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TMI Blog2009 (7) TMI 1293X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1959 (hereinafter referred to as -TNGST Act-) and they are assessees, file returns before the jurisdictional Commercial Tax Officer/Assessing officer. The petitioners have filed monthly returns under Rule 18 of the Tamil Nadu General Sales Tax Rules, 1959.(b) Petitioners are dealers in paper based decorative laminated sheets, which are received from other States and they have paid the tax at the point of first sale in the State. The product is made up of paper and is being treated as paper based products. The first respondent issued clarification under Section 28-A of the TNGST Act, 1959, with regard to the rate of tax on paper based decorative laminated sheet. In clarification No.100/2005, dated 17.8.2005, the first respondent clarified that the products are decorative laminates and taxable at 16% under Entry 8(ii), Part-E of the First schedule of the Act.(c) According to the petitioners, the actual rate of tax on such goods is 10% and therefore they sought for review of the said clarification. The first respondent after reviewing the same, issued clarification No.55/2006 on 23.3.2006 and stated that the paper based decorative laminated sheets are taxable at 10% as the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said Act cannot be applied to the entries made in the TNGST Act, without making any amendment to the relevant entries.(g) It is further stated in the Affidavit that even assuming that the first respondent is entitled to issue such clarification, the assessments already completed and the taxes paid shall not be re-opened for the earlier years as the clarification cannot be applied retrospectively and if the same is applied, it will cause great hardships to the petitioners, who have already paid 10% of tax on their sale of laminated paper products. The second respondent filed counter affidavit by stating that originally paper based decorative laminated sheets were assessed by levying tax at 10% under Entry 22(iv) of Part-C of the First schedule and it was brought to the notice of the department that the Supreme Court by following its own earlier decision in the case of Collector of Central Excise, Hyderabad v. Bakelite Hylam Limited, 1997 (10) SCC 350 Decent Laminates (P) Ltd v. Collector of Central Excise and Customs, 2006 (7) SCC 438 and also Commissioner of Central Excise, Chandigarh v. Punjab Laminates (P) Ltd., 2006 (7) SCC 431, held that paper based decorative laminated sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by issuing clarification on 12.11.1998 and 23.3.2006. THE first respondent is not empowered to take a different view, particularly when the assessments were completed and 10% of tax having been paid by the petitioners. THE learned counsels further submitted that the interpretation given by the Honourable Supreme Court in the judgments relied on by the first respondent is applicable to the tariff payable under the Central Excise Tariff Act, 1985, and the same cannot be made applicable automatically to the TNGST Act, 19.59 and in support of the said contention cited the Judgment of the Division Bench of this Court in Associated Agencies v. State of Tamil Nadu, 1993 (89) STC 447 (Mad), and judgment of the Bombay High Court reported in Neoluxe India Private Limited and Another v. Commissioner of Sales Tax, Vikrikar Bhavan, Bombay and Another, 2008 (13) VST 157 (Bom). The learned counsels also submitted that even assuming without admitting that the clarification issued by the first respondent is valid, the same cannot be applied retrospectively since the petitioners have sold their paper based laminated sheets prior to the said clarification and assessments are also completed and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Special Government Pleader also submitted that since the laminated sheets cannot be treated as paper based, as it is a different product, though paper is used as raw material, higher tax are liable to be payable by the dealers as it is coming under Entry 8(ii) of Part -E- of First Schedule to the Act. The learned Special Government Pleader cited the Division Bench decision of this Court reported in Valtech High Tech Composites Pvt. Ltd. v. Special Commissioner and Commissioner for Commercial Taxes, Chepauk, Madras-5 and Another, Vol.95 STC 476 (Mad) and judgment of the Supreme Court reported in State of Goa and Others v. Leukoplast (India) Ltd., Vol.105 STC 318 (SC) in support of his contention. (5.) IN reply to the said submission, the learned counsels appearing for the petitioners submitted that the paper based laminated sheets shall not be treated as plastic products or plywood products. The interpretation given by the Supreme Court is in respect of plastic products and therefore the respondents are not justified in relying upon the judgments of the Supreme Court. (6.) I have considered the rival submissions made by the learned counsels for the petitioners as well as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Tamil Nadu General Sales Tax Act, 1959 - Rate of tax clarification under Section 28-A of the Act for -Paperbased decorative laminated sheet- - Clarification issued - Reconsideration of - Reg.Ref 1. Commissioner of Commercial Taxes' Dis.ACII/23668/05, dated 17.8.2005. 2. Note by Deputy Commissioner (Central), Chennai, dated 25.11.2005. 3. Review Petition dated nil from Thiru V.V. Ramesh Counsel for Tvl. Century Laminating Co. Ltd., Chennai. 4. Commissioner of Commercial Taxes' Lr. No.ACII/67772/05, dated 2.1.2006. 