Bookmark
PDF
Share
CaseIQ

The State Of Tamil Nadu v. Everest Trading Co.

Madras High Court

Jan 5, 1987

Judgment

Subsequent
References

CaseIQ

Important Paras

Please sign up to view Important Paras.

Smart Summary (Beta)

Structured Summary of the Opinion Delivered by Swamikkannu, J.

Factual and Procedural Background

This revision petition was filed by the State of Tamil Nadu (represented by the Deputy Commissioner (C.T), Madras Division) seeking to reverse an order of the Second Additional Bench of the Sales Tax Appellate Tribunal (T.M.P. No. 508 of 1977 in T.A. No. 64 of 1977). The Tribunal had allowed a miscellaneous petition under section 55 of the Tamil Nadu General Sales Tax Act, 1959, and set aside its earlier order in T.A. No. 64 of 1977 which had sustained an addition of Rs. 10,000 to the assessee's taxable turnover for the assessment year 1975–76 (the addition was for alleged non-maintenance of stock accounts).

Procedurally: the Tribunal initially, by order dated 28 May 1977 (in T.A. No. 64 of 1977), dismissed the appeal and sustained the Rs. 10,000 addition. The respondent (assessee) thereafter filed a miscellaneous petition under section 55 of the Act seeking rectification of that Tribunal order, relying on later decisions of the Tribunal's Main Bench (notably T.A. No. 399 of 1977 dated 8 August 1977) and earlier case law. The Second Additional Bench entertained the section 55 petition, set aside the addition, and allowed the miscellaneous petition. The State challenged that decision by way of revision, arguing that the Tribunal had no power under section 55 to reverse its own earlier judgment in the circumstances of this case.

Legal Issues Presented

Whether the Sales Tax Appellate Tribunal had the power under section 55 of the Tamil Nadu General Sales Tax Act, 1959, to reverse its own earlier order (i.e., to set aside its earlier decision sustaining an addition) by entertaining a rectification application that relied upon a subsequent decision of a higher or co-ordinate forum.
Whether the Tribunal's invocation of section 55 in the present facts (where the later decision relied upon interpreted the law differently) constituted a permissible "rectification of an error apparent on the face of the record" or an impermissible reversal of its earlier judgment.

Arguments of the Parties

Appellant (State / Government Pleader / Revenue)

The Tribunal erred in its appreciation of the scope of power under section 55 of the Tamil Nadu General Sales Tax Act, 1959.
The Tribunal should not have entertained the section 55 application in the circumstances of the case because it effectively reversed its earlier judgment on the basis of subsequent judicial pronouncements.
The Tribunal had followed the decision in Kuppana Gounder v. Appellate Assistant Commissioner ([1973] 32 STC 522 (Mad.)) which was subsequently reversed by the Division Bench in Appellate Assistant Commissioner (Commercial Taxes) Salem v. N. Kuppanna Gounder ([1975] 35 STC 170). The Tribunal ought to have followed the higher authority and other decisions (including Kalyan Textiles v. Appellate Assistant Commissioner [1972] 29 STC 381 (Mad.) as argued by the Revenue).
As succinctly put for the Revenue, a tribunal cannot reverse its own prior judgment on the sole basis of a subsequent decision of a higher forum when the facts relevant to the application of law were not placed before the authority at the time of the original order.

Respondent (Assessee / Mr. K. Mani, Counsel for Respondent)

