TMI Blog2008 (9) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... circular dated March 14, 1970 cannot be made applicable to the assessee and the impugned clarification dated October 8, 1998 requires no interference. However, the adjudication on the provisional assessment notices shall be proceeded in terms of this order. With these observations, this writ petition is dismissed - - - - - Dated:- 8-9-2008 - MURUGESAN D. AND PALANIVELU S. , JJ. ORDER:- The order of the court was made by D. MURUGESAN J. The petitioner M/s. Santhosh Maize and Industries Limited, Salem are dealers in maize starch since 1975 (hereinafter referred to as the assessee ). By Government Notification No. 89/70 dated March 14, 1970, all sale of products of millets (like rice, flour, brokens and bran of cholam, cumbu, ragi, thinai, varagu, samai, kudiraivali, milo and maize) was exempt from payment of tax and the said notification came into effect from April 1, 1970. The State of Tamil Nadu had issued circulars from time to time categorically stating that maize starch classified in the above entry is exempt from payment of tax. In view of series of clarifications, it could be seen that there has been a consistent practice to treat the maize starch as being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation dated October 8, 1998, the Special Commissioner and Commissioner of Commercial Taxes, Chennai again clarified that maize starch is taxable at four per cent under entry No. 61 of Part B of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. By that notification, the Special Commissioner and Commissioner of ommercial Taxes had requested the Government to issue instructions to the assessing officers to assess maize starch from 1998-99 onwards. Questioning the above clarification, the assessee had again made a representation before the Special Commissioner and Commissioner of Commercial Taxes dated June 10, 1999. The said representation was rejected on June 28, 1999. In the circumstances, a provisional assessment notice dated July 27, 1999 was issued by the Commercial Tax Officer demanding a sum of Rs. 88,182 being arrears of tax for the month of April, 1998 payable within 15 days from the date of receipt of such provisional assessment notice from the assessee. Similarly, on the same date, another provisional assessment notice was also issued demanding a sum of Rs. 76,902 being tax for the month of May, 1998. Further, by the provisional assessment notices dated July ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar issued under section 28A has been challenged it would be appropriate that this point of law is decided by the High Court rather than that the case is remanded to the authorities below. We, therefore, allow these appeals, set aside the judgments of the High Court and restore the writ petitions for being decided by the Madras High Court. As such, the writ petition is listed before us for hearing. We heard the learned counsel for the petitioner and the learned Special Government Pleader (Taxes) for the respondents. The thrust of the argument advanced on behalf of the assessee is that inasmuch as this court in State of Tamil Nadu v. Lakshmi Starch Ltd. [1994] 92 STC 464 upheld the finding of the Tribunal that starch is a product of millet and all products of millets would be exempt from tax as per the Notification No. 89/70 dated March 14, 1970, the impugned clarification would amount to nullifying the decision of this court. Further, unless the statutory provisions in entry No. 8 of Part B of the Third Schedule to the Act are amended by the State Legislature, the Revenue cannot issue clarifications/ circulars contrary to the above entry. In any event, the circulars are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f tax. The said notification came into effect from April 1, 1970. It includes maize also. The said notification was not backed by any statutory provision, as section 28A was inserted only with effect from November 6, 1997. All the above judgments arose in respect of the clarifications/circulars issued in exercise of the power under section 28A, namely, statutory circulars/clarifications. The Schedules to the Act were amended in toto with effect from March 12, 1993. The First Schedule was divided and entry No. 53 of Part C of the First Schedule relates to sago and starch of any kind taxable at the rate of five per cent. This entry was in force only till July 16, 1996. Thereafter, with effect from July 17, 1996 sago and starch of any kind was reclassified as entry No. 22(vi) of Part B of the First Schedule taxable at the rate of four per cent at first sale. By Act No. 3 of 1994, the Third Schedule was also amended with effect from August 11, 1993 and the goods enumerated thereunder were exempted on account of the arrangements between the Union and the States under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. In this part of the Schedule in entry No. 44, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsequent amendment to the Act itself. As regards clarification issued by the Special Commissioner of Commercial Taxes dated December 31, 1996 exempting maize starch from payment of tax under entry 8 of Part B of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959, again it must be noted that the said circular was issued prior to the insertion of section 28A into the Act with effect from November 6, 1997. Therefore, the said circular has no statutory backing. The circular dated October 8, 1998 was issued after insertion of section 28A and such circular has statutory backing. In view of the subsequent amendment to the Schedule as well as power conferred on the Commissioner to issue clarifications, the judgement in Lakshmi Starch Ltd.'s case [1994] 92 STC 464 (Mad) cannot be pressed into service, as the said case arose prior to the amendment to the Schedule and the insertion of section 28A into the Act. As it is well-settled in law that a Schedule to the Act is part of the Act itself and as such it has statutory force, the Commissioner being an executive authority cannot override the provisions of the Act and in exercise of the power conferred under section 28A of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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