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TMI Blog2019 (5) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... ld the clarification already issued in this office reference D.Dis.Acts Cell II/65536/2000 dated 13.10.2000 and D.Dis.Acts cell II/76081/2000 dated 30.10.2000, treating the product as falling under Entry 67 in Part-D of the First Schedule to the TNGST Act, 1959, taxable at 11% is hereby cancelled - Thereafter, by the subsequent clarification dated 18.05.2001 read with erratum dated 29.10.2001, it was also clarified that both settled cases and pending cases, in respect of narrow woven fabric labels, would be decided as per the clarification dated 13.02.2001. The question arises as to whether the assessing officers are bound by the clarifications issued under Section 28A or whether they can deviate there from - The above question is no longer res integra and was decided in several judgments. For instance, in PAPER PRODUCTS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [ 1999 (8) TMI 70 - SUPREME COURT] , it was held that instructions/clarifications issued under Section 37B of the Central Excise Act, 1944, which is broadly similar to Section 28A of the TNGST Act, are binding on the assessing officer. In the instant case, it is evident that the re-assessment proceedings were initi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thereafter, in response to letter dated 09.03.2011 from the Narrow Woven Fabrics Manufacturers Association, of which the Petitioner is a member, requesting for a clarification under Section 28A of the TNGST Act, the Special Commissioner and Commissioner of Commercial Taxes (FAC), Chennai, clarified that the Clarification dated 13.02.2011 would be followed and that past settled cases would not be reopened and that pending cases would be decided as per Clarification dated 13.02.2011. A corrigendum/erratum dated 29.10.2001 was issued, subsequently, confirming that the clarification was in the context of narrow woven fabric labels and not narrow woven fabric. 4.In the above context, the Petitioner's returns for the Assessment Year 1999-2000 were assessed and by Assessment Order dated 25.06.2001, it was recorded that the total turnover of the Petitioner is ₹ 2,26,64,354/- and that the taxable turnover is Nil because the dealer sold woven fabric and the said items are exempted from sales tax. The said Assessment Order records that the day book, ledger, purchase and sale bills were produced for assessment purposes. 5.Thereafter, it appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... row woven fabric in roll form. He further referred to the original Assessment Order and pointed that the assessing officer confirmed that these products are exempted from sales tax. He, thereafter, referred to the subsequent clarification dated 18.05.2001 and the erratum thereto dated 29.10.2001 whereby the Special Commissioner and Commissioner of Special Taxes (FAC), Chennai, clarified under Section 28A of the TNGST Act that the assessing officers would be instructed not to re-open settled cases and also follow clarification dated 13.02.2001 in pending cases. 11. In spite of the above clarification, which is binding on the assessing officer, the learned counsel contended that re-assessment proceedings were initiated entirely on the basis of audit objections. In this regard, he also referred to the counter of the respondent at paragraph-5 wherein it is stated, inter alia , as follows: 5. .... Subsequently, the Assessing Officer revised the assessment based on the objection of the audit wing that the woven fabric labels would fall under Entry 58.07 and therefore, not exempted from sales tax, under Entry 11 of Part A of the Third Schedule to the Tamil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly similar to Section 28A of the TNGST Act, are binding on the assessing officer. Likewise, in State Bank of Travancore vs. CIT, (1986) 158 ITR 102 , the Supreme Court held that circulars are binding on the tax authorities although not on the assessee. The said judgment was followed by a Division Bench of this Court in Mohan Breweries vs. CTO, 139 STC 4779 (the Mohan Breweries Case). In Lion Dates vs. Special Commissioner and Commissioner of Commercial Taxes, MANU/TN/2623/2014 , this Court relied on various Supreme Court judgments and the Mohan Breweries Case to conclude that clarifications under Section 28A of the TNGST Act are binding on tax authorities and cannot be modified or cancelled retrospectively. 18.Although another Division Bench of this Court in Tvl. Pizzeria Fast Foods Restaurant (Madras) P. Ltd. vs. Commissioner of Commercial Taxes (2005) 192 ELT 52 (the Pizzeria Fast Foods Case) held that a clarification under Section 28A of the TNGST Act is not binding on the assessing officer who acts in a quasi-judicial capacity, the aforesaid and other binding decisions of the Supreme Court were not brought to the notice of the Court. 19.When ..... X X X X Extracts X X X X X X X X Extracts X X X X
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