The Tribunal was correct to entertain and allow the application under section 55 and to set aside the Rs. 10,000 addition, relying on subsequent decisions of the Tribunal's Main Bench and on several reported authorities (as listed by the respondent), which, in the respondent's submission, supported the decision under revision.
The respondent cited decisions including Kuppana Gounder v. Appellate Assistant Commissioner ([1973] 32 STC 522 (Mad.)), Appellate Assistant Commissioner v. Kuppanna Gounder ([1975] 35 STC 170 (Mad.)), State of Tamil Nadu v. Thakorebhai and Brothers ([1983] 52 STC 104 (Mad.)) and State of Tamil Nadu v. KS.M.G. Meenambal and Co. ([1984] 56 STC 82 (Mad.)) as supporting the Tribunal's rectification and its conclusion that mere non-maintenance of stock accounts did not necessarily warrant best-judgment assessment in the circumstances asserted by the assessee.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Kuppana Gounder v. Appellate Assistant Commissioner, [1973] 32 STC 522 (Mad.)	The decision held that a rectification under the power conferred (section 55) can be justified where a levy is shown to be illegal by a subsequent judicial decision; authorities must entertain rectification applications founded on later judicial pronouncements. (As described in the opinion.)	The Tribunal relied on this decision to justify rectifying its earlier order. The High Court examined this authority but noted that it had later been reversed by a Division Bench decision in Appellate Assistant Commissioner v. Kuppanna Gounder ([1975] 35 STC 170).
Appellate Assistant Commissioner (Commercial Taxes) Salem v. N. Kuppanna Gounder, [1975] 35 STC 170 (Mad.)	Holds that where the legal effect of a statutory provision depends on facts which must be presented by the assessee, failure to present those facts at the time of assessment is not an "error apparent on the face of the record" within section 55; thus, rectification cannot be used to supply missing factual foundations after the event. (This principle is explicitly stated in the opinion.)	The High Court regarded this decision as authoritative and "still a good law." It applied the principle to the facts of the present case to conclude that the Tribunal should not have reversed its earlier judgment by invoking section 55 where relevant facts had not been presented earlier.
Kalyan Textiles v. Appellate Assistant Commissioner, [1972] 29 STC 381 (Mad.)	This information was not available in the provided opinion.	The Revenue submitted that the Tribunal ought to have followed this decision; the opinion records that contention but does not elaborate the decision's rule or how it would apply in detail.
State of Tamil Nadu v. Thakorebhai and Brothers, [1983] 52 STC 104 (Mad.)	This information was not available in the provided opinion.	The respondent cited this decision as supporting the Tribunal's order; the Court's opinion records that citation without elaborating the principle relied upon from that case.
State of Tamil Nadu v. KS.M.G Meenambal and Co., [1984] 56 STC 82 (Mad.)	This information was not available in the provided opinion.	This decision was cited by the respondent as supporting the Tribunal's order; the opinion notes the citation but does not extract a specific legal principle from it for the present analysis.
Commissioner, Sales Tax, U.P., Lucknow v. Khera Shoe Co., [1975] (Allahabad High Court)	The opinion states the Tribunal considered an Allahabad High Court decision on a similar provision in the U.P. Sales Tax Act, but it does not set out the precise principle of that decision in the provided text.	The Second Additional Bench stated it would follow the decision of the High Court in T.C. No. 138 of 1971 in preference to the Allahabad High Court decision (Khera Shoe Co.). The High Court records this comparative preference in recounting the Tribunal's reasons.
T.C. No. 138 of 1971 (decision of the High Court)	The Tribunal treated this High Court decision as sustaining an addition made by way of best judgment assessment because of non-maintenance of regular stock book; the precise textual principle was relied upon by the Tribunal. (As described in the Tribunal's order quoted in the opinion.)	The Second Additional Bench considered itself bound by the observations of the High Court in T.C. No. 138 of 1971 and followed them to sustain the Rs. 10,000 addition in its original order (T.A. No. 64 of 1977). The High Court later recounts that the Main Bench had taken a different view in T.A. No. 946 of 1976 / T.A. No. 399 of 1977 which prompted the rectification application.
T.A. No. 946 of 1976 (Main Bench of the Tribunal)	This information was not available in the provided opinion beyond its being a Main Bench decision which the Tribunal said had not adverted to T.C. No. 138 of 1971.	The Tribunal observed that the Main Bench's earlier opinion (in T.A. No. 946 of 1976) did not advert to the High Court's decision in T.C. No. 138 of 1971; this contextual fact figured in the Tribunal's reasoning in the original T.A. No. 64 of 1977 decision.
T.A. No. 399 of 1977 (Main Bench of the Tribunal, dated 8 Aug 1977)	The Main Bench had clarified that the High Court's observation in T.C. No. 138 of 1971 did not conclude that mere non-maintenance of manufacturing or regular stock book required rejection of accounts, thereby upholding the Main Bench's earlier view that rejection solely for non-maintenance was not justifiable. (This is reported in the opinion.)	The respondent relied on T.A. No. 399 of 1977 to urge rectification of the Second Additional Bench's earlier order. The Second Additional Bench accepted that clarification and relied upon it to allow the section 55 petition; the High Court reviewed that reliance and concluded it amounted improperly to reversing the earlier Tribunal judgment under the guise of rectification.
S.A.L. Narayana Row v. Model Mills Nagpur Ltd., [1967] 64 ITR 67 (SC)	Used to support the proposition that a subsequent judicial pronouncement may be a foundation for exercise of rectification power (in the income-tax context) and thus influenced earlier views on rectification. (Discussed in the opinion.)	The Court recounted this Supreme Court decision (as discussed in the Kuppana Gounder judgment) to explain the prior evolution of the law concerning rectification based on subsequent judicial pronouncements; it formed part of the legal background considered by the High Court.
Khatau Makanji Spinning & Weaving Co. Ltd. v. Commissioner of Income-tax, [1956] 30 ITR 841	The opinion recounts this decision as a factual step in litigation history that led to a later Supreme Court ruling; the opinion does not extract a distinct general principle beyond that context.	The case is discussed as part of the background in S.A.L. Narayana Row and related income-tax jurisprudence illustrating situations where subsequent court decisions required rectification/refunds; the High Court used the illustrative history to analyze the rectification doctrine.
Commissioner of Income-tax v. Khatau Makanji Spinning & Weaving Co. Ltd., [1960] 40 ITR 189 (SC)	This decision confirmed the Bombay High Court and was used to illustrate the Supreme Court's approach to refund/rectification following a judicial pronouncement; the opinion does not set out additional principles beyond that factual/legal history.	The decision is cited in the opinion's discussion of the evolution of rectification principles (in the income-tax context) to show precedent for rectification where tax was held illegal by later judicial decisions; the High Court used the historical analogy but distinguished its applicability under section 55 when factual omissions existed.

