Hassan Nawaz Makhdoom, J. This Sales Tax Reference has been filed by M/s. Auto Craft (the "applicant") under section 47 of the Sales Tax Act, 1990 (the "Act") challenging the order dated 09.02.2017 passed by the Appellate Tribunal Inland Revenue (the "Tribunal"), whereby it has rectified its earlier decision dated 23.05.2016. Through order dated 08.05.2017, this Court framed the following question of law for consideration:- "1) Whether under the facts and the circumstances of the case, the learned ATIR was justified to act as appellate forum and vacate its own order?"
2. Learned counsel for the applicant contended that the Tribunal has wrongly exercised its jurisdiction by recalling its final order dated 23.5.2016, through the impugned order dated 09.02.2017, which amounted to sitting in appeal over its own decision. He argued that such a course was not permissible under the statutory framework of the Act, and that the power under section 57 thereof cannot be exercised to review or recall a final order.
3. Conversely, learned counsel appearing for respondents No.1 and 2 supported the impugned order and submitted that the Tribunal has rightly exercised its jurisdiction under Section 57 of the Act to rectify a mistake apparent on the face of the record. He argued that the (earlier) order dated 23.05.2016 was based on an error regarding the date of the Show Cause Notice (SCN), which materially affected the Tribunal's findings on limitation.
4. Arguments heard. Record perused.
5. A careful perusal of the record reveals that vide order dated 23.5.2016 the Tribunal had set aside the original assessm ent order on the ground of limitation observing that it was passed after 471 days of the issuance of the SCN and was, therefore, time-barred under section 11(5) of the Act. For ready reference, the above referred relevant provision is reproduced as under:- "11. Assessment of Tax and recovery of tax not levied or short-levied or erroneously refunded.-(1) xxxx
(2) xxxxxx
(3) xxxxxx
(4) xxxxxx
(5) No order under this section shall be made by an officer of Inland Revenue unless a notice to show cause is given within five years, of the [end of the financial year in which the relevant date fall], to the person in default specifying the grounds on which it is intended to proceed against him and the officer of Sales Tax shall take into consideration the representation made by such person and provide him with an opportunity of being heard: Provided that order under this section shall be made within one hundred and twenty days of issuance of show cause notice or within such extended period as the Commissioner may, for reasons to be recorded in writing, fix provided that such extended period shall in no case exceed ninety days: Provided further that any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or the time taken through adjournment by the petitioner not exceeding sixty days shall be excluded from the computation of the period specified in the first proviso.
6. xxxxxxxx
7. xxxxxxxx"
It is observed that the aforesaid provision mandates that no assessment or recovery order shall be passed by an officer of Inland Revenue unless a show cause notice is issued within five years from the end of the financial year in which the relevant date falls, clearly specifying the grounds of action, and the taxpayer is provided a fair opportunity of being heard. Furthermore, the assessment order should be passed within 120 days from the issuance of the notice; however, the Commissioner may extend this period by recording reasons in writing, but such extension shall not exceed 90 days. Additionally, the period during which proceedings remain stayed by a court, are pending ADR, or are adjourned due to the taxpayer's own request (not exceeding 60 days) shall be excluded from the computation of the prescribed limitation. While keeping in view the above provisions of law, the order dated 23.05.2016 was passed by the Tribunal.
6. Subsequently, the tax department submitted a Miscellaneous Application, pointing out that the date of issuance of the SCN under section 11 of the Act was erroneously recorded as 18.08.2014, whereas the correct date was 18.08.2015. The following are the contents of the miscellaneous application filed by the respondent No.2 (CIR Zone-VIII, RTO-II, Lahore), to rectify order dated 23.05.2016: "Order in original No.22/2015 dated 14.01.2016 was passed by DCIR, Audit Unit-02, Zone-VIII in the case of subject mentioned taxpayer. Show cause notice u/s 11 of the Sales Tax Act, 1990 was issued to the taxpayer vide letter dated 18.08.2015 but inadvertently the date of issuance of show cause notice was typed as 18.08.2014. This mistake is also supported by the following documentary evidences: i) The AR of the taxpayer M/s Tax & Trade Vision vide their letter No.TV/LAP/108 dated 25.08.2015 (copy enclosed) requested for adjournment maintaining therein that compliance is not possible within 04 to 05 days meaning thereby that show cause notice was served on the taxpayer on 20th or 21st of August, 2015.
