1. W. P. No. 689 of 1968 was filed in this Court praying for quashing of the sales tax assessment order for the assessment year 1966-67 dated 27th January, 1968, passed by the Commercial Tax Officer, Sowcarpet I Division, Madras. The writ petition was disposed of by a judgment of this Court dated 10th April, 1970. The writ petition was allowed and the matter was remanded for fresh disposal. The writ petitioners were carrying on business of re-rolling steel. They bought iron and steel scraps from other registered dealers in this State and converted them into mild steel rounds, flats, angles, etc., by rolling them. The assessing authority assessed to tax the turnover in M. S. rounds, flats and angles at 2 per cent. The objection raised by the writ petitioners was that the iron and steel scraps from which M. S. rounds, flats and angles were made had already suffered tax in this State as first sale of declared goods and that as such, such goods were not liable to tax, because such declared goods were, under Section 14 of the Central Sales Tax Act, not liable to tax on second and subsequent sales. It was also their contention that the rolled mild steel rounds, flats and angles were not goods different from the iron and steel scraps purchased by them. The prayer was for issue of a writ of certiorari for quashing the sales tax assessment. In the main writ petition, which was heard along with this petition, the matter was remanded for investigation as to whether the tax had been paid in this State in respect of iron and steel scrap. If the tax had been so paid, it would follow in the view of this Court, that the turnover in M. S. rounds, flats and angles would not be liable to further tax. The main judgment is reported in Pyarelal Malhotra v. Joint Commercial Tax Officer, T. Nagar Division, Madras [1970] 26 S.T.C. 416. The State of Madras filed an appeal before the Supreme Court against the judgment in the case of Pyarelal Malhotra [1970] 26 S.T.C. 416 and also in the present case. The Supreme Court in the case reported in State of Tamil Nadu v. Pyare Lal Malhotra [1976] 37 S.T.C. 319 (S.C.) reversed the decision of this Court. In the appeal in the present case the Supreme Court set aside the judgment of this Court and the matter was remitted with the direction that the matter would be disposed of in accordance with law and particularly in the view of the decision of the Supreme Court in State of Tamil Nadu v. Pyare Lal Malhotra [1976] 37 S.T.C. 319 (S.C.). The matter has now been posted in pursuance of the direction of the Supreme Court.

2. W. P. No. 966 of 1969 was filed by a firm, India Metal Industries, praying for a writ of certiorari for quashing the assessment order for the assessment year 1967-68 dated 11th March, 1969, passed by the Joint Commercial Tax Officer, Peddunaickenpet (South) Division, Madras-1. That case was also heard along with W. P. No. 689 of 1968 and other cases mentioned above and this Court by its judgment dated 10th April, 1970, allowed the writ petition and remitted the subject-matter to the assessing authority for fresh disposal in the light of the observations made in W. P. No. 520 of 1968, which was heard along with the Pyarelal Malhotra's case [1970] 26 S.T.C. 416 and which was disposed of by the judgment in Pyarelal Malhotra v. Joint Commercial Tax Officer, T. Nagar Division, Madras [1970] 26 S.T.C. 416. The State of Tamil Nadu filed an appeal before the Supreme Court and the judgment of this Court was set aside and the matter was remitted for being dealt with in accordance with law, and in accordance with the directions given by the Supreme Court in State of Tamil Nadu v. Pyare Lal Malhotra [1976] 37 S.T.C. 319 (S.C.), this matter is again posted before us.

3. Similarly, W. A. Nos. 344 and 349 of 1972 came to be filed against the disposal of the corresponding writ petitions filed in this Court. The writ appeals were disposed of in the light of the judgment of this Court in Pyarelal Malhotra v. Joint Commercial Tax Officer, T. Nagar Division, Madras [1970] 26 S.T.C. 416. Against the orders in these writ appeals there were appeals to the Supreme Court which have been again remitted for disposal in the manner described already.

4. The other tax cases are all petitions under Section 38 of the Tamil Nadu Act 1 of 1959 for revising the order of the Sales Tax Appellate Tribunal, which in the respective cases followed the judgment of this Court in Pyarelal Malhotra v. Joint Commercial Tax Officer, T. Nagar Division, Madras [1970] 26 S.T.C. 416. These tax cases were filed by the State, and these cases also following the judgment of this Court in Pyarelal Malhotra v. Joint Commercial Tax Officer, T. Nagar Division, Madras [1970] 26 S.T.C. 416, were dismissed. There were appeals to the Supreme Court and the Supreme Court has remitted the matter with the same direction as mentioned already. Thus, all these cases raise a common question as to whether the respective assessees are eligible for the exemption claimed by them.

