TMI Blog2001 (8) TMI 1335X X X X Extracts X X X X X X X X Extracts X X X X ..... e period prior to April 1, 1996 (when the entry was amended), however, gave relief to the extent that, in accordance with the clarification given by the Commissioner of Commercial Taxes, the assessee was entitled to purchase lumps against form 37. Accordingly, the assessing authority was directed to modify the assessment order. 2.. The respondent herein, filed writ petitions questioning the various assessment orders under the Karnataka and Central Sales Tax Acts for the assessment years 1993-94 to 1995-96 and a declaration was also sought that the iron ore lumps are not liable to purchase tax under entry 1 of the Third Schedule to the Act and also to declare that the clarification of the Commissioner is binding on the assessing authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the seller and consequentially, the assessee gets that benefit while bearing the incidence of tax. 4.. The assessing authority held that the liability is fastened under section 5(3)(b) read with entry 1 of the Third Schedule, the moment the lumps are purchased from the mine owners, because they answer the description of iron ore. Hence, he charged tax on the purchase turnover of iron ore lumps under section 5(3)(b). As regards the second aspect, the assessing authority was of the view that section 5-A does not apply and form 37 should not have been issued by the assessee. For the misuse of form 37, the assessing authority levied penalty. 5.. The question whether the lumps and ore are distinct commodities and whether the commodity lump ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him, iron ore lumps purchased by the assessee cannot be regarded as industrial inputs used for manufacture of other goods for sale. Learned Government Advocate goes to the extent of contending that the Commissioner's circular has no sanctity in the eye of law and cannot be given effect to. Such a stand taken by the department was emphatically refuted by the Supreme Court in a recent case of Commissioner of Sales Tax v. Indra Industries [2001] 122 STC 100; [2001] 248 ITR 338. The Supreme Court observed as follows: "A circular by tax authorities is not binding on the courts. It is not binding on the assessee. However, the interpretation that is thereby placed by the taxing authority on the law is binding on that taxing authority. In other w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s [vide Collector of Central Excise, Bombay v. Jayant Dalal Private Ltd. (1996) 88 ELT 638 (SC), Ranadey Micronutrients v. Collector of Central Excise (1996) 87 ELT 19 (SC), Poulose and Mathen v. Collector of Central Excise (1997) 90 ELT 264 (SC), British Machinery Supplies Co. v. Union of India (1996) 86 ELT 449 (SC)]. Of course the appellate authority is also not bound by the interpretation given by the Board but the assessing officer cannot take a view contrary to the Board's interpretation." The Supreme Court then referred to the principle laid down in Poulose and Mathen v. Collector of Central Excise (1997) 90 ELT 264 (SC) that the assessee should be given the benefit of doubt where two opinions are possible. 8.. In the light of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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