P.N. Bhagwati, C.J.
1. This petition challenges the refusal of the revenue authorities to rectify orders of assessment to wealth-tax made on the petitioner for the assessment years 1957-58, 1958-59 and 1959-60. In the course of the assessment proceedings, the petitioner claimed to deduct in computation of the net wealth on the relevant valuation date a certain amount each year in respect of provision for taxation but the claim was disallowed on the ground that the amount provided for tax liability did not constitute 'debt owed' from the petitioner on the relevant valuation date within the meaning of section 2(m) of the Wealth-tax Act, 1957. The Wealth-tax Officer accordingly added back the amounts claimed by way of deduction and computed the net wealth of the petitioner on that basis. The orders of assessment for the respective assessment years 1957-58, 1958-59 and 1959-60 were made on 22nd September, 1958, 28th September, 1958, and 27the October, 1959. The petitioner did not prefer appeals against th orders of assessment. Subsequently, however, the petitioner came to know from a decision given by the Income-tax Appellate Tribunal that the amounts claimed by it in respect of provision for taxation were deductible in computing the net wealth of the petitioner within the meaning of section 2(m) of the Wealth-tax Act, 1957, on the ground that there was an error apparent on the face of the record in each case in so far as the amounts claimed by the petitioner in respect of provision for taxation were wrongly disallowed and added back by the Wealth-tax Officer. The applications were rejected by the Wealth-tax Officer by a composite order dated 24th April, 1962. The only ground given by the Wealth-tax Officer for rejecting the applications was that there was no error of law apparent on the face of the record in the assessment orders and section 35 was accordingly not attracted. The petitioner preferred revision applications to the Commissioner of Wealth-tax but the revision applications were also unsuccessful and they were dismissed by a composite order dated 23rd March, 1964, on the same ground. The petitioner thereupon preferred the present petition seeking a writ of certiorari quashing the order passed by the Wealth-tax Officer refusing rectification and the order of the Commissioner rejecting the revision applications of the petitioner as also a writ of mandamus directing the Wealth-tax Officer and the Commissioner of Wealth-tax to rectify the orders of assessment by allowing deductions of the amounts claimed by way of provision for taxation.
2. The principal argument of the petitioner in support of the petition was that there was clearly an error of law apparent on the face of the record in each of the three assessment orders inasmuch as the amount claimed by the petitioner in respect of provision for taxation was a 'debt owed' by the petitioner within the meaning of section 2(m) of the Wealth-tax Act, 1957, and was, therefore, deductible in computing the net wealth of the petitioner on the relevant valuation date. This position was settled beyond doubt so far as assessments in the State of Gujarat are concerned by the decision of this court in Commissioner of Wealth-tax v. Raipur . and the view taken by this court was affirmed by the Supreme Court in an appeal from the Calcutta High Court in Kesoram Industries and Cotton Mills Ltd. v. Commissioner of Wealth-tax. The Wealth-tax Officer was, therefore, wrong in refusing to rectify the orders of assessment on the ground that the assessment orders did not disclose any error of law apparent on the face of the record. It was urged that the Commissioner of Wealth-tax was in any event in error in rejecting the revision applications of the petitioner since at that date the decision of this court in Raipur Manufacturing Company's case was already declared and having regard to this decision it was indisputable that there was an error of law apparent on the face of the assessment orders. The petitioner contended that the orders of the Wealth-tax Officer and the Commissioner of Wealth-tax were, therefore, vitiated by an error of law apparent on the face of the record and were liable to be quashed and set aside on certiorari. The revenue did not contest the position and, indeed, having regard to the decision of the Supreme Court in Kesoram Industries case, it was not possible for them to do so, that the amount claimed as provision for taxation was a 'debt owed' within the meaning of section 2(m) of the Wealth-tax Act, 1957, and was, therefore, deductible in computing the net wealth of the petitioner on the relevant valuation date. But the contention raised by them was that the assessment orders did not disclose any error of law apparent on the face of the record and, in any event, so far us the orders of the wealth-tax Officer and the Commissioner of Wealth-tax refusing rectification were concerned, there was no error of law apparent on the face of the record which would attract the certiorari jurisdiction of this court. The revenue also urged that in any event this court should not interfere in the exercise of its discretion under article 226 of the Constitution since the petitioner did not adopt the statutory remedy of an appeal for challenging the orders of assessment but preferred applications for rectification and the applications for rectification were disposed of at a time when there was no decision of the Supreme Court declaratory of the law on the point. These were the rival contentions of the parties and we shall now proceed to examine them.
