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PETITIONER: KARAM CHAND THAPAR & BROS. (COAL SALES)LIMITED

       Vs.

RESPONDENT: STATE OF .UTTAR PRADESH AND ANOTHER

DATE OF JUDGMENT21/07/1976

BENCH: GUPTA, A.C. BENCH: GUPTA, A.C. SINGH, JASWANT

CITATION:  1976 AIR 2101            1977 SCR  (1)  25  1976 SCC  (4) 257

ACT:         Central Sales Tax ,Act (74 of 1956), s. 9(1),  proviso-Scope         of.             U.P.  Sales Tax ,Act, 1948, S. 22---Order of  rectifica-         tion  passed within 3 years of  original order,  but  served         beyond 3 years--If barred by limitation.

HEADNOTE:              Under  s. 3(b), Central Sales Tax Act, 1956, a  sale  or         purchase  of goods is deemed to take place in the course  of         inter-State  trade  or commerce if the sale or  purchase  is         effected  by a transfer of documents of rifle to  the  goods         during  their movement from one State to  another.   Section         7(3  )  provides that on the application of the  dealer  the         prescribed authority shall register the applicant and  grant         him a registration certificate which shall specify the class         or classes of goods for the purpose of s. 8(1); and the Form         prescribed  by  r. 3, Central Sales  Tax  (Registration  and         Turnover)  Rules,  1957, for application  for  registration,         requires the purposes for which the goods were purchased  by         the  dealer to be specified, resale being one such  purpose.         Section  8(1)(b)  provides  that every dealer  who,  in  the         course  of inter-State trade or commerce sells to  a  regis-         tered  dealer  other than the Government, goods of  the  de-         scription  referred to in sub-s. (3) shall be liable to  pay         3.%_  of his turnover as.tax under the Act;  whereas,  under         s.. 8(2), the tax payable with respect to goods which do not         fall  within sub-s.- (1) shall be, in the case  of  declared         goods, at the rate applicable to to the  sale or purchase of         such  goods inside the appropriate State and in the case  of         other goods 10%, or the rate applicable in the State, which-         ever  is  higher.  Prior to April 1, 1963, s.  8(3)  stated,         that  the goods referred to in s. 8(1)(b), "(a) in the  case         of declared goods, are goods Of the class or classes  speci-         fied in the certificate of the registered dealer  purchasing         the  goods as being intended for resale by him; and  (b)  in         the case of goods other than declared goods are goods of the         class  or classes specified in the certificate of  registra-         tion of the registered dealer purchasing the goods, as being         intended  for  resale by him."  By the Amendment Act  (8  of         1963), cl. (a) was omitted and the opening words in cl. (b),         "in  the case of goods other than declared goods" were  also

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       omitted; so that, after April 1, 1963, the goods referred to         in  s. 8(1)(b) are specified in sub-s. (3) as goods of  the,         class  or classes specified in the certificate of  registra-         tion of the registered dealer purchasing the goods as  being         intended  for resale by him.  Section 8(4)(a) says that  the         provisions  of  s. 8(1) shall not apply to any sale  in  the         course  of inter-State. trade or commerce unless the  dealer         selling  the goods furnishes to the prescribed authority  in         the  prescribed  manner, a declaration  in  the  prescribed.         Form,  duly  filled and.signed by the registered  dealer  to         whom  the goods are sold containing the prescribed  particu-         lars.   Section  9(1) contains a general rule that  the  tax         payable  by  any dealer on sales effected in the  course  of         inter-State trade or commerce would be levied by the Govern-         ment  of  India and collected in the State  from  which  the         movement  of the goods commenced.  The proviso to  the  sub-         section qualifies this rule in the case of a subsequent sale         which   is  not  exempted  from  tax  under  s.  6(2).   and         states,  .that  the  tax on such subsequent  sale  would  be         levied and collected in the State from which the  registered         dealer  effecting  the subsequent sale obtained,  or   could         have  Obtained,  the  Form prescribed for the purpose of  s.         8(4)(a).   Coal  is one of the declared  goods  having  been         declared  under s. 14 to be of special importance in  inter-         State trade or commerce.             The appellant was a Company carrying on business as coal         agents  and was registered in U.P. under the U.P. Sales  Tax         Act,  1948,  and the Central Sales Tax Act.   The  appellant         arranged for the supply of coal from collieries in W. Bengal         and Bihar to consumers in U.P. The collieries sent the  coal         by         4--1003 SCI/76         26         rail, the railway receipts either in the name of  the.appel-         lant  or in the name of the consumer in U.P., and  sent  the         bills and invoices to the appellant’s head office in Calcut-         ta.   The  appellant forwarded the railway receipts  to  the         consumers  in cases where the receipts were in the names  of         the  consumers, and in cases where the receipts were in  the         appellant’s name also endorsed them in favour of the consum-         ers. There was thus, in the latter cases, a subsequent  sale         of  goods in the course of inter-State trade or commerce  by         the  transfer of documents of title by the appellant to  the         consumers  in  U.P.   For the assessment  year  1966-67  the         appellant  claimed  that  the turnover in  cases  where  the         railway receipts had been subsequently endorsed in favour of         the consumers in U.P. was not taxable in U.P.  The Sales-tax         Officer by order dated March 27, 1971, accepted the  conten-         tion,  relying  on a decision of the High  Court.   But,  in         subsequent  decisions,  the High Court held  that  in  cases         where  a  regisetred dealer effected a second  sale  in  the         course  of inter State trade and commerce, sales tax on  the         turnover  was to be realised in the State where  the  dealer         effecting  the sale was registered; and in one of the  deci-         sions it was observed that the decision on which the  Sales-         tax Officer relied had overlooked the proviso to s. 9(1 ) of         the Central Act.  The Sales-tax Officer accordingly proposed         to  rectify the error committed by him and  after  following         the procedure prescribed for rectification of errors  appar-         ent  on  the face of the record in s. 22 of  the  U.P.  Act,         passed  an order on March 26, 1974, rectifying  the  mistake         and  served  it  on the appellant on March  31,  1974.   The         appellant  challenged the order unsuccessfully in  the  High         Court.                  In appeal to this Court it was contended:

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                     (1)  That the declaration prescribed under  s.                  8(4)(a)  is necessary when s. 8(1) was  applicable,                  but that, after the omission in s. 8(3),  reference                  to ’declared goods’ is omitted in that section,  so                  that  when s. 8 (1)(b) refers to the sale of  goods                  mentioned in s. 8(3) the reference is only to goods                  other than declared goods and hence, when a  dealer                  sells  declared goods, he could not  have  obtained                  the prescribed declaration and so the proviso to s.                  9(1) did not apply;                       (2)  Section  22’of the U.P. Act was  not  ap-                  plicable  as there was no mistake apparent  on  the                  face of the record; and                       (3) The order under s. 22 was barred by  limi-                  tation,  because it was effective only when it  was                  served on the appellant.                  Dismissing the appeal to this Court,         HELD: (1) The 1971-assessment order was wrong. [46 G]               The Act and the rules and the prescribed Forms make no         distinction  between declared goods and other goods,  except         for the purpose of the rate of tax. Under s. 7(3) the regis-         tration  certificate granted to a dealer has to specify  the         class or classes of goods for the purposes of s. 8(1) and it         makes no distinction between declared goods and other goods.         Sub-sections  8(1)  and (3) also show that all  sales  to  a         registered  dealer  other than the  Government,  whether  of         declared  goods  or  other goods, are covered  by  s.  8(1).         Clause  (a) was omitted from s. 8(3) presumably  because  it         was  considered  unnecessary    to retain it  when  cl.  (b)         apparently covered all goods both declared and    other than         declared.   The  declaration referred to in  s.  8(4)(a)  is         necessary for the dealer to avail himself of the benefit  of         the  rate  of tax mentioned in s. 8(1). There  is  no  valid         reason why the appellant could not have obtained the  decla-         ration in the prescribed Form as required by the proviso  to         s.  9(1 ).  Since no .claim for exemption under s.  6(2)  is         made  by  the appellant, the first order of  assessment  was         contrary to the proviso of s. 9(1) and the sales in question         were  taxable within the respondent-State, where the  appel-         lant was registered as a dealer. [45 D-H]               (2) The 1971-order of assessment was patently  errone-         ous in that it failed to take into consideration the proviso         to  s. 9(1).  Therefore, it could be rectified under s.  22,         U.P. Act. [46 G]         27             (3)  The order rectifying the mistake was recorded  with         in 3 years of the date of the original order as required  by         s. 22 of the U.P. Act.  The fact that the order was communi-         cated, to the appellant on March 31, 1974 could not make any         difference.  The order of rectification is deemed to be made         on the date of communication only for the purpose of  count-         ing the period of limitation for filing the appeal, under s.         9  of  the U.P. Act.  Therefore, in the  instant  case,  the         appellant  was not affected by the order under s.  22  being         communicated to it after the expiry not of 3 years from  the         date of the original order. [47 B; 48 B]                      Raja  Harish  Chandra Raj Singh v.  The  Deputy                  Land  Acquisition Officer [1962]. 3 S.C.R. 676  and                  Madan  Lal  v. State of U.P. [1975]  3  S.C.C.  779                  explained & distinguished.