Court's Reasoning and Analysis

The Court's reasoning proceeds in a sequence that ties statutory language, precedent, and the particular facts together:

Identification of the legal question: The critical question was whether the Tribunal could, under section 55(1) of the Tamil Nadu General Sales Tax Act, 1959, reverse a prior judicially rendered order by treating such reversal as a "rectification" on the basis of subsequent decisions.
Examination of prior authorities: The judgment recounts the divergent authorities. Kuppana Gounder (1973) had been read to permit rectification on the basis of a subsequent judicial pronouncement rendering a levy illegal. The Court accepted that earlier line of thought had merit in its context and discussed the reasoning in Kuppana Gounder, including reliance on Supreme Court income-tax authorities (notably S.A.L. Narayana Row and the Khatau Makanji line of cases) that recognized rectification in the face of intervening judicial rulings.
Distinguishing and recognizing controlling authority: The Court then highlights that the Kuppana Gounder view had been reversed by a later Division Bench decision in Appellate Assistant Commissioner v. Kuppanna Gounder (1975) which the Court regarded as "still a good law." That later decision clarified that where the application of a statutory provision depends on factual matters which should have been presented to the authority, an omission by the assessee to place those facts before the authority cannot be treated as an "error apparent on the face of the record" for purposes of section 55.
Application to the present facts: The Court examined the record and observed that the facts now relied upon by the respondent (and upon which the Tribunal based its rectification) were not presented to the appellate authority at the time the original assessment or appeal was decided. The High Court therefore concluded that the situation was precisely one contemplated by the Appellate Assistant Commissioner v. Kuppanna Gounder (1975) decision — i.e., the omission was factual and the remedy of section 55 was not available to cure that omission.
Interpretation of section 55: The Court analyzed the statutory language of section 55 (quoted in the opinion) and the ordinary meaning of "rectification" (an act of correcting an existing error or defect). The Court emphasized that section 55 does not contemplate a power so broad as to permit an authority to disown or reverse its own prior judicial interpretation on the mere basis of a later interpretation by a higher forum where the reversal effectively supplies missing factual assertions that were not placed on record earlier.
Conclusion from analysis: On a careful appraisal of the facts and authorities, the High Court concluded that the Tribunal had misappreciated the law and had no power under section 55(1) to reverse its earlier order in the manner it had done. The purported rectification amounted to an impermissible reversal of the Tribunal's own judgment.

