Law: Sales Tax Act, (15 of 1948)

Section: 3,3A,4A

(a) Sales tax--- --Circulars---Circulars issued by Commissioner of Sales Tax---Not binding on assessee or Court---Binding on Department---Sales Tax Authority not entitled to argue against interpretation in circular. (b) Sales tax---Exemption---New unit---Eligibility certificate---Inclusion in turnover for exemption---Sales through commission agents---Circular of Commissioner--­Indicating that such sales to be included---Department---Not entitled to challenge ---U.P. Sales Tax Act-(15 of 1948), Ss. 3A & 4A. A circular by the Sales Tax Authorities is not binding on the Courts. It is not binding on the assessee. However, the interpretation that is thereby placed by the taxing authority on the law is binding on that taxing authority. In other words, the taxing authority cannot be heard to advance an argument that is contrary to that interpretation. The respondent, a manufacturer of Dal, had obtained an eligibility certificate under section 4A of the U.P. Sales Tax Act, 1948, for four years. Penalty was sought to be imposed on the respondent on the ground that the respondent had effected sales through commission agents. The High Court set aside the order imposing penalty, relying on a circular, dated January 19, 1991, issued by the Commissioner of Sales Tax, which stated that such sales were also to be included in the turnover for the purposes of exemption under that section. The Department preferred appeals to the Supreme Court and contended that the circular was contrary to the law: Held, accordingly, dismissing the appeals, that the Sales Tax Authority could not advance an argument contrary to the interpretation placed by the Commissioner. Bengal Iron Corporation v. Commercial Tax Officer (1993) 90 STC 47 (SC) considered. Decision of the Allahabad High Court affirmed. The of the Allahabad High-Court (M. Katju, J.), dated October 23, 1992, was as follows: M. KATJU, J.---This revision arid the connected revisions have been filed against the impugned order of the Sales Tax Tribunal, Agra Bench, dated December 25, 1991. These revisions relate to the assessment years 1983-84, 1984-85, 1985-86 and 1986-87 and are being disposed of by a common . The applicant is a…

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