*THE HON’BLE SRI JUSTICE B. PRAKASH RAO AND * THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN + WRIT PETITION No.10717 OF 2010 % Dated 30-07-2010 # M/s M/s. Arora Enterprises, Boggulkunta, Hyderabad …. Petitioner Vs. $ The Deputy Commissioner of Commercial Taxes, Abids Division, Hyderabad and another. …. Respondents ! Counsel for the Petitioner: Sri M.V.J.K. Kumar ^ Counsel for the Respondents: Govt. Pleader for Commercial Taxes. <GIST: > HEAD NOTE: ? Cases referred [1] (1987) 4 SCC 525 2 (1971) 3 SCC 844 3 (2001) 6 SCC 512 4 (2004) 1 SCC 328 5 (2001) 4 SCC 181 6 (1993)3 SCC 500 7 AIR 1966 SC 1047 8 (1981) 1 SCC 500 9 (2007) 2 SCC 433 10 (2008) 2 SCC 439 11 (2003) 8 SCC 154 THE HON'BLE SRI JUSTICE B. PRAKASH RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.10717 OF 2010 ORDER: (Per Hon’ble Sri Justice Ramesh Ranganathan) The order of the Sales Tax Appellate Tribunal, Hyderabad (STAT) in A.R. No.38 of 2010 dated 08.02.2010, and the endorsement of the Deputy Commissioner (C.T) dated 29.12.2009 read with the revision order passed by him, under Section 20(2) of the APGST Act, dated 07.07.2008, are under challenge in this writ petition as ultravires and illegal. The petitioner would seek a consequential direction to the Deputy Commissioner (C.T) to entertain the application submitted by them on 20.10.2009 and decide the same. Facts, in brief, are that the petitioner is an assessee on the rolls of the 2nd respondent. For the assessment year 2004-2005, the petitioner returned a turnover of Rs.2,11,45,852/-, representing the first sale of sports goods, and accordingly paid tax of Rs.21,61,357/-. The said turnover, as assessed to tax, comprised of Rs.31,53,116/- for the period from 01.04.2004 to 26.05.2004 and was subjected to tax at 8%. The Deputy Commissioner (CT), (the 1st respondent herein), issued show cause notice dated 10.06.2008 proposing to revise the assessment, and to levy tax on the turnover of Rs.31,53,116/-, for the first part of the assessment year, at 12% instead of 8% levied by the assessing authority. The petitioners filed their objections thereto on 30.06.2008. The 1st respondent, however, confirmed the revision by his order dated 07.07.2008. The petitioner would submit that the order passed by the revisional authority did not truthfully reflect adoption of the formula as per the Act; the turnover, as defined in Section 2(s) of the APGST Act read with Rule 6 (1)(1) of the APGST Rules, required the tax component to be removed from the taxable turnover; while the assessing authority had calculated the tax component applying the correct formula, the revisional authority, instead of calculating tax at Rs.2,11,45,852/- x 12/112, had directly computed tax at 12% on the turnover, which resulted in increase in the tax liability; and, as a result, the tax liability instead of being Rs.100/- was put at Rs.105/-. The petitioner submitted representation dated 12.01.2009 pointing out to the 2nd respondent the incorrect calculation of tax. He submitted another representation dated 20.10.2009 requesting the 1st respondent to rectify the mistakes which he claimed had crept in the determination of the turnover as well as the quantum of tax. The said representation 20.10.2009 was received by the 1st respondent on 21.10.2009. As there was no response, the petitioner got issued a registered notice dated 16.12.2009 pointing out the mistake in computation of tax which they claimed could be corrected as an arithmetic mistake under Rule 50 of the APGST Rules. The Deputy Commissioner (CT), by his endorsement dated 29.12.2009, held that the said application was not entertainable, and was liable to be rejected. Aggrieved by the said endorsement dated 29.12.2009, the petitioner preferred an appeal to the STAT on 27.01.2010. The STAT, in its order dated 08.02.2010, observed that the scope of an appeal, under Section 21 of the APGST Act, was confined to orders passed either under Section 14(4) or Section 20(2) of the APGST Act, but not to an order or proceeding under Rule 50 of the APGST Rules. Aggrieved thereby, the present writ petition. Sri M.V.J.K. Kumar, Learned Counsel for the petitioner, would contend that, in view of Section 38-A of the APGST Act, the petitioner was entitled to file an application under Rule 50 of the APGST Rules before the Deputy Commissioner, and his conclusion that the application as filed was not entertainable was without basis and was liable to be set aside. Learned Counsel would submit that an order passed by the revisional authority, rejecting the rectification application under Rule 50, was an order in revision appealable to the Tribunal; the power of the revisional authority to rectify the order passed by him was incidental to the power, conferred under Section 20(2) of the Act, to revise orders; the STAT had erred in holding that the endorsement of the revisional authority, under Rule 50, was an independent order which was not appealable under Section 21 of the Act; having held that the appeal itself was not maintainable the STAT had erred in deciding the appeal on merits, and in holding that the order of the revisional authority, and the computation of tax by him, was not an arithmetical mistake which could be rectified under Rule 50 of the APGST Rules. Learned Counsel would submit