3. Now, it is well-settled that a writ of certiorari can be issued where the order of the inferior tribunal is shown to suffer from an error of law which is apparent on the face of the record. It is not every error of law which is amenable to the certiorari jurisdiction of the High Court but only an error of law which is apparent on the face of the record that can be corrected in the exercise of its certiorari jurisdiction by the High Court. The question which, therefore, arises for consideration in this petition is whether the orders of the Wealth-tax Officer and the Commissioner of Wealth-tax suffer from an error of law apparent on the face of the record. The contention raised before the Wealth-tax Officer and the Commissioner of Wealth-tax was that the assessment orders in so far as they disallowed the claim for deduction in respect of the amount of provision for taxation suffered from an error of law apparent on the face of the record inasmuch as the amount of the provision for taxation was a 'debt owed' by the petitioner within the meaning of section 2(m) of the Wealth-tax Act, 1957, and was, therefore, deductible in computing the net wealth of the petitioner. This contention was negatived by the Wealth-tax Officer and the Commissioner of Wealth-tax who took the view that the disallowance of the claim for deduction in respect of the amount of provision for taxation did not constitute a mistake apparent on the face of the record. Can this view taken by the Wealth-tax Officer and the Commissioner of Wealth-tax be said to suffer from an error of law apparent on the face of the record The answer to this question must depend on the decision of the question whether the disallowance of the claim for deduction in the assessment orders was a mistake which was apparent on the face of the record. It is to the determination of that question that we must, therefore, now turn.
4. It was urged by the learned Advocate-General on behalf of the revenue that the orders of assessment to wealth-tax made on the petitioner, in so far as they disallowed the claim for deduction in respect of the amount of provision for taxation, did not disclose any mistake apparent from the record and, therefore, the Wealth-tax Officer and the Commissioner of Wealth-tax committed no error of law apparent on the face of the record in rejecting the petitioner's applications for rectification of the assessment orders. To attract the provisions of section 35 of the Act, and to bring the error, if any, in an assessment order within the meaning of the expression 'mistake apparent from the record', it was urged that what must be shown is that the mistake was committed at the time of the making of the order and not that the order was ultimately found to suffer from an infirmity or a mistake was subsequently discovered in the order as a result of later judicial pronouncements. It was strenuously contended that neither the decision of this court in Raipur Manufacturing Company's case nor the decision of the Supreme Court in Kesoram Industries and Cotton Mills' case was pronounced before the Wealth-tax Officer made the assessment orders in the petitioner's cases and since the law was not yet settled as on the date of the said assessment orders, it could not be said that the assessment orders disclosed any mistake of law apparent from the record. The submission in other words was that the assessment orders were proper and valid when they were made and merely because the said orders were later found to be erroneous in view of the subsequent judicial pronouncements, the provisions of section 35 would not be attracted and the Wealth-tax Officer would not be justified in rectifying the said orders on the ground that they disclosed a mistake of law apparent from the record.
5. We are of the opinion that the submission is not well-founded. It is true that the Wealth-tax Officer did not have before him the decision of this court in Raipur Manufacturing Company's case or that of the Supreme Court in Kesoram Industries and Cotton Mills' case when he passed the assessment orders in the petitioner's cases and that both the decisions were given after the assessment orders were made. But these decisions did not enact or make the law in any sense but merely interpreted the expression 'debt owed' occurring on section 2(m) of the Act which was undoubtedly on the statute book at the time when the assessment orders were made by the Wealth-tax Officer. These decisions, in so far as they declared that the amounts claimed by an assessee in respect of provision for taxation are deductible in computing the net wealth of the assessee since they represent 'debt owed' by the assess within the meaning of section 2(m) of the Act, merely stated what the law had always been and must always be understood to have been. The fact that these decisions were not before the Wealth-tax Officer when he made the orders of assessment in the petitioner's case has, therefore, no material bearing on the question whether the said orders disclose any mistake apparent from the record. If that be the correct legal position, and we hold that it is, the only conclusion possible is that the assessment orders, in so far as they disallowed the claim of the petitioner for deduction in respect of the amount of provision for taxation, proceeded on a wrong view of that law and the said orders were bad at their very inception, on the date on which they were made. The orders of assessment thus disclosed a mistake apparent from the record and were liable to be rectified in exercise of the powers conferred under section 35 of the Act. In our opinion, therefore, the Wealth-tax Officer committed an apparent error of law in rejecting the petitioner's application for rectification of the mistake and the Commissioner of Wealth-tax likewise committed an error of law apparent on the face of the record in rejecting the petitioner's revision application.
