Summary
For assessment year 1998–99, maize starch fell within the specific entry taxing starch of every kind at four per cent, rather than the exemption for listed millet products. The 1998 circular clarified the existing statutory position and operated retrospectively. The Court dismissed the appeals while correcting the High Court’s reasoning about the earlier exemption notification’s statutory basis.
Issues
- Whether maize starch qualified for the millet-products exemption or the specific starch taxation entry for 1998–99.
- Whether the clarification dated 8 October 1998 could apply to the earlier period.
Provisions considered
- Schedule I, Part B, Entry 61; Schedule III, Part B, Entry 8, Tamil Nadu General Sales Tax Act, 1959The specific entry for sago and starch of any kind covered maize starch at four per cent. The exemption’s enumerated millet products did not extend to maize starch after omission of the illustrative word used in the former notification. (¶¶ 2, 8, 9, 10, 11, 12, 15, 16, 17, 18, 21, 22, 23, 24, 25, 26)
- Section 28-A, Tamil Nadu General Sales Tax Act, 1959The circular explained the meaning already implicit in the entries rather than changing the statutory levy, so the clarification was retrospective and consistent with the Act. (¶¶ 2, 27, 28)
- Section 17, Tamil Nadu General Sales Tax Act, 1959The earlier exemption notification did have statutory backing, contrary to the High Court’s reasoning; the relevant amended schedules nevertheless governed the disputed assessment year. (¶ 15)
Held
- The dispute had to be decided under the schedules applicable to 1998–99. The 2002 amendment removing maize from the exemption was outside that period and did not govern the case. Although the earlier notification had statutory authority, it had ceased to operate upon enactment of the relevant schedule exemption. (¶¶ 10, 12, 14, 15, 16)
- Omission of the illustrative word from the former notification restricted the exemption to the specifically listed millet products. Maize starch was a processed product distinct from the maize mentioned there, and the expression covering starch of any kind included maize starch. The preceding reference to sago did not restrict the entry to tapioca starch. (¶¶ 17, 18, 19, 20, 21, 22)
- The specific description of starch prevailed over the general description of millet products. On the language of these two entries, maize starch therefore belonged in the taxable category rather than the exempt category. (¶¶ 23, 24, 25, 26)
- The circular of 8 October 1998 made explicit a meaning already implicit in the statutory entries. A clarification of that nature necessarily operated retrospectively and did not contradict the Act. (¶¶ 27, 28)
- The High Court’s ultimate conclusion was upheld for the Supreme Court’s stated reasons. Both appeals were dismissed, with the parties bearing their own costs. (¶¶ 14, 29, 30)
Result
Appeals dismissed; denial of exemption and the challenged clarification upheld for the reasons stated by the Court. Parties to bear their own costs.