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TMI Blog2005 (8) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... torage tanks at Visakhapatnam, is a registered dealer on the rolls of the Commercial Tax Officer, Visakhapatnam. It is the case of the petitioner that storage tanks are plastic containers falling under sub-item (iv) of entry 19 of the First Schedule to the APGST Act, 1957 as amended with effect from May 12, 1997 and are exigible to sales tax at four per cent. The Deputy Commissioner of Commercial Taxes, Visakhapatnam, sought to revise the assessment order, for the assessment year 1998-99, bringing these plastic water storage tanks under entry 187 relying on the order of the Sales Tax Appellate Tribunal in T. A. No. 270 of 1993 dated October 7, 1996, wherein the question which arose for consideration was as to whether water tanks fell under articles of plastic or water supply and sanitary fittings , in relation to the assessment year 1990-91, which was for a period prior to insertion of sub-item (iv) of entry 19 of the First Schedule to the APGST Act with effect from May 12, 1997. It is stated that, on being pointed out the distinction, the Deputy Commissioner passed the order, dated August 22, 2002 dropping further proceedings confirming the order of the Commercial Tax Officer a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commercial Plastics v. State of Andhra Pradesh [2002] 127 STC 227 [FB], wherein this court held that for the purpose of construing the provisions of a taxing statute a common sense meaning is to be applied and one of the tests laid down in this regard is as to how dealers or consumers would understand the meaning, and that words in a statute must be given their ordinary meaning since the words best declare the intention of the law maker. It is contended that the aforementioned judgment of this court, which brought plastic bags within the ambit of entry 187, ould also apply to plastic water tanks, that entry 19(iv) must be understood to mean all packing material, other than those mentioned under entry 19(i) to (iii), and would therefore not take within its fold plastic and synthetic water tanks, and since these water storage tanks are made of plastic material, they continue to remain plastic articles requiring them to be classified under entry 187 and not entry 19(iv) of the First Schedule to the APGST Act. The counter-affidavit is, however, silent with regards the circular instructions issued by the Commissioner and the second respondent's understanding of the scope and extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant date and on the anvil of judicial precedents, that it was a quasi-judicial power, vested in the assessing, appellate and revisional authorities under the statute, which could not be usurped or derailed by the Commissioner under the garb of issuing circular instructions, and that such circular instructions cannot extend to interpreting relevant entries since they are matters beyond the scope of the powers vested in the Commissioner under section 42-A of the APGST Act. Learned Senior Counsel would submit that the power conferred on the Commissioner, under section 42-A of the APGST Act, is only for the proper administration of the Act and can neither extend to interpretation of statutory provisions nor can it be exercised to create a charge or enhance the tax liability of a dealer. It is contended that even if such wide powers are to be read into section 42-A, it would not be open to the first respondent to issue circular instructions giving a distorted interpretation of judgments of courts/Tribunals, which interpretation would bind his subordinates in view of the statutory prescription under section 42-A, rendering the very provision of assessment and the remedy of appeal, pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since in Commissioner of Central Excise, Bolpur v. Ratan Melting and Wire Industries [2005] 142 STC 595 (SC); [2005] 4 RC 756; [2005] 181 ELT 364 (SC), the earlier judgment in Dhiren Chemicals case [2002] 126 STC 122 (SC); [2002] 2 SCC 122, has been referred to a larger Bench of five Judges, the impugned circular purported to have been issued under section 42-A of the Act, cannot bind courts, Tribunals or quasi-judicial authorities under the APGST Act. Reliance is placed on the judgment of the Supreme Court in UCO Bank v. Commissioner of Income-tax [1999] 237 ITR 889, wherein it was held that circulars can neither pre-empt judicial interpretation of the scope and ambit of a provision of the Act nor could it impose on the tax-payer a burden higher than what the Act itself, on a true interpretation, envisages, that the task of interpretation of the laws is the exclusive domain of courts and the power to issue circulars is merely to tone down the rigour of the law for the benefit of the assessee and to ensure proper administration of fiscal statutes. In support of his contention that circulars, even though they do not have statutory force, are nonetheless binding on departmental of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusive and independent jurisdiction of these statutory authorities under the APGST Act. Sri A. V. Krishna Koundanya, learned Special Standing Counsel, appearing on behalf of the respondents refers to the proviso to section 42-A to contend that circular instructions issued by Commissioner are not meant to interfere with the discretion of any appellate authority in exercise of its appellate powers and would not, in any manner, place fetters on the quasijudicial powers of an appellate authority under the statute. Learned counsel submits that while section 42-A empowers the Commissioner to issue circular instructions, such power is not exercised in a manner inconsistent with the provisions of the Act, and even if it were to be so exercised it would not be binding on the assessing/appellate/revisional authorities under the APGST Act. Reliance is placed on the judgment of the Supreme Court in Bengal Iron Corporation v. Commercial Tax Officer [1993] 90 STC 47 wherein it was held thus: So far as Clarifications/Circulars issued by the Central Government and/or State Government are concerned, they represent merely their understanding of the statutory provisions. They are not bindin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idavit is significantly silent as to whether the impugned circular has been issued by the Commissioner of Commercial Taxes in purported exercise of the power under section 42-A of the Act. We have elaborately heard the learned Senior Counsel appearing on behalf of the petitioner and the learned Special Standing Counsel for the department. In our considered opinion, it is just and necessary that the Commissioner of Commercial Taxes is required to file an affidavit in this matter adverting to the specific question as to whether the impugned circular has been issued by him in exercise of power conferred under section 42-A of the Act. Liberty is given to the Commissioner to clarify or add anything to what has been stated in the counter-affidavit filed by the Deputy Commissioner. The affidavit should be filed within one week from today. Post these writ petitions on August 17, 2005 as part-hear. Pursuant thereto, the Commissioner of Commercial Taxes filed his counter-affidavit wherein it is specifically stated that the circular, in reference AI(1)/1688/2003 dated December 27, 2003, was merely an internal communication, meant for all subordinate officers, only to clarify the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of any particular assessee. It is no doubt true, as rightly contended by the learned Special Standing Counsel, that the power to issue administrative circulars/ instructions inheres in the first respondent as the head of the department of Commercial Taxes. Such an inherent power is, however, available only for ensuring effective administration and proper functioning of the department and cannot extend to interpreting orders of courts and Tribunals, as these are all matters required to be examined and adjudicated by the statutory authorities discharging quasi-judicial functions under the Act. Learned Special Standing Counsel fairly submits that the impugned circular would not bind quasi-judicial authorities under the Act and is not even meant to do so. One cannot, however, ignore the fact that the statutory authorities under the APGST Act are officers administratively subordinate to the Commissioner of Commercial Taxes and while, in law, such circulars would not bind them, there undoubtedly exists a reasonable possibility of their being influenced by such orders/circulars issued by the Commissioner. Since the exercise of this power, is admittedly not under the provisions of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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