JUDGMENT:                  CIVIL  APPELLATE  JURISDICTION:  Civil  Appeals

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                Nos. 928 and 929 of 1975.                  (From the Judgment and Order dated 8-10-1974 of the                  Allahabad  High Court in Civil Writ Nos.  2169  and                  2276 of 1974).                  F.S.  Nariman, D.N. Misra and O.C. Mathur, for  the                  appellant.                  S.C. Manchanda and O.P. Rana, for the respondents.                  ARGUMENTS                  APPELLANTS                    1. Civil Appeal No. 928 of 1975.--In this  Appeal                  three questions arise for determination:                     (i)  Whether in the facts and  circumstances  of                  the  case  the proviso to s. 9(1)  of  the  Central                  Sales Tax Act, 1956 was applicable so as to  enable                  the  State  of Uttar Pradesh to  levy  and  collect                  Central  Sales  Tax in respect  of  the  subsequent                  sales of coal effected by the Appellants to consum-                  ers in the State of U.P. ?                    (ii) Whether the Sales  Tax  Officer,   Moradabad                  had  no jurisdiction to rectify the assessment  for                  the  year 1966-67 as there was no  error   apparent                  on  the face of the record of the original  assess-                  ment (s. 22 of the U.P. Sales Tax Act, 1948)?                    (iii)   Whether  the  order   of    rectification                  passed   under s. 22 of the U.P. Sales Tax  Act  on                  26th March, 1974 (for the assessment year  1966-67)                  and  communicated to the Appellants on 31st  March,                  1974  was barred by limitation as it could  not  be                  said  to be "within. three years from the date  of"                  the  original  assessment  order  dated  the   27th                  March, 1971 ?         II.  Re: Whether in the facts and circumstances of the  case         the  proviso to Section 9(1) of the Central Sales  Tax  Act,         1956  was  applicable  so as to enable the  State  of  Uttar         Pradesh to levy and collect Central         28         Sales  Tax in  respect of the subsequent sates of  coal  ef-         fected by the Appellants to consumers in the State of U.P. ?                  (a) The proviso to s. 9(1) of the Central Sales Tax                  Act, 1956 does not apply either :---                    (i)  to  subsequent  sales   (in  the  course  of                  inter-State   trade   or  commerce)   of   declared                  goods--i.e.  goods declared in s. 14 to be of  spe-                  cial  importance in inter-State trade or  commerce;                  or                  (ii)  to  sale  of goods  to  persons  other   than                  registered dealers;                  (b) The argument ’in support of the submission that                  the proviso to s. 9(1 ) does not apply to  declared                  goods is as follows :--                  Section  8(1)  and 8(2) of the Central  Sales   Tax                  Act, 1956 deals separately with two types of goods,                  namely, (i) goods of the description referred to in                  sub-section(3)  [see  s. 8(1)(b) and (ii)] declared                  goods  [see s. 8(2)(a)].  The rates of tax for  the                  two types of goods have been  and  are  differently                  prescribed  in  sub-s.  (1) and sub-s.  (2)  of  s.                  8---especially since the Amending Act VIII of 1963.                  The  expression "goods of the description  referred                  to  in sub-section (3)" in s. 8(1)  originally  in-                  cluded declared goods intended for re-sale [see  s.                  8(3)(a)]  as  originally enacted in   the   Central                  Sales  Tax  Act, 1956 (reproduced  in  Chaturvedi’s                  Central Sales Tax Act, 4th .Edition, p. 548).  Sub-                  section (3) of s. 8 then read as follows:

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                "(3) The goods referred to in sub-section (1)--                       (a)  in the case of declared goods, are  goods                  of  the class or classes specified in the  certifi-                  cate  of  registration  of  the  registered  dealer                  purchasing  the goods as being intended for  resale                  by him; and                       (b) in any ’other case, are goods of the class                  or  classes specified in the certificate of  regis-                  tration  of the registered dealer  purchasing   the                  goods  as being intended for re-sale by him or  for                  use by him in the manufacture of goods for sale  or                  for use by him in the execution of any; contract;                  and in either case include the containers or  other                  materials  used for the packing of goods   of   the                  class or classes of goods so specified."              By the Amending Act VIII of 1963 (which raised the rate         of  tax under s. 8(1) to 2 per cent), clause (a) of s.  8(3)         stood deleted.  The effect of this deletion was         29         that  since 1963.declared goods fell outside the purview  of         s. 8(3)  Section 8(4) only applies to sales of goods of  the         description referred to in sub-s. (3), since the  provisions         of that sub-section have express reference to the provisions         of s. 8( 1 ).  For the proviso to s. 9( 1 ) being applicable         it  is  necessary that the registered dealer  effecting  the         subsequent  sale  obtained or could have obtained  the  form         prescribed in s. 8(4)(a)--i.e. Form ’C’ prescribed under rr.         12  and 13 of the Central Sales Tax (Registration and  Turn-         over)  Rules,  1957 (see ’pages 25 and  27  of  Chaturvedi’s         Central Sales Tax Act, Fourth Edition).             In the present case, the appellants neither obtained nor         could have obtained Form ’C’ from .their purchaser since  s.         8(4)  [read  with s. 8(1) and (3)] did   not   (after  1963)         apply to declared goods.             It  is submitted that to accept the arguments  urged  on         behalf  of the Respondents that s. 8(4)(a)   [read  with  s.         8(1)  and (3)] dealt with declared goods  as well, would  be         to  give no meaning to the provisions contained in s.  8(2).         Besides,  as held by Their Lordships in State of Tamil  Nadu         v.  Sitalakshmi Mills & Others C [1974] 4 S.C.C. 408 at  412         para  6), s. 8 deals with three different classes of  cases-         declared goods do not fall within the class mentioned in  s.         8 ( 1 ).             The  argument that the charging s. 6 does not  make  any         differentiation between declared and undeclared goods is  of         no  avail.   Section 6(1) itself commences  with  the  words         "Subject   to  the  other  provisions  contained   in   this         Act  ..........  ". If the effect of any other provision  is         to  take away liability to pay sales tax, effect would  have         to  be  given to that other  provision  notwithstanding  the         charging section [see State of Mysore v. L. Setty 16  S.T.C.         231,239 (S.C.)]. Declared’ goods are clearly intended by the         framers   of Central Tax Act, 1956 to  receive  preferential         treatment  not only in respect of local sales tax  on  local         sales  (see  s.  15), but also Central Sales  Tax  in  sales         effected during  the course of inter-State trade or commerce         [see s. 8(2)].         (c) Even assuming that s. 8(4)(a) [read with s. 8(1) and (3)         include within its  purview  "declared  goods", the  proviso         to  s. 9(1) is still inapplicable for the  following  reason         :--                  For  the proviso to s. 9(1) to be  applicable  and.                  for the State of U.P. to have jurisdiction to  levy                  and  collect  the Central Sales Tax  on  subsequent                  sales,  it is necessary that the registered  dealer

