N.KUMAR, J. - (1.) THE petitioner in this petition is seeking a writ of certiorari for quashing of annexure C, the clarification dated December 11, 2007 and in the alternative for a declaration that it would apply prospectively and not retrospectively.
(2.) THE petitioner is a dealer registered under the provisions of the Karnataka Value Added Tax Act, 2003 (for short, hereinafter referred to as "the Act"). He is a commission agent carrying on the business as a distributor for sale of aluminum composite panel among other products. In order to have an absolute clarity on the aspect of the appropriate rate of tax applicable on the sale of goods he filed an application under Section 59(4) of the Act to the second respondent requesting for clarification of the rate of tax applicable on aluminium composite panel and PVC flexible film on December 8, 2005. Along with the application he also enclosed copies of the bill of entries relating to import of these goods in which the commodity imported was described as "aluminum (plastic composite) panel sheet interior". It falls under Chapter 39 of the Central Excise Tariff Act, 1985 (for short, hereinafter referred to as, "the Tariff Act") under Heading No. 3920, sub -heading No. 1019 and sub -heading No. 4900. The said goods find a place under entry 51 of the Third Schedule appended to the Act. The second respondent issued a clarification dated February 2, 2006 clarifying to the effect that PVC flexible film and aluminium panel sheets covered under the Central Excise Tariff Act Code 3920.49.00 and 3920.10.19, respectively, fall under serial No. 144 of the Notification bearing No. FD 197 CSL 2005(6) and would consequently be liable to tax at the rate of four per cent, of the Act. Annexure B is the said clarification dated February 2, 2006. Subsequently, the second respondent served notice on the petitioner dated May 29, 2007 calling upon the petitioner to show cause as to why the clarification dated February 2, 2006 ought not to be withdrawn since the aluminium composite panel was excisable to tax under Section 4(1)(b) of the Act at the rate of 12.5 per cent, and not at four per cent, as clarified earlier. The petitioner appeared through the authorised representative and contested the said show -cause notice. However, the second respondent overruled the objections of the petitioner and withdrew the clarification dated February 2, 2006 and issued a fresh clarification dated December 11, 2007. According to the subsequent clarification, aluminium panel sheets and aluminium composite panel sheets are taxable at the rate of 12.5 per cent, in terms of Section 4(1)(b) of the Act. It was also made clear that the earlier clarification dated February 2, 2006 stood withdrawn from the date of its issue. Annexure C is the said clarification. Aggrieved by the same, the petitioner has preferred this writ petition.
(3.) THE respondents have filed a counter. It was contended that on a thorough examination of the goods in question by the second respondent, it revealed that the commodity in question is made of aluminium sheets on either side and thick plastic sheet in the middle. It is sold/dealt by the dealer in building materials/decorative tiles materials. It is not dealt by the petitioner as plastic goods. It is used for fixing on the wall in building and used as industrial input. Central Excise Tariff Code 3920.10.19 relates to plastic articles combined with other material. Hence, for a commodity to fall under this code, it should predominantly be a plastic article and known in trade and dealt as an article of plastic. The commodity dealt by the petitioner is aluminium panel sheets and aluminium composite panel sheets falling under the Central Excise Tariff Code 7606.11.90. Therefore, it cannot be classified as plastic articles. Therefore, the clarification dated February 2, 2006 was issued on the representation made by the petitioner that the commodity in question falls under the Central Excise Tariff Code 3920.10.19, which was found to be incorrect and the same was withdrawn. As the said clarification was based on misrepresentation made by the petitioner, the same was withdrawn with retrospective effect after providing sufficient opportunity of hearing to the petitioner. An entry cannot have two meanings, one prior to the clarification and subsequent to the clarification. The Commissioner has authority in law to withdraw the clarification. Subsequent clarification is nothing but rectification of the earlier clarification. The modification made to the clarification relates back to the date of issuance of the clarification. Therefore, the petitioner cannot challenge the clarification dated December 11, 2007 on the ground that it cannot be given retrospective effect from the date of notification. The said clarification is applicable to the entry from the date of its incorporation in the Act. Therefore, the respondents have sought for dismissal of the writ petition.;