Holding and Implications

Holding: The revision petition is allowed and the order of the Sales Tax Appellate Tribunal under review is set aside.

Consequences and implications (as stated in the opinion):

The Tribunal's order allowing the miscellaneous petition under section 55 and setting aside the addition of Rs. 10,000 is set aside.
The revision filed by the State is allowed with costs; the Court fixed a fee of Rs. 250 for the learned Government Pleader.
The Court emphasized that section 55(1) does not authorize an authority to disown or reverse its own earlier judgment on the basis of a subsequent decision of a higher forum when the facts necessary to bring the later decision into play were not placed before the authority at the time of the original order.
The opinion does not state that it is laying down a new general precedent beyond applying existing authorities (it relies particularly on the Division Bench decision in Appellate Assistant Commissioner v. Kuppanna Gounder (1975) as good law and applies that principle to the present facts). Therefore, the direct effect is to restore the Tribunal's earlier decision (i.e., sustaining the Rs. 10,000 addition) by setting aside the rectification; no broader novel rule beyond this application is announced in the text of the opinion.

Disposition: Petition allowed.

Show all summary ...

The Judgment of the Court was delivered by

Swamikkannu, J.:— This is a revision petition filed by the State of Tamil Nadu represented by the Deputy Commissioner (C.T), Madras Division, Madras-1, for reversing the order of the Second Additional Bench of the Sales Tax Appellate Tribunal in T.M.P No. 508 of 1977 in T.A No. 64 of 1977, allowing the petition and setting aside the order passed in T.A No. 64 of 1977, sustaining the addition of Rs. 10,000 made to the taxable turnover of the assessee for the assessment year 1975-76, and holding that the disputed turnover of Rs. 10,000 being the subject-matter of appeal in T.A No. 64 of 1977 forms the taxable turnover of the assessee determined for the assessment year 1975-76 is not correct.

2. The learned Government Pleader contends that the order under revision is erroneous in the sense that the Tribunal has not properly appreciated the scope and extent of power vested in it under section 55 of the Tamil Nadu General Sales Tax Act, 1959. It is submitted on behalf of the Revenue that the Tribunal has followed the decision reported in Kuppana Gounder v. Appellate Assistant Commissioner, [1973] 32 STC 522 (Mad.) which has been reversed by the Division Bench of this Court in Appellate Assistant Commissioner (Commercial Taxes) Salem v. N. Kuppanna Gounder, [1975] 35 STC 170. In other words, it is represented on behalf of the Revenue that the Tribunal ought not to have entertained the application under section 55 of the Act in view of the facts and circumstances of the present case. It is also submitted on behalf of the, Revenue that the Tribunal ought to have followed the decision in Kalyan Textiles v. Appellate Assistant Commissioner, [1972] 29 STC 381 (Mad.). Mr. K. Mani, the learned counsel for the respondent, on the other hand, submits that the Tribunal is correct in having rendered the order under revision since the decisions reported in Kuppana Gounder v. Appellate Assistant Commissioner, [1973] 32 STC 522 (Mad.), Appellate Assistant Commissioner v. Kuppanna Gounder, [1975] 35 STC 170 (Mad.), State of Tamil Nadu v. Thakorebhai and Brothers, [1983] 52 STC 104 (Mad.) and State of Tamil Nadu v. KS.M.G Meenambal and Co., [1984] 56 STC 82 (Mad.) support the said decision under revision.