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                effecting  the subsequent sales (by endorsement  of                  documents of title like Railway Receipt during  the                  course of the movement of the goods from one  State                  to another) either "obtained or as the case may  be                  30                  could  have obtained" the Form prescribed.  in   s.                  8(4)(a)  in  connection with the purchase  of  such                  goods  involved in the subsequent  sale.   Such   a                  form could only be  obtained  under s. 8(4)(a) from                  the appellants’ purchasers if the appellants’ sales                  were to  be  "a  registered  dealer"  [see s.  8(1)                  (b)].    Admittedly   in  the   present   case  the                  appellants  though registered dealer for the  rele-                  vant  year in question did not sell coal   to   any                  registered dealer [see the averments in para 11  of                  the  Writ Petition, page 62 Vol. 2 which  have  not                  been  denied  in the Affidavit in  Reply   (para  8                  page  109 Vol. 2].  Therefore, even  assuming  that                  the provisions of s. 8(4)(a) [read with s. 8(1) and                  (3)] were applicable to declared goods (even  after                  the Amending Act VIII of 1963), the sales   result-                  ing in the turnover of Rs. 5,59,172.38 not being to                  registered  dealers, the provisions of  s.  8(1)(b)                  were  not  attracted. Consequently  the  form  pre-                  scribed under s. 8(4)(a)--Form ’C’---could not have                  been obtained by the appellants’ purchaser from the                  prescribed  authority.   Consequently  the   appel-                  lants  could not obtain from their  purchaser  such                  form   under s. 2(4)(a). Accordingly the last  part                  of the proviso to s. 9(1) not being satisfied,  the                  State  of  U.P. had not jurisdiction  to  levy  and                  collect Central Sales Tax from the Appellants.         III.  Re:  Whether the Sales Tax Officer, Moradabad  had  no         jurisdiction to rectify the assessment for the year  1966-67         as there was no error apparent on the face of the record  of         the  original assessment (Section 22 )of the U.P. Sales  Tax         Act, 1948) ?             It  has been stated in the order of rectification  dated         the  26th March, 1974 passed under s. 22 of the  U.P.  Sales         Tax Act, 1948 that (page 96,   Vol. 2):                        "In  the present case of the  assessee  tiffs                  error is apparent because if this fact that it  was                  registered under the Central Sales Tax Act had been                  placed  before the Hon’ble Allahabad High Court  in                  the case of Karam Chand Thapar & Bros. (Coal Sales)                  Ltd.,  Moradabad for the year 1965-66 the  decision                  would have been against them as have been  happened                  in the above mentioned two cases.)             The error apparent on the face of the record, which is a         condition precedent to invoking the rectification  provision         (s. 22) is that the appellants were treated as  unregistered         dealers  by the High Court in the decision for  the  earlier         assessment year 1965-66 (the judgment of the Hi h Court  has         been extracted at pages 71--78 of Vol. 2.  But in s. 22  the         error  has to be an "error apparent on the face of  the  re-         cord" of the assessment--i.e. for the assessment year  1966-         67.   This assessment order is dated 27th March, 1971 and  a         copy of it is at pages         31         79-83  of VoL 2. In that order it is specifically  mentioned         (page 79 viz).:         "10. Whether registered or not: Yes".             Thus  it was known to the Sales Tax Officer passing  the         original  assessment order that the appellants were in  fact         registered dealers.

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           An  error apparent on the face of the record must be  an         error which is "glaring and obvious" [see 34 I.T.R. 143, 150         (S.C.)].   Besides,  there is a distinction between  a  mere         erroneous  decision and a decision which could be  characte-         rised as vitiated by "error apparent". A rectification is by         no means an appeal in disguise whereby an erroneous decision         is reheard and corrected.  It lies only  for  patent   error         (see  Thungabhudra Industries Ltd. v. Government  of  Andhra         Pradesh  [1964]  5  S.C.R. 174, 186)  where  the  expression         "error  apparent  on the face of the record" in  0.47,  r-i,         C.P.C. was interpreted by the Supreme Court).  In that  case         was  also  said that an error apparent on the  face  of  the         record  was  one where "without any elaborate  argument  one         could  point  to the error" (page 186).  This is  also  the.         view expressed in a Sales Tax Case--Master Construction  Co.         17 S.T.C. 360, 365-366 (Subba Rao, J.).             In  the present case, it is submitted that the  view  of         the  Sales  Tax Officer, Moradabad who passed  the  original         assessment order dated 27th March, 1971 following the  deci-         sion  of the Allahabad High Court dated the 24th July,  1970         in  Civil Miscellaneous Writ No. 4356 of 1969 (pages  71  to         78)  was  not patently erroneous. As a matter  of  fact  the         correctness  of  the subsequent decisions of  the  Allahabad         High Court is being doubted in the present Appeal and  there         is no pronouncement of your Lordships on the question  viz.,         interpretation  of  the proviso to s. 9( 1  ).  Besides,  it         cannot be said that at the time when the original assessment         order was passed there was a manifest error.  Moreover, even         as  a  result of the subsequent decisions of  the  Allahabad         High  Court it cannot be said that what was not an error  on         27th  March,  1971 became an error on 26th March  1974  (the         date of the rectification order under s. 22).  In any event,         even  assuming  that there was an error, that error  is  not         apparent  on the face of the record of the original  assess-         ment   it  is a matter in which the arguments,  to  say  the         least,  are  evenly balanced and a decision of  the  Highest         Court is now awaited.             In  the circumstances there was no jurisdiction  in  the         Sales  Tax Officer, Moradabad to rectify and set  aside  the         original order of assessment-                  IV.  Re: Whether the order of rectification  passed                  under Section 22 of the U.P. Sales Tax Act on  26th                  March,  1974 (for the assessment year 1966-67)  and                  communicated to the Appellants on 31st March,  1974                  was barred by limitation as it could not be said to                  be  "within  three  years from the  date.  of"  the                  original  assessment  order dated the  27th  March,                  1971 ?             It  is submitted that the period of limitation under  s.         22  of the U.P. Sales Tax Act, 1948, runs from the  date  on         which  the  order of rectification is  communicated  to  the         assessee--which would enable the         assessee to file an appeal under s. 9 of the U.P. Sales  Tax         Act, 1948. The period of limitation for filing an appeal  is         30  days from the date of service of the copy of  the  order         appealed against. It is submitted that an order of  rectifi-         cation is not complete as against the assessee unless it  is         duly  communicated to him.  The order of  rectification  af-         fects  the  rights and liability of an assessee  and  it  is         essentially fair and just that it should be communicated  to         the  party as stated by Your Lordships in a case  under  the         Land  Acquisition Act where the phrase "date of the  Collec-         tor’s award" was being considered..Your Lordships observed :                        "  ....  If the award is treated as an admin-                  istrative  decision taken by the Collector  in  the

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                matter  of the valuation of the property sought  to                  be  acquired  it is clear that  the  said  decision                  ultimately  affects the rights of the owner of  the                  property  and  in that sense,  like  all  decisions                  which  affect persons, it is essentially  fair                  and just that the said decision should be  communi-                  cated  to  the said party.  The  knowledge  of  the                  party affected by such a decision, either actual or                  constructive, is an essential element which must be                  satisfied  before the decision can be brought  into                  force.   Thus  considered the making of  the  award                  cannot consist merely in the physical act of  writ-                  ing  the award or signing it or even filing  it  in                  the  office of the Collector; it must  involve  the                  communication  of the said award to the party  con-                  cerned  either actually or constructively.  If  the                  award  is. pronounced in the presence of the  party                  whose  rights are affected by it it can be said  to                  be  made when pronounced. If the date for the  pro-                  nouncement  of  the award is  communicated  to  the                  party and it is accordingly pronounced on the  date                  previously announced the award is said to be commu-                  nicated to the said party even if the said party is                  not actually present on the date of its  pronounce-                  ment.  Similarly if without notice of the  date  of                  its  pronouncement  an award is  pronounced  and  a                  party  is not present the award can be said  to  be                  made  when it is communicated to the  party  later.                  The  knowledge of the party affected by the  award,                  either  actual or constructive, being an  essential                  requirement of fair-play and  natural  justice  the                  expression ’the date of award’ used in the  proviso                  must mean the date when the award is either  commu-                  nicated  to  the party or is known  by  him  either                  actually or constructively. In our opinion,  there-                  fore,  it  would  be  unreasonable to construe  the                  words from the date of  the  Collector’s award used                  in the proviso to s. 18 in a literal or  mechanical                  way."                  (A.I.R. 1961 S.C. 1500, 1503--[1962] 1 S.C.R.  676,                  683684).             It  is  submitted that on an analogy  of  reasoning  the         words  "the date of any order passed by him" in s. 22(1)  of         the  U.P. Sates Tax Act, 1948 must be construed to mean  the         effective  date of an order of rectification viz.  the  date         when it is communicated.  In the instant case the order  was         communicated after three years from the date of the  assess-         ment  order  and, therefore, the order of  rectification  is         vitiated as being barred by time.         33         V.  1n Civil Appeal No. 929 of 1975 the only  question  that         arises is:                  Whether in the facts and circumstances of the  case                  the  proviso  to s. 9(1) of the Central  Sales  Tax                  Act, 1956, was applicable so as to enable the State                  of Uttar Pradesh to levy and collect central  sales                  tax  in  respect of the subsequent  sales  of  coal                  effected  by  the appellants to  consumers  in  the                  State of U.P. ?         The assessment year in question is 1969-70 and the Appellant         adopts the arguments urged in Civil Appeal No. 928 of  1975.         With  regard  to  whether the sales by  the  appellants  (in         1969-1970)  during the course of the movement of  the  goods         from State to State were to registered dealers or to consum-         ers, there is  no  indication  in  the  record as  to wheth-

