Govinda Bhat, J.
1. The petitioners a partnership firm are dealers under the Central Sales Tax Act, 1956, hereinafter called 'the Act'. For the period from 1st April, 1964, to 31st March, 1965, they furnished a return showing a total turnover of Rs. 7,90,495.78, of which they claimed exemption on a turnover of Rs. 5,05,825.85. The exemption claimed related to sales of groundnut seeds and groundnut cake. During the period 1964-65, under the Mysore Sales Tax Act, 1957, tax was leviable on groundnut seeds at the point of last purchase and on groundnut cake at the point of first sale. On 10th November, 1964, in The State of Mysore v. Yaddalam Lakshminarasimhiah Setty & Sons : 2SCR129 , the Supreme Court held that no tax could be levied under the Act if no tax could have been levied under the sales tax law of the appropriate State if that sale had taken place inside that State. Applying the said decision, the Commercial Tax Officer, First Circle, Bangalore (respondent No. 1), while making the assessment on the petitioners held that a turnover of Rs. 2,53,256.74 relating to groundnut seeds and Rs. 1,79,037.80 relating to groundnut cake were not taxable under the Act, and, consequently, exempted the said turnover, by his order dated 8th February, 1968.
2. On 9th June, 1969, the President of India promulgated the Central Sales Tax (Amendment) Ordinance, 1969, with the object of superseding the decision in Yaddalam's case : 2SCR129 , and to bring to tax sales effected by every dealer in the course of inter-State trade or commerce notwithstanding the fact that no tax could have been levied under the sales tax law of the appropriate State if that sale had taken place inside that State. The Ordinance was replaced by the Central Sales Tax (Amendment) Act, 1969 (Act 28 of 1969), hereinafter called the 'Amendment Act'.
3. On 9th December, 1969, the first respondent issued a notice to the petitioners proposing to rectify the assessment order dated 8th February, 1968, in view of the amendment of the Act by the Amendment Act. The petitioners sent a reply contending, inter alia, that the assessment order is not liable to be rectified since they have not collected any tax during the relevant period. The first respondent, after affording an opportunity to the petitioners of being heard, made an order dated 1st June, 1970, by which he rectified his order dated 8th February, 1968, and brought to tax the exempted turnover relating to groundnut seeds and groundnut cake. A revised notice demanding payment of Rs. 7,551.07 was also issued on the same date. Aggrieved by the said order and the notice of demand, the petitioners have approached this court for relief under article 226 of the Constitution.
4. Sri K. Srinivasan, the learned counsel for the petitioners, urged (1) that the impugned order is without jurisdiction as there is no 'mistake apparent on the record' entitling the first respondent to rectify the original assessment order; and (2) that the first respondent is in error in the view he has taken that the petitioners have collected tax on the exempted turnover in question.
5. Rule 38 of the Mysore Sales Tax Rules, 1957, (hereinafter called 'the Rules') empowered an assessing, appellate or revising authority or the Appellate Tribunal, at any time, within 5 years from the date of any order passed by it, to rectify 'any mistake apparent on the record'.
6. Rule 38 which confers the power of rectification of 'any mistake apparent on the record' is on the lines of section 35 of the Indian Income-tax Act, 1922, and section 154 of the Indian Income-tax Act, 1961. The scope of the power of rectification under the said Income-tax Acts has been the subject-matter of several judicial decisions and it is settled law that in order to attract the power of rectification, it must be a case of mistake, and the mistake must be apparent from the record. A decision on a debatable point of law or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectification. It is also settled law that rectification must be of a mistake which is a mistake in the light of the law in force at the time when the order sought to be rectified was passed. If, however, subsequent legislation comes with express retrospective effect, what is a mistake in the light of such retrospective legislation may be rectified, because, applying the well-established principle that full effect must be given to a statutory fiction and it should be carried to its logical conclusion, it is the amended law which must be held to have been in force at the time when the order sought to be rectified was passed : vide (a) Venkatachalam v. Bombay Dyeing and Mfg. Co. Ltd. : 34ITR143(SC) ; (b) Volkart Brothers v. Income-tax Officer ( 65 I.T.R. 179) and (c) T. S. Balaram, Income-tax Officer v. Volkart Brothers : 82ITR50(SC) .