3. The learned Government Pleader appearing on behalf of the Revenue, in support of his contentions refers to the decisions in Kuppana Gounder v. Appellate Assistant Commissioner, [1973] 32 STC 522 (Mad.), Appellate Assistant Commissioner v. Kuppanna Gounder, [1975] 35 STC 170 (Mad.) and State of Tamil Nadu v. KS.M.G Meenambal and Co., [1984] 56 STC 82 (Mad.). The arguments advanced on behalf of the Revenue in a nutshell is that the Tribunal cannot reverse its own judgment on the basis of the subsequent decision rendered by the higher appellate forum. In the instant case before us, in the order under review, the Tribunal observed as follows:

‘In the appeal T.A No. 64 of 1977 the point at issue was, whether the estimated addition of Rs. 10,000 to the book turnover for the only defect of non-maintenance of stock was proper

After the order was passed in T.A No. 64 of 1977, the Main Bench of this Tribunal had considered the said observation of the High Court in T.C No. 138 of 1971 and came to the conclusion that the High Court did not state the opinion that the only defect of non-maintenance of manufacturing or regular stock book did not warrant rejection of accounts and so it again reaffirmed the opinion given by it earlier in T.A No. 946 of 1976 dated 19th February, 1977 and upheld its earlier opinion that the rejection of accounts for the sole ground of non-maintenance of stock account is not justifiable. So, in so far as a subsequent decision by the Main Bench of this Tribunal had clarified the observations of the High Court made in T.C No. 138 of 1971, to that extent, there is a subsequent decision on the point that the observation of the High Court in T.C No. 138 of 1971 did not conclude that mere non-maintenance of manufacturing account, did not require rejection of accounts. Therefore, we are of the view that the assessees could rely upon the observations made by the Main Bench of this Tribunal in T.A No. 399 of 1977 to urge this Bench also to take the same view as had been taken by the Main Bench of this Tribunal in T.A No. 946 of 1976.”

4. In this regard, the learned Government Pleader refers to the original order of the Tamil Nadu Sales Tax Appellate Tribunal (Second Additional Bench), Madras-1, in Tribunal Appeal No. 64 of 1977, dated 28th day of May, 1977, wherein it is observed by the said Additional Bench as follows:

“We considered the contentions put forward by both sides carefully, and we have to state that the decision rendered by our High Court in T.C No. 138 of 1971 has to be followed in preference to a decision rendered by the Allahabad High Court in [1975] 36 Commissioner, Sales Tax, U.P, Lucknow v. Khera Shoe Co.), with respect to a similar provision in the Sales Tax Act of Uttar Pradesh. It has also to be stated that the decision rendered in T.C No. 138 of 1971 does not appear to have been brought to the Main Bench of the Tribunal and so the same has not been adverted to in T.A No. 946 of 1976. So, following the approval given by the High Court in T.C No. 138 of 1971 for sustaining an addition made by way of best judgment assessment because of non-maintenance of regular stock ‘book, we are bound by the observations and so, we find the addition of only Rs. 10,000 made to a large book turnover of Rs. 18,80,457 reported by the assessee as ordered by the first appellate authority is justified. In view of our above findings, the appeal is devoid of merits and the same is dismissed.”

5. The point that arises for consideration in this revision is whether the Tribunal is correct in coming to the conclusion that it has got the power to reverse its original stand taken, under the provisions of section 55 of the Tamil Nadu General Sales Tax Act holding that the said reversing of its own judgment is nothing else than a rectification of the error in the earlier order.

