Maize starch is covered by taxation entry no. 61 of Part B of Schedule I

Santhosh Maize & Industries Limited Vs State of Tamil Nadu (Supreme Court of India)

Supreme Court held that where a statute contains both a general provision as well as a specific provision, the latter must prevail. Accordingly, Taxation Entry No.61 is relatable to ‘starch’ of any kind whereas Exemption Entry No.8 relates to products of ‘millet’. Hence, maize starch is covered by taxation entry and not by exemption entry.

Facts- The appellant, registered under the Tamil Nadu General Sales Tax Act, 1959, deals in maize starch since 1975. The classification of maize starch under the Act is the subject of dispute in the first of the two appeals. The Government of Tamil Nadu, vide a Notification exempted the products of millets including maize from tax payable under the Act.

The Legislative Assembly of Tamil Nadu amended Schedule I to the Act, adding Part C and including Entry No. 53 therein, which imposed a 5% tax on ‘sago and starch of any kind’ w.e.f. 12th March, 1993. Later, through another amendment, ‘sago and starch of any kind’ was moved to Entry No. 61 of Part B of Schedule I (“Taxation Entry No. 61”, hereafter) and the tax rate was reduced to 4% effective from 17th July, 1996. The aforesaid amendment dated 12th March, 1993 sparked concerns among maize starch dealers. One of them, M/s Lakshmi Starch, sought clarification from the Special Commissioner and Commissioner of Commercial Taxes.

Vide circular dated 14th December 1993, the Commissioner clarified that the exemption would remain in effect — a specific notification will prevail over a general entry in the Schedule. It was further stated that the process of obtaining maize starch from maize involves simple processing; therefore, maize starch will be classified as ‘maize products’ and covered by the Exemption Notification.

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