Rajes Kumar, J.
1. Present revision under Section 11 of the U. P. Trade Tax Act, 1948 (hereinafter referred to as 'the Act') is directed against the order of Tribunal dated October 28, 1999 relating to the assessment year 1994-95.
2. The dispute relates to the rate of tax on menthol. Dealer/opposite party (hereinafter referred to as 'dealer') admitted the tax at 7.5 per cent on menthol treating it as medicines in view of the circular issued by the Commissioner of Trade Tax dated April 12,1983 which was issued on the basis of the Government Order. The assessing authority had not accepted the claim of the dealer and levied the tax at 10 per cent treating it as an unclassified item. The dealer filed appeal before the Deputy Commissioner (Appeals), Moradabad. The Deputy Commissioner (Appeals) held that in the case of Allied Distillation Co., Moradabad v. Commissioner of Sales Tax reported in [1995] UPTC 393 menthol is held liable to tax as an unclassified item and not as medicines. This decision was given on August 24, 1994. The first appellate authority held that the circular issued by the Commissioner of Trade Tax is binding upon the assessing authority. Therefore, held that menthol is liable to tax at 7.5 per cent as medicines up to August 23,1994 in view of the circular issued by the Commissioner of Trade Tax and, thereafter, liable to tax at 10 per cent as an unclassified item. Being aggrieved by the order of the Deputy Commissioner (Appeals) Commissioner of Trade Tax filed appeal before the Tribunal. The Tribunal by the impugned order dismissed the appeal and upheld the order of the Deputy Commissioner (Appeals).
3. Heard learned Counsel for the parties.
4. I do not find any error in the order of the Tribunal. Circular dated April 12, 1983 issued by the Commissioner of Trade Tax read as follows:
leLr lgk;d vk;qDr dj&fu;/kZkj.k fcdzhdj] fcdzhdj vf/kdkjh ,oa fcdzhdj vf/kdkjh] Js.kh&2] mRrj izns'k
U;k; foHkkx ls ijke'kZ ds Ik'pkr~ 'kkldh; i=&la;[;k ,l0 Vh0&2&5453@nl&82&1219@82] fnukad 28 flrEcj] 1982 rFkk 'kkldh; i= la[;k ,l0 Vh0&2&2028@nl&83] fnukad 31 ekpZ 1983 }kjk fuEu izdkj dh lwfpr fd;k x;k gS%
(1) Menthol vkS'kf/k;kWa vkSj Hks'kth; inkFkZ ftlds vUrZxr d`feuk'kd vkSj dhVuk'kd oLrq,a Hkh gS^ dh izfof'V ds vUrZxr dj ;ksX; gS A
(2) fnukad 31 vxLr 1979 es Menthol-oil ^lHkh izdkj dk rsy tks bl lwph dh vU; izfof'V ;k vf/kfu;e ds v/khu tkjh dh xbZ fdlh vU; foKfIr ds vUrZxr u vkrk gks^ dh izfof'V ds vUrZxr dj ;ksX; gS A
(3) De-Menthalised oil, Peppermint oil and Mentha-oil esa dksbZ
5. The above circular is based on the Government Order. It is settled principle of law that the circulars are binding upon the revenue authorities, even if contrary to the statute.
6. In the case of Commissioner of Sales Tax, U. P. v. Indra Industries reported in [2001] 122 STC 100 : [2000] UPTC 472, the apex court held as follows (page 102 of STC):
A circular by 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.
7. In the case of Paper Products Ltd. v. Commissioner of Central Excise reported in : 1999ECR284(SC) , the apex court held as follows:
This question is no more res integra in view of the various judgments of this Court. This Court in a catena of decisions has held that the circulars issued under Section 37B of the said Act are binding on the Department and the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. These judgments have also held that the position may be different with regard to an assessee who can contest the validity or legality of such instructions but so far as the Department is concerned, such right is not available. See Collector of Central Excise v. Usha Martin Industries : 1997ECR257(SC) . In the case of Ranadey Micronutrients v. Collector of Central Excise : 1996(87)ELT19(SC) , this Court held that 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 purposes of excise duty. The court also held that 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, according to this Court, of far greater importance than the winning or losing of court proceedings. In the case of Collector of Central Excise v. Jayant Dalai Private Ltd. : 1996(88)ELT638(SC) , this Court has held that it is not open to the Revenue to advance an argument or even file an appeal against the correctness of the binding nature of the circulars issued by the Board. Similarly is the view taken by this Court in the case of Collector of Central Excise v. Kores (India) Limited : 1997(89)ELT441(SC) .
8. Similar view has been taken by the apex court in a recent decision in the case of SACI Allied Products Ltd., II. P. v. Commissioner of Central Excise, Meerut reported in : 2005(183)ELT225(SC) , Union of India v. Azadi Bachao Andolan reported in [2003] 263 ITR 706.
9. In the case of Simplex Castings Ltd. v. Commissioner of Customs, Vishakapatnam reported in : 2003(155)ELT5(SC) , the apex court held that it is not open to the Customs Department to prefer an appeal before the CEGAT contrary to what was laid down in the circular.
10. In this view of the matter the view taken by the first appellate authority and the Tribunal that menthol was liable to tax at 7.5 per cent as medicines till August 23,1994 in view of the circular issued by the Commissioner of Trade Tax and, thereafter, liable to tax at 10 per cent in view of the decision of this Court in the case of Allied Distillation Co., Moradabad v. Commissioner of Sales Tax [1995] UPTC 393 cannot be said to be unjustified and is accordingly, upheld.
In the result, revision fails and is accordingly, dismissed.