(ii) Show cause notice was served through TCS consignment No.40047502177 on 18.08.2015. ..."
The Tribunal, upon reconsideration, while invoking its jurisdiction under Section 57 of the Act, rectified its earlier order dated 23.05.2016 and restored the departmental appeal for adjudication on merits. The relevant provision is reproduced below for ease of reference: "57. Rectification of Mistake.- (1) The officer of Inland Revenue, Commissioner, the Commissioner (Appeals) or the Appellate Tribunal may, by an order in writing, amend any order passed by him to rectify any mistake apparent from the record on his or its own motion or any mistake brought to his or its notice by a taxpayer or, in the case of the Commissioner (Appeals) or the Appellate Tribunal, the Commissioner.
(2) No order under sub-section (1) which has the effect of increasing an assessment, reducing a refund or otherwise applying adversely to the taxpayer shall be made unless the taxpayer has been given a reasonable opportunity of being heard.
(3) Where a mistake apparent on the record is brought to the notice of the officer of Inland Revenue, Commissioner or Commissioner (Appeals), as the case may be, and no order has been made under sub-section (1), before the expiration of the Financial year next following the date on which the mistake was brought to their notice, the mistake shall be treated as rectified and all the provisions of this Act shall have effect accordingly.
(4) No order under sub-section (1) shall be made after five years from the date of the order sought to be rectified."
(Underlining is ours)
7. A careful reading of the above reproduced provision of law reveals that it authorizes the Tribunal to rectify any mistake apparent from the record on its own motion or upon being brought to its notice.
8. Recently, a learned Division Bench of this Court, in STR No.39113/2019 titled "Commissioner Inland Revenue v. M/s Chaudhry Steel Furnace", has somewhat also reached upon a similar conclusion.
The relevant excerpt of the above is reproduced as under:- "4. It is clear from the above that the officer of Inland Revenue, the Commissioner, the Commissioner (Appeals) or the Appellate Tribunal may amend an order passed by them to rectify any mistake apparent from the record.
Thus, the scope of the above provision is limited and circumscribed and cannot be extended at the whims of the Appellate Tribunal to render a difference decision from the earlier one on the merits of the case. ...."
(Emphasis added)
9. As reflected from the record the date of SCN was 18.8.2015 instead of 18.8.2014, upon which, the Tribunal had exercised its jurisdiction under section 57 of the Act vide order dated 09.2.2017 while recalling order dated 23.5.2016.
10. Under a regular and ordinary course of exercise of review jurisdiction in matters which are civil in nature, the courts have shown leniency in correcting and rectifying errors floating on the surface.
The law relating to rectification of errors and the scope of review has been elaborated in numerous judicial pronouncements. In Mst. Bilqis Bibi v. Mst. Zainab Bibi and others (1989 SCMR 1008), it was held that review may be granted not because a decision is incorrect, but where something material and obvious has been overlooked. Its relevant portion is reproduced here:- "11. .... B. Z. Kaikaus, J., emphasised the principle of finality of litigation and observed that "the mere incorrectness of a conclusion reached can never be a ground for review". Referring to the limitations underlying the principles of review contained in Order XLVII, rule 1, C.P.C. he observed:- "While I would prefer not to accept those limitations as they placed any technical obstruction in the exercise of the review jurisdiction of this Court I would accept that they embody the principles on which this Court would act in the exercise of such jurisdiction. It is not because a conclusion is wrong but because something obvious has been overlooked, some important aspect of the matter has not been considered, that review petition will lie. It is a remedy to be used only in exceptional circumstances....."
