Supreme Court Sets Aside Commissioner's Review Order Under Rule 83 of Orissa Sales Tax Rules; Review Jurisdiction Cannot Rehear Merits. Reversal of Earlier Refund Order Based on Limitation and Construction of Assessment Orders Was Not Permissible as Error Apparent on Face of Record Under Rule 83, Orissa Sales Tax Rules, 1947.

Case Note & Summary

The appeal arose from an order of the Commissioner of Sales Tax, Orissa, passed under Rule 83 of the Orissa Sales Tax Rules, 1947, reviewing his earlier order directing refund of sales tax to the appellant, Master Construction Co. (P) Ltd. The appellant, a private limited company carrying on business as building contractors in Orissa, was a registered dealer under the Orissa Sales Tax Act, 1947. It was assessed to sales tax under Section 12(4) and Section 12(8) of the Act for various quarters between 1949 and 1954, and paid tax amounting to Rs. 53,220-14-0. Relying on the Supreme Court decision in State of Madras v. Gannon Dunkerley & Co., which held that building contracts were not taxable as sale of goods, the appellant filed a writ petition in the High Court of Orissa under Article 226 of the Constitution. On April 22, 1958, the High Court quashed the assessments and directed refund of tax not barred by limitation. The appellant filed a refund application before the Sales Tax Officer on July 9, 1958. The Sales Tax Officer, while holding that the appellant was entitled to refund, rejected the application on May 15, 1961 on the ground that it was signed by only one director. In revision, the Commissioner of Sales Tax by order dated May 15, 1962 set aside the Sales Tax Officer's order, held that the appellant was entitled to refund, and directed issuance of refund payment orders. Subsequently, on January 5, 1963, the Commissioner issued a notice under Rule 83 to show cause why the earlier order should not be reviewed. On September 24, 1963, the Commissioner reviewed the earlier order and held that the appellant was entitled to refund subject to disallowances; he disallowed certain amounts on grounds of limitation and because some payments were made before assessment orders and were not the subject matter of appeals. The appellant appealed to the Supreme Court by special leave. The respondent raised a preliminary objection that the appeal was not maintainable because the appellant had not exhausted the remedy under Article 226. The Court rejected this objection, holding that Article 136 confers discretionary appellate jurisdiction not subject to any condition of exhausting other remedies. The Court noted that the Orissa Sales Tax Act did not provide a further remedy against the Commissioner's order and that the High Court's jurisdiction under Article 226 was discretionary and limited. On merits, the appellant contended that Rule 83 permitted only correction of arithmetical or clerical mistakes or errors apparent on the face of the record arising from accidental slip or omission, and that the Commissioner had practically reheard the revision and arrived at a different conclusion. The respondent argued that the review was within jurisdiction because the Commissioner corrected misapprehensions regarding payments and limitation. The Court did not examine the factual details, holding that if the Commissioner lacked jurisdiction, the correctness of his order on facts was irrelevant. The Court analysed Rule 83 and held that it provides a summary remedy within a narrow compass. The jurisdiction is limited to correction of arithmetical mistakes (mistakes of calculation), clerical mistakes (mistakes in writing or typing), and errors apparent on the face of the record arising from accidental slip or omission. Such errors must be apparent on the face of the record, not errors requiring elaborate arguments on questions of fact or law. The Court observed that however widely the expressions are construed, they cannot countenance re-argument on merits or permit a party to raise new arguments not advanced earlier. In the present case, the Commissioner reversed his previous order mainly on two grounds: applicability of limitation and construction of appellate orders. These were arguable questions of fact and law; they were not errors apparent on the face of the record or arising from accidental slip or omission. The errors, if any, arose because the department did not raise these points before the Commissioner earlier. The Court found that the Commissioner reheard the matter and came to a different conclusion, which was not permissible under Rule 83. Accordingly, the Supreme Court allowed the appeal and set aside the Commissioner's review order dated September 24, 1963, restoring the earlier order dated May 15, 1962.

Headnote

Issue of Consideration

Final Decision

Appeal allowed; Commissioner's review order dated September 24, 1963 set aside because not permissible under Rule 83; preliminary objection rejected; earlier order dated May 15, 1962 restored.

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