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TMI Blog2008 (9) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... sified under Sl. No. 8, Part B of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959. The Special Commissioner and Commissioner of Commercial Taxes, Chennai had issued a clarification dated December 14, 1993 clarifying that maize starch is also included in the above notification and therefore, it would also be exempt from tax. According to the assessee, till the year 1994, the above entry also referred to the words "like rice", which did not occur in the entry after 1994. Except the said change, the entry continued to be the same even prior to 1994. The assessee further claims that there had been consistent practice to treat maize starch as falling under entry Sl. No. 8 before 1994 and even after the deletion of the word "like" from the entry, after 1994. The deletion of the word "like" will not make any difference to the scope of the entry, as the entry covers products of millets and would naturally cover all products that are manufactured out of maize. The assessee further claims that maize starch as marketed by the petitioner is in the form of flour, though the flour is not obtained by mere grinding of the grains. The treatment of the maize by soaking it in water, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1998 were demanded at the rate of four per cent as against the total taxable turnover. Questioning the above provisional assessment notices, the assessee has approached the Tamil Nadu Taxation Special Tribunal, Chennai in Original Petition Nos. 881 and 883 of 1999, which came to be dismissed with the observation that whether the retrospective clarification is incorrect or not and whether the assessee would be exempt from payment of tax are questions which could be contested in the assessment proceedings. Based on the dismissal order, notices of assessment dated August 9, 1999 were issued demanding Rs. 1,34,011, Rs. 1,53,151, Rs. 1,37,450 and Rs. 68,150 for the months of April, 1998 to July, 1998 from the assessee. Under these circumstances, the petitioner approached this court by way of the present writ petition seeking writ of certiorarified mandamus quashing the orders of the third respondent in O.P. No. 883 of 1999 dated July 29, 1999, confirming the circular of the first respondent in Lr. No. Acts Cell-II/65530/98 dated October 8, 1998, and direct the respondents 1 and 2 not to give effect to the said circular in Lr. No. Acts Cell-II/65530/98 dated October 8, 1998 of the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated March 14, 1970 exempting maize starch from payment of tax is bad in the eye of law. Section 28A of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter called as, "the Act") empowers the Special Commissioner and Commissioner of Commercial Taxes to issue clarifications on an application by a registered dealer. The said section was inserted with effect from November 6, 1997. On and after the said date, any clarification issued in exercise of the power under section 28A, is backed by statutory provision. Whether the circulars and clarifications can override the express provisions of law came up for consideration before this court in Amul Ploycure Industries Ltd. v. Tamil Nadu Taxation Special Tribunal [2004] 134 STC 526. That case arose on a clarification issued by the Special Commissioner in exercise of the power under section 28A of the Act and a Division Bench of this court held that a clarification given by the Special Commissioner is not an adjudication, thereby meaning that it is binding on the dealer concerned. Subsequently, in Salt Sales Corporation v. Deputy Commercial Tax Officer [2004] 134 STC 529 (TNTST), a similar view was taken. However, another Division Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was superseded by the subsequent notification. The notification dated March 14, 1970 did not have any statutory backing, as section 28A of the Act came into force only with effect from November 6, 1997 empowering the Commissioner to issue clarification. That apart, section 3(2) of the Act contemplates that "subject to the provisions of sub-section (1), in the case of goods mentioned in the First Schedule, the tax under the section shall be payable by a dealer, at the rate and at the point specified therein on the turnover in each year relating to such goods". The said provision creates a statutory liability on the dealer to pay the taxes in respect of the goods mentioned in the First Schedule. Section 8 of the Act contemplates exemption from tax and states that subject to such restrictions and conditions as may be prescribed, a dealer who deals in the goods specified in the Third Schedule shall not be liable to pay any tax under the Act in respect of such goods. There is no specific exemption granted to starch maize in entry No. 44 under the Third Schedule entitling a dealer to claim exemption from tax. Generally, a circular may be binding on the subordinate authorities while ..... X X X X Extracts X X X X X X X X Extracts X X X X
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