ORDER
P. Vishwanatha Shetty, J.
1. The petitioners, in this batch of petitions, have challenged either the order of reassessment made under section 12A of the Karnataka Sake Tax Act, 1957 (hereinafter referred to as 'the Act') or the proposition notice issued proposing to reassess the assessment earlier made by the assessing authority under section 12A of the Act. Since the common question of law is raised, all these petitions are heard together and disposed of by this common order.
2. The short question that arises for consideration in these petitions, is as to whether the petitioners are liable for payment of turnover tax as provided under section 6B of the Act for the period commencing from April 1, 1991 to August 27, 1991.
3. A few facts, which has bearing for disposal of these petitions and which are not in serious controversy, may be set out as hereunder :
The petitioners are all dealers registered under the Act, who are engaged in the business of sale and purchase of raw silk and silk yarn. On the returns field by the petitioners, the assessing authorities passed orders of assessment and in the orders of assessment so passed by the assessing authorities, it was held by the concerned assessing authorities that all these petitioners are not liable for payment of turnover tax in respect of the business carried on by them in respect of raw silk and silk yarn for the period commencing from April 1, 1991 to August 28, 1991 in respect of the assessment year 1991-92. The assessing authorities while exempting the petitioners from payment of turnover tax, have relied upon the circular dated October 1, 1991, issued by the Commissioner of Commercial Taxes in No. MCA.CR. 118/91-92, a copy of which has been produced as annexure E to Writ Petition Nos. 22880 and 22881 of 1997, wherein he had directed all the officers of the Department of Sales Tax not to collect turnover tax with effect from April 1, 1991 from dealers in raw silk and silk yarn. However, subsequently, the assessing authorities have passed the impugned orders of reassessment/issued impugned proposition notices proposing to reassess the petitioners under section 12A of the Act, on the ground that the liability of the petitioners for payment of tax for the period commencing from April 1, 1991 to August 27, 1991, has been escaped. As stated earlier, the said orders of assessment/proposition notices are challenged by the petitioners in this batch of petitions.
4. There is no dispute that up to March 31, 1990, raw silk and silk yarn were altogether exempted from tax under the Act, as it is one of the items specified in entry 38-A of the Fifth Schedule to the Act, which provided for total exemption from payment of tax under the Act. Therefore, till April 1, 1990, there was no liability on the dealers in raw silk and silk yarn to pay turnover tax. However, with effect from April 1, 1990, entry 38-A came to be deleted from Fifth Schedule to the Act and raw silk was brought under item 7 of Third Schedule and silk yarn was brought into entry 22 of the Second Schedule, thereby making them liable for payment of purchase tax on raw silk and sales tax on silk yarn. However, in view of the representation given, the State Government, in exercise of the power conferred under section 8A of the Act, issued notification dated March 27, 1991, a copy of which has been produced as annexure A to Writ Petition Nos. 22880 and 22881 of 1997, exempting with effect from April 1, 1991 the tax payable by a dealer under section 5 of the Act, on purchase of raw silk and silk yarn. The notification, annexure A, was preceded by a statement made by the Chief Minister of Karnataka on the Floor of the House while presenting the Budget for the year 1991-92, wherein he had declared that the tax on raw silk and silk yarn would be withdrawn. Thereafter, the Commissioner issued circular dated April 27, 1991 informing all the officers of the department that the question regarding withdrawal of turnover tax and Central sales tax on raw silk and silk yarn, is being examined by the Government in view of the statement made by the Chief Minister declaring that the sale tax on raw silk and silk yarn would be withdrawn. In the said circular, a copy of which has been produced as annexure B in Writ Petition Nos. 22880 and 22881 of 1997, the officers of the department were further directed not to demand turnover tax and Central sales tax on raw silk and silk yarn until the position is clarified by the Government. It is useful to extract the said circular, which reads as hereunder :
'COMMISSIONER OF COMMERCIAL TAXES
Circular No. 4/90-91
Sub : Exemption of raw silk and silk yarn from sales tax - Reg.
Ref : D.O. Letter No. FD 97 CSL 91 dated 27-4-1991 from the Finance Secretary Government of Karnataka.