6. In Kuppana Gounder v. Appellate Assistant Commissioner, [1973] 32 STC 622 (Mad.), Ramaprasada Rao, J., observed as follows:

“If, therefore, the power vested in the authorities in sub-section (1) of section 55 is not always a discretionary power, but is normally to be understood as a duty with which the concerned authority is enjoined, then the next question is when shall the power be exercised. The learned Government Pleader would say that the interception of a judicial pronouncement between the concluded appellate, original or revisional order and the memorandum for rectification would not enable the authorities, even though bound to do so, to exercise such a power. Here again there is a fallacy. Of course, at one time this Court took the view that such supervening judgments of courts, whether of the High Court or the Supreme Court, cannot by themselves form the foundation for the exercise’ of power to rectify an assessment order when the appropriate authority is asked to do so. But, in view of the decision in S.A.L Narayana Row, Commissioner of Income-tax v. Model Mills Nagpur Ltd., [1967] 64 ITR 67 (SC), it is difficult to hold that view. The Supreme Court in that case was considering the scope of the power of rectification vested in the Income-tax Officer under section 35 of the Income-tax Act. The short facts are: The respondent-company was subjected to, among other things, pay an additional tax on the excess dividends declared by it. The order was complied with. Thereafter, in Khatau Makanji Spinning & Weaving Co. Ltd. v. Commissioner of Income-tax, [1956] 30 ITR 841, the Bombay High Court held that the levy of tax on excess dividends was illegal. The view of the Bombay High Court was confirmed by the Supreme Court in Commissioner of Income-tax v. Khatau Makanji Spinning & Weaving Co. Ltd., [1960] 40 ITR 189. Soon after the Bombay High Court rendered the above judgment, the respondent-company applied to the Income-tax Officer for refund of the tax paid and incidentally sought for a rectification of the original order. This was negatived by the Income-tax Officer as well as the Commissioner of Income-tax in revision. The Bombay High Court, however, on an application made to it under article 226 of the Constitution directed the Income-tax Officer to revise the order in the light of the judgment in Khatau Makanji Spinning & Weaving Co. Ltd. v. Commissioner of Income-tax, [1956] 30 ITR 841. The department took up the matter in appeal to the Supreme Court. The learned Judges said:

‘There is no doubt that, in view of the judgment of this court in Commissioner of Income-tax v. Khatau Makanji Spinning & Weaving Co. Ltd., [1960] 40 ITR 189 (SC), the levy of an additional tax was illegal The High Court was right in making the order directing the Commissioner to refund the amount of tax which was illegally collected. ‘”

7. In the said decision reported in Kuppana Gounder v. Appellate Assistant Commissioner, [1973] 32 STC 522 (Mad.) it was held that if a levy is found to be illegal or becomes illegal by reason of a subsequent decision of the court, even the exercise of power by an authority under the provisions governing the rectification of assessments is justified and legal. On the other hand if the application for rectification is returned without being entertained, there is an avoidance of public duty on the part of the authority concerned, when it is obliged in law not only to entertain the same but also deal with it so as to render justice and avoid injustice;

8. In the instant case before us, we find that on the second appeal before the Sales Tax Appellate Tribunal (Second Additional Bench), Madras-1, the Tribunal in T.A No. 64 of 1977 by its order dated 28th May, 1977, had dismissed the appeal sustaining the addition of Rs. 10,000 for non-maintenance of stock accounts. The respondent herein had filed a miscellaneous petition under-section 55 of the Tamil Nadu General Sales Tax Act, 1959, against the original order of the Tribunal in T.A No. 64 of 1977 dated 28th May, 1977, seeking for the relief that the Tribunal has to rectify an error on the part of the Tribunal in not following the opinion of the Main Bench of the Tribunal in T.A No. 399 of 1, 977 dated 8th August, 1977 holding that for the only defect of non-maintenance of stock account, the book turnover need not be rejected and best judgment assessment made. The Tribunal after verifying the records had followed the decision in Kuppana Gounder v. Appellate Assistant Commissioner, [1973] 32 STC 522 (Mad.) and the order of the Main Bench of the Sales Tax Appellate Tribunal, Madras-1, in T.A No. 399 of 1977 dated 8th August, 1977, and set aside the addition of Rs. 10,000 allowing the miscellaneous petition.