5. Article 286(3) of the Constitution of India provides that any law of a State shall, in so far as it imposes, or authorises the imposition of, a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify. The Central Sales Tax Act came to be passed in 1956 and section 14 declared certain goods to be of special importance in inter-State trade or commerce. Under section 15 of the same act, every sales tax law of a State in so far as it imposed or authorised the imposition of a tax on the sale or purchase of declared goods was to be subject to restrictions and conditions set out therein. One of the conditions was that the tax payable under the State law in respect of such declared goods should not exceed 3 per cent of the sale or purchase price thereof, and that such tax shall not be levied at more than one stage. The second condition was that where tax was levied under the State law in respect of the sale or purchase inside the State of any declared goods, and such goods were sold in the course of inter-State trade or commerce, the tax so levied was to be refunded to such person in such manner and subject to such conditions as may be provided in the law in the State. In the light of the provisions of section 15, it is claimed that the respective assessees in these cases have purchased the declared goods in this State, that tax has been paid on their sales and that, therefore, the subsequent transactions of sale are not liable to be taxed. At the material time, Section 14 to the extent relevant to this case ran as follows :

It is hereby declared that the following goods are of special importance in inter-State trade or commerce :--

(iv) iron and steel, that is to say,-

(a) pig iron and iron scrap ;

(b) iron plates sold in the .same form in which they are directly produced by the rolling mill;

(c) steel scrap, steel ingots, steel billets, steel bars and rods ;

7. In the writ petitions which came before this Court the assessees claimed that they had purchased iron and steel scraps from the other registered dealers, that they converted them into mild steel rounds, flats and angles by rolling them, and that as the iron and steel scraps had already suffered tax in this State as first sale of declared goods, the sales of rolled mild steel, iron flats and angles which were not goods different from the iron and steel scraps purchased by them could not be taxed again. It was, therefore, contended that the tax levied in these cases by the assessing authority was wrong and illegal. In the judgment of this Court it was held that the statute treated all forms of iron and steel either as raw material or finished product from the rolling mills. It was held also that the product as emerging from the various stages of manufacture could not be treated as different from "iron and steel", that even though mild steel rounds, flats and angles manufactured from iron and steel scraps might be commercially different from iron and steel scraps, they did not cease to be "iron and steel" and that tax could be levied only at a single point in the series of sales from the stage of raw material till the product was sold in the same form in which it was produced by the rolling mills, that is, till the manufactured articles had been converted into any other form of fabricated material. This judgment was challenged in the appeal before the Supreme Court.

8. The Supreme Court noticed that there was an amendment to Section 14 of the Central Sales Tax Act. Under the amended provision instead of the entries as regards iron and steel, which have already been extracted, a new list came to be given consisting of 16 items of categories. Though these entries were looked into as not being irrelevant in the construction of the provision as it was before the amendment of 1972, still with reference to the entries as they remained in the statute prior to their amendment, the Supreme Court pointed out at page 323 of the decision reported in State of Tamil Nadu v. Pyare Lal Malhotra [1976] 37 S.T.C. 319 (S.C.) as follows:

Although, we have looked at the subsequent amendment of 1972 in order to find an indication of the original intention, because subsequent history of legislation is not irrelevant, yet, we think that, even if we confine our attention to Section 14, as it originally stood at the relevant time, with which we are concerned in the cases before us, the object was not to lay down that all the categories or sub-items of goods, as specified separately even before the amendment of 1972, were to be viewed as a single salable commodity called 'iron and steel' for purposes of determining a starting point for a series of sales. On the other hand, the note against the brackets in front of the five smaller sub-divisions of (d) makes it clear that even each sub-category of a sub-item retains its identity as a commercially separate item for purposes of sales tax so long as it retains the sub-division. The more natural and normal meaning of such a mode of listing special or declared kinds of goods seems to us to be that the object of specification was to enumerate only those categories of items, each of which was to serve as a new starting point for a series of sales, which were to be classed as 'declared' goods. If one were to state the meaning in different words, it would seem to us to be : 'iron and steel goods of various types enumerated below'.

