TMI Blog1933 (4) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... . Accepting the contention of the assessee that the goods sold were manufactured out of tax-suffered iron scrap, the Assistant Commissioner of Commercial Taxes (Assessment), Mysore, exempted the said sales turnover of manufactured goods. Later, the assessing authority, in exercise of his power conferred under section 25A of the Act, issued notice to the petitioner proposing to rectify the alleged mistake apparent on the record on the ground that the deduction allowed on the sale of castings and ingots manufactured out of iron scrap ought not to have been allowed. The petitioner took the contention that the sale of castings and ingots had been duly exempted under the Government order dated May 25, 1976 and the Commissioner's Circular No. 369 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the circulars on the date of the assessment orders, had taken a valid decision to exempt the turnover in accordance with the legal position prevailing at that time. The same legal position was in existence on October 16, 1980, when the notice under section 25-A was issued. As such, there is no error or mistake apparent from the record which could be rectified. Alternatively, even assuming that two views were possible on the exemption or otherwise of the turnover, one possible view was taken by the assessing authority, in which event invoking the power of rectification is impermissible. 3.. On the other hand, Sri H.L. Dattu, learned Government Advocate, urged that once a mistake is discovered on the basis of a judgment of the superior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gots and castings became null and void by virtue of the introduction of explanation II to the Fourth Schedule to the Act by the Karnataka Act 13 of 1982? 4.. It is urged that the two circulars referred to above had not been withdrawn or cancelled by the State Government, and even assuming that there was an implied substitution of the said circulars by law in explanation II to the Fourth Schedule to the Act, the said circulars would cease to exist only on the date of the enactment. This appears to be the view held by this Court also in the case of Shaw Wallace Co. Ltd. v. State of Karnataka [1993] 91 STC 37; ILR [1992] Kar 1494, where the question referred to the Full Bench was whether a notification issued by the State Government in exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption in respect of the said products prior to 1978. In the instant case, the assessment orders were passed on May 10, 1978 and November 23, 1978, for the years 1973 and 1974 respectively. If the contention urged on behalf of the State is accepted, the original exemption granted under the circulars would amount to an error calling for rectification. In this connection, reliance is placed upon the case of Firm A.T.B. Mehtab Majid Co. v. State of Madras [1963] 14 STC 355 (SC). In that case, it is held that a rule made by the Governor in exercise of the power conferred on him under section 19 of the Madras General Sales Tax Act having been substituted by a new rule, the old rule ceases to exist and it does not automatically get revived when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 982 is a substitution of the total exemption granted under the Government circulars, whereby relief was sought to be given to the manufacturers/dealers in respect of the transactions prior to the declaration of law by the Supreme Court in the case of Pyare Lal Malhotra [1976] 37 STC 319. In that view of the matter, the instant exemption circulars issued by virtue of the power of the State under section 8-A of the Act should be considered de hors the explanation which came to be incorporated subsequently under the Act 13 of 1982. 6.. In so far as the second contention of the petitioner, the question is no more res integra. In T.S. Balaram, Income-tax Officer v. Volkart Brothers [1971] 82 ITR 50; AIR 1971 SC 2204 the Supreme Court has state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured out of it. We have, therefore, proceeded on the basis that the scrap iron used for the subsequent manufacture by the assessee had in fact suffered tax as found by the assessing authority as well as by the first appellate authority. This finding cannot be called in question at this stage. 8.. In view of the above discussion, we answer the questions arising in the case as follows: (1) That, on the facts and in the circumstances of the case, the assessing authority was not justified in invoking his jurisdiction under section 25A of the Act; (2) That the circular instructions dated June 28, 1976 and July 5, 1976, exempting part of the turnover in respect of goods manufactured out of tax-paid iron scrap cannot be said to have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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