JUDGMENT : Alok Mathur, J. 1. Heard Sri. Nishant Mishra, learned counsel for the revisionist as well as Sri. Bipin Kumar Pandey, learned Standing Counsel appearing on behalf of revenue. 2. This revision has been preferred against the judgment and order dated 18.01.2006, passed by the Commercial Tax Tribunal, whereby the Appeal No. 133 of 2003 has been allowed in part while the another Appeal No. 294 of 2005 for the same assessment year has been dismissed. This revision relates to the assessment year 1995-96. 3. The facts in brief of this case are that the revisionist is carrying on the business of manufacture and sale of sugar plant and machinery and has its head office situated at Naini, Allahabad. The revisionist firm is registered under Section 8A of the U.P. Trade Tax Act, 1948 (hereinafter referred to as “the Act 1948”) as well as under Section 7(1) and 7(2) of the Central Sales Tax Act. 4. During course of business the revisionist entered into lease agreement with a firm at New Delhi on 20.08.1993 and 24.08.1993, for the purpose of leasing out certain machinery such as turbine, turbo alternator and other machineries to the sugar unit of the lessee i.e. M/s Gangeshwer Limited at Deoband and Ram Kola, both situated in the State of U.P. 5. Contention of the revisionist is that the lease rent received by the revisionist from the lessee, was not amenable to levy of tax on the transfer of right to use the goods as per Section 3F of the Act, 1948 and therefore they were not liable for payment of any tax, as such. 6. The vires of Section 3F of the Act, 1948 were challenged before this High Court by way of writ petitions and by the this Court by means of judgment in the case of V.K. Singhal vs. State of U.P. 1995 UPTC 337 (decided on 11.01.1995), the provisions of Section 3F of the Act, 1948 were declared as ultra vires. 7. At the time of assessment for the year 1995-96, the amount received on account of lease rent from the lessee, was disclosed at Rs. 51,84,382/- but no liability of tax on the said amount was admitted. The assessing authority for the assessment year 1995-96, did not accepted the contention of the revisionist and levied tax on the aforesaid amount of lease rent at the rate of 5%. 51,84,382/- but no liability of tax on the said amount was admitted. The assessing authority for the assessment year 1995-96, did not accepted the contention of the revisionist and levied tax on the aforesaid amount of lease rent at the rate of 5%. The revisionist being aggrieved by the aforesaid assessment order preferred appeal on the ground that this Court in the case of V.K. Singhal (supra) has declared Section 3F of the Act, 1948 ultra vires and therefore, they were not liable to be assessed to any tax on the same and therefore, the order of the assessing authority in this regard was arbitrary and illegal. 8. The appellate authority, considering the contention raised by the revisionist, remanded the matter to the assessing authority and thereafter, fresh assessment order was passed and the assessing authority accepted the contention of the revisionist regarding the fact that he was not liable to pay any tax under Section 3F of the Act, 1948. The revisionist thereafter filed an appeal against the assessment order passed in respect of the amount other than the amount representing the lease rent, which appeal was dismissed by means of order dated 01.01.2003. 9. It has been vehemently urged that the question of liability of tax on lease amount was neither canvassed nor decided by the Joint Commissioner (Appeals). 10. After the decision of the appeal on 01.01.2003, the assessing authority in exercise of power under Section 22 of the Act, 1948, moved an application before the Joint Commissioner (Appeals) on 17.05.2004, seeking to correct the mistake in the appellate order with regard to the fact that the provisions of Section 3F of the Act, 1948 which had been declared ultra vires by this High Court, were amended and introduced by means of U.P. Act No. 11 of 2000, published on 30.04.2001 and the said amendment further provided that all actions taken and assessment made during the period 01.05.1987 to 01.03.1997, were validated. 11. The Joint Commission (Appeals), issued notice to the revisionist and after hearing both the sides, allowed the said application on 25.07.2005 and rectified the order passed earlier on 01.01.2003, thereby subjecting the revisionist to tax under Section 3F of the Act, 1948 for the amount of lease rent received by the revisionist from the lessee. 12. 11. The Joint Commission (Appeals), issued notice to the revisionist and after hearing both the sides, allowed the said application on 25.07.2005 and rectified the order passed earlier on 01.01.2003, thereby subjecting the revisionist to tax under Section 3F of the Act, 1948 for the amount of lease rent received by the revisionist from the lessee. 