9. With reference to the expression "that is to say" used in Section 14, it was observed at page 324 as follows :

But, in the context of single point sales tax, subject to special conditions when imposed on separate categories of specified goods, the expression was apparently meant to exhaustively enumerate the kinds of goods on a given list. The purpose of an enumeration in a statute dealing with sales tax at a single point in a series of sales would, very naturally, be to indicate the types of goods each of which would constitute a separate class for a series of sales. Otherwise, the listing itself loses all meaning and would be without any purpose behind it.

10. With reference to the amended law, it was pointed out at page 326 as follows:

It appears to us that the position has been simplified by the amendment of the law, as indicated above, so that each of the categories falling under 'iron and steel' constitutes a new species of commercial commodity more clearly now. It follows that when one commercial commodity is transformed into another, it becomes a separate commodity for purposes of sales tax.

11. After the decision of the Supreme Court, the question of assessability to tax of M. S. rounds, flats, angles and M. S. squares, in the light of the amended provision, came up for consideration in State of Tamil Nadu v. S. Syam Steel Rolling Mills (P.) Ltd. [1977] 40 S.T.C. 156 In that case the assessee had a factory in Bangalore. It purchased in this State M. S. rounds, transported them to Bangalore, and after some processing brought them back and sold them within this State. The contention taken by the assessee was that these M. S. rounds, M. S. angles and M. S. squares were not liable to tax at the point of sale by the assessee, as they had already suffered tax at the point of purchase as M. S. rounds. This claim was negatived by the assessing officer and the appellate authority. The Tribunal, however, held that M. S. rounds, M. S. angles and M. S. squares would fall within the ambit of entry 4 of the Second Schedule to the Tamil Nadu General Sales Tax Act, namely, "iron and steel" read with Section 4 of the Tamil Nadu Act and that, therefore, the turnover was exempt from tax. This Court held that out of the three articles sold by the assessee, viz., M. S. rounds, M. S. angles and M. S. squares, only M. S. rounds would be entitled to the benefit of the exemption from tax on the ground that the M. S. rounds had suffered tax already, and that, the M. S. angles and M. S. squares would not get the benefit of such exemption as they were different goods. In that case the contention urged on behalf of the assessee was that what was necessary for obtaining the benefit of exemption was the statutory identity in the sense that the goods involved must find a place in the same category or in the same entry and that so long as they were so found, they would certainly be entitled to the benefit of exemption. It was pointed out that for obtaining the benefit of a single point taxation the retention of the identity of the goods as the same commercial commodity was necessary, and that once that identity was lost, the commodity became commercially different. There was then no question of that commodity being exempt from tax on the ground that the commodity from which it was made had suffered tax already. In coming to this conclusion a passage from the decision of the Supreme Court in State of Tamil Nadu v. Pyare Lal Malhotra [1976] 37 S.T.C. 319 at 325 (S.C.) was relied on.

12. The assessee in that case had relied on another passage in the same judgment and it was pointed out that the said passage did not help the assessee. This decision lays down that each and every item described under the main category "iron and steel" was a separate and independent commercial commodity and that only so long as the commodity was sold in the same form, the assessee would be eligible for the exemption from tax of the subsequent sales within the State. In considering the identity, the following passage from the judgment of the Supreme Court in State of Tamil Nadu v. Pyare Lal Malhotra [1976] 37 S.T.C. 319 at 325 (S.C.) will have to be borne in mind:

As we all know, sales tax law is intended to tax sales of different commercial commodities and not to tax the production or manufacture of particular substances out of which these commodities may have been made. As soon as separate commercial commodities emerge or come into existence, they become separately taxable goods or entities for purposes of sales tax. Where commercial goods, without change of their identity as such goods, are merely subjected to some processing or finishing or are merely joined together, they may remain commercially the goods which cannot be taxed again, in a series of sales, so long as they retain their identity as goods of a particular type.

13. Thus, a mere external processing or finishing may not convert the goods into commercially different goods. But if the processing converted them into different commercial goods then their identity would have been lost and the payment of tax in respect of the goods before their conversion would not be of assistance to the assessee so as to exempt his transaction of the converted goods from liability to sales tax.

