9911796707
TMI Blog2007 (11) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner in both writ petitions, has challenged the assessment order and notice, dated December 30, 2005 for the assessment years 2000-01 and 2001-02 respectively and sought a direction to the assessing officer to levy tax at the rate of eight per cent on the compact discs sold by them, in accordance with the clarifications dated August 27, 1999 and October 12, 2000, issued by the Special Commissioner and Commissioner of Commercial Taxes, Chennai. As both the writ petitions deal with the common facts and law, they are taken up together and disposed of by a common order. Brief facts leading to the writ petitions are as follows: The petitioner is a registered dealer on the files of the respondent. By letter dated May 17, 1999, the petitioner requested the Special Commissioner and Commissioner of Commercial Taxes, Chennai to clarify the rate of tax applicable on the sale of video compact disk effected by them. According to the petitioner, the video compact disk is a CD media, meant to store digital files, text/images/graphics/drawing for optimum storage and it is also called a compact disk. Along with the application seeking clarification, the relevant produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated December 31, 2004, levied tax at the rate of 11 per cent on the turnover of Rs. 1,01,04,329 for the period from April 1, 2001 to November 30, 2001 and at the rate of 12 per cent on the turnover of Rs. 30,18,417 for the period from December 1, 2001 to March 26, 2002 on the sale of compact disk effected by the petitioner. The petitioner disputed the levy of higher rate of tax before the Deputy Commissioner (CT) Appeal, the first appellate authority in Appeal No. 8 of 2005. In so far as the appeal filed for the assessment year 2000-01, i.e. Appeal No. 48 of 2003, the first appellate authority, by order dated July 2, 2004, held that the compact disc was not a computer peripheral and therefore, the contention of the petitioner that the same was liable to tax at the rate of four per cent was not accepted. The first appellate authority also held that the above mentioned item was not a sound-transmitting or sound-recording instrument, liable to tax at eight per cent and therefore, remanded the issue to the assessing officer with a direction to make a fresh assessment on the turnover, adopting the correct rate of tax as prescribed under the Act. Pursuant to the order of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale of video compact disc , under the residuary entry, is patently illegal and contrary to the above clarifications. Learned counsel for the petitioner, relying on the decision in UCO Bank v. Commissioner of Income-tax reported in [1999] 237 ITR 889 (SC); [1999] 4 SCC 599, submitted that the clarification issued by the competent authority cannot create any liability to pay tax and the beneficial power conferred on the highest administrative authority can forgo its advantage and in hard cases, can provide the benefit of relaxing the rigour of law. Relying on the decisions reported in Commissioner of Sales Tax v. Indra Industries [2001] 122 STC 100 (SC); [2001] 248 ITR 338 (SC) and Mohan Breweries and Distilleries Limited v. Commercial Tax Officer [2005] 139 STC 477 (Mad), learned counsel for the petitioner submitted that once the Special Commissioner and Commissioner for Commercial Taxes, has issued clarifications under section 28A of the TNGST Act, treating the video compact disk as one, falling under the category of compact disc under entry 52 of Part D of the First Schedule to the TNGST Act, 1959, the assessing officer is bound by the clarifications and it is not o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction, it is not open to the petitioner to by pass the alternative remedy provided under the statute and file a writ petition and therefore, prayed for dismissal of the writ petitions. Heard Mr. K.J. Chandran, learned counsel for the petitioner and Mr. R. Mahadevan, learned Additional Government Pleader, for the respondent. Before dealing with the factual matrix of the case, let me extract the relevant entry, where the goods, viz., the compact disc is mentioned in the TNGST Act. Along with the sound-recording and re-producing equipment classified in item No. 49 of Part C of the First Schedule to the TNGST Act, the compact disc was also included in entry 52 in Part D of the First Schedule and the rate of tax at the point of first sale was 11 per cent between July 17, 1996 and March 4, 1997. The said entry is extracted hereunder: Sound recording and reproducing equipment (excluding item 49 in Part C) including dictaphones, car cassette players, tape-decks, tape players, compact disc player (including a combination of any of them) with or without wireless reception instruments and compact disc, magnetic tapes, micro-tapes and micro-fische for use therewith parts and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, clarifying the rate of tax for the goods video compact disc . The appellate authority, on analysis of the issue as to whether a writable compact disc can be classified as sound recording and reproducing equipments under entry 52 of Part C of the First Schedule to the TNGST Act, remitted the matter to the assessing officer for fresh consideration. On remand, the assessing officer considered the contentions raised by the dealer and overruled the same with the following findings: The clarification issued by the Special Commissioner and Commissioner of Commercial Taxes, dated August 27, 1999, referred to by the dealers pertains to only 'video compact discs' and not writable compact discs. The claim of the dealer is that the Schedule liable to be taxed at eight per cent only and at 11 per cent with effect from January 23, 2000 with reduction in rate to four per cent from April 1, 1999 to January 22, 2000 by notification under entry 52 of Part D to the First Schedule. The above entry contains the commodity compact disc whereas the writable compact discs sold by the dealers is not the same as the item goods mentioned under the category of sound recording and reprodu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dealer in their application submitted to the competent authority and the rate of tax clarified by such authority cannot be applied to a different item of goods. In view of the above, the assessing officer cannot be said to have failed to implement the clarifications of the Commissioner nor he had denied the benefit of the clarifications. In a recent decision of the Supreme Court in Star Paper Mills Ltd. v. State of U.P. reported in [2006] 148 STC 144, the Supreme Court held that recourse to a remedy under article 226 of the Constitution of India is permissible, if the petitioner applies for enforcement of the fundamental rights; where there is violation of the principles of natural justice or where the orders of proceedings are wholly without jurisdiction or vires of an Act is challenged. Whether the petitioner had sold writable compact disc or video compact disk is a matter of evidence and therefore, this court would not venture to deal with the factual aspects. The order impugned in this writ petition cannot be termed as unfair or unreasonable or defies reason. Where factual adjudication of the matter is necessary, writ petition would not be the proper remedy. The pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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