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       er   the sales effected  to  registered dealers or  to  con-         sumers or unregistered dealers.  In the event of Your  Lord-         ships  holding  that declared goods are not covered  by  the         proviso to s. 9(1) this would make no difference because  it         is admitted that the subsequent sales effected by the appel-         lants  were of declared goods namely coal. But in the  event         of Your Lordships coming to the conclusion that the  proviso         to  s. 9 (1 ) may include also subsequent sales of  declared         goods, then the submission urged is (as in Civil Appeal  No.         928  of  1975)  that in any view of the matter  it  is  only         subsequent  sales to registered dealers which would  attract         jurisdiction  of the State authorities under the proviso  to         s.  9(  1 ) and not subsequent sales by  the  appellants  to         unregistered  dealers or consumers.  The fact would be  easy         of ascertainment by the Sales Tax Officer and it is  submit-         ted  that in that event a direction ought to be  given  that         the  State of U.P. could levy and collect central sales  tax         under proviso to s. 9 (1 ) in respect of subsequent sales of         coal   effected  by  the  appellants  only   to   registered         dealers--and not to unregistered dealers or consumers.         RESPONDENTS:         A.  Contention No. 1.  This is the main contention and is  a         short one.  It is as to which State has jurisdiction to  tax         subsequent  sales  made  by a  registered  dealer.   In  the         instant   case, admittedly the appellant is a dealer  regis-         tered  in  U.P.  both under the Central and  the  U.P.  Act.         Therefore, the short question which arises for consideration         is as to whether in the instant case the State of U.P. would         have the jurisdiction to tax such subsequent sales  effected         by  the enforcement of documents t0 parties in U.P. ?  There         is  a  specific provision in the Act, which is proviso to s.         9  (1 ), to cover cases such as the  present case.   Section         9(1) reads:                         "The  tax payable by any dealer  under  this                  Act on sales of goods effected by him in the course                  of interstate trade or commerce, whether such sales                  fall  within   clause (a)  or clause (b) of  s.  3,                  shall  be levied by the  Government  of  India  and                  the  tax so levied shall be collected by that  gov-                  ernment  in accordance with the provisions of  sub-                  section (2) in the State from which the movement of                  goods commence:                       Provided that, in the case of a sale of  goods                  during  their movement from one State  to  another,                  being a sale subse                  quent  to  the first sale in respect  of  the  same                  goods, the tax                  34                  shall,  where such sale does not fall  within  sub-                  section  (2) of section 6, be levied and  collected                  in  the  State  from which  the  registered  dealer                  effecting  the subsequent sale obtained or, as  the                  case  may  be, could have obtained, the  form  pre-                  scribed for the purposes of clause (a) of  sub-sec-                  tion  (4) of section 8 in connection with the  pur-                  chase of such goods."             Sub-s.  (2)   of   s. 9   merely   provides   that   the         appropriate State on behalf of the Government of India shall         assess, ’reassess, collect and enforce payment of tax  under         the Act as if the’ tax under the Act was a tax payable under         the general sales tax law  of  the State.  Therefore, it  is         that the tax to be collected under the Act is by  the appro-         priate  State for and on behalf of the Government of  India.         In  the case of at first sales,  the substantive  provisions         of  s.  9 (1 ) are clear and unequivocal.  Section  9  (1  )

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       selects  out  of several States one.  particular  State  and         empowers it to levy and collect C.S.T. That State alone  has         the  power to levy the tax and all other States by  implica-         tion  are  debarred.  This was a simple  device  adopted  in         order  to fix the forum and jurisdiction of  the  particular         State  to make the assessment in respect of first sales.   A         simple test was evolved to avoid multiplicity of  imposition         of  tax by more than one State in respect of the same  goods         and  that was to link the tax with the commencement  of  the         physical  movement  of the goods on their Journey  from  one         State  to another.  This was simple to comprehend  and  exe-         cute.   Therefore,  the appropriate State was the  one  from         where  the.  movement of goods started on  their  interstate         journey.   That  problem  does not concern us  here  as  the         States  of Bihar and Bengal from where the movement of  coal         commenced have duly assessed the tax u/s 9 (1) of the Act.             The  question, however, is which is the State which  can         tax   the  subsequent sale in the instant  case.   For  this         purpose  the proviso had to be enacted as admittedly CST  is         multipoint in nature and there is no provision for a  single         point  tax.   The only exemption is to be found in  s.  6(2)         which  is the charging section and if the  transaction  does         not  satisfy  all  the three conditions of s.  6(2),   viz.,         (a)  the  purchaser  is a registered dealer, (b)  who  by  a         certificate  of registration is authorised to  purchase  his         goods, and (c) the selling dealer furnishes to his assessing         authority :--                      (i) a certificate duly filled and signed by the                  registered  dealer  from whom the goods  were  pur-                  chased  containing the prescribed particulars in  a                  prescribed  form obtained from the  prescribed  au-                  thority,                  and  (ii) a declaration in C Form duly  filled  and                  signed  by the registered dealer to whom the  goods                  were sold.                  (see Chaturvedi’s 3rd edition, page 383).         No  attempt has been made by the appellant-assessee  in  the         instant case even to allege, what to say of proof, that  the         aforesaid  three conditions were satisfied..  Therefore,  s.         6(2)  which provides for exemption in respect of  subsequent         sales, albeit of declared or undeclared  goods, will have no         application.  The position therefore would be that the         35         subsequent  sales  in the instant case would not  be  exempt         u/s  6(2). Therefore, the subsequent shies have to be  taxed         and the only question is which State would have jurisdiction         to  assess   the subsequent sales.  It was  fairly  conceded         that the subsequent sales  would  be assessable u/s 9 ( 1 ),         except  sales of declared goods.  The argument was built  up         merely  On the omission of el. (a) from s. 8(3) of  the  Act         with effect from 1-4-1963.  Prior to that date section  8(3)         ran as follows:                  "The goods referred to in clause (b) of sub-section                  (1)-                         (a)  in the case of declared goods or  goods                  of  the class or classes specified in the  certifi-                  cate  or  registration  of  the  registered  dealer                  purchasing  the goods as being intended for  resale                  by him.."                  The  above  was  omitted by s. 2(iii)  (a)  of  the                  C.S.T.  Amendment Act (No. 8 of 1963)  with  effect                  from  1st  April, 1963. From this omission  it  was                  assumed  that  it was no longer necessary  for  de-                  clared  goods  to be specified in  the  declaration                  prescribed  under  rule 12 and the  Form  C.   This

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                assumption  is wholly unwarranted and is   contrary                  to  the  provisions of the Amending Act (No.  8  of                  1963),   The omission of cl. (a) and certain  words                  in  cl.  (b)  of s. 8(3) was  necessitated  as  the                  legislature  probably  wanted to do away  with  the                  distinction  between declared goods and  undeclared                  goods  for purposes of s. 8(3).  Hence  it  deleted                  clause  (a) in its entirety and the words  "in  the                  case  of goods other than declared goods" from  cl.                  (b)  of s. 8(3).  Thus with effect from  1-4-63  so                  far  as mentioning of goods in the  certificate  of                  registration  of purchasing dealer for  purpose  of                  re-sale  etc.   are  concerned they made  only  one                  category and specified the same rate of  tax as was                  applicable  u/s  8  ( 1 )  both  for  declared  and                  undeclared  goods, provided Form C was duly submit-                  ted.   The above interpretation also finds  support                  from Chaturvedi’s Central Sales Tax Law, 3rd   edi-                  tion,  1973 at page 325, paras 7 and 8, which  read                  as :--                        "Clause  (a)  of s. 8(3) was  omitted  by  s.                  2(iii) (a)  of the Amendment Act, 1963 with  effect                  from 1-4-63.  Before that the rate of tax for sales                  covered in sub-section (1 ) was 1 p.c. and all  the                  sales or purchases of declared goods under the said                  Act  could be subjected to tax at the rate upto  2%                  by virtue to s. 15 of the principal Act.                        "Sales covered under sub.-s. (1) could  enjoy                  a concessional rate of 1 p.c. instead of the  state                  rate  of 2 p.o..But when by the CST  Amendment  Act                  (No.  8 of 1963) the rate of tax for sales  covered                  by  sub-s. (1 ) was enhanced also to 2  p.o.  there                  was  no  use of cl. (a) of sub-s. (3)  and  it  was                  omitted.                       "In  el. (b) of sub-s. (3), the opening  words                  ’in   the case of goods other than declared  goods’                  were omitted  by s. 2(iii) (b) of the C.S.T. Amend-                  ment Act, 1963 with effect from 1-4-63."         36           Thus  it is manifest that the argument laboriously   built         up   had no foundation and the omission of sub-cl. (a)  from         s.  8(3),  if anything, goes against the contention  of  the         assessee and fully supports the contention of the Department         as  that Vividly  demonstrates  that if .there was ever  any         intention of the legislature to make any distinction between         declared and undeclared goods insofar as the  sale  of  such         goods  was  made  to government or to a  regd  dealer   that         was  done  away with after 1-4-63.  The contention  for  the         Department  was  that there was never any  distinction  made         between  declared and undeclared goods even in the  Act  and         the Rules prior to 1963-64 in the matter of specification of         the  class or classes of  goods  in  the  application  under         Form  A,  the  certificate under From B  and  the  requisite         declaration  under  Forn  C under rr. 5 and 12  of  the  CST         Rules.             The  only place where the words "declared  goods"  occur         is   in section 8(2) (a) which merely provides the  rate  of         tax applicable for sales without furnishing Form C’ and  not         for any other reason.  Thus the Act, the Rules and the Forms         make  no distinction between declared and  undeclared  goods         whatsoever.  The main argument,  therefore, has no force and         in the absence of the condition u/s 6(2) having been  satis-         fied,  declared goods are taxable and the assessee  being  a         regd.  dealer registered in U.P. both under the Central  Act         and the U.P. Act and the subsequent sale having been effect-