14. Mr. V. K. Thiruvenkatachari, the learned counsel appearing for the assessees in W. P. Nos. 689 of 1968 and 966 of 1969, submitted that we are concerned only with Sub-clause (c) of Section 14(iv) which relates to "steel scrap, steel ingots, steel billets, steel bars and rods". His point was that Clause (iv) of Section 14 described 4 categories of iron and steel and that out of the 4 categories, the category coming under Sub-clause (c) would be a single item. His submission was that any conversion of steel scrap into steel ingots or steel billets or steel bars and rods, would not make the converted goods into different categories. While this Court in Pyarelal Malhotra v. Joint Commercial Tax Officer, T. Nagar Division, Madras [1970] 26 S.T.C. 416, proceeded on the basis that all the categories described in (a) to (d) of Clause (iv) of Section 14 fell within the main item of "iron and steel" and that any internal conversion of one item into the other would not make a difference in the matter of sales tax liability, the Supreme Court held that each item was a separate commercial commodity. According to the learned counsel, while the Madras High Court took all the items (a) to (d) as one single category, the effect of the Supreme Court's decision was only to bifurcate them into four categories, viz., (a) to (d). His point was that any internal coversion of goods falling under each of these four sub-clauses would not attract any liability at the time of sale so long as the goods had suffered tax earlier.

15. Mr. Chari relied in support on the following passage occurring at page 323 of the judgment of the Supreme Court :

On the other hand, the note against the brackets in front of the five smaller sub-divisions of (d) makes it clear that even each sub-category of a sub-item retains its identity as a commercially separate item for purposes of sales tax so long as it retains the sub-division.

16. The reference in this passage is to Section 14, sub-clauses (a) to (d) of Clause (iv). This passage afforded the learned counsel an occasion to dwell on the words "sub-item", "sub-category" and "sub-division" occurring therein. We think the terminology employed in the above passage is not liable to be mistaken. By a "category" the Supreme Court intended to refer to the major clauses in Section 14, that is to say, sub-clauses (a) to (d) of Clause (iv) in the words of the Supreme Court, are sub-divisions. What each sub-division dealt with, in the language of the Supreme Court is a "sub-item". In Sub-clause (d) there is a further classification found in (i) to (v). In the words of the Supreme Court, these are "sub-categories". Employing distinctive vocabulary, the Supreme Court laid down that so long as a commodity retained its identity as a sub-category of a sub-item in a sub-division, it must be dealt with as retaining its identity as a commercially separate item for the purposes of sales tax. The Supreme Court underlined this construction by a reference to the marginal words which bracketed all the sub-divisions of Sub-clause (d) of Clause (iv). The words relied on by the court were "sold in the very form...".

17. Whatever be the precise signification of the language employed by the Supreme Court in construing Section 14(iv)(d), there is no justification for holding that in the particular passage relied on by the learned counsel the court had laid down any different principle from the one which it had laid down in the rest of the judgment which we have earlier quoted. As we understand the principle, the enumeration of the several commodities in Clause (iv) must be regarded as each having a separate identity of its own ; different items brought together under a single sub-clause or sub-division cannot be regarded as one single type of commercial commodity having a single identity for the purpose of single point taxation.

18. The real ratio decidendi of the Supreme Court's decision has been set out in the earlier Bench decision of this Court in State of Tamil Nadu v. S. Syam Steel Rolling Mills (P.) Ltd. [1977] 40 S.T.C. 156, to which we have made reference earlier. In that decision it was observed:

Thus it will be seen that the emphasis is on the retention of the identity as a particular commercial commodity and that once that identity is lost, there is no question of the commodity being exempt on the ground that the commercial commodity from which it was changed into a new commodity had already suffered tax.

19. It was suggested that this understanding of the Supreme Court's judgment would require reconsideration by a larger Bench. There is no need for such a course since we hold that the rule laid down by the Supreme Court is not capable of any other meaning, and has, if we may say so, been properly applied in the said case. It follows that the same rule should be applied to the present case as well.

20. The commercial character or identity of steel scrap is wholly different from steel ingots, steel billets, steel bars and rods. The fact that the steel scrap had already suffered tax at some point earlier would not confer immunity from taxation, when the steel scrap was converted into steel ingots, steel billets, steel bars and rods and sold. Thus the levy of tax in this case on the sale of converted items would not be wrong.

21. In W. M. P. Nos. 18 and 19 of 1979, the learned counsel for the assessees in W. P. No. 689 of 1968 and W. P. No. 966 of 1969 wanted to urge a point of estoppel. It was stated that this point was actually taken before the Supreme Court and a civil miscellaneous petition was filed before it. The Supreme Court had, however, remitted the matter to this Court, as mentioned already, and we have no precise information as to the nature of the order passed on this civil miscellaneous petition by the Supreme Court. The learned counsel submitted that the point may be allowed to be urged at this stage.