(Emphasis supplied)
Similarly, in Abdul Rauf and others v. Qutab Khan and others (2006 SCMR 1574), the Hon'ble Supreme Court clarified that a mistake apparent on the face of the record must be self-evident and should not require elaborate arguments. For ease, the relevant portion is reproduced as under:- "3. ... It is well-settled by now that "a review petition is not competent, where neither any new and important matter or evidence has been discovered nor is any mistake or error apparent on the face of record. Such error may be an error of fact or of law, but it must be self-evident and floating on surface and not requiring any elaborate discussion or process of ratiocination. Orders based on erroneous assumption of material facts or without adverting to a provision of law or a departure from undisputed construction of law and the Constitution, may amount to error apparent on the face of record. Error, on the other hand, must not only be apparent, but must also have a material bearing on the fate of case and be not of inconsequential import. ..."
(Emphasis supplied)
Furthermore, the Hon'ble Supreme Court in Commissioner of Income Tax, Karachi v. Messrs Shadman Cotton Mills Ltd., Karachi through Director (2008 PTD 253) clarified that the term "mistake apparent on record" refers to a mistake so clear and manifest that, if allowed to remain uncorrected, may materially affect the outcome of the case. Its relevant part reads as follows:- "7.... The expression "mistake apparent on record" means the error or mistake so manifest and clear which, if is permitted to remain on record, may have material effect on the case. But an error of fact or law, which having direct nexus with the question of determination of rights of parties affecting their substantial rights or causing prejudice to their interest, is not a mistake apparent on the record to be rectified under S. 156 (ibid). The mistake must be of the nature, which is floating on the surface of record and must not involve, an elaborate discussion or detailed probe or process of determination."
(Emphasis supplied)
Likewise, this Court, in Commissioner Inland Revenue v. M/s. Lahore Rubber Store (2023 PTD 182), held that correction of manifest errors to prevent miscarriage of justice is consistent with the intent of Section 57. More recently, in Ahmad Sikander v. Commissioner Inland Revenue AEOI Zone, Lahore (2025 SCMR 140), the apex Court reaffirmed that rectification under fiscal laws is permissible where the error is patent and floating on the surface of the record.
11. The learned counsel for the applicant, upon being confronted as to the real and actual date of the SCN, instead of giving any answer regarding this aspect, stated that there was some other show cause notice much prior to the subject SCN, therefore, the applicant is being vexed twice. We are afraid that this stance has neither been set up in this reference nor has the same been adopted before the Tribunal. Even otherwise, the Tribunal, by way of impugned order, has effectively opened the entire case and any such stance/submission, if having any justification, can always be put forth before the Tribunal for consideration of the same by it.
Moreover, the chronology of dates given in paragraph 3 of the assessment order dated 14.01.2016 is quite relevant in this context. For convenience, the above noted paragraph is reproduced as follows:- "3. Hearing in the case was fixed on 25.08.2015 and Mr. Zulfiqar Ali (Advocate High Court) on behalf of registered person appeared and submitted request for adjournment upto 09.09.2015, which was granted. The case was re-fixed on 09.09.2015 and on the date of hearing registered person submitted partial reply against show cause notice and requested for adjournments. The case was re-fixed on 05.10.2015, 29.10.2015, 12.11.2015, 20.11.2015, 03.12.2015, 16.12.2015 & on 14.01.2016, the authorized person discussed the matter verbally as well as submitted further replies against the show cause notice. ..."
12. In the present case, the date of issuance of the SCN formed the sole basis of the finding on the question of limitation. The mistaken reliance on an incorrect date led to an erroneous conclusion that the assessm ent order was barred by time. The correction of this error being purely factual, apparent, and fundamental squarely falls within the ambit of section 57 of the Act.
13. In view of the above discussion, we find no legal infirmity in the Tribunal's decision dated 09.02.2017, rectifying its earlier order dated 23.05.2016, which acted well within its jurisdiction and in accordance with the law. Hence, the question of law framed in this Reference is answered in the negative, against the applicant. Consequently, the Reference is dismissed. Let a copy of this order be transmitted to the Tribunal in terms of Section 47(5) of the Act.