IMPORTANT POINT
Where a statute contains both a general provision as well as a specific provision, latter must prevail.

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