1. Dispute over classification of maize starch under the Tamil Nadu General Sales Tax Act, 1959, concerning its eligibility for exemption as a product of millets. (Para 2 )
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2023 Supreme(SC) 603
SUPREME COURT OF INDIA
S. RAVINDRA BHAT, DIPANKAR DATTA, JJ.
Santhosh Maize & Industries Limited – Appellant
Versus
The State of Tamil Nadu & Anr. – Respondents
Civil Appeal No. 5731, 5732 of 2009
Decided on : 04-07-2023
Important Points
IMPORTANT POINT
Where a statute contains both a general provision as well as a specific provision, latter must prevail.
Where a statute contains both a general provision as well as a specific provision, latter must prevail.
Subject
Taxation Law - SALES TAX
Act Referred
CONSTITUTION OF INDIA: Art.14, Art.19(1)(g), Art.265
CUSTOMS ACT: S.2(22)(e)
TAMIL NADU GENERAL SALES TAX ACT: S.28(a), S.3(2), S.17, S.8
CUSTOMS ACT: S.2(22)(e)
TAMIL NADU GENERAL SALES TAX ACT: S.28(a), S.3(2), S.17, S.8
Headnote
Tamil Nadu General Sales Tax Act, 1959 – Section 73 – Section 28-A – Exemption – If in any statutory rule or statutory notification two expressions are used, one in general words and other in special terms, under rules of interpretation, it has to be understood that special terms were not meant to be included in general expression – Taxation Entry No.61 is relatable to ‘starch’ of any kind whereas Exemption Entry No.8 relates to products of ‘millet’ – Maize starch would be covered by taxation entry and not by exemption entry – Circular dated 8th October, 1998 does not run counter to provisions of the Act. (Paras 24, 25, 26, 27 and 28)
Result : Appeals dismissed.
Legal Category Hierarchy
Advocates appeared:
For the Appellant(s) : Mr. K. K. Mani, AOR Ms. T.archana, Adv. Mr. Rajeev Gupta, Adv. Mr. Vinay Rajput, Adv.
For the Respondent(s): Mr. Sabarish Subramanian, AOR Mr. C Kranthi Kumar, Adv. Mr. Vishnu Unnikrishnan, Adv. Mr. Naman Dwivedi, Adv. Mr. Danish Saifi, Adv. Mr. M. Yogesh Kanna, AOR.
For the Appellant(s) : Mr. K. K. Mani, AOR Ms. T.archana, Adv. Mr. Rajeev Gupta, Adv. Mr. Vinay Rajput, Adv.
For the Respondent(s): Mr. Sabarish Subramanian, AOR Mr. C Kranthi Kumar, Adv. Mr. Vishnu Unnikrishnan, Adv. Mr. Naman Dwivedi, Adv. Mr. Danish Saifi, Adv. Mr. M. Yogesh Kanna, AOR.
Table of Contents
2. Whether maize starch qualifies as an exempt product of millets or falls under the taxable category of sago and starch of any kind. (Para 4 , 6 )
3. Maize starch is a processed product distinct from raw maize; the phrase starch of any kind is inclusive and specifically covers maize starch. (Para 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 25 , 26 )
4. Specific taxing entries prevail over general exempting entries, and statutory clarifications regarding tax rates are retrospective as they explain implicit meanings. (Para 24 , 27 )
5. Appeals dismissed and the judgment upholding the taxability of maize starch is affirmed. (Para 30 )
6. Does maize starch qualify as an exempt product of millets under the Tamil Nadu General Sales Tax Act?
No. Maize is a raw product, whereas maize starch is a processed product. Since the exempting entry specifically lists products and excludes the word like, maize starch is not covered and instead falls under the inclusive category of starch of any kind. (Para 17 , 18 , 23 )
7. How should the phrase starch of any kind be interpreted in a taxation entry?
The word any is interpreted in a wide sense, meaning one, some, or all. In the context of a taxation entry, it is inclusive and admits no exception unless a specific excluding provision exists. (Para 18 , 20 , 21 )
8. Which entry prevails when a commodity is potentially covered by both a general exempting entry and a specific taxing entry?
Where a statute contains both a general provision and a specific provision, the specific provision must prevail. A specific description of a commodity in a taxing entry overrides a general description in an exempting entry. (Para 23 , 24 , 26 )
9. Are clarifications issued by the Commissioner regarding tax rates under Section 28-A of the Act retrospective?
Yes. Clarifications issued to make explicit what is otherwise implicit in the statute are retrospective in nature, as they clear confusion regarding the existing meaning of the entries. (Para 27 )
JUDGMENT :
DIPANKAR DATTA, J.
THE CHALLENGE
The present appeals before us, by special leave, have been carried by the appellant from orders passed by a Division Bench of the Madras High Court (“High Court”, hereafter). While the judgment and order 8th dated September, 2008 dismissing the Writ Petition No. 14283 of 1999 instituted by the appellant is challenged in C.A. No. 5731 of 2009, the order dated 10th February, 2009 dismissing a review application2[Review Application No. 135 of 2008 in W.P. No. 14283 of 1999] seeking a review of the aforesaid judgment and order is under challenge in C.A. No. 5732 of 2009.
RELEVANT FACTS
2. The relevant facts, leading to institution of the present appeals, are noticed hereunder:
a) The appellant, registered under the Tamil Nadu General Sales Tax Act, 1959 (“the Act”, hereafter), deals in maize starch since 1975. The classification of maize starch under the Act is the subject of dispute in the first of the two appeals.
b) The Government of Tamil Nadu, vide a Notification3[No. 89 of 1970 dated 14th March, 1970] (“Exemption Notification”, hereafter) exempted the products of millets including maize from tax payable under the Act. The relevant extract of the Exemption Notification reads as under:
“[…] the Governor of Tamil Nadu 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) amended4[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 amendment5[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 will prevail over a general entry in the Schedule. It was further stated that the process of obtaining maize starch from maize involves simple processing; therefore, maize starch will be classified as ‘maize products’ and covered by the Exemption Notification.
e) The Legislature next amended6[The TNGST (Amendment) Act, 1994 (Act No. 32 of 1994)] the Act w.e.f. 1st April, 1994. Entry No. 8 of Part B of Schedule III (“Exemption Entry No. 8”, hereafter) was inserted exempting “products of millets (rice, flour, brokens and bran of cholam, cumbu, ragi, thinai, varagu, samai, kudiraivali, milo and maize)” from taxation under the Act. The amendment retained the language of the Exemption Notification except that the word ‘like’ was omitted. Although, in effect, the Exemption Notification lost force with the amendment of the Schedule, nevertheless, the exemption on maize starch remained unchanged based on subsequent clarifications issued by the Commissioner on 31st December, 1996 and 6th May, 1997.
f) However, this position was followed by two subsequent developments -the latter being crucial for the present purpose. Firstly, Section 28-A was inserted w.e.f. 6th November, 1997 by way of an amendment7[The TNGST (Amendment) Act, 1997 (Act No. 60 of 1997)] to the Act which empowered, by way of a statutory provision, the Commissioner to issue clarifications concerning the rate of tax under the Act. Secondly, after the insertion of Section 28-A, the Commissioner issued a Circular dated 23rd June, 1998, clarifying that E
