Binding trade tax circulars prevented rectification and supported exemption for military canteen sales.

Departmental circulars and the related Government opinion were treated as binding on the revenue where exemption had already been granted for inter-State sales to Military Canteens/Canteen Stores Department under the Central Sales Tax framework. The Court held that, in those circumstances, the revenue could not take a contrary view to deny the exemption, and the alleged error could not be treated as a mistake apparent from the record for rectification under the U.P. Trade Tax Act. The Tribunal's deletion of tax was therefore upheld against the Revenue.

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Issues: Whether the Trade Tax Tribunal was justified in deleting the tax imposed under Section 21 of the U.P. Trade Tax Act on the basis of the Commissioner's circular and the related exemption position.

Analysis: The revision turned on whether the departmental circular dated 23.07.1987, read with the Government opinion, bound the revenue authorities and supported exemption on inter-State sales to Military Canteens/Canteen Stores Department under Section 8(2-A) of the Central Sales Tax Act. The Court noted that where the Assessing Authority had granted exemption on that basis, it was not open to the Revenue Authority to take a contrary view. It also accepted that, in such circumstances, the alleged error could not be treated as a mistake apparent from the record so as to permit rectification under Section 22 of the U.P. Trade Tax Act.

Conclusion: The question was answered against the Revenue, and the deletion of tax by the Tribunal was upheld.

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