In the Budget Speech for 1991-92, the honourable Chief Minister has declared that sales tax on raw silk yarn would be withdrawn. In pursuance of this declaration, a notification under KST Act, 1957, has also been issued. However, representations have been made to Government that turnover tax and Central sales tax is being demanded on raw silk and silk yarn by the departmental authorities. The intention at the time of budget was to examine the exemption of all the taxes on raw silk and silk yarn. The matter is still under examination by the Government. In the circumstances, all departmental officers are hereby instructed not to demand turnover tax and Central sales tax on raw silk and silk yarn until the position is examined and clarified by the Government.
Sd/-
Commissioner of Commercial Taxes.'
Thereafter, the State Government, by means of notification dated August 28, 1991, a copy of which has been produced as annexure C in Writ Petition Nos. 22880 and 22881 of 1997, in exercise of the power conferred on it by sub-section (3) of section 8A of the Act, varied the notification dated March 27, 1991, a copy of which has been produced as annexure A in the writ petitions referred to earlier, wherein it was notified that the words and figure 'section 5 of' referred to in the notification dated March 27, 1991 (i.e., annexure A) shall be omitted. Therefore, there is no dispute that with effect from August 28, 1991, the turnover tax is not being levied on dealers of raw silk and silk yarn.
5. Sri K. P. Kumar, learned counsel appearing for the petitioners, in support of the challenge made in these petitions, made two submissions. Firstly, he submitted that the exemption granted by means of notification, annexure C, dated August 28, 1991, dates back to the date on which exemption came to be granted from levy of tax under section 5 of the Act. Elaborating this submission, he submitted that while considering the effect of the notification, annexure C, issued under section 8A of the Act, it must be borne in mind the background and the circumstances under which the said notification came to be issued. In this connection, he drew my attention to the circular of the Commissioner, annexure B dated August 27, 1991 culled out above, wherein the Commissioner has referred to the statement made by the Chief Minister on the Floor of the House in the Budget Speech, wherein he has declared that the sales tax on raw silk and silk yarn would be withdrawn and the question of grant of exemption from payment of turnover tax is being examined by the Government; and till then, directions were given to the officers not to collect the turnover tax on raw silk and silk yarn. The learned counsel further pointed out that it was understood by the State and its authorities that the levy of turnover tax is exempted with effect from April 1, 1991 and, therefore, it must be held that the notification, annexure C, dated August 28, 1991 is retrospective in operation. It is his further submission that when undisputedly turnover tax was not levied prior to April 1, 1991 and subsequent to August 28, 1991, it does not stand to reason to take the view that the tax was leviable only for the period from April 1, 1991 to August 28, 1991. In support of this submission, he relied upon the observations made by this Court in the case of Radhakrishnaiah Shetty and Sons v. Commissioner of Commercial Taxes [1994] 94 STC 226 and drew my attention to the statement made by this Court wherein it is observed that no tax was leviable under the Act in respect of twisted silk prior to April 1, 1990 as well as after April, 1990. It is useful to extract the said observation made by this Court, which reads as hereunder :
'Legislative history may be referred here. Prior to April 1, 1990, raw silk (thrown silk or twisted silk or spun yarn) was found in Sl. No. 38-A of the Fifth Schedule. Therefore, till April 1, 1990, sale, purchase or turnover in respect of twisted silk was statutorily exempted from the tax levied under the Act. After April 1, 1991, again, twisted silk was brought out of the taxation net by virtue of a notification dated March 27, 1991 read with the notification dated August 28, 1991. In other words, undisputedly, no tax was leviable under the Act (including the tax under section 6B) in respect of twisted silk prior to April 1, 1990, as well as, after April 1, 1991.'
In the light of the aforesaid observations made by this Court, Sri Kumar would emphasize and submit that it is not disputed by the State and its authorities before this Court on an earlier occasion that no turnover tax was leviable under section 6B of the Act in respect of raw silk and silk yarn after April 1, 1991. He further submitted that this position is made clear by the Commissioner in the circular, annexure E, issued by him in exercise of the power conferred on him under section 3A of the Act.
