TMI Blog2009 (3) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... law as contained in this judgment will be refunded in accordance with law. - W.P. (C) Nos. 17117, 17152, 17196, 18628 And others - - - Dated:- 5-3-2009 - THOTTATHIL B. RADHAKRISHNAN , JJ. THOTTATHIL B. RADHAKRISHNAN J. What is the compounded rate of tax applicable to primary crushers in terms of the similarly worded Explanations occurring at the foot of section 7(1)(b) of the Kerala General Sales Tax Act, 1963, hereinafter, the KGST Act , and section 8(b) of the Kerala Value Added Tax Act, 2003, for short, the KVAT Act ? The petitioners have granite metal crushing units. They were assessed under the KGST Act till they came to be assessed under the KVAT Act from its introduction on April 1, 2005. On April 2, 2005, the Commissioner of Commercial Taxes issued order No. C3.44514/04/CT, hereinafter, the Clarification for short, under section 59A of the KGST Act, clarifying that the rate of compounded tax of primary crusher is 50 per cent of the rate mentioned in section 7(1)(b) of that Act, depending on the size of the machinery. While that clarification held the field, on the premise that the assessing authorities are not complying with the statutory position in le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase, or if tax is payable, the point and the rate thereof; or (e) . . . such dispute shall be decided by the Commissioner of Commercial Taxes on application by a dealer or any other person. Section 94 of the KVAT Act, in so far as it is relevant, is as follows: 94.. Power of Commissioner to issue clarification. (1) If any dispute arises, otherwise than in a proceedings before any appellate or revisional authority or in any court or Tribunal, as to whether, for the purpose of this Act, (a) to (c) . . . (d) any tax is payable in respect of any sale or purchase, or if tax is payable, the point and the rate thereof; or (e) . . . such dispute shall be decided by the Commissioner on application by a dealer or any other person. Having in mind the statutory titles of those provisions, to wit, power to issue clarification , the power of the Commissioner to decide a dispute is to be understood as a power to clarify: to resolve the dispute as to the application of the statutes in question and not beyond. The provisions in section 59A of the KGST Act and section 94 of the KVAT Act amount only to the statutory recognition of the authority, to clarify, meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax liability. Administrative instructions cannot override statutory rules. Administrative instructions, circulars, orders, etc., have to be consistent with the statutory provisions. The power to make a piece of subordinate legislation is itself a power to act within the purview of the primary legislation. Even that power has to be worked out within the statutory frame of the parent legislation. See the decisions in Paluru Ramkrishnaiah v. Union of India [1989] 2 SCC 541, State of Orissa v. Mamtarani Sahoo [1998] 8 SCC 753 and in Kerala Samsthana Chethu Thozhilali Union v. State of Kerala [2006] 4 SCC 327. This court held in M. Anandavally v. President [2008] 3 KHC 878, that though they may have a statutory flair, circulars cannot override or alter the prescriptions of the primary legislation and the power is only to give effect to the provisions of the Act and not to act de hors it. Hence, the correctness or otherwise of the view in the impugned circular that the compounded tax in respect of primary crushers would be 50 per cent of the total compounded tax arrived for the secondary crushers in a crushing unit would depend upon the question whether that is in accordance wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or primary crusher shall be fifty per cent of the rates mentioned in items (i), (ii) and (iii) above. The question boils down to the interpretation of the Explanation occurring at the foot of section 7(1)(b) of the KGST Act as it stood after April 1, 2004 and the Explanation to section 8(b) of the KVAT Act as it now stands. At the risk of repetition, they are quoted hereunder, for immediate reference: KGST Act Section 7(1)(b) Explanation. For the purpose of this clause primary crusher shall also be reckoned for computation of the quantum of compounded tax and the rate of compounded tax applicable to primary crusher shall be 50 per cent of the rates mentioned in items (i), (ii) and (iii) above. KVAT Act Section 8(b) Explanation. For the purposes of this clause, primary crusher shall also be reckoned for the purpose of computation of the quantum of compounded tax and the rate applicable for primary crusher shall be fifty per cent of the rates mentioned in items (i), (ii) and (iii) above. Though not in pari materia, stricto senso, by syllables to their hilt, the aforesaid Explanations have the same legal effect, even according to the dealers and the Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent of the aggregate of the rates applicable to all the other crushers in the establishment of the dealer. What is prescribed is a rate of tax. The rate of tax applicable for primary crusher is not made dependent on the aggregate of the quantum of tax generated by the application of the rate of tax on the other crushing machines. The word aggregate is not provided in the Explanations. It is impermissible to read into the enactment, any provision, which is not there. What the statutes provide is that rate applicable for primary crusher shall be fifty per cent of the rates mentioned in items (i), (ii) and (iii) above. When the crushers are divided into three categories (i) (ii) and (iii) on the basis of size and three different rates are prescribed for each of them, the prescription that the rate of tax applicable to yet another category, namely primary crushers, shall be fifty per cent of the rates mentioned in items (i), (ii) and (iii); it only means that the rate of tax for a primary crusher shall be fifty per cent of the respective rate as mentioned in items (i), (ii) and (iii), depending on the size of the primary crusher. The provisions falling for consideration do not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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