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TMI Blog2021 (4) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany, Gulbarga whereas petitioner in W.P.No.44960 of 2017 is M/s.Vijay Enterprises. 2.3. M/s. Jai Bhavani Trading Company is aggrieved by the reopening of the assessment for the years 2008-09 to 2011 12 and M/s. Vijay Enterprises is aggrieved by the reopening for the assessment for the year 2012-13. 2.4. M/s. Jai Bhavani Trading Company carried on the business of purchase and sale of unmanufactured tobacco in the brand name of Kishan Tota until 2011-12 and M/s. Vijay Enterprises carries on the same business in the same brand name from 2012-13 onwards. 2.5. The petitioners are the dealers registered under Karnataka Value Added Tax Act, 2003 (for brevity, hereinafter referred to as 'KVAT Act'), Central Sales Tax Act (for brevity, hereinafter referred to as 'CST Act', 1956) and Karnataka Tax on Entry of Goods Act, 1979 (for brevity, hereinafter referred to as 'Entry Tax Act'). 2.6. The petitioners contends that in terms of Section 2(A)(1) of the Entry Tax Act, the said unmanufactured tobacco is exempted from levy of entry tax on account of the same being agricultural produce. 2.7. In terms of Sub-Section 1 to Section 3 of the Entry Tax Act, the State Government had specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led containers are liable to entry tax. It is only thereafter that the Deputy Commissioner of Commercial Taxes, Kalaburagi issued proposition notices dated 16.10.2017 for the years 2008-09, 2009-10 and 2010-11 proposing to levy entry tax on unmanufactured tobacco towards which the petitioner filed a detailed reply along with statement of accounts. 2.14. The petitioners had challenged the proposition notices in W.P.Nos.208289 208290 of 2017 and other connected mattes, which are still pending. 2.15.The reply given by the petitioner was rejected and assessment orders were passed on 30.04.2018, 03.05.2018, 04.05.2018, 27.03.2018 and 02.08.2017 for the assessment years 2008-09, 2009-10, 2010 11, 2011-12 and 2012-13 respectively levying tax, penalty and interest holding that the unmanufactured tobacco is liable to tax under Sl.No.5 of the notification dated 30.03.2002 specifying "Tabacco products of all descriptions including cigarettes, cigars, churuts, zarda, quimam, etc but excluding snuff, ghutka, beedies". 2.16. Respondent No.3-Deputy Commissioner of Commercial Tax also passed rectification orders under Section 17 of the Entry Tax Act approving the aforesaid assessments without i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come within the definition of Section 2(A)(1) of the Act and is therefore exempted from entry tax. 3.6. Apart therefrom, he submits that the said products viz., unmanufactured tobacco was never the subject matter of tax under Entry Tax Act inasmuch as in the year 2002, there was a clarification issued by Advance Rulings under Section 12(C) of Entry Tax Act categorically stating that there is no manufacturing process involved bringing into existence of new commercial commodity and therefore, unmanufactured tobacco is an agricultural produce and as such, no entry tax was levied. 3.7. On 01.10.2013, there was an amendment which was brought about by way of a Notification No.FD.208.CSL.2013 (III) wherein new heading 'unmanufactured tobacco in a sealed container' was added to entry at Sl.No.5 at the rate of duty at 5%. This amendment came into existence with effect from 02.10.2013 as per the said notification itself. Therefore, he submits that this amendment is only prospective in nature and not applicable to the petitioners prior to that date. 3.8. He further submits that irrespective of the above, the consistent interpretation which has been given to entry "tabacco products of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation, which has not been done in the present case and therefore, there being no particular notice issued under Section 5(4) of the Entry Tax Act, reassessment could not have been done in respect of the petitioners' returns. 3.15. By relying upon Section 5(6) of the Entry Tax Act, he would submit that no assessment for any year could be made after a period of three years from the date on which the return under Section 5(1) of that year was submitted by the dealer. The reassessment for the years 2008-09 could have been done within three years from the end of the financial year i.e., 31.03.2009 ending with 31.03.2012. Similarly for the year 2009-10, it should have been done by 31.03.2013, for the year 2010-11, it should have been done by 31.03.2014, for the year 2011-12, it should have been done by 31.03.2015 and for the year 2012-13, it should have been done by 31.03.2015. 3.16. The same not having been done, notice came to be issued under Section 5(4) of the Entry Tax Act on 02.01.2017 after the period of limitation even for the last assessment year 2012-13. Therefore, the same is barred by limitation and is required to be quashed. 4. Sri. Mallikarjun Sahukar, learned HCGP o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r himself has categorically stated that earlier Advance Rulings in the case of Ghaichap Zarda was not applicable to the petitioners? 5. What Order? 7. Answer to Point No.1: Whether the amendment to Entry No.5 brought about on 01.10.2013 is prospective or retrospective? 7.1. The notification substituting Sl.No.5 which was issued on 01.10.2013 categorically states that the said notification would come into effect from 02.10.2013. When the amendment itself says so there cannot be any interpretation of the said provision by the respondent - officers. Though it has been contended otherwise by Sri.Sahukar, learned counsel for the respondents that this amendment would date back to the date of enactment, I am unable to accept the said submission, more so, when the statute is a taxation statute and it is on the basis of the said statute that an assessee and in this case a dealer could plan its business activities taking into consideration the applicable taxes. 7.2. Hence, I am of the considered opinion that the amendment to Entry 5 brought about on 01.10.2013 is prospective in nature and would come into effect only from 02.10.2013. 8. Answer to Point No.2: Whether a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the purview of the said provision and there is no power vested with the authorities to reopen an assessment carried out three years prior to the said date of issuance of notice. Hence, all the assessments which have been carried out are bad in law. 10. Answer to Point No.4: Whether the clarification issued by the Commissioner of Commercial Taxes in the case of Sri. Vittal A. Naik of M/s. Mahadevi Enterprises, Udupi would be applicable to all assessees/dealers more so when the said Commissioner himself has categorically stated that earlier Advance Rulings in the case of Ghaichap Zarda was not applicable to the petitioners? 10.1. Sri. Sahukar, learned counsel has raised an interesting but contradictory argument that the clarification issued by the authority for Clarification Advance Rulings is only applicable to Ghaichap Zarda and not to the product of the petitioner. Whereas on the other hand he contends that clarification issued in Sri. Vittal A. Naik is applicable to all manufacturers. Such a contradictory stand can not be taken by the authorities more so the taxation authorities. If clarification in Sri. Vittal A. Naik's case is applicable to all dealers so woul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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