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       ed by such registered dealer in the State of U.P. the provi-         so to s. 9 (1 ) is clearly attracted.             To  sum up, in the instant case the State of U.P.  would         have  the jurisdiction to assess, levy and collect C.S.T. on         subsequent  sales effected, by the assessee under the provi-         so  to  s. 9 (1 ),  provided  the following  conditions  are         satisfied:         (1)  The sale is a subsequent sale made during the  movement         of  goods  from the States of W. Bengal and’  Bihar  to  the         State  of  U.P .This condition was fairly conceded  by  the-         learned counsel for the assessee to be satisfied.             (2) The subsequent sale is in respect of the same goods.         Tiffs was also conceded.             (3) That the goods do not fail within s. 6(2), that  is,         the  sale was to a registered dealer other than  Government,         if  the  goods are of the description referred  to  in  Sub-         section (3) of  S. 8.  Such subsequent sale would be  exempt         provided the  necessary  certificate  in Form C is produced.             (4) The registered dealer effecting the subsequent  sale         obtained  or  could have obtained the  form  prescribed  for         purposes of el. (a) of sub.-s. (4) or s. 8, that is, Form C.             The last two conditions according to the learned couusel         do   not require to be satisfied in case of declared  goods.         As  already stated there is no express warrant nor does  the         scheme  of the Act  support any distinction for  C.S.T.  be-         tween declared and  undeclared  goods except in the  conces-         sional rate applicable.         37             Section  15 only places restrictions and  conditions  in         regard to intra-state sales of declared goods.’ This has  no         application  to intexstate sales and, therefore, the  single         point  tax  provided in s. 15 cannot be  imported  into  the         other  provisions of the Act.  Therefore, C.S.T.  is  multi-         point  in the absence of any specific provision to  make  it         single point.             The relevant sections are section 3 which   artificially         determines  when sale of goods can be said to take place  in         the course of interstate trade or commerce.             Section  6 is the charging section.  It  is  significant         that it charges tax on all sales.  Therefore unless there is         a specific exemption, sales of both declared and  undeclared         goods would be taxable.  It is well settled that the  burden         of proof lies heavily on the person ,who claims such  exemp-         tion.              Section  6(2)  deals with the charge to  be  levied  in         respect  of a subsequent sale effected by transfer of  docu-         ments to a regd.  dealer which would be exempt provided  the         conditions  specified in the proviso thereto are  satisfied.         These conditions undoubtedly have not  been satisfied.   The         case  .of  the assessee is that they do not  require  to  be         satisfied in the case of declared goods.              S.  7(3)  requires in the certificate  of  registration         under  r. 5 and for the purposes of s. 8 (1 ) the  class  or         classes  of goods to be specified and it is only in  respect         of those goods so specified that to be exemption or  conces-         sional rate is available and not otherwise.            S.  8  merely provides the rates of  tax  on  inter-state         sales.   There   is a concessional rate of 3% for  sales  to         regd.  dealers provided  the  goods are of  the  description         referred  to  in s. 8(3) which refers  to  s. 7(3)  and  the         application in Form A and the certificate in Form B   issued         under rr. 3 and 5 of the Rules.  Section 8(2) refers specif-         ically   to the concessional rate for declared goods  vis-a-         vis  undeclared goods.  For declared goods it is 3  %  being         the  rate in the appropriate State, and  10% for  undeclared

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       goods.   Beyond this concessional rate  there is   no  other         distinction made between declared and undeclared goods.             S. 8(3) refers back to s. 7(3), rr. 3 and 5 and Forms  A         and B  and only those goods, declared and undeclared,  which         find  a place  the certificate are entitled to  the  conces-         sional rate and none others.            The  proviso to s. 9(1) specifically covers  the  instant         case.  The  assessee is a regd. dealer, and the sales do not         fall within the exemption u/s 6(2) and being a regd.  dealer         in  U.P. he could have obtained  the Form C from  the  Sales         Tax  Officer of his Circle.  It, therefore, follows that  in         the instant case there can be no doubt whatsoever that   the         admitted  subsequent sales are taxable in the State of  U.P.         for  and  on behalf of the Government of India u/s  9(1)  of         C.S.T.             B. Contentions 2 and 3. These .may be dealt with togeth-         er. The  argument of the learned counsel for the assessee in         short  was that  there was no error apparent on the face  of         the record and, therefore,         38         s.  22 of the U.P. Act read with s. 9(2) of the Central  Act         could not be invoked.  It must be remembered that this point         is  taken in a writ under Art. 226 when there was no  possi-         bility  of  the appeal or revisional courts going  into  the         facts  of  the case.  In these circumstances  the  facts  as         found  by the Sales Tax Officer in his order u/s 22  and  by         the High Court in its judgment dismissing the writ  petition         will  have to be taken as sacrosanct.  At page 92 of  volume         II is the order u/s 22. At page 94, line 4, it is stated-                        "The  assessee is registered in  this  office                  under  C.S.T.  Act and their Central regn.  No.  is                  2931 which had been in existence since 4-12-65.  In                  the  case of  M/s Karam  Chand Thapar &  Bros.  for                  the  year  1965-66.the High Court   had  held  that                  sales made by them were exempt from C.S.T.  or U.P.                  Sales  Tax  and the authorities of  Bihar  or  West                  Bengal  only could assess the tax.  Thereafter  the                  Hon’ble  High Court of Allahabad in many cases held                  that  if the assessee was registered under the  CST                  the  authority  of that State had  jurisdiction  to                  make assessments.  Therefore,  the  S.T.O.  Morada-                  bad  has jurisdiction to assess the  assessee.   In                  the  meanwhile the High Court of Allahabad held  in                  several cases that only dealers who are  registered                  under  the C.S.T. are liable to be  assessed  under                  the Act as for example  ........  "                  At page 96, line 2                        "In  the  present case of the  assessee  this                  error is apparent because if this fact that it  was                  registered under the C.S.T. had been placed  before                  the  High Court  ..........  for the year  1965-66,                  the  decision would have been against them as  hap-                  pened in the above mentioned two cases."                  At page 97, line 4-                        "In the above mentioned case the error of law                  is  clear  because  u/s 9(1)  the  jurisdiction  of                  assessment  of tax lies only with that State  where                  from  the dealer has received their  Central  Regn.                  No. and wherefrom  the dealer receives C                  Form."                  Similarly,  the  judgment of the High Court  is  at                  page 1, of volume I and at page 2, last  paragraph,                  the finding is:                        The  petitioner claimed that the turnover  of                  Rs. 30.07 lakhs was exempt from tax and that of Rs.