6. We find further that at least on the date of the decision of the Commissioner of Wealth-tax rejecting the revision applications of the petitioner directed against the order of the Wealth-tax Officer refusing to exercise the powers conferred under section 35 of the Act, the decision of this court in Raipur Manufacturing Company's case was already pronounced. The decision of this court in Raipur Manufacturing Company's case was given on October 15 and 16, 1962, whereas the decision of the Commissioner of Wealth-tax in the revision application preferred by the petitioner was given on March 23, 1964. In fact, we find that in the memo, of revision application presented by the petitioner to the Commissioner of Wealth-tax, a copy of which is annexed as 'exhibit B, collectively' to the petition, pointed reference has been made to the decision of this court in Raipur Manufacturing Company's case and the Commissioner of Wealth-tax was invited to exercise his revisional jurisdiction so as to give effect to the said decision. We are of the opinion that, in these circumstances, it was incumbent upon the Commissioner of Wealth-tax to give effect to the decision of this court in Raipur Manufacturing Company's case and inasmuch as he failed to do so, there is an error of law apparent on the face of the record which has altogether vitiated his order.
7. In the view that we are taking, namely, that an order of assessment based upon an interpretation or application of law which is ultimately found to be wrong in the light of judicial pronouncements rendered subsequently, discloses a mistake apparent from the record, we are fortified by the decision of the Bombay High Court in Bhagwandas Kevaldas v. N. D. Mehrotra. In that case, the assessment of the petitioner for the year 1948-49 was finalised on March 31, 1953. The Income-tax Officer omitted to charge any interest under section 18A(6) of the Income-tax Act. On October 4, 1956, the Income-tax Officer passed an order under section 35 rectifying the original assessment by including the interest chargeable under section 18A (6). In the meantime section 18A (6) was amended with retrospective effect from April 1, 1958, and the 5th proviso was added investing the Income-tax Officer with a discretion to reduce or waive the interest. The petitioner applied to the Commissioner for revision of the order of the Income-tax Officer and the Commissioner substantially dismissed the application but modified the order of the Income-tax Officer and directed that interest should be charged for a shorter period. The petitioner preferred a petition in the High Court under article 226 of the Constitution challenging the legality of the order of the Income-tax Officer. It was contended on behalf of the assessee that, in view of the judgment of that court in Shantilal Rawji v. M. C. Nair, IV Income-tax Officer, the Income-tax Officer had no jurisdiction to pass the order of rectification because the Income-tax Officer, by virtue of the discretion retrospectively vested in him to waive the interest payable by the assessee, must be deemed to have waived the amount of interest notwithstanding the fact that the 5th proviso was not there on the statute book when the assessment order was made. It was contended on behalf of the revenue that the decision in Shantilal Rawji's case was not before the income-tax authorities when the order of rectification was made and, in the absence of a judicial pronouncement to the effect that an order of rectification of the nature passed by the Income-tax Officer in the circumstances of that case would be without jurisdiction, it could not be said that the impugned order disclosed an error of law apparent on the face of the record. Negativing this argument, S. T. Desai J., speaking for the Division Bench, observed at page 543 of the report :
'The argument is not tenable and for this reason. When the court decides a matter it dies not make the law in any sense but all it dies is that it interprets the law and states what the law has always been and must be understood to have been. A question of error of law apparent on the face of the record does arise on this petition and what we have to see is whether at the date of the petition, the petitioner is able to establish from the record including the order of the Commissioner of Income-tax that there is an error of law apparent on the face of the record. Therefore, it is in the light of the decision in Shantilal Rawji's case, that we have to examine the order of the Commissioner of Income-tax and if that be done - and we have no doubt that that is the only correct approach in these matters - it is difficult to see how it can be said that there is no error of law apparent on the face of the record.'