12. The revisionist being aggrieved by the said order, filed second appeal before the Trade Tax Tribunal, Allahabad (hereinafter referred to as “the Tribunal”) being Second Appeal No. 294 of 2005, which has been rejected by means of order dated 18.01.2006, which has been impugned in the instant revision. 13. Learned counsel for the revisionist has raised following contentions: (i) In exercise of power conferred under Section 22 of the Act, 1948, an application can be made for rectification of a mistake, where as in the present case there was no mistake committed in the order of the appellate authority and therefore the said application was itself not maintainable. (ii) The application seeking rectification of the order of appellate authority was not maintainable inasmuch as the order of the assessing authority stood merged with the order of the appellate authority and the order which is not in existence cannot be rectified and therefore the application filed by the revenue was misconceived. (iii) By means of impugned order the Tribunal has upheld the application for rectification which does not amount to rectification of mistake, instead it is a fresh imposition of tax liability which should have been done by the proper assessment and giving opportunity to the assessee, which is a matter of debate, hence fresh assessment could not have been done in the garb of rectification of mistake. 14. Learned counsel for the respondent-revenue on the other hand submits that the order of assessing authority merged with the appellate order and therefore the revenue had no option but to move an application for correction of mistake in the appellate order so as to bring the amount of lease rent to tax in the light of amended provisions of Section 3F of the Act, 1948. 15. In support of his contention, learned Standing Counsel appearing on behalf of revenue has placed reliance on the judgment in the case of M.R. Soap Pvt. Ltd. vs. Assistant Commissioner, 1991 UPTC 517. 16. Heard learned counsel for the parties and perused the record. 17. 15. In support of his contention, learned Standing Counsel appearing on behalf of revenue has placed reliance on the judgment in the case of M.R. Soap Pvt. Ltd. vs. Assistant Commissioner, 1991 UPTC 517. 16. Heard learned counsel for the parties and perused the record. 17. The questions of law which arise for consideration of this Court are: (i) Whether the Tribunal was justified in up holding the applicability of Section 22 of the Act, 1948? (ii) Whether the Tribunal was justified in up holding the order of the first appellate authority in allowing the application filed under Section 22 of the Act, 1948 and correcting the mistake thereby levying tax on the revisionist? (iii) Whether the order of the assessing authority was amenable to any correction after it stood merged with the appellate order? 18. The undisputed facts of this case which emerge are that the revisionist leased out certain machinery to the sugar units of M/s Gangeshwar Ltd. at Deoband and Ramkola. An amount of Rs. 51,84,382/- was received by the revisionist during the assessment year 1995-96, towards lease rent, which was initially subjected to tax under Section 3F of the Act, 1948, but on remand by means of order dated 07.06.2002, it was not assessed to tax under the belief that Section 3F of the Act, 1948 had been held to be ultra-vires by this Court in the case of V.K. Singhal (supra). 19. After the declaration of Section 3F of the Act, 1948 ultra-vires an amending Act was passed, reintroducing the provisions of Section 3F by means of U.P. Act No. 11 of 2001, published on 30.04.2001, validating all actions taken during the period 01.05.1987 to 01.05.1997. 20. The assessing authority while assessing the revisionist in remand proceedings made assessment on 07.06.2002 on which date the amended Section 3F had come into existence and it was open to the assessing authority to assess the revisionist in the light of amended provisions of the Act, 1948. The assessment order dated 07.06.2002, it seems was passed in ignorance of the aforesaid amendment and the amount of lease rent disclosed by the revisionist was not put to tax. 21. The assessment order dated 07.06.2002, it seems was passed in ignorance of the aforesaid amendment and the amount of lease rent disclosed by the revisionist was not put to tax. 21. The issue regarding liability of tax under Section 3F with regard to lease rent was not carried by the revisionist to the appellate authority, rather appeal was preferred with regard to other issues from which the revisionist was aggrieved with and the issue regarding taxability of lease rent became final. The revenue also did not seek to reopen the assessment in this regard in exercise of powers as conferred by the provisions contained in Act, 1948. It is only after passing of the final order by the first Appellate Authority on 01.01.2003 that the application for rectification of the said order was moved on 17.05.2004, for rectification of the mistake in the appellate order dated 01.01.2003. 