Case: Bengal Iron Corporation Vs. Commercial Tax Officer

For the assessment year 1989-90, the Commercial Tax Officer, Narayanguda Circle, Hyderabad levied sales tax upon the turnover relating to said products treating them as general goods. He overruled the petitioners contention that the said products are declared goods liable to tax at the rate of 4% only. The assessees appeal preferred before the Appellate Deputy Commissioner is still pending. Evidently because no stay was granted pending the said appeal, a notice was issued to the appellant calling up on him to pay the tax assessed, against which notice he preferred a writ petition, being W.P. No. 9315 of 1992, in the High Court of Andhra Pradesh. His main contention in the writ petition was that by virtue of G.O.Ms. No. 383 Revenue(s) Department dated April 17, 1985, his products are declared goods and are, therefore, liable to tax only @ 4%2.The Division Bench of the High Court dismissed the writ petition following its earlier decision in Deccan Engineers v. State of A.P.1 In Deccan Engineers it was held by the A.P. High Court that the expression cast iron in Item (2)(i) of the Third Schedule to the Andhra Pradesh General Sales Tax Act does not include cast-iron pipes, manhole covers and bends etc. In this appeal, the correctness of the said view is questioned.

Reasoning: 18. So far as clarifications/circulars issued by the Central Government and/or State Government are concerned, they represent merely their understanding of the statutory provisions. They are not binding upon the courts. It is true that those clarifications and circulars were communicated to the concerned dealers but even so nothing pr events the State from recovering the tax, if in truth such tax was leviable according to law. There can be no Estelle against the statute. The understanding of the Government, whether in favour or against the assessee, is nothing more than its under standing and opinion. It is doubtful whether such clarifications and circulars bind the quasi-judicial functioning of the authorities under the Act. While acting in quasi-judicial capacity, they are bound by law and not by any administrative instructions, opinions, clarifications or circulars. Law is what is declared by this Court and the High Court to wit, it is f or this Court and the High Court to declare what does a particular provision of statute say, and not for the executive. Of course, the Parliament/Legislature never speaks or explains what does a provision enacted by it mean. (See Sanjeev Coke Mfg. Co. v. Bharat Coking Coal Ltd.4)19. Now coming to G.O.Ms. No. 383, it is undoubtedly of a statutory character but, as explained hereinbefore the power under Section 42 cannot be utilised for altering the provisions of the Act but only for giving effect to the provisions of the Act. Since the goods manufactured by the appellant are different and distinct goods from cast iron, their sale attracts the levy created by the Act. In such a case, the Government cannot say, in exercise of its power under Section 42(2) that the levy created by the Act shall not be effective or operative. In other words, the said power cannot be utilised for dispensing with the levy created by the Act, over a class of goods or a class of persons, as the case may be. For doing that, the power of exemption conferred by Section 9 of the A.P. Act has to be exercised. Though it is not argued before us, we tried to see the possibility but we find it difficult to relate the order in G.O.Ms. No. 383 to the power of the Government under Section 9, apart from the fact that the nature and character of the power under Section 42 is different from the one conferred by Section 9. As exemption under Section 9 has to be g ranted, not only by a notification, it is also required to be published in the Andhra Pradesh Gazette. it is not suggested, nor is it brought to our notice, that G.O.Ms. No. 383 was published in the Andhra Pradesh Gazette. This does not, however, preclude the Government of Andhra Pradesh from exercising the said power of exemption, in accordance with law, if it is so advised. We need express no opinion on that score20. The learned counsel for the appellant brought to our notice that the very same Division Bench which rendered the decision in Deccan Engineers had rendered another decision in Tax Revision Case No. 93 of 1990 (State of A. P. v. Pratap Steel) applying G.O.Ms. No. 383 and giving relief to the dealer. It is argued that the Division Bench ought to have taken the same view in Deccan Engineers1 as well. We have perused the decision in Pratap Steel. It is a short judgment dismissing the revision applying G.O.Ms. No. 383. It does not appear that the matter was argued in the manner it was in Deccan Engineers. The said argument, therefore, cannot advance the case of the appellant21. In this view of the matter it is not necessary for us to go into the question whether the word including in Sect ion 14(iv)(i) of Central Sales Tax Act and item (2)(i) of the Third Schedule to the A.P. Act has the effect of making the said sub-clause exhaustive or otherwise22. Accordingly, we hold that the cast iron castings manufactured by the appellants do not fall within the expression cast iron in Entry 2(i) of the Third Schedule to the Andhra Pradesh General Sales Tax Act or within Section 14(iv)(i) of the Central Sales Tax Act.