Amul Ploycure Industries Ltd. vs Tamil Nadu Taxation Special Tribunal and Others

V.S. Sirpurkar, J.—Learned Additional Government Pleader (Taxes) takes notice for the respondents. Heard with the consent of parties.

The petitioner herein challenges the order passed by the Special Tribunal whereby the Special Tribunal refused to entertain the challenge made

by the assessee to an order u/s 28-A of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as ""the Act""). The petitioner-

assessee herein sought clarification u/s 28-A of the Act regarding the rate of tax that was applicable to the product which he was dealing in. The

said clarification was challenged before the Tribunal on various grounds. According to the petitioner, the product was covered under entry 55(i),

part D of the First Schedule so as to be taxable at the rate of 11 per cent on the first sale in the State while according to the clarification, the said

product would invite higher tax rate at the rate of 16 per cent as it would be covered under entry 8 of Part E of the First Schedule.

The learned member of the Tribunal has refused to go into the merits of the question as to whether the product would be covered under entry

55 as claimed by the assessee or under entry 8 as clarified by the concerned authority, the Special Commissioner on the ground that even after the

clarification, the challenge regarding the applicability of a particular entry would still be available to the assessee in the appeal. The Tribunal

observes and in our view correctly as under :

Before going to the merits of the case, we are of the opinion that Section 28-A was introduced in the TNGST Act only to enable the dealers to

get clarification and accordingly collect tax at the rates, as clarified by the Commissioner. Otherwise, they can always go before the assessing

authority and argue the case and if adverse orders are passed, challenge the same before higher authorities.

The Tribunal has further clarified in its concluding paragraph as under :

Without therefore expressing any opinion we give liberty to the petitioner to face the assessment order and if it is adverse to the petitioner,

challenge the same in appeals. It is needless to point out that the appellate authorities can very well go into the merits of the case even without

reference to the clarification issued by the Commissioner.

The order is absolutely correct, inasmuch as, the clarification issued by the Special Commissioner u/s 28-A of the Act is not, we repeat, not an

adjudication. It is merely a clarification given by the Special Commissioner to the concerned dealer who may need the same, for collecting taxes.

Learned counsel for the petitioner very strenuously argues that once the clarification is issued by the Special Commissioner, it would be a point

of no return for the assessee. We do not agree. The said clarification can be assailed in the appeal as well as before the assessing officer on the

basis of proper evidence, if the assessee so feels. Learned counsel further expresses an apprehension that even if the appellate authority does not

agree with the clarification and agrees with the contention raised by the assessee, the assessing authority would be bound by the clarification issued

because of the provisions of Section 28-A(3) of the Act.

We do not read any such compulsion and binding nature in that provision. In fact, the assessing authority would certainly be bound only by the

appellate order. In the present case, the Tribunal has left that question open before the appellate authority. In that view of the matter, we do not

deem it necessary to go into the question of correctness of the clarification issued. That question would depend on the evidence which would be

lead by the assessee before the concerned authorities. In that view of the matter, we do not see any merit in this writ petition and it is dismissed.

No costs. Consequently, W.M.Ps are dismissed.