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TMI Blog2003 (12) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the State and the Central statutes were finalised vide orders dated May 14, 2001 and May 31, 2001 respectively. Copies of these orders are on record as exhibits P10 and P11 respectively. A perusal of the order at exhibit P10 shows that the petitioner had shown a total turnover of Rs. 26,04,47,281. It had claimed exemption in respect of the turnover of Rs. 18,57,66,989. The taxable turnover shown by the petitioner was Rs. 7,46,80,300. On a consideration of the matter, the assessing authority had found that the taxable turnover was Rs. 8,15,64,680. Similarly, under the Central Sales Tax Act, the petitioner had shown a total turnover of Rs. 13,58,52,997.72. It had claimed exemption in respect of the total turnover. On a consideration of the matter, the assessing authority had found that tax at the rate of four per cent was leviable on a turnover of Rs. 1,93,05,306. The petitioner had paid the tax in full. 4.. On October 11, 2001 a division Bench of this Court decided the case of Supersonic Industrial Complex, Muvattupuzha v. Deputy Commissioner of Sales Tax (Law), Ernakulam (TRC No. 37 of 2001) [2003] 130 STC 69. It was inter alia held that raw rubber latex and centrifuged late ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax". After the decision of the division Bench in Supersonic's case [2003] 130 STC 69 (Ker); (2002) 10 KTR 203 notice under section 19(2) was issued to the assessee in respect of both the assessment years. The petitioner's plea that all the species of rubber have to be considered as one commodity cannot be accepted. Under section 3(1A), the Commissioner can issue circulars for the purpose of proper administration of the Act. He has no power to grant exemption, which is specifically vested in the State Government under section 10. It is maintained that the rule enunciated in Supersonic's case [2003] 130 STC 69 (Ker); (2002) 10 KTR 203 is correct. It is binding on the department. Thus, the impugned orders are legal and valid. 8.. Learned counsel for the parties have been heard. On behalf of the petitioner, Mr. S. Ganesh has contended that latex and centrifuged latex, as mentioned in entry 110 of the First Schedule to the Act, are merely species covered by the genus "rubber". This position has been clarified by the Board in exercise of the power under section 3(1A). The authorities in the department are bound by the circular. The counsel further contended that on the faith of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 5." A perusal of entry 38 shows that prior to July 1, 1987 tax was levied on the sale or purchase of rubber. Thereafter, the entry was modified. At the relevant time, the provision was contained in entry 110. It permits levy of tax on rubber. Still further, it defines rubber to mean "raw rubber, latex, dry ribbed sheet of all RMA Grades, " Mr. Raju Joseph contended that latex and centrifuged latex having been separately mentioned, these have to be treated as different commodities. Is it so? 12.. It may be stated at the outset that the provisions of a taxing statute have to be construed strictly. A person cannot be taxed unless the provision clearly provides for it. The words of the statute or the relevant entry have to be given their true and natural meaning. The authority cannot add to the words. It cannot impose a levy by reading an implication into the plain words of the provision. There is no room for intendment. The words of the statute cannot be strained. Strict letter of law has to be seen. The present case has to be examined in the light of these broad parameters. 13.. A perusal of the entry 110 shows that rubber is followed by the expression "that is to say ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that while modifying, the words used by the Legislature do not indicate that there was an intention to treat each item mentioned in clause (A) as a different product. If such had been the contention, there was no need to use the expression-"rubber, that is to say". 15.. There is another aspect of the matter. Raw rubber and latex have been separately mentioned. If the contention as raised on behalf of the Revenue is correct, then these should be two different products. But there is nothing to suggest that it is so. In fact, despite being repeatedly asked, Mr. Raju Joseph was unable to point out any distinction between raw rubber and latex. Both are the produces directly obtained from the tree. Still further, the tree lace and earth scraps have been mentioned. The tree lace is the material that gets stuck to the tree trunk below the point of tapping. Earth scrap is the material that spills from the bowl and is picked from the ground. Even in the case of these, no processing is involved. That being so, it cannot be said that they are products different from raw rubber or latex. The entry includes "all other qualities and grades of latex". Does it mean that each quality or