Jain Trading Co. vs Union Of India (Uoi) And Ors.
2005 Latest Caselaw 110 Bom

JUDGMENT

1. Rule. Rule made returnable forthwith. Heard the learned counsel for the petitioner and the respondents. The learned counsel for the respondents waives service. By consent taken for hearing.

2. By this petition, the petitioner is challenging the order dt. 28th Aug., 2003, passed by the Tribunal with regard to a miscellaneous petition filed by the petitioner for rectification of mistake under Section 254(2) of IT Act, 1961.

3. The Tribunal had passed an order on 19th May, 2003, pertaining to asst. yr. 1999-2000. The petitioner found certain apparent mistakes in the aforesaid order. Therefore, the petitioner filed a miscellaneous application under Section 254(2) of IT Act, 1961, for rectification of those mistakes. Shri Shivram by way of example pointed out that with regard to para 11 of the above order of Tribunal, the petitioner had pointed out as under in the said miscellaneous application :

"The survey party verified the purchases and sales bills and in majority of bills, GP rate worked out to 7.27 per cent. Therefore, the survey party applied this GP rate and prepared the trading account and as per the trading account, the closing stock was worked out at Rs. 14,28,957.

The applicant states that it has given details of each and every transaction of purchase and sale and GP thereon, which has not been looked into by any of the authorities at any stage. The total transactions of purchase, sale and GP are about 485 out of which, there are only about 21 transactions of purchase and sale, where GP is ranging between 7 per cent to 8 per cent. Therefore, the observations that GP of 7,26 per cent was as per majority of bills is contrary to the factual position. Thus, applying incorrect GP rate to arrive at derived stock would definitely result in working out incorrect closing stock. This important and factual aspect of the matter is not looked into at all by the Hon'ble Bench."

4. During the pendency of the above miscellaneous application, the petitioner had filed an IT Appeal No. 622 of 2003, before this Court. Later, the petitioner withdrew the above appeal, so as to challenge the above order of 28th Aug., 2003. Accordingly, the above appeal was allowed to be withdrawn by this Court on 20th Dec., 2004.

5. Shri Shivram, the learned counsel for the petitioner, pointed out that the petitioner was not afforded any hearing whatsoever by the Tribunal, before the above order dt. 28th Aug., 2003, was passed. The learned counsel for the petitioner also pointed out that various factual errors were pointed out to the Tribunal, but same have not been properly considered by the Tribunal.

6. Shri Shivram emphasised that the total transactions of purchase, sale and GP are about 485 and out of which only in about 21 transactions of purchase and sale, GP is ranging between 7 to 8 per cent. He therefore, contended that the observations that the GP of 7.26 per cent was as per majority of bills is contrary to the factual position. He also pointed out that the above order was in violation of principles of natural justice, as no personal hearing was given.

7. Even Shri Suresh Kumar could not dispute that no hearing was given to the petitioner, before the impugned order was passed, however, he sought to justify the order contending that the miscellaneous application was a review petition, hence it was rightly rejected by the Tribunal.

8. After hearing both sides and considering the facts and circumstances, we are clearly of the view, that the Tribunal ought to have heard the petitioner and also ought to have dealt with the specific contentions regarding factual errors, by giving a proper findings. Hence, we do hereby, quash and set aside the said impugned order dt. 28th Aug., 2003, and remand back the matter to the Tribunal to consider the said miscellaneous application for rectification of mistakes, to be decided strictly on its own merits in accordance with law after affording an opportunity of hearing to the petitioner.

9. Writ petition stands disposed of accordingly, however with no order as to costs.