1. These are revisions filed by the State Government from two orders passed by the Sales Tax Appellate Tribunal purporting to be under section 55 of the Tamil Nadu General Sales Tax Act, 1959.
2. Section 55 has the marginal heading "Power to rectify any error apparent on the face of the record". Under this section the Appellate Tribunal may at any time within three years from the date of any order passed by it "rectify any error apparent on the face of the record". In this case, the original orders were passed by the Tribunal on 31st January, 1978, and 25th April, 1978, respectively. Those orders had been rendered in appeals filed by two assessees who were hoteliers. They contended before the Tribunal that the receipt from their hotel business could not be subjected to sales tax as sales turnover. This contention was rejected by the Tribunal in their orders dated 25th April, 1978, and 31st January, 1978. Subsequently, on 7th September, 1978, the Supreme Court rendered a judgment in Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi . In this
judgment it was held that where eatables were sold for consumption within the precincts of the hotel there was no sale involved which is susceptible for charge to sales tax. Subsequent to the Supreme Court's judgment, the assessees in both cases moved the Tribunal, invoking the powers of the Tribunal under section 55 of the Act, to rectify the Tribunal's earlier decision against the assessees and to hold, instead, that the turnover in question was not susceptible to tax. These applications were opposed by the State Government on the ground that the Tribunal cannot review their final decision in the appeal under the power to rectify mistakes apparent on the face of the record. The Tribunal, however, overruled this objection, and proceeded to apply the decision of the Supreme Court to the assessees' case, and granted the requisite tax relief.
3. In these revisions by the State, the learned Government Pleader submits that the Tribunal was in error in holding that merely because there was a subsequent decision of the Supreme Court on the subject, the order passed by them earlier must be regarded as a mistake which becomes apparent from the record of the appeal.
4. This contention is well taken. The error which can be rectified under section 55 must be an error which is so apparent on the very face of the record that it is a wonder how it had "crept in", as the saying goes. It is the assumption of the section that if the Tribunal had not "nodded" as it were, they could have avoided the mistake, even in the first place. It is only error of this kind which is amenable to correction or rectification under section 55.
5. In the present case, with the fullest information on facts made available to the Tribunal and with the most up to date knowledge of the law, it would still be impossible for such a body to have anticipated what the Supreme Court's decision would have been a few months later. It follows, therefore, that the error could not be said to be an apparent error within the meaning of section 55.
6. The learned counsel for the assessees put forward the well-known doctrine of jurisprudence that whenever a court declares what the law is, it takes effect, not from the date of the judgment, but from the very date of the commencement of the law in question. This is a well-known fiction of our jurisprudence. Cynics sometimes refer to the doctrine by describing court judgments as always being retrospective, in contrast to Acts of the legislature which are generally prospective and where occasional retrospectivity is the butt of high-faulting criticism from legal purists and from the pulpit of the Bench. We quite agree with the learned counsel for the assessees that retrospectivity is the very life-breath of court decisions generally. But this doctrine of jurisprudence cannot alter the realities of time or space. At the time when the Tribunal rendered their decision in these cases, there was no Supreme Court decision at all. So it cannot be said that the Tribunal's decision could be regarded, ex facie as running counter to the Supreme Court's decision, and so ex facie erroneous. The Supreme Court have no doubt clarified what the law under the Tamil Nadu General Sales Tax Act, 1959, was from its very commencement, but their judgment has not the effect of rendering the orders of the Tribunal dated 31st January, 1973, and 25th April, 1978, as mistakes apparent from the record.
7. The learned counsel for the assessees submitted that on the wording of section 55, for an error to be apparent from the face of the record it is not correct to say that the error could have been avoided even at the time when it had been committed. The learned counsel pointed out that section 55 carries a three-year period of time to rectify the error, and this shows that an error can become apparent at any time within that period, which means that it could become apparent subsequent to the commission of the error. This argument is misconceived. Section 55 contains two things : one is the commission of apparent error; the other is its rectification. The period of limitation prescribed by the section relates to the aspect of rectification. The learned counsel's contention is based on a transference of the limitation period of three years prescribed for rectification to the very basic requirement, namely, the commission of an apparent error which is the provocation for the exercise of the rectificatory power.
8. For the reasons aforesaid, we allow the revision petitions, set aside the order passed by the Tribunal under section 55 and restore their earlier orders in appeal. The State Government will get its costs from the assessees. Counsel's fee Rs. 250 (one set).