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TMI Blog2002 (4) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer accepted the contention of the petitioner that the masterbatches come within the purview of the said notification and an assessment was made accordingly. By reason of the impugned order, however, the Commissioner noted: "It has been brought to the notice of the undersigned that some dealers engaged in business of manufacturing and trading of masterbatches are treating the sales of masterbatches as plastic raw material, whereas it has been held that masterbatches is neither plastic raw material, nor colourant pigment. The same should not be treated in the classification of plastic raw material and colourant pigment. Hence masterbatch shall fall under the category of unspecified goods taxable at 8 per cent. It is also pointed out here that the rate of tax of the plastic raw material was reduced from 7 per cent to 3 per cent with effect from April 1, 1998. The rate of tax for unspecified goods remained at 7 per cent hence the unscrupulous dealers tried to exploit the position by treating the masterbatch as plastic raw material/pigment. It is therefore impressed upon all the assessing authorities to ensure that dealers engaged in the business of manufacturing and trading o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhir Chawla, the learned counsel for the petitioner would submit that the Commissioner of Sales Tax does not have any power to issue a circular as obtaining in the appropriate authority in terms of section 37B of the Central Excise and Salt Act, 1944 or in the Board of Direct Taxes under section 119 of the Income-tax Act, 1961. In exercise of it purported control over the subordinate officers, the Commissioner of Sales Tax, contends the learned counsel, cannot issue any circular in terms whereof the jurisdiction of the Assessing Officer in the matter of exercise of his judicial power is impeded. Strong reliance in this connection has been placed on Sita Juneja Associates v. Commissioner of Sales Tax Officer (1998-99) DSTC 60 (Delhi). The learned counsel further relied upon a decision of the apex Court in Bengal Iron Corporation v. Commercial Tax Officer [1993] 90 STC 47. 8.. Mr. Bhatia, learned counsel appearing for the respondent would contend that administrative circulars issued by the Commissioner of Sales Tax cannot per se be said to be bad in law. In support of his contention, reliance has been placed on S.V. Halavapalli and Sons v. Commissioner of Commercial Taxes [1984] 57 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would have power to fill up gaps in the Rules by issuing administrative instructions if the Rules are silent on the subject provided the same is not inconsistent with the statutory Rules already framed. In the present case, the Act does not empower the State Government to supplement the Rules by issuing administrative instructions or orders. In the absence of such provision in the Act, it is not open to the Government to supplement the Rules by the executive orders. If we accept the argument of learned counsel for the respondent, it would be repugnant to sections 3 and 15 of the Act." 12.. A division Bench of this Court in Sita Juneja Associates (1998-99) DSTC 60, categorically held that if issuance of such circular amounts to interference in the judicial exercise of the power of tax authorities in passing the judicial orders under the Act, the same would be without jurisdiction. It was held: "30. The adjudicatory discretion vesting in the assessing authorities cannot be bound down by the dictates from the superiors if not so warranted or permitted by the statute. The assessing authorities should be left free to arrive at findings from case to case depending on the reliabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. They are not binding upon the Courts." 14.. The decision of the Karnataka High Court in S.V. Halavapalli Sons v. Commissioner of Commercial Taxes [1984] 57 STC 343, cannot be said to have any application in the instant case. Therein a clarificatory circular was issued to the effect that the term "cereal" at item No. 9 means the edible oils and not seeds. The court went to the merit of the matter and held that the seeds would not come within the purview of cereal. It was stated: "26. We can take judicial note of the fact that a common man in a village who grows paddy, ragi and other cereals raises the crop for human consumption and does not use the crop grown as seeds. He selects and collects the best from out of the wheat, paddy, ragi, etc., he has grown for the purposes of sowing and raising a new crop. He does not use them as food. He makes a distinction and treats each as a distinct commodity. He does not identify one with the other. He calls those collected by him for raising the fresh crop as 'seed-paddy', 'seed-ragi', 'seed-jowar', etc., and does not call them paddy, ragi, etc.". 15.. In Adarsh Industrial Corporation v. State of Haryana, Chandigarh [1990] 79 STC 94 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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