TaxTMI 
TaxTMI 
2017 (5) TMI 735
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....2 dated 30.06.2012. 4. Mr. Totala and Mr. Ladda, the learned counsel for petitioners strenuously contend that, the petitioners sell unmanufactured tobacco. The learned counsel submit that, Sec. 45­A of the Maharashtra Value Added Tax Act 2002 (for short "Act of 2002") was amended with effect from 01.02.2006. The learned counsel submit that, the petitioners do not have any objection about levy of Value Added Tax (for short "VAT") on unmanufactured tobacco, as stated in the explanation of the notification dated 31st March, 2012 with effect from 01st April, 2012. According to the learned counsel, the impugned circular dated 30.06.2012 is contrary to the notification dated 31.03.2012. The learned counsel submit that, when explanation seeks to give artificial meaning and brings about the change effectively in the existing law and in addition states to have come into force with effect from a future date, there is no principle of interpretation, which would justify reading the explanation as operating retrospectively. According to the learned counsel, as per the provisions of the Act of 2002, the manufacturer shall levy the VAT on sell and collect it from the petitioners and then t....
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....terpretation of the provisions of law, as it is clarificatory in nature. The interpretation of the notification shall be independent of the circular. The learned A. G. P. further submits that, entry No. 12 of Schedule D and E covers unmanufactured tobacco. Further Schedule E entry E­1 provides that, all goods not covered under any other schedules are covered under the said entry. The petitioners are selling the tobacco under brand name. These are covered under clause 2 and 3 of Chapter 24 of the Central Excise Tariff Act under the head 2401. As such cannot be termed as unmanufactured tobacco. The explanation is of clarificatory nature. For incorrect assessment the remedy of appeal is provided and appeals are either decided or pending. The petitioners have alternate remedy, which they can avail. 7. Upon consideration of the arguments canvassed by learned counsel for respective parties, it is manifest that we will have to deal with Entry 45­A, it's explanation, so also entry 2401. For the sake of convenience the same are reproduced below. MAHARASHTRA VALUE ADDED TAX ACT 2002 SCHEDULE ­ A 1. ......... Before amendment 45A (a) unman....
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....hy;Tobacco for manufacture of hookah tobacco kg 10.00% 2401 20 90 ­­ Other kg 10.00% 2401 30 00 ­­ Tobacco refuse kg 10.00% 8. The moot question would be reading the explanation, as a substantive amendment or clarificatory. 9. Entry 45­A of the Act of 2002 was amended by notification dated 31.03.2012 by the Government exercising its powers U/Sec. 09 of the Act of 2002. Entry 45­A as it stood prior to amendment of 31.03.2002, it contained Clause ­ B with no explanation. Vide notification dated 31.03.2012 Clause ­ B which dealt with biris is deleted and an explanation is added. The bone of contention between the parties is the date of applicability of amendment. By the explanation, it is declared that the unmanufactured tobacco shall not include unmanufactured tobacco when sold in packets under the brand name. Prior to 31.03.2012, the legislature did not make any distinction between unmanufactured tobacco sold in brand name or otherwise. The entry 45A is part of Schedule ­ A, which details the list of goods for which the rate of tax is nil. The unmanufactured tobacco covered under tariff heading....
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....ufactured tobacco sold in brand name is taxable. We are only concerned with unmanufactured tobacco covered under heading 2401 of CETA. 13. Considering the trade circular dated 30th March, 2007 and 06th August, 2009, it would be clear that the Department considered the unmanufactured tobacco covered under Chapter Head 2401 of the Central Excise and Terrifs Act exempted from tax. The said position subsisted till 31.03.2012. It would appear that, no distinction was made between sale of unmanufactured tobacco in packet or in retail or whether branded or not branded. For the first time the said distinction is made by virtue of explanation to Entry No. 45­A of the Maharashtra Value Added Tax Act 2002. 14. The explanation no doubt begins with the expression "for removal of doubts", however, the same does not appear to be plain and conclusive in nature. The operative implication of the expression "for removal of doubts" in the explanation does not show nexus to legislative intent of taxing liability. By virtue of explanation a particular class is created. By inserting explanation to Entry No. 45­A. New class is created i. e. unmanufactured tobacco sold in packets under a bran....