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TMI Blog1976 (4) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... at multi-point rates under s. 3(1) of Tamil Nadu General Sales Tax Act. This issue in the assessment was allowed to become final. (b) Page 219 of the assessment file contains a note detailing the circumstance under which the AO took up the revision of assessment under s. 16 of the Tamil Nadu General Sales Tax Act. The Accountant General in the course of his audit found that the clarification of the Government in G.O. 11404/ Revenue dt. 2nd June, 1969 has not been followed. He viewed that the related sales should be assessed at 13 per cent as first sales of auto parts to traders who did not utilise them in the manufacture of automobiles. The AO accordingly effected requisite revision as assessment under s. 16 after due notice. The AAC found no grounds to interfere on behalf of the appellants in the first appeal canvassed before him under s. 31 and dismissed the appeal. 3. We heard the learned counsel for the appellants and the State Representative for Revenue on merits. We also considered the records made available before us. 4. The crux of arguments lead to consideration of three important counts. The first count involved the scope of the jurisdiction to effect the revision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y vs. Dhanalakashmi Trading Co. the Lordships of the Madras High court had occasion to consider the implications and repercussions of this retrospective amendment. Their conclusions are as extracted below: " We are of the view that the scope and object of the present "Explanation" is to give the benefit of concessional rate of levy under s. 3(3) only to sales of components which are identifiable visually and capable of being separated by any mechanical process from the finished product." " We are, therefore, of the view that the effect of the retrospective operation of the amended Act 27 of 1970 is that the "explanation" inserted by s. 1(2) would, for all legal purposes, have to be deemed to have been included in the Principal Act as and from 1st April, 1959. If that is done, the assessee cannot have the benefits of s. 3(3) in this case, as the groundnut oil is not a visually identifiable constituent of the finished product." (vi) Identity is thus related to visual process or mechanical process. The component should be visible. It could be capable of being separated from the finished product by a mechanical process. Identification by any other chemical processes was thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diamond wheels mounted on specialised fixtures to ensure that the profile is achieved. In as much as 100 per cent accuracy of the push rod seat finish is to be maintained, electronic devices are used for this purpose, besides checking up the dimensions with a telescope after making a wax impression of the cavity. One end of the tappet is in constant contract with the cam-lobe. This is known as the camface and the geometry of the camface has been a matter of deep study all over the world. In order to give auto rotation to the tappet when it is in constant contact with the cam-lobe, the camface has to be ground in a spherical shape with a high degree of accuracy. The curvature to be mentioned on the surface is so accurate that the difference in height, between the centre and the edge of the tappet has to be less than 1/10,00,000 "(1th/4,000 of the thickness of a strand of human hair) and this dimension can be measured only with the help of a precision instrument known as Millimus Comparator. In addition to maintaining this geometry, it is also required to maintain a higher degree of surface finish i.e. the depression on the surface while finish grinding should be maintained wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfactory. It appears to have wholly misapprehended the scope of sub-s. (3) and the proviso thereto. It propounded the question for its consideration as whether the goods sold by the dealer as such had been used as component parts as contemplated in s. 3(3). It went further and, on investigation, found that the goods applied by the assessee underwent physical charges such as drilling of holes, sizing of thickness etc. This approach, against, exhibits a misdirection on the part of the Board". The use of the components in the same from without further processing is an essential concommitants for the application of s. 3(3). The factual course involved in the disputed instance is clear. The appellants process further operations on the rough castings purchased by them to convert them in shape and substance to become components useful for assembly of automobiles. Resultantly, we find no scope or grounds for the type of treatment adopted by the authorities in the revision of assessment. 7.(a) The other count is about the scope for effecting the revision of assessment under s. 16. This section gains scope for application under the following circumstances; Where for any reason, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trative authorities, also confirm the above trend of view explicit from a factual appraisal of the basic course of activity involved. (b) The Accountant-Gneral referred to a clarification rendered by the Government in G.O. No. 1104, Revenue dt. 2nd June, 1969. This was communicated in B.P. Perm 81/69, dt. 20th June, 1969 to the authorities. This clarification pertains to rough castings and iron forging. It consider the rate of levy applicable to sales of rough castings and iron forgings with particular reference to its use as components to articles specified in the First Schedule. This clarification was issued in suppression of all the previous orders on the subject. It specifically outlines that rough castings of spare parts of goods liable to single point tax under the First Schedule to the Madras General Sales Tax Act, 1959 which are used as components of such goods after finishing (i.e. simple processing like drilling of holes after finishing etc.) and which could be identified as such after assembly may be treated as component parts of such goods and allowed the concessional rate of tax under s. 3(3) of the Tamil Nadu General Sales Tax Act, 1959. This clarification makes tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Specific clarification sought for is in respect of the rough castings of tippets. The rough castings undergo various sophisticated and precision operations at the hands of the buyers as in the present instant case before us. They therefore completely lost their identity as rough castings at the hands of the buyers from the appellants. The rough castings can gain the shape and identity of a component only after finishing of the further processing. The rough castings which undergo substantial changes at the hands of the buyers as in the case before us, were clearly clarified to be liable to multipoint rate of tax under s. 3(3) of the Act. This settled position clarified by the Government has naturally to be followed by the authorities. 9. The value of the interpretation and clarifications made by the administrative authorities generally have considerable force. They have to be taken as effective and proper interpretation by the administrative authorities. Normally such a settled position is not disturbed. We find support for this view in the expert opinion of Bernard Schwartz. Bernard Schwartz viewed that the administrative interpretations in most of the cases are accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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