2005 (6) TMI 527 - HC - VAT and Sales Tax

Summary

Issues:
1. Classification of stainless steel wire under tax schedules.
2. Commissioner's authority to issue clarifications.
3. Right of a dealer to seek directions from the Commissioner under section 42-A of the Act.

Issue 1: Classification of stainless steel wire under tax schedules
The petitioner, a private limited company, challenged the classification of stainless steel wire by the assessing authority under entry 10 of the Sixth Schedule of the Andhra Pradesh General Sales Tax Act, 1957. The petitioner argued that the commodity should be classified as declared goods under sub-item XV of entry 2 of the Third Schedule of the Act, taxable at a lower rate of 4 percent. Despite representations and reliance on a judgment from the Madras High Court, the Commissioner reiterated that stainless steel wire falls under entry 10 of the Sixth Schedule, attracting a tax rate of 12 percent at every point of sale in the State from January 1, 2000.

Issue 2: Commissioner's authority to issue clarifications
The petitioner contended that the Commissioner should have provided reasons and an opportunity to be heard before determining the tax rate for stainless steel wire. However, the Court examined section 42-A of the Act, which empowers the Commissioner to issue general orders, instructions, and directions for the proper administration of the Act. It was clarified that this provision does not confer the right upon a dealer to seek specific directions in individual cases, as assessment orders are quasi-judicial in nature and must be made by the assessing authority in accordance with the Act and rules.

Issue 3: Right of a dealer to seek directions from the Commissioner
The Court held that section 42-A does not provide an additional remedy to dealers beyond the appeal and revision mechanisms outlined in the Act. It emphasized that dealers cannot insist on the Commissioner issuing directions in specific cases, as this would interfere with the discretion of the quasi-judicial powers of the assessing authorities. The judgment highlighted that the Commissioner was not obligated to respond to the petitioner's application for clarification, and the petitioner could not challenge the order in judicial review proceedings after inviting it.

In conclusion, the Court dismissed the writ petition, emphasizing that the assessing authority should make the assessment order in accordance with the law, allowing the petitioner to raise objections and contentions during that process.