TMI Blog1990 (10) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 12,500. As to the trading account reflected from his books of account, the return came to be accepted and the exemption claimed also came to be allowed. But the assessing authority treated the sale of lime as sale of chemical falling under entry 79 of the Second Schedule to the Karnataka Sales Tax Act, 1957 ("the Act" for short), instead of taxing the same under section 5(1) of the Karnataka Sales Tax Act in accordance with the clarification issued by the Commissioner of Commercial Taxes in Karnataka, on the query of the Belgaum Chamber of Commerce and Industries in his letter dated September 20, 1984. Aggrieved by the conclusion of assessment and the consequent demand at the rate prescribed by entry 79 of the Second Schedule to the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s caused to the Revenue by the appellate order. 5.. We have already noticed that the appellate authority after examining the records and after considering the claim of the benefit of clarification issued by the Commissioner under section 3-A of the Act concluded that the sale of "lime mortar" though a chemical within the meaning of the expression under entry 79, in view of the clarification, when sold to builders would attract only the tax under section 5(1), i.e., at the prescribed rate in that sub-section itself at 4 per cent or 5 per cent depending on the period in the relevant assessment year. 6.. Section 3-A of the Act is as follows: "3-A. Instructions to subordinate authorities.-(1) The State Government and the Commissioner may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n issued thereunder in terms thereof has fallen for consideration by this Court in the case of S.N. Gondakar v. Commissioner of Commercial Taxes in Karnataka [1983] 54 STC 190 and a Division Bench of this Court considering the effect held that in terms of the provision, the clarification was binding on all officers who were entrusted with the administration of the Act including the assessee who might have sought such clarification as to the rate of tax payable. It was in the light of that decision and the binding nature of the clarification, the appellate authority gave the benefit of the lower rate of turnover tax under section 5(1) as clarified by the Commissioner in the clarification. He was bound to do so as he was a subordinate officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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