(a) Secondly, he submitted that even assuming that the turnover tax came to be exempted only from August 28, 1991 as contended by the State and it has no retrospective operation, it is not permissible for the authorities in view of the circular, annexure E, issued by the Commissioner to reopen the assessments already made. According to Sri Kumar, the circular issued by the Commissioner in exercise of the power conferred on him under section 3A of the Act, is binding on all the officers subordinate to him. Elaborating this submission, Sri Kumar pointed out that when the assessing authorities acting upon the circular in question have passed an order of assessments granting exemption to the petitioners from levy of turnover tax for the period from April 1, 1991 to August 27, 1991, cannot, now, in the guise of exercising the power conferred on them under section 12A of the Act, reopen the assessment which has been properly done. He submits that the power conferred on the assessing authorities under section 12A of the Act cannot be exercised in a situation like this. It is his further contention that the circular, annexure E, issued by the Commissioner is consistent with the object sought to be achieved in the notification, annexure C, by granting exemption from payment of turnover tax with effect from April 1, 1991; and for any reason, even if it is to be held that the circular, annexure E, issued by the Commissioner is not consistent with the intendment of the notification, annexure C, dated August 28, 1991, so long as the circular holds the field, it is binding on the officers subordinate to the Commissioner and it is not permissible for them to go back on that and reopen the assessments earlier made. He also submitted that the circular, annexure E, came to be issued by the highest authority of the Department of Sales Tax, who was fully aware of the background and the circumstances in which the notification, annexure C, came to be issued and the object the said notification is intended to achieve. According to the learned counsel, if the background of the issue of the notification, annexure C, is considered, it would be clear that the same came to be issued in the light of the statement made by the Chief Minister on the Floor of the House that exemption from levy of all types of taxes under the Act would be granted on raw silk and silk yarn and the same was further clarified by the Commissioner in his circular, annexure B, dated April 27, 1991. The learned counsel also submitted that even if the circular is contrary to the provisions of section 8A of the Act as sought to be made out by the State, still the circular is binding on the officers of the department. In support of the second submission, referred to above, made by the learned counsel, he relied upon the decisions in (1) J. S. Udupi v. Commissioner for Commercial Taxes in Karnataka , (2) Commissioner of Income-tax, Kerala-I v. B. M. Edward, India Sea Foods, Cochin : [1979]119ITR334(Ker) , (3) Bangalore Wood Industries v. Asst. Commissioner of Commercial Taxes (Assessment), Hassan and (4) Ranadey Micronutrients v. Collector of Central Excise : 1996(87)ELT19(SC) .
6. However, Sri Shivayogiswamy, learned Government Pleader, strongly refuting the submissions of Sri Kumar, submitted that the notification, annexure C, prima facie does not show that the notification is retrospective in operation and when the notification has not been made retrospective in operation, it is not permissible to read the said notification as retrospective in operation and grant exemption from levy of turnover tax with effect from April 1, 1991. The learned Government Pleader pointed out that the notification, annexure C, has been issued under sub-section (3) of section 8A of the Act and it is not permissible for the executive to grant exemption retrospectively from levy of tax which made leviable under section 6B of the Act. He further pointed out that since, in the notification, annexure C, exemption of levy of turnover tax under section 6-B has been granted only with effect from August 28, 1991, it is not permissible for the Commissioner to issue the circular, annexure E and grant exemption from levy of the tax with effect from April 1, 1991. It is his further submission that what is not permissible under section 8A of the Act, cannot be held to be valid on the basis of the circular, annexure E, issued by the Commissioner.
7. After giving my anxious consideration to the rival contentions advanced by the learned counsel appearing for the parties, I am of the view that the petitioners are entitled to succeed in these petitions.
8. In so far as the first contention of Sri Kumar that the exemption granted in the notification, annexure C, dates back to April 1, 1991 though the notification, annexure C, is dated August 28, 1991, is concerned, though the observation made by this Court in the case of Radhakrishnaith Setty and Sons [1994] 94 STC 226 wherein this Court has observed that 'no tax was leviable under the Act (including the tax under section 6B) in respect of twisted silk prior to April 1, 1990, as well as, after April 1, 1991', it prima facie supports the contention of Sri Kumar, I am of the view that the said observation made by this Court in the case of Radhakrishnaith Setty and Sons [1994] 94 STC 226, must be considered only as an obiter as the question whether the exemption granted in the notification, annexure C, dates back to April 1, 1991 or not, was not the subject-matter of issue in the said case and the same was not considered by the court. Further, since I am inclined to accept the second submission of Sri Kumar, I find it unnecessary to consider his first submission except observing that the said submission is not totally without any basis.