22. A perusal of the application dated 17.05.2004, which is part of the record of the instant revision, would indicate that it has been clearly stated that the assessing authority had assessed the revisionist by means of order dated 07.06.2002 for the assessment year 1995-96 did not imposed any tax with regard to the lease rent, despite the fact that U.P. Act No. 11 of 2001 had come into existence which provides that all the proceedings and assessments from 01.05.1987 to 01.05.1997 had been validated. The application further states that in the light of the judgment of Division Bench of this Court in the case of M.R. Soap Pvt. Ltd. (supra) the order of the assessing authority having merged in the order of the first Appellate Authority, the application under Section 22 of the Act, 1948, is being preferred. 23. Perusal of the entire application does not reveal as to what is the mistake committed by the first Appellate Authority which necessitated moving of an application for rectification of the mistake, rather, in the entire application it seems that actually the order of the assessing authority dated 07.02.2002 is being sought to the rectified in the garb of application for rectification of the order of the first Appellate Authority. 24. Learned Standing Counsel appearing on behalf of revenue could not point out as to the error in the order of the first Appellate Authority which required any rectification for which the application has been moved. 25. 24. Learned Standing Counsel appearing on behalf of revenue could not point out as to the error in the order of the first Appellate Authority which required any rectification for which the application has been moved. 25. Section 22 of the Act, 1948 provides for rectification of the mistakes, and states that the authority or the Tribunal or High Court may on its own motion or on application of the dealer or any other interested person, rectify any mistake in any order passed by him or it under the Act, apparent on record, within three years from the date of the order sought to be rectified. 26. The application for rectification would necessarily have to demonstrate that there is an apparent mistake in the order passed by the authority concerned on which the rectification is sought and such an application is to be moved within three years from the date of the order sought to be rectified. 27. Perusal of the provisions of Section 22 of the Act, 1948, also clearly indicate that the application is maintainable only where there is a mistake in the order of the authority itself before whom such an application is made. For ready reference, Section 22 of the Act, 1948 is reproduced herein-below: “22. Rectification of mistakes - (1) Any officer or authority or the Tribunal or the High Court may, on its own motion or on the application of the dealer or any other interested person rectify any mistake in any order passed by him or it under the Act, apparent on the record within three years from the date of the order sought to be rectified: Provided that where an application under this subsection has been made within such period of three years, it may be disposed of even beyond such period: Provided further that no such rectification as has the effect of enhancing the assessment, penalty, fees or other dues shall be made unless reasonable opportunity of being heard has been given to the dealer or other person likely to be affected by such enhancement. (2) Where such rectification has the effect of enhancing the assessment, the authority concerned shall serve on the dealer a revised notice of demand in the prescribed form and therefrom all the provisions of the Act and Rule framed thereunder shall apply as if such notice had been served in the first instance.” 28. (2) Where such rectification has the effect of enhancing the assessment, the authority concerned shall serve on the dealer a revised notice of demand in the prescribed form and therefrom all the provisions of the Act and Rule framed thereunder shall apply as if such notice had been served in the first instance.” 28. Considering the arguments of learned counsel for the parties as well as perusal of the application under Section 22 of the Act, 1948 moved by the revenue, it is clear that the application under Section 22 of the Act, 1948 sought to rectify the mistake committed by the assessing authority who passed the assessment order in ignorance of the amendments made in Section 3F of the Act, 1948 by means of Amendment Act No. 11 of 2001 and therefore the said application was clearly not maintainable, inasmuch as, in exercise of power under Section 22 of the Act, 1948, only the mistake committed by the first Appellate Authority could have been rectified. 