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TMI Blog2007 (11) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2002-03, TNGST No. 2922745 for the assessment year 2002-03 and TNGST No. 2920699 for the assessment year 1998-99 respectively is illegal and void and for consequential relief. The appellants, placing reliance on the Government Order G.O.D. 383, dated October 22, 1998, have contended that they are liable to pay only four per cent sales tax, as per the clarification letter dated July 8, 2002 by the first respondent, instead of at 16 per cent, as demanded in the revised order. According to the appellants, as per the Government Letter No. 10754/ B2/99.1, dated July 16, 1999, No. K. Dis. Acts Cell-III/38721/02, dated July 8, 2002 and G.O. Ms. No. 121, Commercial Taxes, dated May 28, 1999, it was informed that sales tax payable for bajji, bonda mix was only four per cent, as the said items would come under entry 22 C in Part B of the First Schedule of the Act. The learned single judge, dismissed the writ petitions on the ground that the appellants have right of appeal before the appellate authority against the orders passed by the second respondent under section 31 of the TNGST Act and accordingly, the appellants were also given liberty to file appeal before the appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under article 226 of the Constitution of India, despite the fact that there is alternative remedy of statutory appeal. Even though the above said decision was rendered in the context of the Central Excise Act, we are of the view that the ratio laid down by the honourable Supreme Court therein, would apply to the question of law involved in these writ appeals. Relying on this decision, a Division Bench of this High Court in Pizzeria Fast Foods Restaurant (Madras) Pvt. Ltd. v. Commissioner of Commercial Taxes, Chennai reported in [2005] 140 STC 97 (Mad); [2005] 1 CTC 629 has held as follows (page 110 of STC): ". . . once a clarification or circular is issued by a superior authority, it would be an exercise in futility to ask the assessee to raise an objection to the circular before an inferior authority, vide the Constitution Bench decision of the Supreme Court in Filterco v. Commissioner of Sales Tax, Madhya Pradesh [1986] 61 STC 318; [1986] 2 SCC 103. Subsequently, it was also held by the Supreme Court that clarifications or circulars could be challenged before the High Court under article 226 of the Constitution, since the remedies of appeal or revision would be futile or not ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mixed with spices/masala powders sold with or without any brand were not scheduled commodities under the Act. Hence, they were being treated only under the head "others" in Part B of the First Schedule of the Act, for which tax was fixed at 11 per cent. Subsequently, after the TNGST Act came to be amended in the year 1999, the masala powder was included as a scheduled commodity as item No. 22 C in Part B of the First Schedule of the Act and thereby the tax was reduced to four per cent from 11 per cent. As per G.O. Ms. No. 121, Commercial Taxes, dated May 28, 1999, reducing the tax to four per cent from 11 per cent was given effect from June 1, 1999 and accordingly assessment orders have been passed by the authorities, which is not in dispute. As per letter of the first respondent in No. D. Dis. Acts Cell-III/45190/ 2001, dated November 1, 2001, it was clarified that bonda mix, bajji mix containing flour of gram, rice, ragi mixed with masala powders or spices will fall under entry 22 C in Part B of the First Schedule of the Act, for which the sales tax was fixed at four per cent, when the same was sold with or without any brand with effect from June 1, 1999. As per D. Dis. Act Cell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and accordingly tax fixed initially for ginger coriander mix at 11 per cent has been reduced to four per cent. The learned Special Government Pleader, in his argument contended that ginger coriander mix (sukku coffee) would not come under entry 22 C in Part B of the First Schedule, though it had been clarified so in the circular issued by the authorities, but we are of the considered view that such an argument cannot be sustained, after the period of assessment. It is seen that the said entry of the First Schedule of the TNGST Act reads as follows: "22 C. Flour of grams, rice and ragi mixed with spices/masala powder sold with or without brand name." and as per the aforesaid order, the Appellate Assistant Commissioner (CT), Erode has held that the same is taxable at four per cent only. It is not in dispute that originally, it was clarified by the respondents that bonda, bajji mix and ginger coriander mix would come under entry 22 C in Part B of the First Schedule of the TNGST Act, as per circular, Letter No. D. Dis. Acts Cell-III/45190/2001, dated November 1, 2001 and accordingly, the tax levied was also intimated only as four per cent. It is quite clear that the authority can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clarification issued under section 28A, wherein a direction to levy tax at 16 per cent though the charging section prescribes a flat rate of two per cent was held not permissible, since the impugned clarification was contrary to the provisions of section 3D, as it stood prior to April 1, 2002 and accordingly, the impugned clarification No. 156/03, dated June 26, 2003 was quashed. Since the Commissioner of Commercial Taxes is the superior authority to the assessing officer/appellate authority, it would be impracticable for the sub-ordinate officer to take a view contrary to the view expressed by the said Commissioner, since the view expressed by him is binding on the sub-ordinate officer. Therefore, in the light of the decisions referred to above, we are of the considered view that the plea of alternative remedy cannot be accepted and it is open to the aggrieved persons to seek appropriate remedy under article 226 of the Constitution of India. The decisions referred to by the learned counsel for the respondents are not applicable for the facts and circumstances of this case, since the questions of law involved in the writ appeals are different. The important questions of law arisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court held that the benefits of such circulars to assessees have been held to be permissible even though the circulars might have departed from the strict tenor of the statutory provision 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." In Mohan Breweries and Distilleries Limited v. Commercial Tax Officer, Porur Assessment Circle, Chennai reported in [2005] 139 STC 477 (Mad), the Division Bench of this court held as follows (page 502): "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 Janua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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