] 4 SCC 257 and held that a
  decision of this Court can be a ground for rectification of error in terms
  of Section 22 of the Act. The High Court did not accept the "tand of th~
E appellant that Aluminium powder in the powder form remains Aluminium
  in its primary form and in any case this is a debatable issue and, therefore,
  Section 22 of the Act does not apply.
       4. Learned counsel for the appellant submitted that this is a case
  where Section 22 of the Act had no application. The said provision is
F only applicable to a case where the error is apparent on the face of the
  record; Where the issue can not be decided in a undisputable manner,
  Section 22 has no application; and where a matter is disputable there can
  be no order under Section 22 of the Act.
        5. Learned counsel for the respondent on the other hand submitted
G that in view of this Court's decision in Hindustan Aluminium
  Corporation's case (supra) there is no scope for taking a different view
  and, therefore, Section 22 clearly had application.
          6. Section 22 of the Act reads as follows:
H
(
     DEVAMETALPOWDERSPVT.LTD.v. COMMISSIONER, 897
             TRADETAX,U.P.[PASAYAT,J.]
           "Rectification of Mistakes:                                         A
           (I) Any officer or authority, or the Tribunal or the High Court may,
               on it's own motion or on the application of the 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 B
               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.                            c
               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 likely to be affected by
               such enhancement.                                                D
          (2) Where such rectification has the effect of enhancing the
              assessment, the assessing authority concerned shall serve on
              the dealer a revised notice of demand in the prescribed form
              and there from all the provisions of the Act and rules framed
              there under shall apply as if such notice had been served in E
              the first instance."
                                                  (Underlined for emphasis)
          7. The Deputy Commissioner (Appeal) held that Section 22 of the
    Act did not contemplate rectification of debatable issues and therefore, F
    this was not a case where Section 22 of the Act applies. Similar was the
    view taken by the Tribunal. It has been submitted by the appellant that
    the Notification considered in Hindustan Aluminium Corporation's case
    (supra) was dated 30.5.1975. Subsequently, there has been an
    amendment by Notification dated 7.9.1981 by which "scrap" has also G
    been included in the entry. It is, therefore, submitted that the ratio in
    Hindustan Aluminium Corporation's case (supra) applied as scrap has
    always been produced as a result of processing of the original metal.
         8. This Court in Mis. Thungabhadra Industries Ltd (in all the H
                                                                                   )
    898           SUPREME COURT REPORTS                    [2007] 12 S.C.R.


A Appeals) v. The Government of Andhra Pradesh represented by the
  Deputy Commissioner of Commercial Taxes, Anantapur, AIR (1964)
  SC 1372 held as follows:
               'There is a distinction which is real, though it might not always
           be capable of exposition, between a mere erroneous decision and
B          a decision which could be characterized as vitiated by "error
           apparent". A review is by no means an appeal in disguise whereby
           an erroneous decision is reheard and corrected, but lies only for
           patent error. Where without any elaborate argument one could
           point to the error and say here is a substantial point oflaw which
c          states one in the face and there could reasonably be no two
           opinions entertained about it, a clear case of error apparent on the
           face of the record would be made out."
        9. An error apparent on the face of the record for acquiring
D jurisdiction to effect rectification must be such an error which may strike
  one on a mere looking at the record and would not require any long drawn
  process of reasoning. The following observations in connection with an
  error apparent on the face of the record in the case of Satyanarayan
  Laxminarayan Hegde v. Mallikarjun Bhavanappa Tiruyma/e, AIR
E (1960) SC 13 7 need to be noted:
           "An error which has to be established by a long drawn process of
           reasoning on points where there may conceivably be two opinions
           can hardly be said to be an error apparent on the face of the record.
           Where an alleged error is far from self-evident and if it can be
F          established, it has to be established, by lengthy and complicated
           arguments, such an error cannot be cured by a writ of certiorari
           according to the rule governing the powers of the superior Court
           to issue such a writ."
         10. A bare look at Section 22 of the Act makes it clear that a
G
    mistake apparent from the record is rectifiable. In order to attract the
    application of Section 22, the mistake must exist and the same must be
    apparent from the record. The power to rectify the mistake, however,
    does not cover cases where a revision or review of the order is intended.
    "Mistake" means to take or understand wrongly or inaccurately; to make
H
 DEVA METAL POWDERS PVT. LTD.v. COMMISSIONER, 899
          TRADETAX,U.P.[PASAYAT,J.]
an error in interpreting; it is an error, a fault, a misunderstanding, a          A
misconception. "Apparent" means visible; capable of being seen, obvious;
plain. It means "open to view, visible, evident, appears, appearing as real
and true, conspicuous, manifest, obvious, seeming." A mistake which can
be rectified under Section 22 is one which is patent, which is obvious
and whose discovery is not dependent on argument or elaboration. In our           B
view rectification of an order does not mean obliteration of the order
originally passed and its substitution by a new order. What the Revenue
intends to do in the present case is precisely the substitution of the order
which according to us is not permissible under the provisions of Section
22 and, therefore, the High Court was not justified in holding that there         C
was mistake apparent on the face of the record. In order to bring an
application under Section 22, the mistake must be "apparent" from the
record. Section 22 does not enable an order to be reversed by revision
or by review, but permits only some error which is apparent on the face
of the record to be corrected. Where an error is far from self-evident, it        D
ceases to be an apparent error. It is, no doubt, true that a mistake capable
of being rectified under Section 22 is not confined to clerical or arithmetical
mistake. On the other hand, it does not cover any mistake which may be
discovered by a complicated process of investigation, argument or proof.
As observed by this Court in Master Construction Co. (P) Ltd. v. State            E
of Orissa, (1966) 17 STC 360, an error which is apparent from record
should be one which is not an error which depends for its discovery on
elaborate arguments on questions of fact or law.
       11. "Mistake" is an ordinary word but in taxation laws, it has a special
significance. It is not an arithmetical error which, after a judicious probe F
into the record from which it is supposed to emanate is discerned. The
word "mistake" is inherently indefinite in scope, as to what may be a
mistake for one may not be one for another. It is mostly subjective and
the dividing line in border areas is thin and indiscernible. It is something
which a duly and judiciously instructed mind can find out from the record. G
In order to attract the power to rectify under Section 22, it is not sufficient
if there is merely a mistake in the order sought to be rectified The mistake
to be rectified must be one apparent from the record. A decision on a
debatable point of law or a disputed question of fact is not a mistake
apparent from the record. The plain meaning of the word "apparent" is H
    900             SUPREME COURT REPORTS                   [2007] 12 S.C.R.

A that it must be something which appears to be so ex facie and it is
  incapable of argument or debate. It, therefore, follows that a decision on
  a debatable point of law or fact or failure to apply the law to a set of
  facts which remains to be investigated cannot be corrected by way of
  rectifications.
B        12. In the Hindustan Aluminium Corporation's case (supra) the
    dispute did not relate to Aluminium Powder. What the assessing officer
    and the High Court did was to inferentially apply the ratio of the said
    decision to Aluminium powder. The ratio in Karam Chand's case (supra)
    has, therefore, no application.
c
        13. Above being the position, the High Court's order is clearly
  unsustainable and is set aside. We make it clear that we have not expressed
  any opinion on the issue as to whether Aluminium powder can be regarded
  "metal in primary form" for the purpose of payment of tax. There is no
D need to adjudicate that aspect in view of the fact that the rectification done
  in purported exercise of Section 22 of the Act is clearly impermissible.
           14. The appeal is allowed without any order as to costs.
    D.G.                                                     Appeal allowed.