that, in so far as it related to the decision on merits, the STAT was functus officio. In his endorsement dated 29.12.2009, the Deputy Commissioner (CT) held that the application filed under Rule 50 of the APGST Rules was not maintainable as there was no arithmetical mistake, in the original order dated 07.07.2009, which could be rectified under Rule 50 of the APGST Rules; the petitioner’s request that an order be passed under Rule 50 of the APGST Rules could not be entertained and was, therefore, being rejected. The STAT, in its order dated 08.02.2010, held that it is only if the assessing authority/revisional authority suo motu came to the conclusion that there was an arithmetical error could they rectify the clerical or arithmetic mistake apparent from the record; there was no clerical or arithmetical error or mistake in the order of the revisional authority; the petitioner, having failed to avail the opportunity of filing an appeal within 60 days, and with a view to gain time, had invented an ingenious method of sending a letter to the revisional authority under Rule 50 seeking re-revision of the revisional order alleging that there was a mistake in the order; there was no provision, under the APGST Act, to prefer an appeal before the STAT against the endorsement of the Deputy Commissioner; under Section 19 of the Act an appeal could be preferred against any order or proceeding; the authorities to entertain appeals under Section 19, against an order passed under Rule 50 of the APGST Rules, were the Appellate Deputy Commissioner, the Additional Commissioner and the Joint Commissioner, but not the STAT; Section 21 provided for an appeal to the STAT against an order passed under Section 19, or an order of the Additional Commissioner or the Joint Commissioner or the Deputy Commissioner under Section 14 or Section 20(2) of the Act; Section 21 made no reference to Rule 50 of the APGST Rules, and merely stipulated that an order, under Section 19, 20(2) and 14 of the Act, could be appealed against under Section 21; the endorsement dated 29.12.2009 was not appealable to the STAT under the APGST Act; and, in the absence of a provision, the Tribunal lacked jurisdiction to entertain the appeal. Section 38-A of the APGST Act reads as under:- 38-A: Provision in the case of defective or irregular proceedings: No assessment made, penalty or compounding fee levied or other order passed by any officer or authority under this Act, shall be set aside merely on account of any defect or irregularity in the procedure relating thereto, unless it appears that such defect or irregularity has in fact occasioned material hardship or failure of justice. Section 38-A of the Act is not a source of power for the Deputy Commissioner (CT) to review the revisional order passed by him earlier. The said provision prohibits a revisional order being set aside merely for a defect or irregularity in procedure, except where such a defect or irregularity has occasioned material hardship or failure of justice. As the revisional authority under the Act has not been conferred the power of review, Section 38-A does not enable an assessee to file an application requesting him to set aside the order in revision passed by him earlier. Section 38-A would come into operation only where an order passed by any officer or authority under the Act is sought to be set aside, on account of any defect or irregularity in procedure relating thereto. Section 38-A is a restriction on the powers of the STAT in interfering with the order passed by the revisional authority on the ground that there is a defect or an irregularity in the procedure followed in passing the said order. In view of Section 38-A the revisional order, even if it had been subjected to challenge by way of an appeal, could not have been set aside by the STAT for every defect or irregularity in procedure. It is only if such a defect or irregularity in procedure had resulted in an order being passed which caused material hardship, or occasioned failure of justice, would interference be justified. In the absence of a power of review, Section 38-A cannot be pressed into service before the revisional authority himself. The petitioner’s contention that the power to rectify a mistake inheres in the Deputy Commissioner while revising the order, and the endorsement refusing to do so must be held to be a revisional order under Section 20(2) of the Act, does not merit acceptance. The mode prescribed under the Act to have a revisional order, passed under Section 20(2) of the Act, set aside is only by way of an appeal under Section 21 of the Act to the STAT. A quasi-judicial authority cannot review its own order, unless the power of review is conferred on it by the Statute under which it derives its jurisdiction. (Kuntesh Gupta v. Hindu Kanya Mahavidyalaya[1]). The power of review is not an inherent power. It must be conferred by law either specifically or by necessary implication. (Patel Narshi Thakershi v. Pradyumansinghji Arjunsinghji[2]; Kewal Chand Mimani v. S.K. Sen[3]). The question whether the order in revision suffers from an error of fact or law cannot be examined by the Deputy Commissioner himself as the APGST Act, neither expressly nor by necessary implication, has conferred on him the power to review