http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 4  

CASE NO.: Appeal (civil)  5607 of 2007

PETITIONER: M/s. Deva Metal Powders Pvt. Ltd

RESPONDENT: Commissioner, Trade Tax, U.P.

DATE OF JUDGMENT: 04/12/2007

BENCH: Dr. ARIJIT PASAYAT & P. SATHASIVAM

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO.    5607  OF 2007 (Arising out of SLP (C) No.9396 of 2006)

Dr. ARIJIT PASAYAT, J.

1.      Leave granted. 2.      Challenge in this appeal is to the judgment of a Division  Bench of the Allahabad High Court allowing the Trade Tax  Revision Case Nos. 1055 and 1070 of 1998 filed by the  respondent.  The two revisions were filed under Section 11 of  the Uttar Pradesh Sales Tax Act, 1948 (in short the ’Act) and  the Central Trade Tax Act, 1956 (in short the ’Central Act’). 3.      Factual background in a nutshell is as follows : Appellant hereinafter also referred to as the Assessee was  dealing with Aluminium powder. In the original assessment  order passed under Section 7(3) of the Act and Section 9 of the  Central Act, Aluminium Powder was treated as metal and  accordingly held liable to tax at the rate of 2.2%.  Assessing  officer initiated proceedings under Section 22 of the Act on the  ground that this Court had in Hindustan Aluminium  Corporation Ltd. v. State of Uttar Pradesh and Another  [1981(3) SCC 578] considered the entry "All kinds of minerals,  ores, metals and alloys including sheets and circles"  and held  that under this entry only the primary metal is covered.  It was  also held that sheets and circle of Aluminium would not be  covered under the entry "Metal" Assessing officer accordingly  rectified the assessment orders under Section 22 and levied  tax treating the Aluminium powder as an unclassified item.   The First appellate authority in the appeals filed by the  assessee held that Section 22 of the Act had no application  and the assessments were set aside.   The present respondent  filed appeals before the Sales Tax Tribunal, Varanasi Bench (in  short the ’Tribunal’) which were also dismissed. In the revision  petitions filed, as noted above, the High Court held that action  under Section 22 of the Act is clearly sustainable.  It referred  to a decision of this Court in M/s. Karam Chand Thapar &  Bros. (Coal Sales) Ltd. v. State of Uttar Pradesh & Anr. [(1976)  4 SCC 257] and held that a decision of this Court can be a  ground for rectification of error in terms of Section 22 of the  Act. The High Court did not accept the stand of the appellant  that Aluminium powder in the powder form remains  Aluminium in its primary form and in any case this is a  debatable issue and, therefore, Section 22 of the Act does not

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 4  

apply. 4.      Learned counsel for the appellant submitted that this is a  case where Section 22 of the Act had no application.  The said  provision is only applicable to a case where the error is  apparent on the face of the record;  Where the issue can not be  decided in a undisputable manner, Section 22 has no  application; and where a matter is disputable there can be no  order under Section 22 of the Act.  5.      Learned counsel for the respondent on the other hand  submitted that in view of this Court’s decision in Hindustan  Aluminium Corporation’s case (supra) there is no scope for  taking a different view and, therefore, Section 22 clearly had  application.   

6.      Section 22 of the Act reads as follows: "Rectification of Mistakes: (1)     Any officer or authority, or the Tribunal or  the High Court may, on it’s own motion or  on the application of the dealer or any  other interested person rectify any mistake  in any order passed by him or it under this  Act apparent on the record within three  years from the date of the order sought to  be rectified: Provided that where an application under  this sub-section has been made within  such period of three years, it may be  disposed of even beyond such period. Provided further that no such rectification  as has the effect of enhancing the  assessment, penalty, fees or other dues  shall be made unless reasonable  opportunity of being heard has been given  to the dealer or other person likely to be  affected by such enhancement. 2.      Where such rectification has the  effect of enhancing the assessment,  the assessing authority concerned  shall serve on the dealer a revised  notice of demand in the prescribed  form and there from all the  provisions of the Act and rules  framed there under shall apply as if  such notice had been served in the  first instance."         (Underlined for emphasis) 7.      The Deputy Commissioner (Appeal) held that Section 22  of the Act did not contemplate rectification of debatable issues  and therefore, this was not a case where Section 22 of the Act  applies.  Similar was the view taken by the Tribunal.  It has  been submitted by the appellant that the Notification  considered in Hindustan Aluminium Corporation’s case  (supra) was dated 30.5.1975. Subsequently, there has been an  amendment by Notification dated 7.9.1981 by which "scrap"  has also been included in the entry.  It is, therefore, submitted  that the ratio in Hindustan Aluminium Corporation’s case  (supra) applied as scrap has always been produced as a result  of processing of the original metal. 8.      This Court in M/s. Thungabhadra Industries Ltd. (in all  the Appeals) v. The Government of Andhra Pradesh  represented by the Deputy Commissioner of Commercial  Taxes, Anantapur, [AIR 1964 SC 1372] held as follows:   

"There is a distinction which is real,  though it might not always be capable of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 4  

exposition, between a mere erroneous decision  and a decision which could be characterized as  vitiated by "error apparent".  A review is by no  means an appeal in disguise whereby an  erroneous decision is reheard and corrected,  but lies only for patent error.  Where without  any elaborate argument one could point to the  error and say here is a substantial point of law  which states one in the face and there could  reasonably be no two opinions entertained  about it, a clear case of error apparent on the  face of the record would be made out."

