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2015 (5) TMI 105 - HC - VAT and Sales TaxExemption from tax - Whether the commodity in question, i.e., White Oats would be exempted under Entry 16 of the First Schedule of the Karnataka Value Added Tax Act, 2003 or would be subjected to tax under the Act - Held that:- First clarification dated 03.06.2006 was issued by the Commissioner itself on a query made by another dealer with regard to the sale of White Oats, which was a product similar, if not identical to the product being dealt with by the assessee herein. When along with the query, the sample of the product had also been furnished by the dealer, it would be presumed that only after examining the said sample, the Commissioner had issued the clarification dated 03.06.2006. Once such clarification had been issued for exempting the product White Oats from payment of tax (even though the clarification order may have mentioned only Oats and not White Oats), then the question of payment of tax on the same would not arise. In fact, not only the assessee but the department itself was under a genuine belief or impression that the product in question was exempted from tax, as the department did not raise any question with regard to the monthly returns filed by the assessee right from April 2006 onwards and it accepted the same, which would amount to ‘deemed assessment’. Where the Commissioner itself had issued a clarification dated 03.06.2006 with regard to the commodity in question, the assessee/dealer would be presumed to have a genuine belief that it was exempted from tax and thus, it cannot be said to be a case where the assessee had furnished any wrong information or concealed any material information. It is not the case where the sale of White Oats had not been disclosed by the assessee. It is not the assessee alone but, in the facts of the present case, we can safely say that even the department was under the genuine belief that the commodity in question was exempted from tax, until the second clarification dated 20.01.2010 was issued. After the issuance of the said clarification, the assessee (instead of getting into litigation by raising a dispute regarding the White Oat flakes being subjected to tax or not) started paying taxes on sale of the said commodity. Clarification dated 03.06.2006 was issued under Section 59(4) of the Act. Such clarification is not applicable merely in the case of the applicant seeking clarification, but, to all registered dealers which are liable to pay tax under the Act. The clarification issued under Section 59 is different from the clarification or advanced ruling given under Section 60. In the latter case, the ruling of the authority would be binding only on the applicant which seeks such clarification, whereas in the former case (under Section 59 of the Act), it would be applicable to all registered dealers liable to pay tax. - Impugned orders are set aside - assessee/petitioner shall not be held liable for payment of tax with regard to the commodity in question (i.e., White Oats) till 20.01.2010 i.e., the date when the second clarification was issued by the Commissioner - Decided partly in favour of assessee.
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