his own orders. Once a revisional order is passed the statutory remedy available to an assessee, to question the validity of the order in revision, is only by way of an appeal to the STAT and not under Section 38-A of the Act. It is evident, therefore, that Section 38-A has no application and cannot, by itself, form the basis for an application being filed by the petitioner before the Deputy Commissioner (CT) requesting him to rectify the mistake in his revisional order dated 7.7.2008. Rule 50(1) of the APGST Rules enables any assessing, appellate or revising authority, at any time within four years from the date of any order passed by him, to rectify any clerical or arithmetical mistake apparent from the record. The basis of Rule 50 is founded on the maxim “actus curiae neminem gravabit” an act of a court/quasi-judicial authority shall prejudice no man. The maxim is founded upon justice and good sense; and affords a safe and certain guide for the administration of the law. An unintentional mistake of the court/tribunal which may prejudice the cause of any party must, and alone, be rectified. No new arguments or rearguments on merits can be entertained to facilitate such rectification of mistakes. The provision cannot be invoked to modify, alter or add to the terms of the original order. (State of Punjab v. Darshan Singh[4]; Jayalakshmi Coelho v. Oswald Joseph Coelho[5]). The principle behind the Rule is that whatever is intended by the authority, while passing the order, must be properly reflected therein. (Jayalakshmi Coelho5). The exercise of this power contemplates the correction of mistakes by the quasi-judicial authority of its ministerial acts, and does not encompass the passing of an effective order after the original order is passed. An order passed becomes final subject to the remedies provided in the Statute in respect thereof. The very same authority or tribunal cannot and, on a mere change of view, is not entitled to vary the terms of the order earlier passed except by means of review, if statutorily provided specifically therefor and subject to the conditions or limitations provided therein. The power under Rule 50 of the APGST Rules cannot be equated with the power of review. The corrections contemplated are of correcting only accidental omissions or mistakes and not all omissions and mistakes which might have been committed by the Tribunal/quasi- judicial authority while passing the order. The omission sought to be corrected which goes to the merits of the case is beyond the scope of Rule 50, and it cannot be pressed into service to correct an omission which is intentional however erroneous that may be. (Dwaraka Das v. State of M.P[6]; Jayalakshmi Coelho5; Darshan Singh4). The correction in the order should be of the mistake or omission which is accidental and not intentional without going into the merits of the case. (Dwaraka Das6; Jayalakshmi Coelho5). The power of rectification of clerical or arithmetical errors does not empower the quasi-judicial authority to have a second thought over the matter, and to find that a better order could or should be passed. There cannot be a reconsideration of the merits of the matter to come to a conclusion that it would have been better, and in the fitness of things, to have passed an order as sought to be passed on rectification. It is to be confined to something initially intended but left out or added against such intention. (Jayalakshmi Coelho5). Arithmetical mistake is a mistake of calculation and a clerical mistake is a mistake in writing or typing. Such omissions are attributable to the quasi-judicial authority which may say something or omit to say something which it did not intend to say or omit. No new arguments or rearguments on merits are required for such rectification of mistake. (Master Construction Co (P) Ltd v. State of Orissa[7]; Jayalakshmi Coelho5). A clerical or arithmetical error is an error occasioned by an accidental slip or omission of the court/tribunal. It represents that which the court/tribunal never intended to say. It is an error apparent on the face of the record and does not depend for its discovery on argument or disputation. (Sooraj Devi v. Pyare Lal[8]). If there is an arithmetical or clerical error in the order, it can be corrected. The power cannot be exercised where the matter involves a rehearing on merits, or reconsideration of questions of fact or law, or consideration of fresh material, or new arguments which were not advanced when the original order was made. Nor can the power be exercised to change the reasoning and conclusions. (J.K. Synthetics Ltd. v. K.P. Agrawal[9]). In order to attract Rule 50, 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 an error in interpreting; it is an error, a fault, a misunderstanding, 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 Rule 50 is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. (Deva Metal Powders (P) Ltd. v. CTT[10]). Rectification of an order does not mean obliteration of the order originally passed and its substitution by a new order. In order to bring an application under Rule 50, the mistake must be “apparent” from the record. Rule 50 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 to be an apparent error. Rule 50 does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. (Deva Metal Powders (P) Ltd.10). An error which is apparent from the record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law. 