9. In so far as the second submission of Sri Kumar is concerned, I find that the said submission merits acceptance. It is not in dispute that the circular, annexure E, has been issued by the Commissioner in exercise of the powers conferred on him under section 3A of the Act. The said section reads as follows :
'3-A. Instructions to subordinate authorities. - (1) The State Government and the Commissioner may from time to time, issue such orders, instructions and directions to all officers and persons employed in the execution of this Act as they may deem fit for the administration of this Act, and all such officers and persons shall observe and follow such orders, instructions and directions of the State Government and the Commissioner :
Provided that no such orders, instructions or directions shall be issued so as to interfere with the discretion of any appellate authority in the exercise of its appellate functions. (2) Without prejudice to the generality of the foregoing power, the Commissioner may, on his own motion or on an application by a registered dealer liable to pay tax under the Act, if he considers it necessary or expedient so to do for the purpose of maintaining uniformity in the work of assessments and collection of revenue, clarify the rate of tax payable under this Act in respect of goods liable to tax under the Act, and all officers and persons employed in the execution of this Act shall observe and follow such clarification :
Provided that no such application shall be entertained unless it is accompanied by proof of payment of such fee, paid in such manner, as may be prescribed. (3) All officers and persons employed in the execution of this Act, shall observe and follow such administrative instructions as may be issued to him for his guidance by the Joint Commissioner within whose jurisdiction he performs his functions.'
From a plain reading of sub-section (1) of section 3A of the Act, it is clear that the Commissioner is conferred with the power to issue such orders, instructions and directions to all officers and persons employed in the execution of the Act as he may deem fit for the administration of the Act, and all such officers and persons should observe and follow such orders, instructions and directions. Therefore, when the instructions or the directions issued by the Commissioner to the persons employed in the execution of the Act, are statutorily made binding on them and it is made mandatory on such officers/persons to follow such orders and instructions, I am unable to accede to the submission of the learned Government Pleader that it was open to the assessing authorities to reopen the assessments already made by them following the instructions given in the circular, annexure E issued by the Commissioner, in exercise of the power conferred on the assessing authorities under section 12A of the Act. It is not in dispute that the assessment orders were passed by the assessing authorities following the instructions given in the circular, annexure E. In my view, the power conferred on the assessing authority under section 12A of the Act cannot be exercised by him to reopen the assessments completed on the basis of the circular instructions issued by the Commissioner in exercise of the power conferred on him under sub-section (1) of section 3 of the Act. The assessment made in such a case cannot be treated or construed as an escaped assessment or under-assessment or assessment made at a rate lower than which it is assessable under the Act or any deductions and exemptions wrongly allowed by the assessing authority. What has been properly done by the assessing authority following the circular instructions given by the Commissioner under section 3A cannot be suo motu treated by the assessing authority in the purported exercise of the power conferred under section 12A of the Act as an escaped assessment or under-assessment or an exemption or deduction wrongly allowed. Therefore, I am of the view that the impugned orders of assessment or the proposition notices issued under section 12A of the Act, are liable to be quashed. Before I do that, it may be necessary to refer to some of the decisions relied upon by the learned counsel for the petitioners, which support the view I have taken above.
10. (a) In the case of J. S. Udupi , while considering the binding force of the circular issued by the Commissioner under section 3A of the Act, the Division Bench of this Court speaking through Shivashankar Bhat, J. (as he then was), has, at paragraphs 10 and 11, observed as follows :
'10. The learned Government Advocate referred to section 13(2A) of the Act to contend that the Commissioner had no competence to make any order giving up of the penalty and the effect of clause 13 will be to give up the statutory penalty. It is true that under the said provision, it is only the State Government which can remit either whole or in part, the penalty payable thereunder. But here, we are concerned with the instructions issued by the Commissioner. Even if the instructions are opposed to the plain language of the statutory provision, still the instructions are binding on the subordinate authorities in view of section 3A of the Karnataka Sales Tax Act.
11. In K. P. Varghese v. Income-tax Officers : [1981]131ITR597(SC) ; while considering a similar provision under section 119 of the Income-tax Act, 1961, the Supreme Court held that the circulars issued by the Central Board of Direct Taxes are binding on all officers and persons employed in the execution of the Act even if they deviate from the provisions of the Act.'
