2011 (1) TMI 1231

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....ed under Entry 28 of Part C of the First Schedule or under Entry 2 of Part B of the First Schedule to the TNGST Act, 1959. 2. The petitioner in T.C.(R) Nos.642 and 646 of 2006 is one and the same while T.C.(R)No.643 of 2006 is by another petitioner. Both the petitioners are dealers in various items including the sale of 'star anise seeds'. The assessment year insofar as T.C.Nos.642 and 646/2006 are concerned pertains to 1997-98 and 1998-99 respectively and T.C.No.643 of 2006 pertains to 1998-1999. The Assessing Authority took the view that 'star anise seeds' is not one of the classified items in the Schedule and therefore, the same will fall under the residual Entry, namely, Entry 67 of Part D of the First Schedule, which....

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....Assessing Authority should follow the clarification issued in the said letter. A copy of the said letter was also enclosed along with the subsequent letter dated 13.03.2001. The petitioners, therefore, contended before the Tribunal by relying upon the clarification letter dated 21.11.2000 issued under Section 28-A of the TNGST Act and claimed that the issue may be remitted back to the Assessing Authority to follow the aforesaid clarification. The Tribunal however held that the clarification letter was not binding on the Tribunal and that all its endeavour was only to classify the commodity according to law and decide the rate of tax applicable. So holding, even while allowing the petitioners' appeals, the Tribunal held that the 'sta....

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....te of tax would be applicable only from the date of issuance of clarification letter and not for the earlier years. The learned Government Advocate, therefore, contended that having regard to the prescription contained in Section 28-A(3) of the Act, which says that the clarification letters binding on subordinate authorities and when there was an earlier clarification letter issued in the year 1996, which stated that the rate of tax applicable to 'star anise seeds' was 11% under the residual Entry 67 of Part D, which came to be replaced by the subsequent clarification letter dated 21.11.2000, the claim of the petitioners for remittal order to the Assessing Authority was not justified. 9. Having heard the learned counsel for the r....