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2021 (1) TMI 926 - HC - VAT and Sales TaxLevy of Entry Tax - petroleum based lubricating oil - Entry 67 of 3rd Schedule of Karnataka Tax on Entry of Goods Act, 1979 read with Entry 1(viii)(a) Notification bearing No. FD/11/CET/2002 dated 30.03.2002 - HELD THAT:- Section 3 of the 1979 Act is the charging Section, which mandates that there shall be levy and collection of tax on entry of any goods specified in First schedule into a local area for consumption, use or sale therein at such rates not exceeding 5% of the value of goods as may be specified retrospectively or prospectively by the State Government by a Notification. The aforesaid Section further provides that different dates on different rates may be specified in respect of different goods or different classes of goods or different local areas. First Schedule to the Act specifies the items or goods, on which tax is levied - Thereafter, the Finance Department of Government of Karnataka issued Circulars. By Circular dated 12.04.2006, it was provided that petroleum products, which are similar to ‘tar’ would be covered by the words ‘and others’. Similar view was taken in the Circular dated 02.05.2006 and it was provided that benzene, toluene and xylene are not covered under the Entry ‘tar and others’ or under any other sub entry, therefore, they are not petroleum products specified in the Notification. Thereafter, by Circular dated 09.04.2013, the Circular dated 12.04.2006 was withdrawn. However, the Circular dated 02.05.2006 issued by the I9nance Department of Government of Karnataka is in force. It is well established rule of interpretation of taxing statutes in words of Lord Simonds that subject is not to be taxed without clear words for that purpose and that every Act of Parliament must be read according to natural construction of its words - From perusal of the Entry 67 as well as Sl.No.1 of the Notification, it is evident that Entries seem to cover only petroleum based lubricating oil which entry tax is being paid by the appellant. The synthetic based lubricating oil is not a petroleum product and is therefore, not covered under the entry. Similarly, the grease and base oil have also not been specifically enumerated in the Notification and therefore, the same also cannot be subjected to entry tax. It is also pertinent to mention here that grease and base oil not being similar to tar cannot be classified within the expression ‘tar and others’ which are already been clarified by the revenue department vide Circular dated 02.05.2006. It is trite law that the Circulars issued by the department are binding on it. It is well settled in law that a decision of the court is only an authority for what it decides and not what can logically be deduced therefrom. It cannot be quoted for a proposition that may seem to follow logically from it and such a mode of reasoning assumes that law is necessarily a logical code, whereas it must be acknowledged that law is not always logical. It is equally well settled legal position, that court should not place reliance on a decision without discussing as to how the factual situation fits in with the fact situation of the decision, on which reliance is placed - the revisional authority could not have concluded in the fact situation of the case that the tribunal has failed to decide or has decided erroneously any question of law. Appeal allowed.
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