(b) The Full Bench decision of the Kerala High Court relied upon by Sri Kumar in the case of Commissioner of Income-tax, Kerala-I v. B. M. Edward, India Sea Foods, Cochin : [1979]119ITR334(Ker) supports the view I have taken above. At pages 338 and 339, the Kerala High Court speaking through Gopalan Nambiyar C.J., has observed as hereunder :
'The section sufficiently brings out the object and the scope of the circulars. Sub-section (2) requires that in certain cases the circulars are to be published and circulated in the prescribed manner for general information. We have little doubt that although the circulars are primarily meant to serve as guidelines and binding upon the subordinate authorities vested with the administration of the I.T. Act, some of them, from their nature and content, do confer some privileges and right on the assessee whose cases have to be assessed by the authorities concerned. There may be circulars which affect only certain administrative or procedural aspects; there may equally be circulars which affect certain important rights in regard to assessment of the assessees. This has been noticed and is sufficiently implicit in the provisions of sub-section (2) of section 119 of the ACt. In regard to the latter type of circulars affecting the rights of assessees, we are of the opinion that despite the power to recall or withdraw the circulars, the assessee's right to have the assessment effected or carried out in accordance with the circulars, cannot be prejudicially affected by the recall or the withdrawal of the circulars. This, we gather, is the effect of the decisions of the Supreme Court which we may briefly notice. In Navnit Lal C. Javeri v. K. K. Sen, AAC : [1965]56ITR198(SC) , the Supreme Court had occasion to examine the statutory basis and background of the circulars issued by the Board of Revenue under the provisions of the I.T. Act, and the scope and the effect of such circulars. It was remarked that a circular of the kind there considered, issued by the Board under section 5(8) of the 1922 Act, was binding on all officers and persons employed in the administration of the Act. Noticing the effect of the circular in that case, the Supreme Court pointed out that past transactions which would normally have attracted the stringent provisions of section 12(1B) as it stood in 1955, were substantially granted exemption from the operation of the said provision, by making it clear to all the companies and their shareholders that if the past loans were genuinely refunded to the companies, they would not be taken into account under the section.
In Ellerman Lines Ltd. v. Commissioner of Income-tax : [1971]82ITR913(SC) , the question again fell to be examined by the Supreme Court. At page 921, the court observed :
'Now, coming to the question as to the effect of instructions issued under section 5(8) of the Act, this Court observed in Navnit Lal C. Javeri v. K. K. Sen, Appellate Assistant Commissioner, Bombay : [1965]56ITR198(SC) :
'It is clear that a circular of the kind which was issued by the Board would be binding on all officers and persons employed in the execution of the Act under section 5(8) of the Act. This circular pointed out to all the officers that it was likely that some of the companies might have advanced loans to their shareholders as a result of genuine transactions of loans, and the idea was not to affect such transactions and not to bring them within the mischief of the new provision.' The directions given in that circular clearly deviated from the provisions of the Act, yet this Court held that the circular was binding on the Income-tax Officer'.'
(c) In the case of Ranadey Micronutrients v. Collector of Central Excise : 1996(87)ELT19(SC) , the Supreme Court has held that the instructions or directions issued to the Central Excise Officers by the Central Board of Excise and Customs constituted under the Central Excises and Salt Act, 1994, are binding on the officers. In the said decision, it has been laid down by the Supreme Court that it is not open to the Revenue to repudiate the circular issued by the Board on the basis that it is inconsistent with the statutory provision. At paragraphs 14 and 15 on page 24, the Supreme Court has observed thus :
'14. We reject the submission to the contrary made by learned counsel for the Revenue and in the affidavit by M. K. Gupta, working as Director in the Department of Revenue, Ministry of Finance. One should have thought that an officer of the Ministry of Finance would have greater respect for circulars such as these issued by the Board, which also operates under the aegis of the Ministry of Finance, for it is the Board which is by statute, entrusted with the task of classifying excisable goods uniformly. The whole objective of such circulars is to adopt a uniform practice and to inform the trade as to how a particular product will be treated for the purpose of excise duty. It does not lie in the mouth of the Revenue to repudiate a circular issued by the Board on the basis that it is inconsistent with a statutory provision. Consistency and discipline are of far greater importance than the winning or losing of court proceedings.
15. The argument that the later circular has only prospective operation and that it cannot apply to these appeals because the Tribunal has already decided them must also be rejected. It is not open to the Revenue to raise a contention that is contrary to a binding circular issued by the Board. It cannot but urge the point of view made binding by the later circular.'
(d) In the case of Bangalore Wood Industries [1994] 92 STC 603, the Division Bench of this Court, while considering the effect of the circular issued by the Commissioner under section 3A and after referring to the decision of the Supreme Court, has observed that the understanding of law at the earliest point of time of its enactment, cannot be ignored and the rule of construction by reference to contemporanea expositio, is a well-established rule for interpreting statutes by reference to the exposition the exposition it has received from contemporary authority, through it must give way where the language of the statute is plain and unambiguous. It is useful to refer to the observation made by this Court in the case of Bangalore Wood Industries [1994] 92 STC 603, which reads as follows :
'The circular reflected the understanding of the Commissioner, who heads the Commercial Tax Department...........
