JUDGMENT Rajes Kumar, J.
1. Present revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 24.12.1998 for the assessment year 1988-89.
2. Dealer/opposite party (hereinafter referred to as "Dealer") was carrying on the business of chemicals, Soda, Starch etc. The dispute relates to the rate of tax on the turn over of starch. According to the dealer, turn over of starch was liable to tax @4% under the entry "Aata, Maida and Suji" It is claimed that starch was a maize flour and edible by human being. Assessing authority, however, taxed starch @6.6% including surcharge as washing material. Claim of the dealer was however, accepted by the first appellate authority and by the Tribunal.
3. Heard learned Counsel for the parties.
4. Learned Standing Counsel submitted that in the case of CST v. Raghunath Das Prabhu Dayal, reported in 1988 S.T.D. High Court, 75 this Court held that starch is taxable as washing material. He submitted that the entry "Aata, Maida and Suji" covers only wheat products namely, wheat flour and not maize flour (starch). He submitted that in the case of Vishambhar Sahai Sheetal Prasad v. State of U.P. and Ors. reported in 2004 UPTC, 593, Division Bench of this Court held that besan is not covered under the entry "Aata, Maida and Suji" It has been held that only wheat flour is Aata.
5. Learned Counsel for the dealer submitted that starch, which is not edible and is used for stiffening cloth is only washing material and the starch, which is edible is not washing material and maize flour is covered under the entry "Aata, Maida and Suji" He submitted that the entry "Aata" is not confined to wheat flour but it covers flour of all items. He submitted that after the decision of this Court in the case of CST v. Raghunath Das Prabhu Dayal (Supra). Commissioner of Trade Tax has issued circular No. Vidhi-1(1)(C-8)1990-91/2173/Bikrikar, dated 11.03.1991 reported in STI 1991 UP Commissioner's Circulars S.No. 36 page 46. On the basis of the Government letter ST-2-277/11-91-7(29)/89 dated 27.02.1991 based on the information of the legal department that the edible starch should be taxed under the entry "Aata, Maida and Suji" and non-edible starch should be taxed as washing material. He submitted that the aforesaid circular still exists and has not been withdrawn till date. He submitted that the circular is binding upon the revenue authorities as held by the Apex Court in the case of CST v. Indra Industries, reported in 2000 UPTC 472.
6. Having heard learned Counsel for the parties, I have perused the order of Tribunal and the authorities below.
7. Word 'starch' has been defined by Webster's Encyclopedic unabridged dictionary of the English Language as follows:
Starch-I. A white tasteless solid carbohydrate occurring in the form of minute granules in the seeds tubers other parts of plants and forming an important constituent of rice, corn, wheat, beans, potatoes and many other vegetables foods, 2 a commercial preparation of this substance used to stiffen textile fabrics in laundering.
8. In the case of CST v. Raghunath Das Prabhu Dayal (Supra) arising from the proceedings under Section 35 of the Act. This Court held as follows:
There can be no manner of doubt that starch is mostly used for stiffening clothes in laundries. It is also possible that starch may be used for some other purposes also but since starch is used as a material for stiffening clothes, in my opinion, it does fall within the scope of "material used for washing purpose". Washing is a process and, in my opinion, stiffening of clothes is a part of that process. Since it is not disputed that starch is used for stiffening clothes in laundries, it is a material for washing purposes.
