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TMI Blog2017 (5) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... ory is held to be erroneous to that extent - The explanation to Entry 45A of the Maharashtra Value Added Tax would operate prospectively and not retrospectively - matters are remanded to the Tribunal for deciding it afresh - appeal allowed by way of remand. - WRIT PETITION NO. 4944 OF 2013, WITH WRIT PETITION NO. 8950 OF 2014, 499 OF 2015, 11344 OF 2014, 9468 OF 2013, 10103 OF 2013, 8998 OF 2014, 11343 OF 2014, 9968 OF 2016, 10003 OF 2016, - - - Dated:- 5-5-2017 - S. V. GANGAPURWALA AND K. L. WADANE, JJ. Shri Rameshwar F. Totala, Advocate for the Petitioner. Shri Dwarkadas S. Ladda, Advocate for the Petitioner. Shri M. B. Bharaswadkar, A.G.P. for Respondent Nos. 1 to 5. JUDGMENT (Per S. V. Gangapurwala, J.): 1. Rule. Rule made returnable forthwith. With the consent of parties taken up for final hearing. 2. All these writ petitions are based on similar set of facts and involve common question of law, as such are decided together. 3. The petitioners are aggrieved by the trade circular No. 9T of 2012 dated 30.06.2012. 4. Mr. Totala and Mr. Ladda, the learned counsel for petitioners strenuously contend that, the petitioners sell unmanufactured tob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining the period to which the return relates. The respondent authorities are claiming VAT from the year 2007. The respondents cannot exercise the powers U/Sec. 29(5) of the Act of 2002 of issuing the show cause notice, as pre conditions of Sec. 8 of the Act of 2002 are not available in case of petitioners. The exercise of powers of authority in issuing the show cause notice U/Sec. 29(5) of the Act of 2002 is colourable exercise of powers by the respondent authorities. The trade circular and the impugned notices are contrary to the provisions of law. The learned counsel rely on the judgment of the Apex Court in a case of Sedco Forex International, Drill, Inc. and others Vs. Commissioner of Income Tax, Dehradun and another reported in (2005) 12 SCC 717. 6. Mr. Bharaswadkar, the learned Assistant Government Pleader for respondent Nos. 1 to 5 submits that, while challenging the explanation to the trade circular, the petitioners have not considered the note 5 of the said circular. The circular cannot be used for legal interpretation of the provisions of law, as it is clarificatory in nature. The interpretation of the notification shall be independent of the circular. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2401 10 30 Sun cured Virginia tobacco kg 10.00% 2401 10 40 Burley tobacco kg 10.00% 2401 10 50 Tobacco for manufacture of biris, not stemmed kg 10.00% 2401 10 60 Tobacco for manufacture of chewing tobacco kg 10.00% 2401 10 70 Tobacco for manufacture of cigar and cheroot kg 10.00% 2401 10 80 Tobacco for manufacture of hookah tobacco kg 10.00% 2401 10 90 Other . . . . . . . . . Tobacco partly or wholly stemmed or stripped: kg 10.00% 2401 20 10 Flue cured virginia tobacco kg 10.00% 2401 20 20 Sun cured country (natu) tobacco kg 10.00% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting law, there is no question of its prospective or retrospective operation, as the said explanation would only explain and clear any mental cobwebs surrounding meaning of statutory provision and to prevent controversial interpretation. Explanations generally are intended more as a legislative exposition or clarification of the existing law than as a change in it. If we go to the literal words employed in the explanation, then the said explanation is introduced for the removal of the doubts. The language of the explanation depicts such intention. If the explanation is interpreted as merely clarificatory, then the trade circular cannot be held to be erroneous. 11. Yet, we will have to bear in mind that, the taxing statutes have to be interpreted strictly. We will have to consider whether the incorporation of explanation to Entry 45A of the Act of 2002 has altered the law as existing prior to the amendment dated 31.03.2012. While adding the said explanation, the entry 12 to Schedule D is also amended. 12. As per Section 9(1 A) of the Act, the State Government has the powers to amend the schedule by adding or modifying any entry in the schedule. The notification dated 29.03.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n will have to be held amendatory to operate prospectively and not retrospectively. 15. In the light of the above, it will have to be held that the addition of explanation to Entry No. 45 A under notification dated 31.03.2012 is substantive provision and it is not merely clarificatory, as such would operate prospectively. It will have to be held that, unmanufactured tobacco sold in packets under a brand name would not be taxable from 01.04.2007 to 31.03.2012. The impugned trade circular 9T dated 30.06.2012 stating that explanation is merely clarificatory is held to be erroneous to that extent. 16. The writ petitions are accordingly allowed holding that the unmanufactured tobacco sold in packets under a brand name covered under Tariff heading No. 2401 of Central Excise Teriff Act would not be taxable upto 31.03.2012. The impugned trade circular 9T dated 30.06.2012 stating that explanation is merely clarificatory is held to be erroneous to that extent. The explanation to Entry 45 A of the Maharashtra Value Added Tax would operate prospectively and not retrospectively. The reply to the show cause notices shall be given by petitioners and the authorities shall decide accordingly. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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