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Judgment
Srinivasan, J.—In the first three petitions, the petitioner is the same and the assessments relate to the years 1956-57, 1957-58 and 1958-
In W.P. No. 1409 of 1962, the assessment relates to 1958-59. In this case, there was a separate assessment for part of the year, for the
business was in the hands of a partnership. The business passed into the hands of the sole proprietor for the rest of the year and in that regard an
assessment was made, which has led to W.P. No. 1410 of 1962. In W. P. No. 1434 of 1963, the assessment relates to 1956-57.
The point, involved is the same in all these cases. The petitioners are all persons carrying on business in sales of articles of food or drink sold in a
hotel or restaurant. Tax was levied at the rate of 4 1/2 pies in the rupee under the proviso to Section 3(i)(b) of the Act as against the normal rate of
3 pies in the rupee, which every dealer had to pay on his total turnover for the year. The first proviso to Section 3(i)(b), as it then stood, imposed a
rate of 4J pies on sales turnover of this description where the turnover was not less than Rs. 25,000. The constitutionality of such levy had been
raised in several proceedings in this Court. In K.M. Goel v. State of Madras [1961] 12 S.T.C. 527, this Court affirmed the earlier decision in
Krishna Iyer v. State of Madras [1956] 7 S.T.C. 346, which had held that the levy of the higher rate of tax was discriminatory and
unconstitutional. The proviso had been amended by Act XV of 1956, but even as amended, it was decided by this Court that the taint of
unconstitutionality had not been avoided. The result of these decisions was that the levy at the higher rate of tax was unlawful. Following this
decision, the petitioners applied for refund of the excess tax after rectification of the assessment under Rule 18 of the Madras General Sales Tax
Rules of 1939 or u/s 55 of the Madras General Sales Tax Act, 1959. When the matter finally reached the Sales Tax Appellate Tribunal, the
Tribunal was not prepared to accept the position that the decision in K.M. Goel v. Sate of Madras [1961] 12 S.T.C. 527 resulted in any error
apparent on the face of the record. It thought that there could be no ""retrospective operation"" of a decision to render an assessment open to
rectification as though there was an error apparent on the face of the record. On the rejection of the petitions for an amendment of the assessment
in the light of the decision cited and consequent refund of the excess tax levied, the petitioners have come to this Court with applications for the
issue of writs of certiorari.
It is unnecessary to refer to the various turnovers and the taxes imposed on the basis of the provision as it stood. In the counter-affidavit filed by
the State, it is only urged that the petitioners were not diligent in enforcing their rights and that they could have moved this Court in the ordinary
way by revision petitions as provided under the Sales Tax Act. It is claimed that the impugned orders of the Tribunal are quite valid and that the
mistake sought to be rectified is not one apparent on the face of the record. This is the short ground upon which the remedy sought is resisted.
On behalf of the petitioners, the decision of the Maharashtra High Court in Walchand Nagar Industries Ltd. Vs. V.S. Gaitonde, Income Tax
Officer, Companies Circle 1(3), Bombay and Another, has been cited. In that case, an assessment had been made upon the petitioner and in
respect of certain dividends an additional tax had been charged under the relevant provision of the Finance Act of 1950. This levy was confirmed
by the Appellate Tribunal in due course. In some other cases (to which the petitioner was not a party) the levy of this additional tax was challenged
as invalid and the challenge was sustained. Subsequent thereto, the petitioner applied u/s 35 of the Income Tax Act for rectification of his
assessment order by deleting the excess charge and for refund of the tax levied in excess. This application was rejected by the Income Tax Officer
and in the further revision to the Commissioner, the Commissioner held that the invalidity of the levy of the excess tax was not a mistake apparent
on the face of the record. The petitioners came to the High Court with a petition under Article 226 for a writ of certiorari to quash these orders and
for consequential reliefs. The learned Judges of the Bombay High Court decided that since the decision of the High Court declaring the levy to be
invalid (which was also subsequently upheld by the Supreme Court) resulted in the position that the levy was at no time good, and notwithstanding
that the decision of the Supreme Court was subsequent to the date on which the assessment order was made, the assessment order was bad from
its very inception and that was a mistake apparent from the record within the meaning of Section 35 of the Income Tax Act.
The Supreme Court in Mahendra Lal Jaini Vs. The State of Uttar Pradesh and Others, , had to consider the effect of unconstitutionality. It is
observed herein that a declaration of unconstitutionality brought about by lack of legislative power did not stand on a different footing from a
declaration of unconstitutionality brought about by reason of the abridgement of fundamental rights. Referring to Behram Khurshed Pesikaka Vs.
The State of Bombay, , their Lordships held:
It was also observed that when the law-making power of a State is restricted by a written fundamental law, then any law enacted which is opposed
to the fundamental law was in excess of the legislative authority and was thus a nullity. Both these declarations of unconstitutionality go to the root
of the power itself and there was no real distinction between them, and they represent two aspects of want of legislative power.