9. After the decision of this Court in the case of CST v. Raghunath Das Prabhu Dayal (Supra) matter has been referred to the Government for opinion. Government has expressed its opinion vide letter No. ST-II-277/11-91-7(29)/89 dated 27.02.1991, which has been circulated by Commissioner of Trade Tax vide circular No. Vidhi-1(1)(C-8)l990-91/2173/Bikrikar, dated 11.03.1991, which reads as follows:
i= la[;k&fof/k&1&1&lh&8&1990&91&2173 @ fcdzhdj dk;kZy; vk;qDr fcdzhdj] mRrj izns'k fof/k&vuqHkkx fnukad % y[ku % ekpZ 11] 1991 A leLr lgk;d vk;qDr dj&fu/kkZj.k fcdzhdj] leLr fcdzhdj vf/kdkjh ,oa fcdzhdj vf/kdkjh Js.kh&2] dj&fu/kkZj.k fcdzhdj] mRrj izns'k A fo"k; % LVkpZ dh djns;rk A 1& LVkpZ dj djns;rk ds lEcU/k esa bl dk;kZy; ds i= la[;k&1 1&lh&8 fnukad 19&1&1991 }kjk lwfpr fd;k x;k Fkk dh LVkpZ ^^vkVk] eSnk vkSj lwth** ds vUrxZr ugha vkrk gS cfYd ^^diM+k /kksus dk lkcqu vkSj /kqykbZ ds iz;kstuksa ds fy, mi;ksx esa yk;k tkus okys vU; lkeku** lEcaf/kr izfof"V ds varxZr vkrk gS A mDr ds lEca/k esa ekeyk iqu% 'kklu dks lanfHZkr fd;k x;k Fkk A 'kklu us vius i= la[;k&fodd&2&288 @ X;kjg&91&7 29 @ 89 fnukad 13 Qjojh] 1991 ls U;k; foHkkx ls ijke'kZ ds i'pkr lwfpr fd;k gS fd [kk| LVkpZ dks vkVk] eSnk] lwth dh izfof"V ds varxZr dj;ksX; ekuk tk; rFkk v[kk| LVkpZ dks okf'kax eSVhfj;y dh izfof"V ds varxZr dj;ksX; ekuk tk; A 3&d`I;k mijksDrkuqlkj dk;Zokgh djuk lwqfuf'pr djsa A lqthr cuth vk;qDr fcdzhdj] mRrj izns'k A
10. Division Bench of this Court in the case of Vishambhar Sahai Sheetal Prasad v. State of U.P. and Ors. (Supra) has categorically held that the entry "Aata, Maida and Suji" covers only wheat flour and not besan, which is gram flour. The Division Bench of this Court in the case of Vishambhar Sahai Sheetal Prasad v. State of U.P. and Ors. reported in 2004 UPTC 593 held as follows:
The observation in the decision of this Court in Commissioner of Sales Tax v. Nihal Chand Hans Raj (supra) that besan is nothing but fine gram flour is in our opinion not a principle of law which has been laid down in that decision but only a factual remark. In our opinion such a factual remark is not a precedent. Everyone knows that atta and besan are totally different commodities. Atta is made of wheat while besan is made of gram (chana). If one visits a grocery and asks for besan he will not be given atta, and if he asks to atta he will not be given besan. In our opinion by no stretch of imagination can it be said that besan is comprehended in the word atta.
11. In my opinion, in view of the Division Bench decision of this Court in the case of Vishambhar Sahai Sheetal Prasad v. State of U.P. and Ors. (Supra) it would be difficult to accept that maize flour even if edible is covered under the entry "Aata, Maida and Suji."
12. In the case of CST v. Indra Industries, reported in 2000 UPTC 472, Apex court held as follows:
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.
13. In the case of Paper Products Ltd. v. Commissioner of central Excise, reported in (1997) 7 SCC 84, Apex Court held as follows:
From the case-law it is clear that apart from the fact that the circulars issued by the Board are binding on the Department, the Department is precluded from challenging the correctness of the said circulars even on the ground of the same being inconsistent with the statutory provision. The Department is further precluded from the right to file an appeal against the correctness of the binding nature of the circulars. Therefore, whatever action the Department has to take, the same will have to be consistent with the circular which is in force at the relevant point of time.
14. In the case of Simplex Castings Ltd. v. Commissioner of Customs, Vishakhapatnam, , Apex Court held as follows:
It will not open to the Department to prefer the appeal before CEGAT contrary to what was laid down in the circular dated 12.7.1989 which specifically provided that residual Section 15(1)(c) of the Customs Act would apply to the cases where the goods are removed from a warehouse after expiry of the warehousing period and that the rate of duty in such cases shall be the rate prevalent on the date of payment of duty. No doubt the aforesaid circular was withdrawn by the circular dated 14.8.1997. Still however, at the relevant time the impugned order passed by the Collector of Customs (Appeals) could not be said to be in any way illegal or erroneous.
15. Circular No. Vidhi-1(1)9C-8)1990-91/2173/Bikrikar., dated 11.03.1991 issued by Commissioner of Trade Tax in pursuance of the Government Order dated 27.02.1991 categorically says that the edible starch is liable to tax under the entry "Aata, Maida and Suji" and non edible starch is liable to tax as washing material. Though the above circular appears to be contrary to the Division Bench decision in the case of Vishambhar Sahai Sheetal Prasad v. State of U.P. and Ors. (Supra) is binding upon the revenue authorities in view of the aforesaid decision of the Apex Court. In the present case, both the appellate authorities held that starch is edible maize flour and following the circular issued by the Commissioner of Trade Tax, held covered under the entry "Aata, Maida and Suji" does not require any interference for the reasons stated above.
16. In the result, revision fails and is accordingly dismissed.