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                5.59 lakhs could not be taxed in the State of  U.P.                  The  S.T.O. relying upon the observations  made  by                  the High Court in petitioner’s own assessment  case                  for  the  year 1965-66 accepted his case  that  his                  turnover  amounting to Rs. 5.59 lakhs could not  be                  taxed  in  U.P. Subsequently in a number  of  cases                  this  Court  ruled that in a case  where  a  dealer                  effecting  a  second sale in the course  of  inter-                  state  trade is a registered dealer, sales  tax  on                  the turnover of such goods is to be realised in the                  State  where  the  dealer effecting  the  sale,  is                  registered."                  39                  Page 7, para 2:                        "In  the  instant  case we  find  that  while                  making the assessment order of 27-3-71 and  holding                  that  petitioner’s turnover amounting to  Rs.  5.59                  lakhs  was  not liable to tax in U.P.,  the  S.T.O.                  relied  upon a decision of this Court   which,   as                  subsequently  clarified  in the  case  of  Shinghal                  Bros. & Co. v. State did  ....................  not                  lay  down  that even in the case  of  a  registered                  dealer effecting a subsequent sale in the course of                  inter-state trade or commerce would  not  be liable                  to  be taxed in the State where he  is  registered.                  Accordingly,  the S.T.O. applied the law laid  down                  in  this Court’s earlier judgment to the  facts  of                  the present case under some misapprehension and  it                  is  not  disputed that  in  subsequent  cases  this                  Court  has very clearly laid down that in the  case                  of a subsequent sale effected during the course  of                  interstate trade and commerce by a regd. dealer the                  turnover  of  such sale. is to be assessed  in  the                  State  where the dealer is registered.  It is  thus                  clear  that there Was a mistake in  the  assessment                  order dr. 27-3-71.  The mistake was apparent on the                  face  of the record inasmuch as the S.T.O.  applied                  the observations made by this Court in a case which                  had been decided on the footing that the  concerned                  dealer  was an unregistered dealer to a case  where                  the  dealer  was admittedly  a  registered  dealer.                  This  mistake did not require any elaborate   argu-                  ment  or prolonged debate on the merits or  on  the                  questions of law involved in the case."         In  view of these categorical findings by. two  courts  that         there  was  a  clear and obvious mistake  resulting  from  a         mistake which had crept into the judgment of the High  Court         in the assessee’s own case for the A/year 1965-66 which  the         S.T.O. was bound to follow and could not ignore, the mistake         in  the subsequent  assessments  could  be rectified u/s  22         within  the period of limitation of  3 years.  Action  could         also  have  been  taken u/s 21 under the U.P.  Act   for   a         reassessment  .where the period of limitation is   4  years.         It   is   well settled that ss. 21 and 22 are  not  mutually         exclusive and  the same action may be taken under either  of         the  sections provided the conditions specified therein  are         satisfied.  The notice u/s 22 was  issued within the  period         of  three  years and there was yet another year to  run  for         action u/s 21, and in these circumstances a technical  point         of  this  nature  raised in a writ petition  should  not  be         countenanced.  The main point that the sum of Rs. 5.59 lakhs         was  taxable  not  being in dispute as stated  by  the  High         Court,  no  assessee has a vested right to the forum  or  to         succeed on mere technicalities.              The  contention that the notice u/s 22. and  the  order

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       passed  thereunder  should  have been  communicated  to  the         assessee  within  three years is wholly unsupported  by  any         authority.  Section 22 merely requires the order to be  made         within  three years.  No  rights  of  the assessee  are  af-         fected  by the passing of the order and it is only when  the         additional  demand is served upon him under  the  provisions         of         40         s.  22(2) of the Act that the period of limitation  for  any         appeal, revision, etc. would begin to run.         Authorities           Rectification--Glaring and obvious mistake of law                     34 ITR 143 SC                     53 Cal Weekly Notes 869                     87 ITR 669 Cal                     100 ITR 118 A .P.           Date of order---meaning of                     34 S.T.C. 257 SC                     46 ITR 529 All.                     86 ITR 141 SC                     22 ITR 296 Pb                     31 ITR 231 All.         The Judgment of the Court was delivered by             GUPTA,  J.  The appellant in Civil Appeal  No.  928   of         1975.  M/s.  Karam Chand Thapar and Brothers, is  a  limited         company incorporated  under the Companies  Act, (referred to         hereinafter  as  the Company), and the six branches  of  the         Company   at   Allahabad,  Moradabad,   Kanpur,    Varanasi,         Gorakhpur   and Lucknow are the appellants in  Civil  Appeal         No.  929  of 1975. The Company carries on business  as  coal         agents  and is registered under the Uttar Pradesh Sales  Tax         Act,  1948  and  the Central Sales Tax Act,  1956  with  the         Sales  Tax Officer at Moradabad in Uttar Pradesh.  We  shall         refer to these two statutes as the U.P. Act and the  Central         Act for the  sake  of brevity.  The Company used to  arrange         supply  of coal from collieries situate in West  Bengal  and         Bihar to consumers in Uttar Pradesh.  The collieries used to         send  the coal by rail and the railway receipts   were  pre-         pared  either in the name of the Company or in the  name  of         the consumer in Uttar Pradesh on whose behalf the order  for         supply  of. coal was placed.  The collieries sent the  bills         and  invoices  in respect of the coal  despatched  to  Uttar         Pradesh to the Company’s head office in Calcutta; the Compa-         ny forwarded the railway receipts to the consumers in  cases         where  the receipts were in the names of the  consumers  and         endorsed  the  receipts that were in the Company’s  name  in         favour  of the consumers for whom the coal had   been   des-         patched.   These  two appeals, brought  on  certificates  of         fitness  granted by the Allahabad High Court, arise  out  of         two writ petitions filed in the  High  Court respectively by         the Company and its aforesaid branches.  The petition  filed         by  the  Company leading to Civil Appeal  928,  is  directed         against  an  order  made under section 22 of  the  U.P.  Act         giving   rise to the question whether section 9 (1 ) of  the         Central Act was applicable to the case enabling the State of         Uttar  Pradesh  to  levy and collect Central  sales  tax  in         respect of subsequent sales of coal effected by the  Company         to  consumers  in  Uttar Pradesh by   endorsement   of   the         documents of title; in the other writ petition, filed by the         Company’s six branches, the applicability of section 9(1) of         the Central Act was         41         one of the points raised in the High Court, but this was the         only  point  urged before us in Civil Appeal No.  929.   The         assessment year in question in Civil Appeal 928 is  1966-67,

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       and  that in Civil Appeal 929 is 1969-70.  As the  Company’s         appeal  covers the question involved in the other  case  and         raises  two  additional questions, we shall state  only  the         facts  of Civil Appeal 928 to indicate how  these  questions         arise.                In  the assessment year 1966-67, the  Company   filed         quarterly returns showing its turnover of coal in two  cate-         gories:                         (a)  turnover  in cases  where  the  railway                  receipts  had  been prepared in the  names  of  the                  consumers  amounting to Rs. 30,07,439/02p.; and                         (b)  turnover  in cases  where  the  railway                  receipts  had  been  prepared in the  name  of  the                  Company but  subsequently endorsed in favour of the                  consumers   in  Uttar  Pradesh  amounting  to   Rs.                  5,59,172/32p.                  The  dispute in this case relates to the amount  of                  Rs.  5,59,172/32p. which according to  the  Company                  could  not be taxed in the State of Uttar  Pradesh.                  Before We proceed further, it would. be  convenient                  to set out the relevant provisions of the two Acts.                  Taking  the Central Act first,  section  2(c)   de-                  fines   "declared  goods"  as  the  goods  declared                  under  section  14 to be of special  importance  in                  inter-State  trade or commerce.  SectiOn  14  which                  declares certain goods to  be of special importance                  in  inter-State trade or commerce mentions coal  as                  one of them.  Under section 3 a sale or.purchase of                  goods   is  deemed to take place in the  course  of                  inter-State  trade or commerce if the sale or  pur-                  chase, (a) occasions the movement of goods from one                  State to another; or (b) is effected by a  transfer                  of  documents  of title to the goods .during  their                  movement  from one State to another. The  sales  we                  are concerned with in this case were of this second                  type.  Sub-section (1) of section 6  provides  that                  subject  to the other provisions of the Act,  every                  dealer shall be liable to pay tax under this Act on                  sales  of  goods effected by him in the  course  of                  inter-State trade or commerce.  Sub-section (2)  of                  section  6  states  that  notwithstanding  what  is                  provided in sub-section (1), any subsequent sale of                  goods effected by a transfer of documents of  title                  to  the goods,-(A) to the Government, or (B)  to  a                  registered dealer other than the Government, if the                  goods  are of the description referred to  in  sub-                  section (3) of section 8, shall be exempt from  tax                  under  this  Act.  There are two provisos  to  this                  sub-section,  but it is not necessary to  refer  to                  them.  Section 7(1) requires every dealer liable to                  pay  tax under this Act to apply for  registration.                  Sub-section (3) of section 7 provides that if   the                  application  is in order, the prescribed  authority                  shall   register  the applicant and grant to him  a                  certificate of registration in the prescribed  form                  which  shall specify the class or classes of  goods                  for  the purpose of sub-section (1) of  section  8.                  Rule  3 of the Central Sales Tax (Registration  and                  Turnover)  Rules, 1957, states that an  application                  for  registration under section 7 shall be made  in                  Form A, and Form A requires the purpose or purposes                  for which the  goods  or                  5--1003 SCI/76                  42                  casses of goods are purchased by the dealer in  the

