Suo motu tax clarification power under Tamil Nadu sales tax law may be issued, but assessing authorities decide taxability independently.

Section 28-A(2) of the Tamil Nadu General Sales Tax Act, 1959 is stated to confer suo motu power on the Commissioner to issue clarification on rate of tax or assessment procedure for uniformity in assessment and collection, including a clarification that differs from an earlier one. Such clarification is not conclusive against the assessing authority, which must still decide taxability independently on the facts of each case. The document further notes that the question whether rubber used in re-rubberising worn out spindles is exigible to sales tax depends on the nature of the process and the identity of the commodity, and cannot be declared finally in the abstract.

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Issues: (i) Whether the Commissioner of Commercial Taxes had power under section 28-A(2) to issue a suo motu clarification and supersede an earlier clarification on the same subject; (ii) whether the impugned clarification treating rubber used in re-rubberising worn out spindles as taxable could be quashed or the rubber could be declared not exigible to sales tax.

Issue (i): Whether the Commissioner of Commercial Taxes had power under section 28-A(2) to issue a suo motu clarification and supersede an earlier clarification on the same subject.

Analysis: Section 28-A(1) authorises clarification on an application by a registered dealer, while section 28-A(2) separately empowers the Commissioner to clarify any point concerning rate of tax or assessment procedure whenever he considers it necessary or expedient for uniformity in assessment and collection. The provision therefore confers suo motu power, and the fact that a later clarification differs from an earlier one does not by itself invalidate the exercise of power. The impugned clarification also recorded reasons for taking a different view.

Conclusion: The Commissioner had the power to issue the suo motu clarification, and the challenge on that ground fails.

Issue (ii): Whether the impugned clarification treating rubber used in re-rubberising worn out spindles as taxable could be quashed or the rubber could be declared not exigible to sales tax.

Analysis: The clarification concerned the nature of the process, the use of rubber sheets after manufacturing, and the possible change in the identity of the commodity. The Tribunal held that such questions are to be examined in assessment proceedings on the facts of each case, and that the assessing authority is not mechanically bound to follow the clarification but must take an independent decision after considering it. In that setting, the petitioners were not entitled to a declaration that the material was not taxable, and the impugned clarification was not liable to be struck down.

Conclusion: The request to quash the clarification and the declaration that the rubber was not exigible to sales tax were rejected.

Final Conclusion: All the original petitions were dismissed, and the impugned clarification was upheld.

Ratio Decidendi: A clarification issued under section 28-A(2) of the Tamil Nadu General Sales Tax Act, 1959 may be issued suo motu for uniformity in assessment, and it does not conclusively bind the assessing authority, who must still decide taxability independently on the facts of the case.

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