29. The application moved by the revenue for correction of the mistake clearly indicates that there is no mention of any mistake having been committed by the First Appellate Authority, inasmuch as, the question of taxability of the lease rent was not an issue before the First Appellate Authority. It is clearly not possible to correct an order or issue which was neither raised nor considered by the First Appellate Authority. 30. Before the appellate authority, the question of liability to tax the lease rent received by the revisionist was not in question and therefore in this regard the order of the assessing authority did not merge with the order of the first Appellate Authority. The issue regarding tax on lease rent became final when the same was duly accepted by the revisionist and the revenue did not chose to reopen the same by exercising powers relating to reopening the assessment and therefore, the order of the assessing authority attained finality and was not liable to be opened in the manner the revenue has sought to reopen, i.e. by moving an application under Section 22 of the Act, 1948. 31. The situation would have been different had the issue regarding lease rent been considered and decided by the first appellate authority. 32. In the aforesaid circumstances, the “doctrine of merger” as canvassed by the learned counsel for the revenue would not apply. 31. The situation would have been different had the issue regarding lease rent been considered and decided by the first appellate authority. 32. In the aforesaid circumstances, the “doctrine of merger” as canvassed by the learned counsel for the revenue would not apply. The “doctrine of merger” has been discussed by Hon’ble Apex Court in the case of Commissioner of Central Excise, Delhi vs. Pearl Drinks Ltd. 2010 (255) E.L.T. 485 (SC). The Court in para no. 14 has held as under: “14. Applying the above test to the case at hand the doctrine would have no application for the plain and simple reason that the subject matter of the appeal filed by the assessee against the adjudicating authority’s order in original was limited to disallowance of two out of eight deductions claimed by the assessee. The Tribunal was in that appeal concerned only with the question whether the adjudicating authority was justified in disallowing deductions under the said two heads. It had no occasion to examine the admissibility of the deductions under the remaining six heads obviously because the assessee’s appeal did not question the grant of such deductions. Admissibility of the said deductions could have been raised only by the Revenue who had lost its case qua those deductions before the adjudicating authority. Dismissal of the appeal filed by the assessee could consequently bring finality only to the question of admissibility of deductions under the two heads regarding which the appeal was filed. The said order could not be understood to mean that the Tribunal had expressed any opinion regarding the admissibility of deductions under the remaining six heads which were not the subject matter of scrutiny before the Tribunal. That being so, the proceedings instituted by the Commissioner, Central Excise pursuant to the order passed by the Central Board of Excise and Customs brought up a subject matter which was distinctively different from that which had been examined and determined in the assessee’s appeal no matter against the same order, especially when the decision was not rendered on a principle of law that could foreclose the Revenue’s case. The Tribunal obviously failed to notice this distinction and proceeded to apply the doctrine of merger rather mechanically. The Tribunal obviously failed to notice this distinction and proceeded to apply the doctrine of merger rather mechanically. It failed to take into consideration a situation where an order may be partly in favour and partly against a party in which event the part that goes in favour of the party can be separately assailed by them in appeal filed before the appellate Court or authority but dismissal on merits or otherwise of any such appeal against a part only of the order will not foreclose the right of the party who is aggrieved of the other part of this order. If the doctrine of merger were to be applied in a pedantic or wooden manner it would lead to anomalous results inasmuch as a party who has lost in part can by getting his appeal dismissed claim that the opposite party who may be aggrieved of another part of the very same order cannot assail its correctness no matter the appeal earlier disposed of by the Court or authority had not examined the correctness of that part of the order.” 