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TMI Blog2023 (7) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... ing a post-millennium event is admittedly beyond the period under consideration, i.e., 1998-99; hence, we need not be too concerned with the latter amendment. It would appear from the conspectus of the statutory provisions as delineated above that there were two entries in the field at or about the period of the relevant assessment year, i.e., sago and starch of any kind in Schedule I, referred by us as Taxation Entry No.61, and products of millets (rice, flour, brokens and brans of cholam, cumbu, ragi, thinai, varagu, samai, kudiraivali, milo and maize) in Schedule III which we are referring to as Exemption Entry No.8. Law is well settled that if in any statutory rule or statutory notification two expressions are used - one in general words and the other in special terms - under the rules of interpretation, it has to be understood that the special terms were not meant to be included in the general expression; alternatively, it can be said that where a statute contains both a general provision as well as a specific provision, the latter must prevail - it is thus emerged that Taxation Entry No.61 is relatable to starch of any kind whereas Exemption Entry No.8 relates to products of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u hereby exempts, with effect on and from the 1st April 1970, all sales of products of millets (like rice, flour, brokens and bran of cholam, cumbu, ragi, thinai, varagu, samai, kudiraivali, milo and maize) from the tax payable under the said Act." c) The Legislative Assembly of Tamil Nadu ("Legislature", hereafter) amended The TNGST (Amendment) Act, 1993 (Act No. 24 of 1993) Schedule I to the Act, adding Part C and including Entry No. 53 therein, which imposed a 5% tax on 'sago and starch of any kind' w.e.f. 12th March, 1993. Later, through another amendment The TNGST (Second Amendment) Act, 1996 (Act No. 37 of 1996), 'sago and starch of any kind' was moved to Entry No. 61 of Part B of Schedule I ("Taxation Entry No. 61", hereafter) and the tax rate was reduced to 4% effective from 17th July, 1996. d) The aforesaid amendment dated 12th March, 1993 sparked concerns among maize starch dealers. One of them, M/s Lakshmi Starch, sought a clarification from the Special Commissioner and Commissioner of Commercial Taxes ("Commissioner", hereafter). Vide Circular dated 14th December, 1993, the Commissioner clarified that the exemption would remain in effect -- a specific notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... July, 1996 and not tax at 11%. g) Questioning the aforesaid clarification, the appellant made a representation before the Commissioner which came to be rejected on 28th June, 1999. The appellant was served with notices Dated 25th June, 1999 and 6th July, 1999 for recovery of general sales tax to the tune of Rs 7,69,729/- for FY 1998-1999, followed by a provisional assessment notice Dated 27th July, 1999 issued by the Commissioner. This triggered litigation between the parties. THE HISTORY OF LITIGATION 3. The judicial trajectory of the case leading to the present stage is set out hereunder: a) Assessment proceedings having been initiated, the appellant approached the Tamil Nadu Taxation Special Tribunal ("Tribunal", hereafter) questioning the provisional assessment notices and challenging the validity of the Circular dated 8th October, 1998. The petitions Original Petition Nos. 881 and 883 of 1999 came to be dismissed, vide judgment dated 29th July, 1999, with the observation that it was not proper for the appellant to independently challenge the said Circular and also contest the assessment proceedings at the same time; the questions regarding the validity of the Circular, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary, 2009. SUBMISSIONS OF THE PARTIES 4. Appearing on behalf of the appellant, Mr. K.K. Mani, learned counsel, advanced the following submissions: a) The High Court failed to consider the correct entry pertaining to the assessment year 1998-99. Exemption Entry No. 8 clearly outlined an exemption in favour of products of millet, including maize, because maize starch is in the form of flour, though the flour is not obtained by mere grinding of the grains, but rather through the treatment of maize by soaking it in water, subjecting it to various processes, and ultimately obtaining starch, which is sold as flour, and this process would certainly result in the sole product of millet retaining the flour form. This is distinct from Taxation Entry No. 61, which pertains to 'sago and starch of any kind' and sago being derived from tapioca, a combined interpretation of the phrase 'sago and starch of any kind' would exclude maize starch and encompass only tapioca starch. b) The decision in Reliance Trading Company, Kerala vs. State of Kerala (2011) 15 SCC 762 was referred to in support of the contention that an exemption will only arise when there is a liability to pay tax. Section 3(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, is liable to be quashed. g) In any event, the aforesaid Circular cannot have a retrospective effect and will take effect only from the date of issue, i.e., on and from 8th October, 1998. 