Exemption for pens extended to sketch pens; binding clarification protected the assessee and the tax assessment was set aside.

The exemption for "pens" under Entry No. 65(1) in Part B of the Third Schedule to the Tamil Nadu General Sales Tax Act was held to extend to sketch pens. A Commissioner's clarification stating that sketch pens fell within "pens" was binding on subordinate assessing authorities, especially because it was favourable to the assessee. As a result, tax could not be sustained on the turnover relating to sketch pens, and the assessment was set aside.

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Issues: Whether sketch pens fell within the expression "pens" in Entry No. 65(1) in Part B of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959, and whether the Commissioner's clarification treating sketch pens as covered by that entry was binding on subordinate assessing authorities.

Analysis: The relevant entry exempted "pens", and the clarification issued by the Commissioner stated that the expression included sketch pens. Such clarification, issued under the statute, was binding on subordinate officers, including assessing authorities, particularly where the clarification was favourable to the assessee. On that basis, the exemption available to pens extended to sketch pens as well, and the assessment sustaining tax on the turnover relating to sketch pens could not stand.

Conclusion: The issue was decided in favour of the assessee. Sketch pens were held to be covered by the exemption for pens, and the assessment on that turnover was set aside.

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