33. Learned counsel for the revisionist has fairly placed the judgment in the case of M/s Triveni Engg. Industries Ltd. vs. Commissioner of Trade Tax passed in Sales Tax Revision No. 212 of 2006 (decided on 28.08.2017), The aforesaid judgment pertains to a similar dispute between the revisionist and the revenue for the assessment year 1996-97. The question considered by the court in M/s Triveni Engg. Industries Ltd. (supra) is whether the First Appellate Authority was within its jurisdiction in imposing tax upon the dealer under Section 3F in the proceedings under Section 22 of the Act, 1948? 34. The learned Single Judge in M/s Triveni Engg. Industries Ltd. (supra) considered various judgments of the Hon’ble Supreme Court and concluded as under: “Thus, in my considered opinion, the mistake is apparent on the record of the order of the first appellate authority which was rightly rectified under Section 22 of the Act. The rectification and subsequent assessment to tax under Section 3F does not amount to review/revision but a rectification of mistake apparent on the record in the order of the fist appellate authority in view of retrospective application of Amendment Act, restoring Section 3F and validating all actions take thereunder. The revision being devoid of merit is, accordingly dismissed.” 35. The rectification and subsequent assessment to tax under Section 3F does not amount to review/revision but a rectification of mistake apparent on the record in the order of the fist appellate authority in view of retrospective application of Amendment Act, restoring Section 3F and validating all actions take thereunder. The revision being devoid of merit is, accordingly dismissed.” 35. Learned counsel for the revisionist has urged that the said judgment would not be binding to decide the controversy raised in the present revision which pertains to the assessment year 1995-96 and that principle of res-judicata are not applicable for subsequent assessment years and also a binding judgment of the Division Bench of this Court in the case of M.R. Soap Pvt. Ltd. (supra) was not considered by the learned Single Judge. The Court in M.R. Soap Pvt. Ltd. (supra), in para nos. 12, 13 and 14 observed as under: “12. It will be seen that the jurisdiction of the Appellate Authority under Section 9(3) is of the widest possible amplitude. The Appellate Authority cannot only confirm, vary or annul the order of assessment but may even enhance the amount of assessment, irrespective of whether such enhancement arises from the points raised in the grounds of appeal or otherwise considered by the Assessing Authority. The appellate power under this provision, is, as observed by the learned Chief Justice Chagla in Narroandas Manordas (supra) in the nature of the power of revision, and, as observed by the Supreme Court in (1967) 66 ITR 443 , 449 (supra), it would be wholly erroneous to compare such appellate powers with the narrow and restricted powers possessed by a court of appeal under the Code of Civil Procedure. That being so, the entire assessment order, whether challenged in appeal as a whole or only in part, will merge in the appellate order irrespective of the points urged by the parties or decided by the Appellate Authority. 13. Once it is found that the order of assessment has merged in the appellate order, it follows as a matter of necessary corollary that the Assessing Authority shall not have the power to reopen the assessment under Section 22 of the U.P. Sales Tax Act. The reason is obvious. The original order of assessment cease to exist, its identity having merged in the appellate order. The reason is obvious. The original order of assessment cease to exist, its identity having merged in the appellate order. That being so, the impugned notice issued by the Assessing Authority is plainly and manifestly without jurisdiction. 14. Some single Judge decisions have, however, been brought to our notice by the learned Standing Court in which a somewhat different view seems to have been expressed on the issue whether there is merger even with regard to the part of the order of the Assessing Authority which was not appealed against by the assessee. The learned Standing Counsel, however, vary candidly conceded that the contrary view expressed by the learned Single Judges runs counter to the decision of the Division Bench in J.K. Synthetics. We think that the learned Standing Counsel is clearly right in his submission.” 36. Perusal of the aforesaid judgment clearly lays down the law in this regard that the order of the assessing authority merge with the order of appellate authority and thereby it ceases to exist as its identity stands merged with the appellate order and therefore any application under Section 22 of the Act, 1948, for correction of assessment order, would not be maintainable. 