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TMI Blog1996 (5) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and overstepping in this regard be denounced and annulled. 2.. The facts of the present case present an apt example to demonstrate as to how the Commissioner had been acting outside his statutory authority thereby unwarrantedly flooding this Court to examine his uncalled for views in the matters pertaining assessments of tax under the Act. The petitioner in the present case is a partnership firm which is registered under the State as also the Central Sales Tax Act, 1956. It deals in dyes and chemicals. For the assessment year 1993-94 the firm was subjected to an assessment under section 9(2) of the Central Act read with section 12(2) of the Act, issued by the respondent-Additional Deputy Commissioner, whereunder it was subjected to a tax liability of Rs. 84,851. The said demand notice (annexure C) was served on it on May 22, 1995. If it had any grievance against the legality of the said order, it had a right to file appeal within 30 days. But no appeal was preferred. Thus the order of assessment became final. Subsequently, on July 7, 1995, the petitioner addressed a letter to the respondent-Commissioner, purporting to seek clarification under section 3A(2) of the Act, calling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Government and the Commissioner may from time to time, issue such orders, instructions and directions to all officers and persons employed in the execution of this Act as they may deem fit for the administration of this Act, and all such officers and persons shall observe and follow such orders, instructions and directions of the State Government and the Commissioner: Provided that no such orders, instructions or directions shall be issued so as to interfere with the discretion of any appellate authority in the exercise of its appellate functions. (2) Without prejudice to the generality of the foregoing power, the Commissioner may, on his own motion or on an application by a registered dealer liable to pay tax under the Act, if he considers it necessary or expedient so to do, for the purpose of maintaining uniformity in the work of assessments and collection of revenue, clarify the rate of tax payable under this Act in respect of goods liable to tax under the Act, and all officers and persons employed in the execution of this Act shall observe and follow such clarification. ........................ (3) All officers and persons employed in the execution of this Act, sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of, still leaves doubt as to the rate which can be made applicable to the particular taxable goods, on being approached either by the dealer or even suo motu, the Commissioner can clear the doubts in this regard by making it certain both for the tax-payers and the authorities under the Act so that the same may uniformly be applied to the dealings in such goods. This provision falls in the category of removal of doubts or difficulty clauses which as a sound legislative practice are incorporated by the Legislature by delegating its part of its functions to a specified authority to attend to the doubts genuinely emerging from its Acts to ensure proper and effective administration thereof. 7.. In the case of Jalan Trading Co. Private Ltd. v. Mill Mazdoor Sabha [1967] 29 FJR 463 (SC); AIR 1967 SC 691 (para 21) a five-Judge Bench of the Supreme Court, while dealing with the constitutional validity of section 37 of the Payment of Bonus Act, 1965, has held that the power to remove the doubt or difficulty by altering the provisions of the Act would in substance amount to exercise of legislative authority. Even otherwise, the power to prescribe the rate of tax conferred on an authority h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he exercise of power and existence of the condition if challenged must be established as an objective fact. 10.. Two Division Benches of this Court in the case of S.N. Gondakar v. Commissioner of Commercial Taxes [1983] 54 STC 190 and G.S. Sunagar and Brothers v. Commissioner of Commercial Taxes [1991] 82 STC 288, have held that the circulars issued by the Commissioner specifying the rate of tax in respect of a commodity is binding on all those who are charged with the duty to implement the provisions of the Act and it is not open to them to ignore such circulars. Therefore, these clarifications or circulars have to be held as of general nature having a binding effect that of the law. Communications made in the form of replies to the queries cannot be said to be statutory clarifications issued pursuant to the delegated legislative function contemplated under sub-section (2) of section 3A of the Act. 11.. The said aspect of the matter has been laid down by latter Division Bench decision of this Court in the case of Lipton India Limited v. State of Karnataka [1994] 95 STC 225 ; (1994) 44 ILR 1848 (Kar) (para 53) wherein it had to observe that: It is difficult to appreciate ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng bearing on assessments under the Act and communicating the gist thereof as guidelines to the statutory assessing authorities except in a manner provided under section 3A of the Act. 12.. Accordingly it is held that none of the communication made by the Commissioner or from his office pursuant to individual queries of dealers or any person whosoever he may be, shall be treated as a statutory clarification/circular in terms of section 3A(2) of the Act and it will not bind any one, may be the tax-payer or the authorities constituted under the Act. 13.. Further, I have already held that the circulars/clarifications issued under section 3A(2) of the Act being of the nature of the statutory instruments having status of law meant to be observed and implemented by all governed by the provisions of the Act either as by way of compliance or by way of enforcement thereof, cannot be acted upon as law unless the same has been notified to the public at large in a mode and manner known to law. In Harla case AIR 1951 SC 467 it has been held that: Natural justice requires that before a law can become operative it must be promulgated or published. It must be broadcast in some recognisable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the dealer has to be favoured with a reply in this regard. I agree with Mr. D Sa. The application has to be acknowledged. But if the Commissioner finds that no statutory clarification regarding rate of tax in the sense I have discussed above, is necessary to be made, then his reply should bear his opinion only to that extent without repeating what the Legislature has already expressed under the Act and the Schedules thereto. If he purports to answer to the queries made to him travelling beyond the four corners of the impugned provisions, then he will be merely expressing his personal view having no statutory sanction behind the same. 16.. To sum up it is held that: (i) A statutory clarification under section 3A(2) of the Act can be issued only in respect of rate of tax payable under the Act in respect of goods liable to be taxed under the Act; (ii) Such clarifications can be issued only if on a fair reading of the respective provisions/entries pertaining to rate of tax under the Act and the Schedules thereto, genuinely raises a doubt regarding the rate of tax applicable to any taxable goods; (iii) The clarification should spell out the reasons which has prevailed with th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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