9. Now, we find that the decision in Appellate Assistant Commissioner v. Kuppanna Gounder, [1975] 35 STC 170 (Mad.), which had reversed the decision in Kuppana Gounder v. Appellate Assistant Commissioner, [1973] 32 STC 522 (Mad.) holds good and it is still a good law. The said decision in Appellate Assistant Commissioner v. Kuppanna Gounder, [1975] 35 STC 170 (Mad.) lays down that where a statutory provision is interpreted as to its precise ambit and effect, it will have effect right from the inception of the statutory provision and, therefore, where 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 section 55 of the Tamil Nadu General Sales Tax Act, 1959. The question involved in this revision is whether the order of the Tribunal in reversing its own prior order invoking the provisions of section 55(1) of the Act is correct and is in accordance with law. It has been laid down succinctly in Appellate Assistant Commissioner v. Kuppanna Gounder, [1975] 35 STC 170 (Mad.) that 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 he has not placed them before the authorities at the time the assessment order was made. In the instant case, we find that when the facts that are now being placed, that is even at the stage of the petition the order of which is the subject-matter of this revision were placed before the appellate authority, there was no submission of the facts necessary. It was held in Appellate Assistant Commissioner v. Kuppanna Gounder, [1975] 35 STC 170 (Mad.) that “although at the time the assessment order was made the sales turnover would be chargeable to tax at the concessional rate of tax if such turnover came out of raw hides and skins which had suffered tax according to the decision of the High Court, as the assessee had not claimed the concessional rate by placing the necessary facts, such omission would not be an error apparent on the face of the record within the meaning of section 55.” Section 55 of the Tamil Nadu General Sales Tax Act (1 of 1959), reads as follows:

“65. Power to rectify any error apparent on the face of the record.—(1) An assessing authority or an appellate or revising authority (including the Appellate Tribunal) may, at any time within three years from the date of any order passed by it, rectify any error apparent on the face of the record:

Provided that no such rectification which has the effect of enhancing an assessment or any penalty shall be made unless such authority has given notice to the dealer and has allowed him a reasonable opportunity of being heard.

(2) Where such rectification has the effect of reducing an assessment or penalty, the assessing authority shall make any refund which may be due to the dealer.

(3) Where any such rectification has the effect of enhancing an assessment or penalty, the assessing authority shall give the dealer a revised notice of assessment or penalty and thereupon the provisions of this Act and the Rules made thereunder shall apply as if such notice had been given in the first instance.

(4) The provisions of this Act relating to appeal and revision shall apply to an order of rectification made under this section as they apply to the order in respect of which such order of rectification has been made.”

10. “Rectification” implies the correctness of an error or removal of defects or imperfections. It implies prior existence of error, mistake or defect, which after rectification is made right, and corrected by removal of the flaws.

11. In the instant case, what we are very much concerned is whether section 55 of the Act gives such a wide power to the Tribunal to reverse its own order when an application is made under the provisions of the said section relying on a subsequent decision that had been rendered. On a careful and anxious consideration of the facts involved in this case together with the decisions rendered on the point of rectification under the provisions of section 55 of the Act we are of the definite opinion that the order under revision is necessarily to be set aside, since the law on the question has not been properly appreciated by the Tribunal. Such a wide power of reversing of its own order is not contem-plated under section 55(1) of the Act, on the pretext and guise of rectifying the error in the earlier order. The provision of section 55 does not in any way authorise an authority to disown its own earlier judgment on an interpretation of a subsequent decision that had been rendered by a higher forum. Under these circumstances, the revision is allowed with costs. The order of the Tribunal is set aside. Fee for the learned Government Pleader is fixed at Rs. 250.

12. Petition allowed.