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 that it must be something which appears ex facie and 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 rectification. (Deva Metal Powders (P) Ltd.10). The Deputy Commissioner (CT), in his revisonal order dated 07.07.2008, had computed tax at 12% of the turnover. The petitioner would contend that the Deputy Commissioner had erred in doing so, and that tax should, instead, have been calculated at Rs.2,11,45,852 x 12/112. Even if the Deputy Commissioner (CT) is presumed to have erred, it is not a clerical or arithmetical mistake apparent from the record which can be corrected by him under Rule 50 of the APGST Rules. The remedy available to the petitioner, against such an error, is only by way of an appeal against the order in revision. (Bharat Coking Coal Ltd. v. Annapurna Construction[11]). Section 21(1) of the APGST Act enables any dealer, objecting to an order passed or proceeding recorded (a) by any prescribed authority on appeal under Section 19; or (b) by the Additional Commissioner or Joint Commissioner or Deputy Commissioner under Section 14 or under Section 20(2); to prefer an appeal to the STAT. Section 14 confers power on the assessing authority to assess the dealer to tax and, if such an order of assessment is passed by the Additional Commissioner, Joint Commissioner or Deputy Commissioner, an appeal lies to the STAT under Section 21(1) (b) of the Act. Section 20(2) enables the Additional Commissioner, Joint Commissioner, Deputy Commissioner, Assistant Commissioner etc., to revise the orders passed by officers subordinate to them. Against an order of revision passed under Section 20(2) of the Act, an appeal also lies to the STAT under Section 21(1)(b) of the Act. As the appeal, which the petitioner filed before the STAT, is not against the order of revision passed under Section 20(2) of the Act, but against the endorsement of the Deputy Commissioner refusing to entertain an application for rectification of the mistake under Rule 50 of the APSGT Rules, Section 21(1)(b) of the Act is not attracted. Under Section 19(1) of the Act any dealer objecting to any “order passed or proceeding recorded by any authority under the provisions of the Act”, other than an order passed by the Additional Commissioner, Joint Commissioner, Deputy Commissioner under Section 14(4-C), may prefer an appeal to such authority as may be prescribed. The remedy of an appeal, under Section 19(1) of the Act, is not available only where an order is passed under Section 14(4-C) of the Act. Section 14(4-C) confers power on certain authorities, higher in rank than the assessing authority, to pass a best judgment assessment. Since the words used in Section 19(1) are “any order passed or proceeding recorded by any authority under the provisions of the Act”, the statutory remedy available to the petitioner, to question the validity of the endorsement of the Deputy Commissioner refusing to entertain an application for rectification of a mistake in the revisional order passed by him earlier, is only by way of an appeal under Section 19(1) of the Act. An appeal under Section 19(1) does not lie to the STAT. The appeal which the STAT can entertain are only those falling within the ambit of Section 21(1) of the Act. The power to rectify a mistake is specifically provided for in Rule 50 of the A.P.G.S.T. Rules, and the STAT has rightly held that rejection of the request for rectification is an independent order against which an appeal lies only under Section 19, and not under Section 21 of the Act. The conclusion of the STAT that the appeal filed before it is not maintainable cannot be said to suffer from any infirmity necessitating interference under Article 226 of the Constitution of India. The STAT has neither passed any orders on merits nor has it examined whether or not the petitioner is entitled to have the tax computed at Rs.2,11,45,852 x 12/112 instead of Rs.2,11,45,852 x 12/100. The STAT has rejected the petitioner’s appeal on two grounds. Firstly that the application filed by the petitioner does not fall within the ambit of Rule 50 of the APGST Rules. Secondly that an appeal does not lie to it under Section 21(1) of the Act, against the endorsement of the Deputy Commissioner refusing to entertain an application filed under Rule 50 of the APGST Rules for rectification of an alleged mistake in the order under revision. The STAT has not examined the petitioner’s appeal on merits. Leaving it open to the petitioner to avail such other remedies as are available to them in law to question the order in revision passed by the Deputy Commissioner dated 07.07.2008, the Writ Petition fails and is, accordingly, dismissed. However, in the circumstances, without costs. _____________________ B.PRAKASH RAO,J Date: 30-07-2010 ___________________________ RAMESH RANGANATHAN,J Note: L.R. copy to be marked. B/o MRKR/ASP [1] (1987) 4 SCC 525 [2] (1971) 3 SCC 844 [3] (2001) 6 SCC 512 [4] (2004) 1 SCC 328 [5] (2001) 4 SCC 181 [6] (1993)3 SCC 500 [7] AIR 1966 SC 1047 [8] (1981) 1 SCC 500 [9] (2007) 2 SCC 433 [10] (2008) 2 SCC 439 [11] (2003) 8 SCC 154