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TMI Blog2006 (11) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... oner is engaged in the business of sale of compacting machines to spinning mills. For the year 2003-04, the petitioner had reported a total and taxable turnover of Rs. 77,69,000 exigible to tax at four per cent and the same was duly accepted and assessment was finalised. Subsequently, the second respondent proposed a revision of assessment vide his proceedings, dated February 24, 2006 on the ground that compacting machinery dealt with by the petitioner would fall under entry No. 20 of Part D of the First Schedule attracting 12 per cent tax and penalty is also leviable for the shortfall of tax paid. The petitioner filed their objections vide letter dated March 19, 2006 contending, inter alia, that compacting machinery is a "textile mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, the learned counsel relied upon various judgments of the Supreme Court including the judgment in Paper Products Ltd. v. Commissioner of Central Excise [1999] 112 ELT 765, wherein it was held that the Revenue can withdraw the earlier clarification issued with prospective effect and not with retrospective effect. He also relied upon a decision of the division Bench of this court in Mohan Breweries and Distilleries Limited v. Commercial Tax Officer [2005] 139 STC 477. In reply, the learned Special Government Pleader submitted that a clarification issued under sub-section (3) of section 28-A of the Tamil Nadu General Sales Tax Act, 1959 cannot bind the sales tax authorities acting under judicial or quasi-judicial capacity. He submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion and mitigated the rigour of law. In Collector of Central Excise, Patna v. Usha Martin Industries [1998] 111 STC 254, a three-Judge of the Supreme Court held that when the Central Board of Excise and Customs made all others to understand a notification in a particular manner and when the latter have acted accordingly, it is not open to the Revenue to turn against such persons on a premise contrary to such instructions and such circulars would be binding on the department. The Supreme Court in Paper Products Ltd. v. Commissioner of Central Excise [1999] 112 ELT 765, while interpreting section 37-B of the Central Excise Act, 1944 which is in pari materia to section 28-A of the Tamil Nadu General Sales Tax Act held as follows: "It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05] 139 STC 477, the division Bench of this court after examining the aforesaid decisions held as follows: "8.6.10. It is, therefore, clear that even though the clarification dated November 9, 1989 is executive in nature, the same is binding on the authorities till the concessions given to the petitioner under the clarification were withdrawn, which could be done only prospectively, viz., in the instant case, with effect from January 28, 2002, and the Revenue could not refuse the benefit of the clarifications dated November 9, 1989 and December 27, 2000 in respect of levy of purchase tax under section 7-A of the Act for the impugned assessment year 1996-97." It is thus clear that the clarification issued by the Commissioner of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s maintainable against the clarification issued by the Commissioner under section 28-A of the Tamil Nadu General Sales Tax Act, 1959, wherein the court held that though the circular issued by the Commissioner under section 28-A is not binding on the assessing authority or the appellate authority, yet the court cannot overlook the fact that since the Commissioner is a superior authority to the assessing officer or appellate authority, it would be impracticable to expect the subordinate authority to take a view contrary to the view expressed by the Commissioner and hence the writ petition would be maintainable. This judgment has also no application to the facts of the present case. In the result, the writ petition is allowed. It is declared ..... X X X X Extracts X X X X X X X X Extracts X X X X
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