The Appellate Assistant Commissioner (Commercial Taxes) Salem, And Another v. N. Kuppanna Gounder.

(The Chief Justice)

1. This writ appeal involves a problem of application of S. 55(1) of the Madras General Sales Tax Act, 1959 to its facts. The assessment was on 14th October 1967. Purchase of raw hides and skins in the State during the assessment year were brought to tax There was an appeal which was dismissed on 20th December 1967. On 18th April 1969 was the decision in Sadak Thamby and Co. v. Appellate Asst. Commissioner of Commercial Taxes(1) which held that, where during an year of assessment, dressed bides and skins were sold and such bides and skins came out of raw bides and skins which bad suffered tax, the concession rate of 1½ percent should be applied at the point of first sale in the State of such dressed bides and skins. When the law was so declared, it had its effect not merely from the date of the decision but also from the inception of the statutory provision. Subsequent to Sadak Thamby and Co. v. Appellate Asst. Commissioner of Commercial Taxes(2) the respondent applied under S. 55 for rectifying the error in the assessment order. That was refused. But, a petition under Art. 226 of the Constitution was successful,

2. In our opinion, the order under appeal cannot be sustained. The question in this case is not whether where a law has been declared to be such and such by a decision, it could be applied to a state of affairs which had become concluded by the decision. When a statutory provision is interpreted as to its precise ambit and effect, it will have effect from the inception of the statutory provision, as we mentioned earlier. Where, therefore, ex facie the record or order an error is evident with reference to such declaration of ambit and effect of the statutory provision, it may well fall within the purview of S. 55. But, where the law as declared, will in its application depend on facts, and those facts will have to be presented by the assessee, then the error will be on the part of the assessee, if be has not placed them before the authorities at the time the assessment order was made. To put it differently, while at the time the assessment order was made the sales turnover would be chargeable to tax at the concessional rate; if such turnover came out of rawhides and skins which had suffered tax, the assessee had not claimed the concessional rate by placing the necessary facts, such omission will not be an error within the meaning of S. 55. Madras Auto Service Private Ltd. v. Joint Commercial Tax Officer relied on for the asstssee-respondent dealt with a different situation. That was a case where no subsequent decision was involved and there was an error apparent on the face of record, in as much as the facts before the authorities were not duly appreciated. If the facts had been looked into in that case carefully, it would have emerged that the sales charged to tax were second sales not subject to tax. In the instant case, the error was not on the scope of the law vis-a-vis entries 7(a) and (b) in Sch. II of the Act, but the arror lay on the assessee not placing the necessary facts and establishing that be was entitled to the charge, only at the concessional rate under entry 7(b).

3. On that view, the appeal is allowed. No costs.

V.C.S