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TMI Blog1990 (10) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption in respect of sale turnover relating to charcoal in a sum of Rs. 12,500. As to the trading account reflected from his books of account, the return came to be accepted and the exemption claimed also came to be allowed. But the assessing authority treated the sale of lime as sale of chemical falling under entry 79 of the Second Schedule to the Karnataka Sales Tax Act, 1957 ("the Act" for short), instead of taxing the same under section 5(1) of the Karnataka Sales Tax Act in accordance with the clarification issued by the Commissioner of Commercial Taxes in Karnataka, on the query of the Belgaum Chamber of Commerce and Industries in his letter dated September 20, 1984. Aggrieved by the conclusion of assessment and the consequent dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the order of the appellate authority (2) whether any prejudice was caused to the Revenue by the appellate order. 5.. We have already noticed that the appellate authority after examining the records and after considering the claim of the benefit of clarification issued by the Commissioner under section 3-A of the Act concluded that the sale of "lime mortar" though a chemical within the meaning of the expression under entry 79, in view of the clarification, when sold to builders would attract only the tax under section 5(1), i.e., at the prescribed rate in that sub-section itself at 4 per cent or 5 per cent depending on the period in the relevant assessment year. 6.. Section 3-A of the Act is as follows: "3-A. Instructions to subordina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n he performs his functions." The effect of the clarification issued thereunder in terms thereof has fallen for consideration by this Court in the case of S.N. Gondakar v. Commissioner of Commercial Taxes in Karnataka [1983] 54 STC 190 and a Division Bench of this Court considering the effect held that in terms of the provision, the clarification was binding on all officers who were entrusted with the administration of the Act including the assessee who might have sought such clarification as to the rate of tax payable. It was in the light of that decision and the binding nature of the clarification, the appellate authority gave the benefit of the lower rate of turnover tax under section 5(1) as clarified by the Commissioner in the clarifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld or lime mortar was sold, as long as the sale was in favour of the builder, it should be in accordance with the clarification. The exigibility to tax was only at 4 per cent or 5 per cent and not 8 per cent or 10 per cent under entry 79 of the Second Schedule. Therefore, no prejudice had been caused in the light of the clarification to the Revenue.
9.. In that view of the matter the Commissioner had wrongly assumed jurisdiction under section 22-A of the Act. We, therefore, must interfere with the order which is not in accordance with law.
10.. We quash the said order of the Commissioner of Commercial Taxes as one without jurisdiction and restore the appellate order.
Appeal is allowed in terms above.
Appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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