TaxTMI 
TaxTMI 
2007 (11) TMI 569
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....f Commercial Taxes, Chennai to clarify the rate of tax applicable on the sale of "video compact disk" effected by them. According to the petitioner, the "video compact disk" is a CD media, meant to store digital files, text/images/graphics/drawing for optimum storage and it is also called a compact disk. Along with the application seeking clarification, the relevant product description documents were also enclosed, which clearly say that the petitioner was marketing the commodity as "Kodak Writable CD Media with INFOGUARD Protection System" and it was designed to store up to 580 MB with 63 minute media and 682 MB with 74 minute media. The Special Commissioner and Commissioner of Commercial Taxes, Chennai, by letter dated July 9, 1999, clarified that "video compact disk" falls under the category of "compact disc" in entry 52 of Part "D" of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. Subsequently, by another clarification dated August 27, 1999, it was further clarified that the rate of tax on the sale of "video compact disk" falling under the category of "compact disc", was reduced to four per cent with effect from April 1, 1999 by G.O. Ms. No. 72, dated M....
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....t accepted. The first appellate authority also held that the above mentioned item was not a sound-transmitting or sound-recording instrument, liable to tax at eight per cent and therefore, remanded the issue to the assessing officer with a direction to make a fresh assessment on the turnover, adopting the correct rate of tax as prescribed under the Act. Pursuant to the order of remand, the assessing officer, issued notice dated November 22, 2004, proposing to levy tax at 11 per cent on the turnover of Rs. 53,99,392, relating to the sale of "compact disc" under the residuary entry. By another notice dated August 31, 2005, the respondent proposed to revise the assessment on the turnover of Rs. 26,45,646 and proposed to levy tax at 11 per cent instead of eight per cent, as already levied at the time of original assessment. In response to the notices referred to above, the petitioner submitted their detailed replies on December 23, 2004 and September 26, 2005, stating that as per the clarification dated September 26, 1989, issued by the Special Commissioner and Commissioner for Commercial Taxes, Chennai, clarifying that the "video compact disk" sold by the petitioner was liable to tax ....
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....titioner submitted that once the Special Commissioner and Commissioner for Commercial Taxes, has issued clarifications under section 28A of the TNGST Act, treating the "video compact disk" as one, falling under the category of "compact disc" under entry 52 of Part "D" of the First Schedule to the TNGST Act, 1959, the assessing officer is bound by the clarifications and it is not open to him to act or advance any arguments, contrary to the interpretation of the competent authority. On the other hand, Mr. R. Mahadevan, learned Additional Government Pleader, submitted that the clarification issued by the Special Commissioner and Commissioner of Commercial Taxes was with respect to "video compact disk" and not a "writable compact disc". He further submitted that contention of the petitioner that "writable compact disc" sold by the petitioner would be liable to tax at eight per cent is not tenable, as the assessing officer, on comparative assessment of the product, has categorically found that the clarification issued by the Special Commissioner and Commissioner for Commercial Taxes, is not applicable to the product sold by the petitioner and therefore, this court should not interfer....
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.... said entry is extracted hereunder: "Sound recording and reproducing equipment (excluding item 49 in Part C) including dictaphones, car cassette players, tape-decks, tape players, compact disc player (including a combination of any of them) with or without wireless reception instruments and compact disc, magnetic tapes, micro-tapes and micro-fische for use therewith parts and accessories thereof and head cleaner in any form." Subsequently, the Government in G.O. Ms. No. 72, dated March 27, 1999 issued a Notification No. II(1)/CT/40(d-3)/99, reducing the rate of tax on the sale of "video compact disc" falling under the category of "compact disc" from 11 per cent to four per cent with effect from April 1, 1999. On the request of the petitioner dated May 17, 1999, the then Special Commissioner and Commissioner of Commercial Taxes, Chennai issued clarification dated August 27, 1999, informing the petitioner that "video compact disk", falling under the category of "compact disc" in entry 52 of Part "D" of the First Schedule to the TNGST Act, would be taxable at lesser rate. Thereafter, the Government issued orders in G.O. Ms. No. 11 CT, dated January 23, 2000, where, the....
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....1 per cent with effect from January 23, 2000 with reduction in rate to four per cent from April 1, 1999 to January 22, 2000 by notification under entry 52 of Part D to the First Schedule. The above entry contains the commodity compact disc whereas the writable compact discs sold by the dealers is not the same as the item goods mentioned under the category of sound recording and reproducing equipments, liable to tax at eight per cent. Hence, it cannot be concluded, that the meaning of the expression 'compact discs' in the entry 59 has the same meaning as that of compact disc dealt by the assessee. 'Writable compact disc' cannot be classified as sound recording and reproducing equipment and also the same cannot be construed as 'video compact disc' classifiable under entry 59 of Part C of the First Schedule. Further, their claim that compact disc would fall under entry 18 of Part B of the First Schedule is also not acceptable as the item 'compact disc' has not been explicitly included either in entry 18 or 87 of Part B of the First Schedule. The 'writable compact disc' cannot be lassified either as an integral part of a computer inasmuch a....