THE COMMERCIAL TAX OFFICER & ANR. v. MOHAN BREWERIES AND DISTILLERIES LIMITED

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A handling agencies which is, in effect what Section 65(105)(zr) provides for.” 59.3. In the case of India Cements Limited (supra), this Court noticed the declaration of law by the Constitution Bench in the case of Ratan Melting & Wire Industries (supra) that a circular which is B contrary to the statutory provisions has really no existence in law. In India Cements Limited, the circular in question was not found to be in conflict with any statutory provision or the applicable schemes and, therefore, the same was held binding on the adjudicating authority in the following words: – C “30. In the present case, it is not the case of the Revenue that the Circular dated 1-5-2000 is in conflict with either any statutory provision or the deferral schemes announced under the aforementioned government orders. We, therefore, hold that the said circular is binding in law on the adjudicating authority under the TNGST Act.” D

60Copy pinpoint60. The aforesaid and other decisions, essentially dealing with exemption notifications, have no application to the present case; and in any event, none of the decisions, as referred on behalf of the assessee or as referred by the High Court, could be read for any principle contrary to that laid down by the Constitution Bench in Ratan Melting & Wire E Industries (supra).

61Copy pinpoint61. For what has been discussed hereinabove, we need not examine as to whether the Clarifications/Circulars in question could be said to be such clarification as envisaged by Section 28-A of the Act because even if the Clarifications/Circulars in question are treated to be F those authorised by Section 28-A, they cannot have any effect over and above the interpretation of Section 7-A of the Act by the Courts. In other words, applicability of Section 7-A to the turnover in question could only be decided on the interpretation of the provision and its application to the given fact situation and not on the basis of Clarifications/Circulars G in question. Put differently, the so-called Clarifications dated 09.11.1989 and 27.12.2000 had not been of explaining the meaning of any doubtful term or expression in the statutory provision nor they were explaining the object and purport of the provision concerned. The said Clarifications/ Circulars had merely been the expression of the understanding of the concerned officer, be it SCCT or PCCT, about operation of Section 7-A H

THE COMMERCIAL TAX OFFICER & ANR. v. MOHAN BREWERIES 951 AND DISTILLERIES LIMITED [DINESH MAHESHWARI, J.]

of the Act vis-à-vis the purchase turnover of the empty bottles purchased A by the assessee. However, such understanding of the officer concerned turns out to be a pure misunderstanding, when it stands at contradiction or incongruous to the declaration of law by the Courts; and could only be ignored. The latest Circular of the year 2002, issued after decision of the jurisdictional Tribunal in the case of Appollo Saline Pharmaceuticals B (supra) could also be read only to the extent it is in conformity with the decision of the Tribunal (that came to be approved by the High Court) and in any case, even this circular cannot be decisive of the interpretation of Section 7-A of the Act. The decisive interpretation shall only be the one which is rendered in the binding decision/s of the Court. In continuity, we may also observe that various other decisions referred on behalf of the assessee, that modification of any particular circular or guideline or policy decision could only be made effective prospectively, have no application whatsoever to the present case.

62Copy pinpoint62. In the aforesaid view of matter, we have no hesitation in concluding that the High Court, after having found that purchase tax was leviable on the turnover in question under Section 7-A of the Act, could not have issued directions for any benefit to the assessee with reference to the Clarifications/Circulars dated 09.11.1989 and 27.12.2000, particularly when such Clarifications/Circulars do not stand in conformity with the statutory provision and its interpretation by the Courts. E

63Copy pinpoint63. Hence, the impugned order of the High Court, on the second question as regards the operation and effect of Clarifications/Circulars dated 09.11.1989 and 27.12.2000, cannot be approved.

64Copy pinpoint64. The net result of the discussion foregoing is that the purchase turnover of the empty bottles purchased by the assessee from the F unregistered dealers under bought note is exigible to purchase tax under Section 7-A of the Tamil Nadu Act; and the assessee cannot escape such liability on the strength of the Clarifications/Circulars dated 09.11.1989 and 27.12.2000 which do not stand in conformity with the statutory provision as also declaration of law by the Courts. G Other Question

65Copy pinpoint65. So far as the other question regarding taxability of cash discount on the price offered by the assessee to the Tamil Nadu State Marketing Corporation Limited is concerned, the High Court has ruled in favour of the assessee with reference to the decision in the case of Neyvli Lignite H

