KULKO ENGINEERING WORKS LIMITED Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The applicants, who are registered as dealers under the Bombay Sales Tax Act, 1959, manufacture and sell horizontal low-speed cold start crude oil engines. In respect of the period 1st January, 1965, to 31st December, 1965, the applicants filed their returns in which they showed the engines sold by them during this period as taxable under the residuary entry, namely, entry No. 22 of Schedule E to the said Act, and along with their returns paid into the Government treasury the amount of sales tax and general sales tax according to the said entry No. 22 payable in respect of the sales of these engines showed by them in their said returns. While assessing the applicants for the said period the Sales Tax Officer also held that the sale of the said engines were taxable under the said entry No. 22.

(2.) In respect of certain subsequent transactions of sale of engines the purchasers of the engines felt that these engines were taxable under entry No. 12 of Schedule C to the said Act as being agricultural machinery. These were transactions of sale effected on 2nd April, 1971, and 19th April, 1971. In view of this objection raised by the purchasers, presumably because the applicants wanted to recover from them the amount of tax they will have to pay on these sales at the rates specified in the said entry No. 22, the applicants filed an application under section 52 asking the Commissioner of Sales Tax to determine the rate of tax in respect of these two transactions of sale. By his order dated 12th June, 1971, the Commissioner held with respect to these sales that they were taxable under the said entry No. 12 of Schedule C. In his order the Commissioner stated that it was the contention of the applicants that the engines which were the subject-matter of those two transactions of sale were specifically designed for agricultural purposes and were in fact sold to agriculturists. In his order he further referred to the fact that the applicants had pointed out to the Commissioner several special features of the said engines which showed that they were designed to suit the requirements of farmers. Thereafter, on 10th August, 1972, the applicants made another application to the Commissioner under section 52 of the said Act asking him to determine the entry under which tax was payable in respect of four transactions of sale effected on 5th November, 1970, 29th February, 1972, 26th March, 1972, and 30th April, 1972. In their said application, the appleants stated that these engines were specifically designed for agricultural purposes and set out in their said application eleven special features which showed that these engines had been specifically designed for agricultural purposes. They also stated that all these engines were sold to agriculturists. They produced before the Commissioner evidence in support of these contentions including the literature in respect of the said engines. They also satisfied the Commissioner that these engines were in fact sold to farmers. By his order dated 20th November, 1972, the Commissioner held that these engines which were the the subject-matter of these above-mentioned transactions of sale were taxable under the said entry No. 12 of Schedule C. In his said order the Commissioner has referred to all the evidence that was produced and the materials which were placed before him by the applicants in order to determine this question.

(3.) In the meanwhile, after the decision of the Commissioner on their said first application under section 52 and while their said second application under the said section 52 was pending, the applicants filed an application on 4th September, 1972, before the Sales Tax Officer under section 62 of the said Act requesting the said Sales Tax Officer to Rectify his order of assessment for the said period 1st January, 1965, to 31st December, 1965, and assess the sales of engines by the applicants during the said period as being exigible to tax under the said entry No. 12 of Schedule C. The order of assessment was passed on 22nd September, 1970, and, therefore, the said application for rectification was made within the period of limitation of two years prescribed under sub-section (1) of section 62. It may be mentioned that the period of appeal against the said order of assessment had long since expired as under section 55 of the said Act, an appeal is to be filed within 60 days from the date of the communication of an order to the aggrieved person. The Sales Tax Officer rejected the said application on the ground that as no objection had been raised by the applicants to taxing the sales of these engines during the said period as falling under the residuary entry No. 22 in Schedule E, it could not be said to be a "mistake apparent from the record" within the meaning of section 62(1). This reasoning of the Sales Tax Officer is obviously incorrect. For a case to fall under section 62, the mistake is to be apparent from the record. Such a mistake would happen either because the taxing authority or the assessee committed that mistake. Therefore, whether an assessee realised what the correct position was at the time of the assessment or not cannot be decisive of the question whether there was a "mistake apparent from the record".