5. Written submissions dt.12.1.2006 by Thiru. V.V. Sampathkumar, Chartered Accountant on behalf of the petitioner. -In the reference 1st cited, a clarification was issued to Tvl. Century Laminating Co. Ltd., Chennai, that -Paper based decorative Laminated Sheet- is taxable at 16% under entry 8(ii), Part E of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.In the reference 3rd cited, the petitioners have filed a reconsideration petition with a request to consider their product as taxable at 10% under entry No.22(iv), Part C, First Schedule and they have requested a personal hearing. Accordingly, they have been provided with an opportunity to expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y contending that when the earlier clarification restoring 16% of tax was cancelled, opportunity of hearing was given to the assessee and while cancelling the same and enhancing the tax rate at 16%, no notice having been issued, this Court by order dated 29.1.2008 set aside the clarification dated 7.4.2007 and directed the first respondent to issue notice, hear the objections and pass revised orders. Consequentially the first respondent issued clarification on 30.5.2008 stating that no fresh point for consideration was made by the assessees at the time of hearing and therefore reiterated the earlier clarification issued on 7.4.2007 as valid and stated that paper based decorative laminated sheets is taxable at 16% under Entry 8(ii) of Part-E of First Schedule and if imported taxable at 20% under Entry No.9 of 11th Schedule. (8.) THE question as to whether interpretation given by the Supreme Court with respect to entry made under the Central Excise Tariff Act, 1985, with regard to paper based decorative laminated sheets can be relied on by the first respondent to collect tax under TNGST Act, 1959, which is a separate enactment passed by the State Legislature, is the issue to be deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting plastic laminates in Entry C-11.61 in Schedule II Bombay Sales Tax Act. In paragraph 31 it is held as follows:"It is only after the decision of CEGAT in the year 1988. in the case of Melamine Fibre Board Ltd., 1988 (36) ELT 139, the petitioners and other manufacturers for the first time started claiming that the goods in question are paper board/coated board classifiable under Entry C-II-9 and not under Entry C-II-61. It is pertinent to note that the decision of CEGAT in the case of Melamine Fibre Board Ltd., 1988 (36) ELT 139, related to interpretation of the entries under the Central Excise Act and not under the BST Act. Apart from the fact that entries under the Central Excise Tariff are totally different, it is well-settled in law that a, situation contemplated in one statute cannot, in the absence of any express or clear intendment, be made to apply or be given effect while applying the provisions of another statute. Moreover, even the CEGAT ruling under the Central Excise Act is not to the effect that "paper based decorative laminated sheets" are "paper board or coated board" as contended by the petitioners. All that is held in that case is that the goods in question are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be relied on to issue the impugned circular. Admittedly the entry contained in the TNGST Act was not amended after the interpretation given by' the Tamil Nadu Taxation Special Tribunal. Thus, the circular issued by the first respondent cannot be sustained. As rightly contended by the learned counsel for the petitioners, the respondents are also not justified in relying on the circular for re-opening the assessments already made and the tax paid. (10.) THE clarification/circular issued by the first respondent also cannot be applied retrospectively as the order nowhere states that it will have retrospective effect (a) In the decision reported in Government of India v. Indian Tobacco Association, 2005 (187) ELT 162 (SC) similar issue was considered by the Supreme Court with regard to the exemption notification issued under the DEPB Scheme of Customs Tarrif Act. In paragraphs 28 and 29 it is held as follows: "28. THE doctrine of fairness also is now considered to be a relevant factor for construing a statute. In a case of this nature where the effect of a beneficent statute was sought to be extended keeping in view the fact that the benefit was already availed of by the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard to the identical goods imported through Delhi, wherein the items were classified under the same heading, Delhi Customs House extended the benefit of the said notifications to the respondent. "(d) In Suchitra Components Ltd v. Commissioner of Central Excise, Guntur, 2006 (12) SCC 452: 2007 (208) ELT 321 (SC), whether the departmental clarifications will have retrospective effect was considered by the Supreme Court and in paragraph 2 held thus:". 2. We have heard Mr. A.R. Madhav Rao, learned counsel for the appellant and Mr. K. Radhakrishna, learned Senior Counsel for the respondent. We have perused the orders passed by the lower authorities and also of the Tribunal. THE point raised by the learned counsel for the appellant is covered by the recent judgment of this Court in CCE v. Mysore Electricals Industries Ltd. In the said judgment, this Court held that a beneficial circular has to be applied retrospectively while oppressive circular has to be applied prospectively. Thus, when the circular is against the assessee, they have right to claim enforcement of the same prospectively."From the above cited decisions it is evident that in tax matters, the clarifications issued can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute then there is no tax in law. Then it is for the legislature to do the needful in the matter." (b) In Manish Maheshwari v. Assistant Commissioner of Income-tax and Another, 2007 (3) SCC 794: 2007 (8) RC 455, the Supreme Court held that while two interpretations are possible, the Court would ordinarily interpret the provisions in favour of the tax-payers and against the revenue. In paragraph 13 it is held thus: ". 13. A taxing statute, as is well known, must be construed strictly. In Sneh Enterprises v. Commr of Customs it was held: (SCC p.721, para 24)". 24. While dealing with a taxing provision, the principle of 'strict interpretation' should be applied. The court shall not interpret the statutory provision in such a manner which would create an additional fiscal burden on a person. It would never be done by invoking the provisions of another Act, which are not attracted. It is also trite that while two interpretations are possible, the court ordinarily would interpret the provisions in favour of a taxpayer and against the Revenue."(c) Recently in Commissioner of Trade Tax, UP. v. S.S. Ayodhya Distillery, 2009 (233) ELT 146 (SC) again the same issue was consider ..... X X X X Extracts X X X X X X X X Extracts X X X X
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