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A Corporation Ltd. and the clear expressions in Explanation 2(iii) to Section 2(r) of the Act. 65.1. The relevant provision reads as under:- “Section 2(r).- “turnover” means the aggregate amount for which goods are bought or sold, or delivered or supplied or otherwise disposed of in any of the ways referred to in clause (n), by a dealer either directly or through another, on his own account or on account of others whether for cash or for deferred payment or other valuable consideration, provided that the proceeds of the sale by a person of agricultural or horticultural produce, other than tea, and rubber (natural rubber, latex and all varieties and grades of raw rubber) grown within the State by himself or on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover. D *** *** *** Explanation (2) Subject to such conditions and restrictions, if any, as may be prescribed in this behalf- *** *** *** (iii) any cash or other discount on the price allowed in respect of E any sale and any amount refunded in respect of articles returned by customers shall not be included in the turnover; *** *** ***” 65.2. In view of the clear phraseology of the above extracted F Explanation, not much of discussion appears requisite as regards this issue that has rightly been decided by the High Court in favour of the assessee and not much of serious contentions have been put forward by the revenue in this regard. The impugned order of the High Court, to this extent, calls for no interference. G CONCLUSION

66Copy pinpoint66. In view of the above, the appeal filed by the revenue (Civil Appeal No. 7164 of 2013) is partly allowed by holding that the purchase turnover of the empty bottles purchased by the assessee from the unregistered dealers under bought note is exigible to purchase tax under H Section 7-A of the Tamil Nadu Act; and the assessee cannot escape

THE COMMERCIAL TAX OFFICER & ANR. v. MOHAN BREWERIES 953 AND DISTILLERIES LIMITED [DINESH MAHESHWARI, J.]

such liability on the strength of the Clarifications/Circulars dated A 09.11.1989 and 27.12.2000. As a necessary consequence, the appeal filed by the assessee (Civil Appeal No. 7165 of 2013) is dismissed. Civil Appeal Nos. 4416-4419 of 2014

67Copy pinpoint67. This set of appeals by the assessee pertaining to assessment years 1986-87, 1987-88, 1988-89 and 1989-90, directed against the common order dated 05.12.2013 passed by the High Court in a batch of tax revision petitions, involves essentially the same question on the applicability of Section 7-A of the Act against the assessee.

68Copy pinpoint68. Briefly put, the relevant background aspects relating to these appeals had been that by the respective assessment order pertaining to the said assessment years 1986-87, 1987-88, 1988-89 and 1989-90 the AO held the assessee liable for purchase tax against the purchase of empty bottles from unregistered dealers and also levied penalty on various scores like turnover relating to excise duty and vend fees as also the turnover relating to purchase tax. After the respective orders passed by the Appellate Authority, the matters ultimately travelled to the Tribunal in cross appeals preferred by the assessee and by the State. The Tribunal, by its common order dated 09.09.2002, decided various issues including those relating to purchase tax under Section 7-A of the Act and levy of penalty in relation to the turnover pertaining to excise duty, vend fee and purchase tax. So far the issue relating to purchase tax was concerned, the Tribunal took the view that the assessee was liable for purchase tax under Section 7-A of the Act while relying upon the decision of the High Court in Appollo Saline Pharmaceuticals (supra) and of this Court in Premier Breweries (supra).

69Copy pinpoint69. Aggrieved by the order so passed by the Tribunal, the assessee filed Tax Revision petitions, being Tax Case (Revisions) Nos. 1667,1669, 1857 of 2008 and 13 of 2009 before the High Court. The High Court, by its impugned common order dated 05.12.2013, has partly allowed the said petitions while deciding the issues pertaining to penalty in favour of the assessee but, has dismissed the same in relation to the levy of purchase tax under Section 7-A of the Act. In regard to the issue of purchase tax, the High Court relied on the reasoning given in its earlier order dated 10.09.2004 for assessment year 1996-97, which we have taken note of hereinbefore. The assessee has, therefore, assailed the said common order dated 05.12.2013 insofar as the High Court has H

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A confirmed its liability towards purchase tax under Section 7-A of the Act for the aforesaid assessment years 1986-87, 1987-88, 1988-89 and 1989- 90 in Civil Appeal Nos. 4416-4419 of 2014.

70Copy pinpoint70. What has been discussed and held hereinbefore in relation to order dated 10.09.2004, equally applies to this set of appeals too. B Therefore, the High Court has rightly decided the issue of levy of purchase tax against the assessee in its order dated 05.12.2013 and no case for interference at the instance of the assessee is made out.

71Copy pinpoint71. Accordingly, Civil Appeal Nos. 4416-4419 of 2014 filed by the assessee stand dismissed. C Ankit Gyan Appeals disposed of.