37. The Division Bench of this Court in M.R. Soap Pvt. Ltd. (supra) while considering the powers under Section 22 of the Act, 1948, took note of the jurisdiction of the appellate authority under Section 9(3) of the Act, 1948 where they have noticed that the appellate authority under the Act, 1948 is extremely wide and the appellate authority can not only confirm, vary or annul the order of the assessing authority but may enhance and assess the assessee to tax on the issue which was not taken up before the assessing authority and therefore concluded that in exercise of power under Section 22 of the Act, 1948, the assessment cannot be reopened as has been sought to be done in the present case. 38. It has further been contended by learned counsel for the revisionist that the order of assessment on remand was passed on 07.06.2002, thereby no tax was levied on the proceeds of lease rent taken from M/s Gangeshwar Limited under the belief that provisions of Section 3F of the Act, 1948 were declared ultra vires by this Court in the case of V.K. Singhal (supra). An appeal was preferred by the revisionist on some other issues but the issue regarding lease rent attained finality. Even if the stand of the revenue is accepted that no tax was levied on the lease rent, taking into account the fact that same had been declared ultra vires and the assessing authority was ignorant about the reintroduction of the same provision by means of subsequent amendment in the Act, 1948, it was always open for the revenue to exercise the power contained under Section 21 of the Act, 1948 as the same would amount to escaped assessment to tax, but, a fresh assessment cannot be made in the garb of exercise of powers conferred under Section 22 of the Act, 1948, which only provides for rectification of mistakes. 39. The very words “rectification of mistake” includes due application of mind on a particular set of fact or law which are liable to be corrected under the powers conferred under Section 22 of the Act, 1948. In the facts of the present case, I am of the considered opinion that where an issue was never raised before the Appellate Authority nor considered by it, it cannot be subject matter for correction of a mistake and therefore application under Section 22 of the Act, 1948, preferred by the revenue for correction of mistake in the order of Joint Commissioner (Appeals), was clearly misconceived. 40. Another aspect of the matter which has been considered in the discussion made above is with regard to the “doctrine of merger” as discussed in the case of M.R. Soap Pvt. Ltd. (supra). According to the Division Bench of this Court in the aforesaid case, it is provided as under: “12........That being so, the entire assessment order, whether challenged in appeal as a whole or only in part, will merge in the appellate order irrespective of the points urged by the parties or decided by the Appellate Authority. 13. Once it is found that the order of assessment has merged in the appellate order, it follows as a matter of necessary corollary that the Assessing Authority shall not have the power to reopen the assessment under Section 22 of the U.P. Sales Tax Act.........” 41. 13. Once it is found that the order of assessment has merged in the appellate order, it follows as a matter of necessary corollary that the Assessing Authority shall not have the power to reopen the assessment under Section 22 of the U.P. Sales Tax Act.........” 41. Taking into consideration the “doctrine of merger” as per the judgment of the Hon’ble Apex Court in the case of Commissioner of Central Excise vs. Pearl Drinks Ltd. (supra), and applying it to the facts of the present case, it emerges that issue regarding taxability on the lease rent as provided under Section 3F of the Act, 1948, becomes final at the stage of the Assessing Authority and the same was not challenged by the revenue before the Joint Commissioner (Appeals) nor there was an order of reassessment and therefore, the said issue became final and even if the said issue did not merge with the order of the Appellate Authority, the same could not have been rectified by an application under Section 22 of the Act, 1948. 42. From the perusal of the record, the application for rectification under Section 22 of the Act, 1948 was moved by the revenue for rectification of the order of the Joint Commissioner (Appeals) but in the entire application there was no mention of the mistake sought to be rectified in the said order and therefore, such an application would not be maintainable and it would be a colourable exercise that under the garb of rectification of mistake of the order of first Appellate Authority, the order of the Assessing Authority is rectified/modified and fresh assessment is made in this regard. 43. In the light of above, the impugned order of the Tribunal is not sustainable and therefore the same is set aside. 44. The revision is allowed.