2016 Supreme(SC) 722

SUPREME COURT OF INDIA
Dipak Misra, C. Nagappan, JJ.
J.K. Lakshmi Cement Ltd. – Appellant
Versus
Commercial Tax Officer, Pali – Respondent
Civil Appeal Nos. 102 of 2010 & 6136 of 2013
Decided On : 16-09-2016

IMPORTANT POINTS
Exclusion or inclusion of levy cement is critical and significant for determination and quantification of the benefit.
Dealer making inter-State sales under the notification dated 21.01.2000 is disqualified and not eligible to claim benefit under the notification dated 06.05.1986.
Circulars and instructions are binding on the authorities, not on the Court. Court can direct that the circular should not be given effect to.
Doctrine of contemporanea exposition is applicable only to an ancient statute.

Headnote:(a) Central Sales Tax Act, 1956 – Section 8(5) – Exemption – Notification dated 06.05.1986 and 21.01.2000 – Exclusion or inclusion of levy cement – Critical and significant for determination and quantification of the benefit. (Para 16)

       (b) Central Sales Tax Act, 1956 – Section 8(5) – Exemption – Notification dated 06.05.1986 and 21.01.2000 – Dealer making inter-State sales under the notification dated 21.01.2000 – Disqualified and not eligible to claim benefit under the notification dated 06.05.1986. (Para 18)

       (c) Central Sales Tax Act, 1956 – Section 8(5) – Exemption – Notification dated 06.05.1986 and 21.01.2000 – Notification dated 07.03.1994 – Applicable from 1st April, 1994 to 31st March, 1997 – Not applicable with effect from 1st April, 1997 – Appellant pleading that dual benefits were availed of under notification dated 07.03.1994 post 1st April, 1997 – Unacceptable – Rejected (Para 23)

       (d) Central Sales Tax Act, 1956 – Section 8(5) – Exemption – Notification dated 06.05.1986 and 21.01.2000 – Circular dated 15.04.1994 – Referring to notifications dated 07.03.1994 as well as 06.05.1986 – Notification dated 07.03.1994 unconditionally fixing rate of central tax on inter-State sale of cement at 4% even in absence of Form C and Form D – Notification dated 06.05.1986 requiring Form C and Form D for availing benefits – Circular not expressly laying down that dual or multiple benefits under the two notifications could be availed of by the same dealer. (Para 24)

       2006 (16) Tax update 199; 2007 (17) Tax update 307; (2004) 137 STC 438; (2006) 8 SCC 702 – Referred

       (e) Interpretation – Taxing statutes – Circulars can tone down the rigour of law, for an authority which wields power for its own advantage is given right to forego advantage when required and considered necessary – Power to issue circulars is for just, proper and efficient management of the work and in public interest – It is a beneficial power for proper administration of fiscal law – Circulars are binding on the authorities administering the enactment but cannot alter the provision of the enactment, etc. to the detriment of the assessee – Circulars and instructions issued by the Board are binding on the authorities, not on the court – Court can direct that the circular should not be given effect to – Instantly, circular dated 15.04.1994 stands withdrawn vide circular dated 16.04.2001 – Appellant-assessee therefore cannot claim the benefit of the withdrawn circular. (Para 25, 26, 27)

       (1999) 4 SCC 599; (2008) 13 SCC 1 – Relied upon

       (f) Doctrine – Contemporanea exposition – Applicable only to ancient statute – Paragraph 3 of notification dated 21.01.2000 unambiguous and not susceptible to two interpretations – The doctrine has no application. (Para 28, 29)

       (2013) 11 SCC 451 – Relied upon

       

       Facts of the case:

       For the assessment year 2000-2001, a Show Cause Notice dated 11.01.2001 was issued to the appellant seeking to disallow the benefit under notification dated 06.05.1986 on the ground that the appellant had not calculated the benefits under notification dated 06.05.1986 after including the figure of sale of levy cement in the base year, that is, 1984-85. Against the said show cause notice Writ Petition bearing No. 551 of 2002 was filed which is pending before the High Court.

       After a lapse of seven years from the previous circular dated 15.04.1994, the CCT issued another Circular No. 94-95/119 dated 16.04.2001 purporting to clarify the applicability of partial exemption notification dated 06.05.1986 vis-a-vis notification dated 07.03.1994 and subsequent notifications dated 12.03.1997 and 21.01.2000. By the said circular the competent authority purported to state that the dealer can avail of the benefit of either of these two notifications in any financial year meaning thereby that if he opts for the benefit under notification dated 06.05.1986 for the year 2000-2001, he would not be entitled to claim simultaneous benefit in respect of the same year under the notification dated 21.01.2000.

       For the assessment year 2000-2001, a show cause notice dated 19.08.2003 was issued by the Commercial Taxes Officer to the appellant seeking to disallow the benefits under notification dated 06.05.1986 on a purported retrospective application of the Circular dated 16.04.2001. Appellant challenged the said show cause notice before the High Court which held that the said show cause notice dated 19.08.2003 was not justified as Circular dated 16.04.2001 could apply only prospectively and not retrospectively.

       While finalizing the assessment for the assessment year 2001-2002, a show cause notice dated 19.08.2003 was issued purportedly based on Circular dated 16.04.2001 requiring the appellant to show cause why the partial exemption claimed under State Government’s notification No. F4(72)FD/Gr.IV/81-18 dated 06.05.1986 should not be disallowed. The appellant submitted its reply but the assessing authority vide order dated 26.08.2003 rejected the claim of partial exemption only on the basis of Circular dated 16.04.2001 and imposed additional tax on the assessee for the assessment year 2001-2002.

       The appellant filed an appeal before the Deputy Commissioner (Appeals), who allowed the appeal.

       The revenue approached the Rajasthan Tax Board in appeal which was allowed. Against the order of the Tax Board, the appellant filed revision petition before the High Court and the learned Single Judge came to hold that condition no. 3 of Notification No. 21.01.2000 has to be given its plain and clear meaning and cannot be restricted only to the specific transaction of sale covered by notification dated 21.01.2000 itself and when the condition no. 3 unequivocally states that once the assessee avails of the benefit of concessional rate of tax under notification dated 21.01.2000, he cannot get the partial benefit as envisaged in the Notification dated 06.05.1986 and accordingly repelled the stand of the assessee.

       The seminal issue that arises for consideration, succinctly put, is whether the appellant is entitled to dual benefit of partial exemption under the notification dated 06.05.1986 and also the lower rate of tax @ 6% under notification dated 21.01.2000.

       Finding of the Court:

       Appellant-assessee therefore cannot claim the benefit of the withdrawn circular dated 15.04.1994.

       Result: Appeals dismissed.