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                course of interState trade or commerce to be speci-                  fied;  as would appear from the Form,  ’resale’  is                  one  such purpose.  Rule 5 (1 ) of the  Rules  pro-                  vides that the certificate of registration must  be                  in Form B.  Section 8(1) provides that every dealer                  who in the course of inter-State trade or commerce,                  (a) sells to the Government any goods; or (b) sells                  to  a registered dealer other than  the  Government                  goods  of the description referred to. in  sub-sec-                  tion  (3) of this section, shall be liable to   pay                  tax under this Act at the rate of three per cent of                  his  turnover.  Subsection (2) of section 8  states                  that the tax payable by any dealer on his  turnover                  relating  to  the sales of goods in the  course  of                  inter-State  trade or commerce which does not  fall                  within  sub-section (1)  shall be--(a) in the  case                  of  declared goods, at the rate applicable to   the                  sale or purchase of such goods inside the appropri-                  ate State, and (b) in the case of goods other  than                  declared goods, at the rate  of  ten per cent or at                  the rate applicable to the sale or purchase of such                  goods  inside the appropriate State,  whichever  is                  higher.   The  goods referred to in clause  (b)  of                  sub-section (1) are specified in sub-section (3) of                  this  section  as  goods of the  class  or  classes                  specified in the certificate of registration of the                  registered  dealer purchasing the goods   as  being                  intended  for  resale by him.  Sub-section  (4)  of                  section 8 says  that the "provisions of sub-section                  (1)  shall not apply to any sale in the  course  of                  inter-State  trade  or commerce unless  the  dealer                  selling  the  goods  furnishes  to  the  prescribed                  authority  in the prescribed manner (a) a  declara-                  tion  duly  filled  and signed  by  the  registered                  dealer  to whom the goods are sold  containing  the                  prescribed  particulars   in   a  prescribed   form                  obtained from the prescribed authority;" rule 12(1)                  of the Rules states inter alia that the declaration                  referred  to in sub-section (4) of section 8  shall                  be in Form C. Clause (b) of sub-section (4) is  not                  relevant  to  the  present purpose. Section  9  (1)                  reads:                     "9.  (1) Levy and collection of tax  and  penal-                  ties.                         The tax payable by any dealer under this Act                  on sales of goods effected by him in the course  of                  inter-State  trade or commerce, whether such  sales                  fall within clause (a) or clause (b) of section  3,                  shall be levied by the Government of India and  the                  tax so levied shall be collected by that Government                  in  accordance with the provisions  of  sub-section                  (2),  in the State from which the movement  of  the                  goods commenced:                         Provided  that,  in the case of  a  sale  of                  goods  during  their  movement from  one  State  to                  another, being a sale subsequent to the first  sale                  in respect of the same goods, the tax shall,  where                  such  sale does not fall within sub-section (2)  of                  section  6,  be levied and collected in  the  State                  from  which  the registered  dealer  effecting  the                  subsequent  sale obtained or, as the case  may  be,                  could  have  obtained,  the  form  prescribed   the                  purposes  of  clause  (a) of  sub-section  (4)   of                  section  8 in connection with the purchase of  such                  good

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                43                  The  dispute   in  this case turns on  whether  the                  proviso  to   section 9 (1 ) is applicable  to  the                  case.   Reference  may also be made to  section  15                  which  provides the restrictions and conditions  in                  regard  to the tax on sale or purchase of  declared                  goods within a State.  The tax on sale or  purchase                  of  such goods inside the State. is not  to  exceed                  three  per cent of the price thereof, and such  tax                  is not to be levied at more than one stage.                      The  only  provision of the U.P. Act  which  is                  relevant is section 22 which is in these terms:                        "22.  Rectification  of  mistakes.  (1)   The                  assessing, appellate, revising or additional revis-                  ing  authority may, at any time within three  years                  from  the date of any order passed by  it,  rectify                  any mistake apparent on the record;                        Provided  that no such  rectification,  which                  has the effect of enhancing the assessment shall be                  made  unless  the  authority  concerned  has  given                  notice to the dealer of his intention to do so  and                  has allowed him a reasonable opportunity  of  being                  heard.                        (2)  Where such rectification has the  effect                  of  enhancing  the assessment, the  authority  con-                  cerned shall serve on  the dealer a revised  notice                  of demand in the prescribed form and therefrom  all                  the  provisions  of the Act and  the  rules  framed                  thereunder  shall apply as if such notice had  been                  served in the first instance."         The  Sales Tax Officer had accepted the contention that  the         turnover amounting to Rs. 5,59,172/32p. was  not taxable  in         Uttar  Pradesh.  In taking this view the Sales  Tax  Officer         appears to have  proceeded upon the observations in a  Judg-         ment  of the Allahabad High Court in the Company’s  own  as-         sessment  case  for the year 2965-66.. However,  in  several         subsequent  decisions,  the High Court held that m  a   case         where  a  registered dealer effected a second  sale  in  the         course  of interState trade and commerce, sales tax  on  the         turnover  was to be realised in the State where  the  dealer         effecting  the sale was registered.  In one of these  cases,         M/s.  Singhal & Co. v. State & Ors(1)  it  was  pointed  out         that  the earlier decision of the High Court had  completely         overlooked  the  proviso to section 9(2)  of   the   Central         Act.  The Company being admittedly a registered dealer under         the  Central Act and liable to pay tax under that  Act,  the         Sales  Tax Officer thought that there was an apparent  error         in the order of assessment made on March 27, 1972  exempting         the  turnover amounting to Rs. 5,59,172/32 p. which in  view         of  the  proviso  to  section 9(1) of the  Central  Act  was         taxable  in Uttar Pradesh.  Accordingly,  he   proposed   to         rectify  the error under section 22 of the U.P. Act, and  on         March  21, 1974 he issued a notice to the Company  requiring         it  to appear before him on March 25, 1974.  In response  to         the notice a representative         (1) (1973) U.P. Tax Cases 466.         44         of  the  Company appeared. contended  against  the  proposed         rectification,  and  also filed a  written  objection.   The         Sales  Tax  Officer  recorded an order on  March  26,  197.4         overruling the objections and rectified the order of assess-         ment  dated March 27, 1.971.  A copy of the order passed  on         March 26, 1974 rectifying the mistake in the earlier assess-         ment  order  was served on the Company on March  31,   1974.         The  Company challenged the order dated March 26,  1974   by

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       a   writ  petition in the Allahabad High  Court  which,  was         dismissed giving rise to this appeal.             Mr.  Nariman appearing for the appellants in  these  ap-         peals pressed the following grounds:                      (1)  the proviso to section 9 (1 ) of the  Cen-                  tral Act has no application to goods declared to be                  of  special  importance  in  inter-State  sales  or                  commerce under  section 14 of the Central Act;                      (2) section 22 of the U.P. Act was not applica-                  ble as there was no mistake apparent on the face of                  the record; and                      (3) in any event, the order made under  section                  22 of the. U.P. Act was barred by limitation.             The  argument. that the proviso to sub-section  (1)   of         section  9  does  not apply to declared  goods  proceeds  as         follows:   Sub-section (1) (b) and sub-section 2(a) of  sec-         tion  8 of the Central Act deal with two different types  of         goods.  Sub-section (1)(b)  speaks  of goods of the descrip-         tion  referred to in sub-section (3),  and   subsection  (2)         relates  to  declared goods.  Sub-section (3) of  section  8         only  mentions the goods referred to in  sub-section  (1)(b)         which  are  goods of the class or classes specified  in  the         certificate  of  registration of the dealer  purchasing  the         goods as being intended for resale.  Subsection (4) requires         a  declaration for the purposes of sub-section (1) (b),  and         as sub-section (1)(b) does not speak of declared goods,  the         declaration  referred  to in sub-section (4)  would  not  be         necessary  in  the  case of sale’ or  purchase  of  declared         goods.             We  fail to see any valid distinction  between  declared         goods  and other goods for the purpose of the  applicability         of sub-section (1 ) of section 8.  The .distinction was made         by  Mr.  Nariman  inferentially from the Central  Sales  Tax         (Amendment) Act (8 of 1963)  which omitted with effect  from         April 1, 1963, clause (a) from sub-section (3) of section  8         as it stood prior to that date.  Sub-section (3), it may  be         recalled,  specifies  the  goods  referred  to  in   section         8(1)(b).  Prior to April 1, 1963, section  8(3)listing  such         goods,  stated  in clause (a)--                    "(a) in the case of declared goods, are goods  of                  the class                      or  classes  specified in  the  certificate  of                  registration                  45                  of  the registered dealer purchasing the  goods  as                  being intended for resale by him."         Clause  (b) of section 8(3) then began with the  words:  "in         the  case of goods other than declared goods, are   ........         ".  By the  same Amendment Act (8 of 1963) the opening words         of  clause  (b), "in the case of goods other  than  declared         goods", were  consequentially omitted, also with effect from         April  1, 1963.  The omission of clause (a) is the basis  of         the argument that declared goods are  altogether outside the         purview  of sub-section (3) and, therefore, of   sub-section         (1)  of  section 8, and, as the declaration referred  to  in         sub-section (4) of section 8 was required where  sub-section         (1) of the section  was applicable, it was not possible  for         the Company to obtain  such  a declaration.             The  contention seems to us untenable.  Section 9(1)  of         the Central Act contains a general rule that tax payable  by         any  dealer under this Act shall be levied and collected  in         the  State from which  the movement of the goods  commenced.         The  proviso  to  section 9(1 ) qualifies this rule  in  the         case of a subsequent sale which is not exempt from tax under         section  6(2),  and states that the tax on  such  subsequent