grade wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue shall have superintendence overall officers and persons employed in the execution of this Act and the Board of Revenue may; (a) call for returns from such officers and persons; (b) make and issue general rules and prescribe forms for regulating the practice and proceedings of such officers and persons; (c) issue such orders, instructions and directions to such officers and persons as it may deem fit, for the proper administration of this Act." A perusal of clause (1A) shows that the Board of Revenue exercises superintendence overall officers and persons employed for the purpose of enforcement of the Act. It has been empowered to make and issue rules for regulating the practice and proceedings before the officers. It can issue orders and instructions for the "proper administration of the Act". The power is wide. It is calculated to control the exercise of quasi-judicial power according to the exigencies of the situation. The Board can even make rules for regulating the practice and proceedings before the authorities under the Act. In the present case, the abovementioned circular is clearly within the ambit of the power of the Board under section 3(1A). It merely clarifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se for consideration was "whether the benefit of excise duty exemption (granted by the Central Government as per certain notifications) can be claimed in respect of commodities made out of raw materials on which no excise duty was payable?" On behalf of the Revenue it was contended that "the circulars issued by the Board cannot take the place of judicial interpretation of statutory notifications as those circulars could at best be reflective of that line of thinking on the part of the department for a time". It was also submitted that "judicial interpretation of a statutory provision or notifications thereunder should not be influenced by what the department thought it at a particular time". While dealing with these contentions, their Lordships were pleased to observe as under: "19. No doubt the court has to interpret statutory provisions and notifications thereunder as they are with emphasis to the intention of the Legislature. But when the Board made all others to understand a notification in a particular manner and when the latter have acted accordingly, is it open to the Revenue to turn against such persons on a premise contrary to such instructions? 20.. Section 37-B o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that we have placed on the said phrase, if there are circulars which have been issued by the Central Board of Excise and Customs which place a different interpretation upon the said phrase, that interpretation will be binding upon the Revenue." (emphasis supplied). The above rule clearly supports the petitioner's plea and indicates that even though the view taken by the Central Board of Excise and Customs was not correct, it was binding upon the Revenue. 25.. Another fact, which deserves mention, is that the Constitution Bench, which had considered Dhiren Chemical Industries' case [2002] 126 STC 122, had remanded the matter to another Bench for decision on merits. Therefore, the matter was considered in Collector of Central Excise, Vadodara v. Dhiren Chemical Industries (2002) 10 SCC 64. The appeals were disposed of with the following order: "The issue involved in these appeals is covered by the decision of a Constitution Bench in Collector of Central Excise, Vadodara v. Dhiren Chemical Industries [2002] 126 STC 122 (SC); [2002] 254 ITR 554. The Constitution Bench interpreted the phrase 'on which the appropriate amount of duty of excise has already been paid' in favour o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ins in effect till date. It has not been shown that it has been withdrawn. It is, therefore, very remarkable that it should be contended on behalf of the very Sales Tax Department whose Commissioner issued that circular that it is erroneous. It is very remarkable that the sales tax authorities should instruct their Assistant Commissioners who deal with tax assessments in a manner which is, according to them, contrary to the law. 3.. A circular by tax authorities is not binding on the courts. It is not binding on the assessee. However, the interpretation that is thereby placed by the taxing authority on the law is binding on that taxing authority. In other words, the taxing authority cannot be heard to advance an argument that is contrary to that interpretation." It is, thus, clear that even in case of the levy of sales tax, the circular issued by the Board is binding on the subordinate authorities. The view taken by the court in the case of Bengal Iron Corporation's case [1993] 90 STC 47 (SC) has not been followed in the later case. In fact, the dictum of the Constitution Bench in Dhiren Chemical Industries' case [2002] 126 STC 122 (SC); [2002] 254 ITR 554 (SC) is clear and the ..... 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