The understanding of the law at the earliest point of time of its enactment cannot be ignored. The Finance Act, 1964, amended section 52(2) of the Income-tax Act, 1961; this was understood in a particular manner by the Central Board of Direct Taxes, in a circular issued on July 7, 1964. In Varghese v. Income-tax Officer : [1981]131ITR597(SC) , the principle of contemporanea expositio was applied to the circular which understood the amendment in a particular manner. At page 612 of ITR; 1932 of AIR, the court observed :
'......The rule of construction by reference to contemporanea expositio is a well-established rule for interpreting a statute by reference to the exposition it has received from contemporary authority, though it must give way where the language of the stature is plain and unambiguous. This rule has been succinctly and felicitously expressed in Crawford on Statutory Construction, 1940 Edn., where it is stated in para 219 that 'Administrative construction (i.e., contemporaneous construction placed by administration or executive officers charged with executing a statute) generally should be clearly wrong before it is overturned; such a construction, commonly, referred to as practical construction, although non-controlling, is nevertheless entitled to considerable weight, it is highly persuasive'.' Since the circular was issued by the highest authority entrusted with the execution of the provisions of the Act, the circular was accepted as conveying the true import of the provisions of the Act. Thereafter the Supreme Court pointed out that the circular issued by the Central Board was administratively binding on the Revenue under the Income-tax Act. Situation is not different under the Karnataka Sales Tax Act; here as per section 3A of the Act instructions issued by the Commissioner binds all subordinate authorities in the enforcement of the provisions of the Act. The relevancy of the circular issued on October 30, 1985 on the interpretation of the provisions of the Act, cannot be brushed aside. The Commissioner has changed his view while issuing the subsequent circular. This would affect a large number of assessments or transactions already concluded. In the absence of any substantial new material forthcoming shedding a different light on the language employed by the Legislature (such as an amendment to the Act affecting its scheme, or some interpretation of the provisions of the Act by the High Court or Supreme Court), the Commissioner should not normally issue a different circular; he should realise the inconvenience and hardship that may be caused, by the changed instruction. The Commissioner has a responsibility not only to safeguard the interest of the Revenue, but also a duty to consider the well being of the trading class, who contribute to the Revenue.'
The decision of this Court in the case of Bangalore Wood Industries [1994] 92 STC 603 relied upon by Sri Kumar, fully supports his contention that the principle of contemporanea expositio is required to be applied to the circular, annexure E, which understood the effect of notification, annexure C. The circular, annexure E, which, in unequivocal terms, points out that the combined effect of Government instructions and amendment of the notification by means of notification at annexure C dated August 28, 1991, is that even the turnover tax under section 6B of the Act and the tax under the Central Sales Tax Act should not be collected with effect from April 1, 1991 from the dealers in raw silk and silk yarn. Therefore, I am of the view that such instructions cannot be ignored and the principle of contemporanea expositio has to be applied to understand the contents of the said circular and to decide about the effect and from what date the notification, annexure C, has to be applied. The circular was issued by the highest authority entrusted with the execution of the provisions of the Act and the same was acted upon by the assessing authorities. Under these circumstances, it is not permissible for the assessing authorities to violate the instructions or directions given in the circular, annexure E. Therefore, I am of the view as rightly contended by the learned counsel for the petitioner, the impugned action of the assessing authorities is wholly without the authority of law.
12. In the light of the above discussion, I am of the view that the learned Government Pleader cannot derive any assistance from the decisions of this Court in the case of Ananda Soap Factory v. State of Karnataka [1978] 42 STC 356 and in the case of Hubli Opticals v. Assistant Commissioner of Commercial Taxes, V Circle, Hubli [1996] 100 STC 405. In both the cases, referred to above, the circular issued by the Commissioner under section 3A of the Act did not arise for consideration. On the other hand, the decisions referred to by me above, are directly on the question which I have considered.
13. In the light of the above discussion, I am of the view that as stated earlier, the impugned orders of reassessment and the proposition notices are liable to be quashed.
14. Accordingly, the impugned orders of reassessment/proposition notices impugned in each of the petitions are hereby quashed. These petitions are allowed. Rule issued is made absolute. However, no order is made as to costs.
15. Petitions allowed.