5. Finally, submitting that for the assessment year 1998-1999 the appellant is entitled to exemption from tax on maize starch in accordance with Exemption Entry No. 8, Mr. Mani prayed that the orders under challenge be set aside by declaring the appellant's entitlement to exemption; consequently, the appeals be allowed. 6. Mr. C. Kranthi Kumar, learned counsel appearing for the respondents while supporting the impugned judgment, contended as follows: a) Firstly, in the Assessment Year 1998-1999, maize starch will fall under Taxation Entry No. 61, categorized as 'sago and starch of any kind', and will be subject to a 4% tax rate. The term 'starch of any kind', encompasses all types of starch, including maize starch. The decision in Associated Cement Company Ltd. vs. Commissioner of Customs (2001) 4 SCC 593 was relied on to support the contention that the words 'any kind' ought to be interpreted in an inclusive manner to include all kinds of goods within its ambit. b) Secondly, the Exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax was reduced from 5% to 4% in respect of 'sago and starch of any kind'. 12. Considering that the statutory scheme as regards the classification of 'maize' underwent several changes over time, we deem it appropriate to provide a comprehensive overview of the applicable taxing and exempting entries at relevant time periods. To facilitate clarity, the following table enumerates the applicability of these entries: TAXING ENTRIES From To Entry No. Description Rate of Tax 12.03.1993 16.07.1996 53 of Part C of Schedule I sago and starch of any kind 5% 17.07.1996 26.03.2002 61 of Part B of Schedule I sago and starch of any kind 4% 27.03.2002 ------------ 22(vi) of Part B of Schedule I sago and starch of any kind 4% EXEMPTING ENTRIES From To Entry No. Description 14.03.1970 31.03.1994 Notification No 89/1970 products of millets (like rice, flour, brokens and bran of cholam, cumbu, ragi, thinai, varagu, samai, kudiraivali, milo and maize) 01.04.1994 26.03.2002 8 of Part B of Schedule III products of millets (rice, flour, brokens and bran of cholam, cumbu, ragi, thinai, varagu, samai, kudiraivali, milo and maize) 27.03.2002 ------------ 44 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be used as a verb, as a noun as well as a preposition depending upon its setting. It had been used in the Exemption Notification as a 'noun". Once it becomes clear from Exemption Entry No.8, as introduced by Act No.32 of 1994, that (i) it does not include the noun "like" as the first word within brackets and (ii) that maize is only included along with rice, flour, etc. (and not maize starch), it is only those items within the brackets which, for the purposes of exemption, qualify as products of millets. It is, therefore, those products of millets specifically indicated, which are entitled to exemption under Section 8 of the Act read with Schedule III as per Exemption Entry No.8. 18. Can maize starch be considered a millet product, as in Exemption Entry No.8, for the present purpose? We do not think so. Maize is the raw product, whereas maize starch is a processed product. While we are bound to hold that maize is entitled to exemption in terms of Exemption Entry No.8 as it stood prior to the relevant assessment year, maize starch being a product of maize derived through mechanical process, it cannot be read as "like maize", the "like" having been excluded by Act No. 32 of 1994. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d maize starch undoubtedly being a 'kind of starch' would, therefore, be comprehended in it. This is more so because what is covered by Exemption Entry No.8 is maize, which is a product of millet. The position would have been otherwise if Exemption Entry No.8 or any other entry in Schedule III carried the description of product of maize instead of 'product of millet'. 24. Law is well settled that if in any statutory rule or statutory notification two expressions are used - one in general words and the other in special terms - under the rules of interpretation, it has to be understood that the special terms were not meant to be included in the general expression; alternatively, it can be said that where a statute contains both a general provision as well as a specific provision, the latter must prevail. 25. What emerges from the above discussion is that Taxation Entry No.61 is relatable to 'starch' of any kind whereas Exemption Entry No.8 relates to products of 'millet'. 26. Looking at the specific (Taxation Entry No.61) in contradistinction with the general (Exemption Entry No.8), there can be no manner of doubt that maize starch would be covered by the taxation entry and not by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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