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2007 (10) TMI 579 - HC - VAT and Sales TaxLegality of Circular No. VIII(i)6/99-16715/CT dated July 30, 1999 and also circular No. III(1)/94/982935/CT dated February 9, 2001 issued by the Commissioner of Commercial Taxes challenged - Held that:- The circulars which have been impugned in this case and which have been noted hereinabove, cannot be treated to be a valid basis for assessment. In order to constitute valid basis for taxation, the rate of deduction, specially a flat rate of deduction cannot be applied to calculate the taxable turnover in works contract. So those circulars cannot hold the field. As stated in the judgments referred to above, in the absence of any statutory basis for calculation of taxable turnover, the Act remains unworkable. Such gap in the statute cannot be filled up by the circulars which are purely ad hoc and administrative in nature and specially so when it relates to taxing law. Therefore, the impugned circulars are set aside as also the impugned orders of assessment. The assessee's liability to pay tax remains but in order to assess that the State has to act in accordance with the statutory prescription by framing Rules under its rule-making power under section 29 of the Act and the assessing authority can pass fresh orders of assessment on the basis of such statutory Rules.
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