7. Applying these principles, we have to consider whether the power under rule 38 can be invoked for the purpose of bringing to tax the exempted turnover in view of the amendment of the Act. When the original assessment order was made on 8th February, 1968, the disputed turnover relating to groundnut seeds and groundnut cake was not exigible to tax. The Act was amended with the object of superseding the decision in Yaddalam's case : 2SCR129 and to bring to tax sales effected by every dealer in the course of inter-State trade or commerce notwithstanding the fact that no tax could have been levied under the State sales tax law if that sale had taken place inside the State. That result was brought about by section 3 of the Amendment Act, which introduced section 6(1A) in the Act.
8. Section 3 of the Amendment Act states that section 6(1A) of the Act shall be, and shall be deemed always to have been, inserted in the Act. By this fiction created by Parliament, section 6(1A) should be deemed to be present in the Act when the original assessment order was made. If section 6(1A) stood by itself, there is no doubt that there is a mistake apparent on the record, since the exemption of the turnover in question is inconsistent with the provisions of section 6(1A). The Amendment Act, in addition, contains section 10 which reads thus :
'(1) Where any sale of goods in the course of inter-State trade or commerce has been effected during the period between the 10th day of November, 1964, and the 9th day of June, 1969, and the dealer effecting such sale has not collected any tax under the principal Act on the ground that no such tax could have been levied or collected in respect of such sale or any portion of the turnover relating to such sale and no such tax could have been levied or collected if the amendments made in the principal Act by this Act had not been made, then, notwithstanding anything contained in section 9 of the said amendments, the dealer shall not be liable to pay any tax under the principal Act, as amended by this Act, in respect of such sale or such part of the turnover relating to such sale.
(2) For the purposes of sub-section (1), the burden of proving that no tax was collected under the principal Act in respect of any sale referred to in sub-section (1) or in respect of any portion of the turnover relating to such sale shall be on the dealer effecting such sale.'
9. The above section was enacted in order to relieve the hardship that might be caused to dealers by the retrospective operation of section 6(1A) of the Act. Therefore, it provided for exemption of sales tax in the course of inter-State trade or commerce between 10th November, 1964, and 9th June, 1969, if the dealers have not collected any tax.
10. In Basappa & Bros. v. Deputy Commissioner of Commercial Taxes, Belgaum Division, and Others ( 27 S.T.C. 241), we sustained the validity of section 3 of the Amendment Act repelling the challenge made to it as violative of the fundamental rights guaranteed under article 19(1)(f) and (g) of the Constitution, on the ground that no hardship will be caused to the dealers since by section 10 of the Amendment Act, exemption is provided to those dealers who have not collected any tax. Section 6(1A) of the Act cannot be separated from section 10 of the Amendment Act as they together constitute an integral part of the scheme of retrospective taxation.
11. Section 10 of the Amendment Act has not been inserted in the Act nor is the said section by legal fiction deemed to be in force during the period when the order sought to be rectified was passed.
12. The question whether the turnover exempted is liable to be brought under tax or not, depends on the determination of the question whether the petitioners have collected any tax during the period from 10th November, 1964, to 31st March, 1965. Sub-section (2) of section 10 of the Amendment Act casts the burden on the assessees of proving that they have not collected any tax. Facts necessary for determination of that question were never examined or could have been examined when the assessment order was made on 8th February, 1968. That question arose for the first time after the Amendment Act was passed. Since that is a matter requiring investigation into fresh facts on the basis of section 10 of the Amendment Act, it cannot be said that the assessment order dated 8th February, 1968, suffers from 'a mistake apparent on the record'.
13. The first respondent has stated in the impugned order that the petitioners have not proved that they have not collected tax on the disputed turnover. Even if the petitioners wanted to prove that fact, the evidence could not have been entertained in proceedings for rectification.
14. Since, in our judgment, the petitioners are entitled to succeed on the first ground urged by the learned counsel for the petitioners, we refrain from expressing any opinion on the second ground.
15. That the groundnut sales in relation to the turnover of Rs. 2,53,256.74 were effected after 10th November, 1964, was not disputed. The exemption granted in respect of the said turnover cannot be rectified in proceedings under rule 38. With respect to the disputed turnover of Rs. 1,79,037.80, relating to groundnut cake, it was submitted that the sales were effected during the entire period from 1st April, 1964, to 31st March, 1965. If from the records, the first respondent can show that any particular portion of the said turnover relates to the period prior to 10th November, 1964, it is open to him to rectify his order and to bring to tax the said turnover under section 6(1A).
16. For the reasons stated above, we allow this writ petition and quash the impugned order dated 1st June, 1970. In the circumstances, we make no order as to costs.
17. Petition allowed.