9.     An error apparent on the face of the record for acquiring  jurisdiction to effect rectification must be such an error which  may strike one on a mere looking at the record and would not  require any long drawn process of reasoning.  The following  observations in connection with an error apparent on the face  of the record in the case of Satyanarayan Laxminarayan Hegde  v. Mallikarjun Bhavanappa Tiruymale [ AIR 1960 SC 137]   need to be noted:

"An error which has to be established by a long  drawn process of reasoning on points where  there may conceivably be two opinions can  hardly be said to be an error apparent on the  face of the record.  Where an alleged error is  far from self-evident and if it can be  established, it has to be established, by  lengthy and complicated arguments, such an  error cannot be cured by a writ of certiorari  according to the rule governing the powers of  the superior Court to issue such a writ."

10.     A bare look at Section 22 of the Act makes it clear that a  mistake apparent from the record is rectifiable. In order to  attract the application of Section 22, the mistake must exist  and the same must be apparent from the record.  The power to  rectify the mistake, however, does not cover cases where a  revision or review of the order is intended.  "Mistake" means to  take or understand wrongly or inaccurately; to make an error  in interpreting; it is an error, a fault, a misunderstanding, a  misconception.  "Apparent" means visible; capable of being  seen, obvious; plain.  It means "open to view, visible, evident,  appears, appearing as real and true, conspicuous, manifest,  obvious, seeming."  A mistake which can be rectified under  Section 22 is one which is patent, which is obvious and whose  discovery is not dependent on argument or elaboration.  In our  view rectification of an order does not mean obliteration of the  order originally passed and its substitution by a new order.   What the Revenue intends to do in the present case is  precisely the substitution of the order which according to us is  not permissible under the provisions of Section 22 and,  therefore, the High Court was not justified in holding that  there was mistake apparent on the face of the record.  In order  to bring an application under Section 22, the mistake must be  "apparent" from the record.  Section 22 does not enable an  order to be reversed by revision or by review, but permits only  some error which is apparent on the face of the record to be  corrected.  Where an error is far from self-evident, it ceases to  be an apparent error. It is, no doubt, true that a mistake  capable of being rectified under Section 22 is not confined to  clerical or arithmetical mistake.  On the other hand, it does  not cover any mistake which may be discovered by a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 4  

complicated process of investigation, argument or proof.  As  observed by this Court in Master Construction Co. (P) Ltd. v.  State of Orissa [1966] 17 STC 360, an error which is apparent  from record should be one which is not an error which  depends for its discovery on elaborate arguments on questions  of fact or law.                   11.     "Mistake" is an ordinary word but in taxation laws, it has  a special significance.  It is not an arithmetical error which,  after a judicious probe into the record from which it is  supposed to emanate is discerned.  The word "mistake" is  inherently indefinite in scope, as to what may be a mistake for  one may not be one for another. It is mostly subjective and the  dividing line in border areas is thin and indiscernible.  It is  something which a duly and judiciously instructed mind can  find out from the record.  In order to attract the power to  rectify under Section 22, it is not sufficient if there is merely a  mistake in the order sought to be rectified.  The mistake to be  rectified must be one apparent from the record.  A decision on  a debatable point of law or a disputed question of fact is not a  mistake apparent from the record.  The plain meaning of the  word "apparent" is that it must be something which appears to  be so ex facie and it is incapable of argument or debate. It,  therefore, follows that a decision on a debatable point of law or  fact or failure to apply the law to a set of facts which remains  to be investigated cannot be corrected by way of rectifications.      12.     In the Hindustan Aluminium Corporation’s case (supra)  the dispute did not relate to Aluminium Powder.  What the  assessing officer and the High Court did was to inferentially  apply the ratio of the said decision to Aluminium powder.  The  ratio in Karam Chand’s case (supra) has, therefore, no  application. 13.     Above being the position, the High Court’s order is clearly  unsustainable and is set aside.  We make it clear that we have  not expressed any opinion on the issue as to whether  Aluminium powder can be regarded "metal in primary form"  for the purpose of payment of tax.  There is no need to  adjudicate that aspect in view of the fact that the rectification  done in purported exercise of Section 22 of the Act is clearly  impermissible.

14.     The appeal is allowed without any order as to costs.