8. There can be no doubt, therefore, that in rejecting the petitioner's applications for rectification, the Wealth-tax Officer and in rejecting the petitioner's revision applications, the Commissioner of Wealth-tax have committed an error of law apparent on the face of the record and the orders are, therefore, liable to be quashed.
9. It was next urged by the learned Advocate-General on behalf of the revenue that once an assessment proceeding has been completed by making an order of assessment which has become final by the assessee having not challenged the said order by adopting the statutory remedy of appeal, the finality of the order passed by the assessing authority cannot be impaired by subsequent judicial pronouncements which may have the effect of showing that the assessment was made on a wrong view of the law and further that the finality of the said order cannot, in any event, be taken away by invoking the power of rectification under section 35 of the Act on the basis of the decision of the court subsequently rendered. It was further contended that in any event this court should not in the exercise of its discretion under article 226 of the Constitution interfere with an order passed in the circumstances aforementioned by the authorities functioning under the Act rejecting an application for rectification. We are unable to accede to this submission. In our opinion, the order of assessment passed by the Wealth-tax Officer cannot be said to be final in the literal sense of the word. The order was and continued to be liable to be modified under section 35 of the Act if the condition precedent for the exercise of the power under that section was satisfied (vide M. K. Venkatachalam, Income-tax Officer v. Bombay Dyeing and .). If it is shown in a given case that the order of assessment made by the Wealth-tax Officer discloses a mistake apparent from the record, the condition precedent for the exercise of the power under section 35 would be satisfied and the order would ordinarily be liable to be modified in exercise of the power conferred by the said section notwithstanding the fact that no appeal was preferred from the order of assessment. If, as in the present case, the order of the Wealth-tax Officer disclosed a mistake apparent from the record, the assessee would be entitled to invoke the jurisdiction of the Wealth-tax Officer to rectify the said mistake and the application cannot be thrown out either on the ground that the finality of the original assessment order cannot be taken away by invoking the power of rectification on the basis of the decision of the court subsequently rendered or on the ground that the said order having become final, since no appeal was preferred, therefore, the power of rectification cannot be exercised. As regards the further contention on behalf of the revenue that we should not exercise our discretion under article 226 of the Constitution in favour of the petitioner in the circumstances of the case, we are satisfied that no grounds are made out be the respondents for denying to the petitioner the relief he has prayed for when we find that he has succeeded in showing that the impugned orders suffer from the vice of an error of law apparent on the face of the record. The only ground urged on behalf of the revenue for not exercising the discretion in favour of the petitioner was that the petitioner has not adopted the statutory remedy of an appeal for challenging the orders of assessment and the orders of assessment having thus become final, he cannot be allowed to challenge them by preferring applications for rectification and then a writ petition. We have held above that the orders of assessment did not become final in the literal sense of the word and if as a result of the judgment of this court in Raipur Manufacturing Company's case, the orders disclosed a mistake apparent from the record, the assessee was entitled to apply for rectification and that is what he has done in the present case. The relief sought by him has been denied by the Wealth-tax Officer and the Commissioner of Wealth-tax although he has shown that in the orders of assessment there was a mistake apparent from the record and in view of the failure of the authorities under the Act to grant relief on an erroneous view of the law, a patent error of law clearly appears on the face of the record and we think this is a fit case for exercise of our discretion in favour of the petitioner.
10. In the result, the petition succeeds. The rule is made absolute. We issue a writ of certiorari against the respondents as prayed in prayer clauses (a) and (b) and quash and set aside the impugned orders passed by the respondents. The Wealth-tax Officer is directed to pass appropriate orders on the three applications, each dated March 20, 1962, filed by the petitioner under section 35 of the Wealth-tax Act for the assessment years 1957-58, 1958-59 and 1959-60 in accordance with law and in the light of the observations made in this judgment. The respondents will pay the costs of the petition to the petitioner.