The retrospective operation of an amendment to a statute may result in a mistake apparent from the record in an earlier order, which can be rectified under S. 35 of the Income-tax Act, 1922.

Judgment

P. B. GAJENDRAGADKAR, J. : This is an appeal by the Income-tax Officer Companies, Circle I(1), Bombay and the Union of India and it raises a short question about the construction of S. 35 of the Income-tax Act read with S. 1, sub-s. (2) and S. 13 of the Indian Income-tax (Amendment) Act, 1953 (XXV of 1953). It arises in this way. The Income- Tax Officer, by his assessment order made on October 9, 1952, for the assessment year 1952-53, assessed the respondent, the Bombay Dyeing and Manufacturing Co. Ltd., under the Act. In the said assessment order the respondent was given credit for Rs. 50,603-15-0 as representing interest at 2 per cent on tax paid in advance under S. 18A of the Act. This credit was given to the respondent in pursuance of the provisions contained in S. 18-A, sub-s. (5) of the Act as it then stood. On May 24, 1953, the Amendment Act came into force. Section 1, sub-s. (2) of the Amendment Act provides that "subject to any special provision made in this behalf in the Amendment Act, it shall be deemed to have come into force on the first day of April, 1952". By S. 13 of the Amendment Act, a proviso was added to S. 18A(5) of the Act. The effect of the amendment made by the insertion of the said proviso to S. 18A(5) was that the assessee was entitled to get interest at 2 per cent not on the whole of the advance amount of tax paid by him as before but only on the difference between the payment made and the amount at which the assessee was assessed to tax under the regular assessment under S. 23 of the Act. After the Amendment Act was passed, the first appellant exercised his power under S. 35 of the Act and purported to rectify the mistake apparent from the record in regard to the credit for Rs. 50,603-15-0 allowed by him to the assessee. The first appellant held that the assessee was really entitled to a credit of only Rs. 21.157-6-0 by way of interest on tax paid in advance as a result of the retrospective operation of the amendment made in S. 18-A (5) by the Amendment Act. In accordance with this order a notice of demand under S. 29 of the Act was issued against the assessee for the sum of Rs. 29,446-9-0 on the ground that the assessee had been given credit for this excess amount through mistake. Aggrieved by this notice of demand, the respondent filed a petition in the High Court of Bombay on January 4, 1954, under Art. 226 of the Constitution praying for a writ against the appellants inter alia prohibiting them from enforcing the said rectified order and the said notice of demand. It appears that this petition was admitted by Tendolkar, J., on January 6, 1954, and a rule issued on it. Thereafter the said petition was referred to a Division Bench by the Hon ble the Chief Justice for final disposal. Accordingly on March 5, 1954, the petition was heard by Chagla C. J. and Tendolkar J. and a writ was issued against the appellants. The High Court held that S. 35 of the Act had no application to the facts of the case because the mistake apparent from the record contemplated by the said Section is not a mistake which is the result of the amendment of the law even though the amending law may be retrospective in operation. In other words, in the opinion of the High Court, the mistake mentioned by S. 35 had to be apparent on the face of the order and it can only be judged in the light of the law as it stood on the day when the order was passed. The appellants then applied for and obtained a certificate from the High Court on October 8, 1954; on their behalf it is urged that the High Court of Bombay has erred in law in taking the view that the appellant No. 1 was not entitled to rectify the mistake in question under S. 35 of the Act. Thus the short question which arises before us in the present appeal is whether an order which was proper and valid when it was made can be said to the disclose a mistake apparent from the record if the said order would be erroneous in view of a subsequent amendment made by the Amendme