Dealing with post-Constitution laws which are affected by unconstitutionality of this description they observed:
Unlike a law covered by Article 13(1) which was valid when made, a law made in contravention of the prohibition contained in Article 13(2) is a
still-born law either wholly or partially depending upon the extent of the contravention. Such a law is dead from the beginning....
In Rayalaseema Construction v. Deputy Commercial Tax Officer [1959] 10 S.T.C. 345, the question arose whether though an assessment had
become final and part of the assessed tax had also been paid, the balance could be recovered from the assessee when once it had been declared
by judicial decisions that the law conferred upon the officers no power to make the levy. A Bench of this Court held that in such circumstances a
writ of mandamus could issue directing the officers to forbear from collecting the amounts from the petitioners. The Supreme Court considered in
Thungabhadra Industries Ltd. Vs. The Government of Andhra Pradesh, what an error apparent from the record connotes. In that case, the High
Court had dismissed petitions for leave to appeal to the Supreme Court in certain cases. The appellant filed review petitions urging before the High
Court that in similar circumstances in regard to previous assessments, the High Court had granted leave in respect of the same question which was
in dispute. The High Court dismissed these review applications and against the dismissal of these review applications, appeals were taken to the
Supreme Court. What their Lordships had to consider was whether the impugned order of the High Court that the case did not involve any
substantial question of law is an error apparent on the face of the record. They observe that the fact that on an earlier occasion the Court had held
on an identical set of facts that a substantial question of law arose would not per se be conclusive. They also say that a review is not an appeal in
disguise. They proceed:
We do not consider that this furnishes a suitable occasion for dealing with this difference exhaustively or in any great detail, but it would suffice for
us to say that where without any elaborate argument one could point to the error and say ''here is a substantial point of law which stares 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.
Undeniably, on the basis of these decisions, it would certainly appear to follow that there is an error apparent on the face of the record in that
the assessments were made on foot of a law which has been declared to be unconstitutional. It is however contended by the learned Additional
Government Pleader that the scope of an error in the context of Rule 18 of the Madras General Sales Tax Rules, 1939, has been construed
differently in Ramakrishnaiah and Sons v. State of Andhra Pradesh [1961] 12 S.T.C. 212. This rule contemplates the correction of mistake by the
authority which made the mistake or by an appellate or revising authority where the mistake is brought to its notice in appeal or revision, and if
within three years from the date of the order passed by the authority which committed the mistake, no application is presented to correct the
mistake, no application would lie to correct it by any other authority, even though the application may be within three years from the date of the
final order of that authority. It appears to be the contention on the basis of this decision that since a period of three years had elapsed since the
date of the order of assessment, the applications would not lie. Even applying the decision, I am unable to agree that the applications in these cases
are not within time. Rule 18 confers the power upon the assessing, appellate or revising authority or the Appellate Tribunal to rectify any mistake
apparent from the record within three years from the date of any order passed by it. The date to be computed is the date of the order of the
appropriate authority to whom the application has been made. When once the assessments had received a finality at the hands of the Appellate
Tribunal, it is obvious that it is the Appellate Tribunal that would have to be approached for rectification of an error apparent from the record, and
it is from the date of the Appellate Tribunal''s order that the period of three years has to be computed. It is not denied that in these cases the
assessment proceedings in question were disposed of by the Appellate Tribunal within three years from the date on which the respective
applications u/s 55 of the Madras General Sales Tax Act of 1959 were made. Section 55 of this Act is in terms identical with Rule 18 of the
Madras General Sales Tax Rules, 1939. It should therefore follow that the applications were within time and should have been entertained.
On the basis of the decisions I have cited earlier, there can be no dispute that the making of the assessments on foot of a law which has been
declared to be invalid and unconstitutional discloses an error apparent from the record, and the view taken by the Tribunal that it is not an error
apparent from the record, for on the date on which the assessment order was made, the law had not been declared to be unconstitutional, is
erroneous. As pointed out by the Supreme Court, the law was a dead law and any proceedings taken thereunder could not be sustained solely for
the reason that the declaration that it was unconstitutional was made on a subsequent date. In these circumstances, the Tribunal was in error in not
granting the prayer sought.
The result is that these petitions succeed. The orders of the Tribunal are quashed. The Tribunal will dispose of the matter afresh and grant the
consequential reliefs which the petitioners are entitled to.
This petition having been set down this day for being mentioned in the presence of the aforesaid Advocates, the Court made the following
order on 13th July, 1965.
It is brought to my notice that W.P.No. 1378 of 1962 is directed against the order of the Appellate Assistant Commissioner. In the light of the
observations contained in the judgment, that order also will stand quashed. It will be open to the Appellate Assistant Commissioner to deal with the
matter afresh.
No costs in any of the petitions.