M/S VIVIDH MARBLES PVT. LTD. versus COMMERCIAL TAX OFFICER

Citation: [2007] 3 S.C.R. 140 · Decided: 23-02-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

A 
MIS VIVIDH MARBLES PVT. LTD. 
).> .. 
v. 
COMMERCIAL TAX OFFICER 
FEBRUARY 23, 2007 
B 
[S.B. SINHA AND MARKANDEY KA TJU, JJ.] 
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Taxation--Sales tax-Exemption-Pursuant to Industrial Policy-Two 
schemes exempting payment of sales tax-Option to the entrepreneur to opt 
c for any one scheme-Assessee opting/or later scheme getting 75% exemption-
Assessing Authority by mistake granted exemption under former Scheme 
granting 100% exemption-On realization of mistake, demand made for 
recovery of 25% tax-Challenged in Writ Petition-Dismissal thereof-On 
appeal, held: Assessee having opted for one Scheme, is estoppedfrom opting 
D for another Scheme,-Assessee cannot be permitted to derive benefit of the 
mistake of Assessing Authority-Statutory Authorities are entitled to rectify 
their mistake. 
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State Government, pursuant to its industrial policy, formulated two 
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Schemes exempting payment of Sales tax, one in the year 1987 (granting 
E 100% exemption) and another in 1989 (granting 75% exemption). Both the 
Schemes provided for different nature of incentives 1989 .Scheme not given 
retrospective effect and entrepreneurs were given a choice to opt for either 
of the two Schemes. Appellant herein opted for 1989 Scheme. Eligibility 
Certificate was granted in terms whereof 1989 Scheme was applied. In order 
F of assessment exemptions were stated to have been granted in terms of 1987 
Scheme. When the mistake of the Assessing Authority was discovered, a show 
cause notice was issued to the appellant for payment of balance sales tax. 
Appellant filed a Writ Petition thereagainst on the grounds that it being 
eligible for grant of exemption under both the Schemes, it preferred to avail 
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of 100% exemption under 1987 Scheme; that notices seeking recovery of 
the balance tax was contrary to assessment order; and that respondent having 
granted exemption under 1987 Scheme, could not be permitted to change its 
opinion to allow exemption under 1989 Scheme. The Writ Petition was 
f· 
dismissed by High Court. Hence the present appeal. 
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140 
Vl'llDH MARBLES PVL LTD. v. COMMERCIAL TAX OFFICER 
141 
Dismissing the appeal, the Court 
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HELD: I.I. It may be true that the Assessing Authority committed a 
mistake in referring to the 1987 Scheme in its order of assessment, but 
thereby the appellant cannot be permitted to derive any benefit to which it was 
not entitled under the law. Appellant indisputably was eligible for grant of B 
exemption in terms of both the Schemes. Having opted for the 1989 Scheme, 
now the appellant cannot be permitted to turn round and contend that it should 
have been granted the benefit of 1987 Scheme, only because at a later stage 
it found the same to be more beneficial. [Para 10) [145-G-H; 146-A) 
Indian Cement and Ors. v. State of Andhra Pradesh and Ors., (1988) 1 c 
sec 743; West Bengal Hosiery Association and Ors. v. State of Bihar and 
Anr., [1988) 4 SCC 134 and British Physical Lab India Ltd. v. State of 
Karnataka and Anr., (1999) l SCC 170, distinguished. 
Maharashtra State Seeds Corporation Ltd. v. Hariprasad Drupadrao D 
Jhadao and Anr., (2006) 3 SCC 690, referred to. 
1.2. If the Assessing Authority committed a mistake in referring to 1987 
Scheme and allowed 100% exemption in terms thereof, the State cannot suffer 
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thereby. The statutory authorities are entitled to rectify their mistake. When 
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such mistakes are apparent on the face of the records even no opportunity of E 
hearing is necessary. [Para 13) (146-E, F] 
2. In a case of this nature, a direction to the effect that the appellant is 
not liable to pay any interest or any penalty, cannot be issued. Appellant herein 
knew the actual state of affairs. It at all material times was aware of the extent 
of its entitlement thereto, which was confined to the benefits under the 1989 F 
Scheme. However, despite such knowledge if it had not recovered any tax, it 
must thank itself therefor. (Para 19) (147-D, E) 
~ 
Shree Cement Ltd. and Anr. v. State of Rajasthan and Ors., (2000) 1 
sec 765; Indian Cement and Shree Digvijay Cement Co. Ltd. and Ors. v. G 
State of Rajasthan and Ors., (2000) 1 SCC 688 and State of Rajasthan and 
Anr. v. J.K. Udiapur Udyog Ltd. and Anr., (2004) 7 SCC 673, distinguished. 
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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 926 of2007. 
From the Final Common Judgment and Order dated 6.2.2006 of the High H 
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142 
SUPREME COURT REPORTS 
[2007] 3 S.C.R. 
Court of Judicature for R

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