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       sale  would be levied and collected in the State from  which         the registered dealer effecting the subsequent sale obtained         or   could  have obtained the form prescribed for  the  pur-         poses of section 8 (4) (a). No exemption under section  6(2)         is  claimed  in this case.  The declaration referred  to  in         section  8 (4) (a) is necessary for the dealer to  avail  of         the  benefit of the rate of tax mentioned in section 8(1  ).         Under  section 7(3) the certificate of registration  granted         to a dealer has to specify the class or classes of goods for         the purposes of section 8 (1 ). Rule 3 of the Central  Sales         Tax  (Registration  and Turnover) Rules,  1957  requires  an         application for registration under section 7 to  be made  in         Form  A,  and Form A requires the purpose  for   which   the         goods  or class of goods are purchased by the dealer  to  be         specified;  resale is one of the purposes mentioned in  Form         A.  Thus, section 7(3) makes no distinction between declared         goods and other  goods; it is impossible to argue  therefore         that  declared goods purchased by a dealer for  resale  need         not be specified in his certificate of registration. Reading         sub-section  (1) and sub-section (3) of section 8  together,         it is clear that all sales to a registered dealer other than         the   Government, whether of declared goods or other  goods,         are covered by subsection (1) of section 8.  Clause (a)  was         omitted  from sub-section (3) of section 8 by the  Amendment         Act (8 of 1963)  presumably because it was considered unnec-         essary  to retain clause (a)  to  deal with  declared  goods         when clause (b) apparently covered all  goods, both declared         and  other  than declared.  The Act and the  rules  and  the         prescribed forms make no. distinction between declared goods         and  other goods except for the purpose of the rate of  tax.         There  is  no valid reason why the Company  could  not  have         obtained a declaration in Form C as required by the  proviso         to  section 9(1).  It  follows therefore that the  order  of         assessment  dated  March 27,  1971  was wrong  as  it  held,         contrary  to the proviso to section 9(1), that the sales  in         question  were  not taxable in the State  of  Uttar  Pradesh         where the Company was registered as a dealer under this Act.         46             Another point sought to be made against the applicabili-         ty  of the proviso to section 9(1) was tiffs.   The  proviso         refers  to  the Form prescribed for the purpose  of  section         8(4)(a)  which should contain a declaration duly filled  and         signed  by  the registered dealer to. whom  the  goods  were         sold.  It was argued that as  the  declaration  was required         only where the sale was to a registered dealer, and as there         was  no finding in this case that the sales were  to  regis-         tered  dealers, the proviso was not attracted.  It  appears,         however, that the Company never claimed before the Sales Tax         Officer  that the sales were not to registered  dealers;  in         the  written objection filed before the Sales   Tax  Officer         pursuant  to  the notice under section 22 of the  U.P.  Act,         the  only ground taken was that no declaration was  required         to  be filed in the case of declared goods.  The  point  was         taken  for the first time in the writ petitions. We  do  not         think  we should allow this question, which is one of  fact,         to be raised at this stage.             The next question is whether this error in the  original         order  of assessment can be called an apparent error  within         the  meaning   of section 22 of the U.P. Act.  There  is  no         dispute that  an  apparent error means a patent mistake,  an         error  which  one could  point  out  without  any  elaborate         argument.  The order of assessment  relating to the  assess-         ment  year in question, 1966-67, was made on March 27,  1971         by the Sales Tax Officer relying on a Judgment of the  Alla-         habad  High  Court on a writ petition made  by  the  Company

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       questioning the validity of the assessment in respect of the         assessment  year  1965-66. In that Judgment the  High  Court         held,  referring to the provisions of section 9(1 )  of  the         Act,  that "the Sales tax authorities in the  State of  U.P.         had  no. jurisdiction to make any assessment even  if  there         was any inter-State sale which could be liable to tax in the         hands of the petitioner Company.  The only State which could         levy tax could be either Bihar or West Bengal.  The impugned         assessment order passed by the Sales Tax Officer, Moradabad,         is  therefore clearly without jurisdiction and is liable  to         be quashed".  In this Judgment there is no reference to  the         proviso  to section 9(1 ).  It appears  from   the  Judgment         under  appeal  that the High Court in a  number  of   latter         decisions   held  that  in  view  of the proviso, tax  on  a         subsequent  sale  by a registered dealer in  the  course  of         inter-State trade or commerce was to be levied and collected         in the State where the  dealer effecting the subsequent sale         was  registered.  We are of the view that the order  of  as-         sessment  dated March 27, 1971 was apparently  erroneous  in         that  it failed to take into consideration the  proviso  to.         section 9(1).  It is not that the order dated March 27, 1971         was in accordance  with  law when it was made but the subse-         quent  decision of the High Court took a different  view  of         the  law.  For the reasons we have given above, it was  pat-         ently erroneous when it was made, but in view of the  obser-         vations  of the High Court in the case relating to  the  as-         sessment of an earlier year, the Sales Tax Officer felt that         he had to dispose of the assessment case for the year  1966-         67   in  the manner he did. The Judgment of the  High  Court         which the  Sales Tax Officer followed in making the  assess-         ment  for the year in question did not concern  itself  with         the proviso to section 9(1).         47             The  next, and the last, question is whether  the  order         dated March 22, 1974 rectifying the assessment order made on         March 27,  1971 was barred by limitation.  Under section 22(         1  ) of the U.P. Act any mistake apparent on the record  may         be rectified at any time within three years from the date of         the  order.  It is not disputed that the other  requirements         of  section  22  have been  complied  with.   The  Company’s         representative  appeared  before the   Sales   Tax   Officer         pursuant to the notice served on them on March 25, 1974, and         the  objections  to the proposed rectification  were  heard.         There  is no dispute that the order rectifying  the  mistake         was recorded by the Sales Tax Officer on March 26, 1974, and         this  order was communicated to the appellant on  March  31,         1974  According to Mr. Nariman,  the order of  rectification         must be held to have been made on March 31, 1974 when it was         communicated  to the assessee which was beyond  three  years         from  the  date  of the order of  assessment.   Mr.  Nariman         relied on the well-known rule of fairplay that the rights of         a  party cannot be affected by an order until he has  notice         of it.  In Raja Harish Chandra Rai Singh v. The Deputy  Land         Acquisition  Officer and another,(1) this Court  considering         the  meaning of the words "the date of the award"  occurring         in s. 18 of the Land Acquisition Act,  1894 observed.                        "The knowledge of the party affected by   the                  award,  either  actual or  constructive,  being  an                  essential  requirement  of  fairplay  and   natural                  justice the expression "the date of the award" used                  in the proviso must mean the date when the award is                  either communicated to the party or is known by him                  either actually or constructively.  In our opinion,                  therefore, it would be unreasonable to construe the                  words  "from  the date of  the  Collector’s  award"

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                used  in the proviso to s. 18 in a literal  or  me-                  chanical way.                        ......   where  the rights of  a  person  are                  affected by any order and limitation is  prescribed                  for  the  enforcement of the remedy by  the  person                  aggrieved  against the said order by  reference  to                  the making of the order must mean either actual  or                  constructive communication of the said order to the                  party concerned."                  Following  this  decision,  this Court  held  in  a                  subsequent ease under the Indian Forest Act,  1927,                  Madan Lal v. State of U.P. and others,(1) that  the                  right  of appeal given by s. 17 of the  Forest  Act                  should  be  deemed to be the date  when  the  party                  aggrieved  by an order came to know of  that  order                  from  which an appeal was sought to  be  preferred.                  But how have the Company’s rights been affected  in                  this  case ?                  (1) [1962] 1 S.C.R. 676.        (2) [1975] 3 S.C.C.                  779.                  48                  Section  9 of the U.P. Act gives a right of  appeal                  to  "any dealer objecting to any order made by  the                  assessing authority, other than an order  mentioned                  in  S. 10-A", within thirty days from the  date  of                  service of the copy of the order. In this case  the                  Company  was not affected by the order under s.  22                  being communicated to it after the expiry of  three                  years from the date of the order because the  limi-                  tation for an appeal from that order did not  begin                  to run before the communication of the order.   The                  provisions of s. 9 of the U.P. Act make that clear.                      The appeals therefore fail and are dismissed.                  Considering  the circumstances, we direct the  par-                  ties  to bear their own costs here and in the  High                  Court.                  V.P.S.                  Appeals dismissed.         49