22. For the respondent (the State of Tamil Nadu) the Additional Government Pleader submitted that this contention cannot be allowed to be taken at this stage, as it had not been taken either in the writ petitions or actually in the course of the appeal before the Supreme Court. After hearing the parties, we considered that we could exercise our discretion in favour of the petitioner-assessees and allow them to urge this point especially because this matter had been attempted to be urged before the Supreme Court. We gave earlier an opportunity to the Additional Government Pleader to file a counter-affidavit and he has filed a counter-affidavit in these two petitions.

23. The point that is now sought to be urged is that as a result of the judgment of this Court in Pyarelal Malhotra v. Joint Commercial Tax Officer [1970] 26 S.T.C. 416 the assessees were not taxed on the sales of steel bars, steel rods and steel flats and that as a result of Section 22 there was also a prohibition from collecting tax. Section 22(2) of the Tamil Nadu General Sales Tax Act, 1959, provided that if any dealer or person who was not liable to tax under the Act collected any amount purporting to be by way of tax, such dealer or person should pay over to the Government within such time and in such manner as might be prescribed all amounts so collected. sub-section (3) of the same section provided that if any dealer or person collected tax on transactions not liable to tax, then he should pay over to the Government the amount so collected. The difference between Sub-section (2) and Sub-section (3) is that Sub-section (2) deals with purported collection as and by way of tax, while Sub-section (3) deals with actual collection as and by way of tax. This provision has been substituted by another provision by Tamil Nadu Act 31 of 1972. Under the amended provision no person who was not a registered dealer should collect any amount by way of tax or purporting to be by way of tax under the Act; and no registered dealer should make any such collection except in accordance with the provisions of the Act and the Rules made thereunder. If any person collected tax in contravention of Sub-section (1) whether or not any tax was due from him, the assessing authority, after giving a reasonable opportunity to the assessee of being heard, may, by an order in writing, impose upon him a penalty of a sum not exceeding one and a half times such amount. Section 45(1)(d) as it was in force before 1972 envisaged prosecution in cases where any person collected any amount by way of tax under the Act in contravention of Section 21. Clause (d) was omitted from Section 45(1) by Act 31 of 1972. The contention of the learned counsel was that there was thus scope for levy of penalty and also prosecution, if he had collected tax during all these years when the judgment of the High Court held the field. His further point was that there was a circular issued on 4th September, 1972, by the Government of India, Ministry of Finance. The question considered in the said circular was whether notwithstanding the prohibition contained in Section 15 of the Central Sales Tax Act, sales tax could be levied on rolled steel sections prepared out of billets on which sales tax had been levied. It was pointed out therein that if an article was converted from one category of iron and steel into another, it would still fall within the genus of iron and steel and that the article could not be subjected to sales tax over again. The transformation in the character would not make them an article other than iron and steel so as to take them out of the prohibition imposed by Section 15. The circular appears to have taken the law as laid down by this Court in the Pyarelal Malhotra's case [1970] 26 S.T.C. 416. Thus in the view enunciated in the circular, rolled steel sections manufactured out of tax suffered billets could not be subjected again to local sales tax, as such manufactured steel sections remained "iron and steel". Though this circular was originally addressed only to the Secretary to Government of Mysore, Finance Department, the said communication was circulated to all the other States also. According to the learned counsel for the assessee, as a result of this circular the States were estopped from levying tax on the said goods.

24. The submission for the State was that merely because the assessee had not collected tax or the assessee had not been taxed for the subsequent years in accordance with the judgment of this Court, it did not mean that the assessee was not liable to tax, and that there is no question of estoppel operating against this statutory liability. His further point was that even the circular of 4th September, 1972, was long after the years with which we are now concerned, so that the assessees in these cases could not have relied on this circular and altered their position in any manner.

25. We find that there is considerable force in the contention of the learned Additional Government Pleader that this circular having been issued only on 4th September, 1972, cannot avail the assessees and support a plea of promissory estoppel, because the Government had not made any representation before these relevant years, as a result of which the assessees altered their position in any manner. We shall go into this aspect in more detail presently. Further assuming that the plea of estoppel is open to the assessees in the present case, still we are not satisfied on the facts herein that the plea can be sustained.

26. The question of promissory estoppel binding the Government has been the subject of discussion in a number of cases, which arose for consideration by the Supreme Court starting from Collector of Bombay v. Municipal Corporation of the City of Bombay [1952] S.C.R. 43, Union of India v. Indo-Afghan Agencies [1968] 2 S.C.R. 366, Century Spinning and Manufacturing Co. Ltd. v. Ulhasnagar Municipal Council [1970] 3 S.C.R. 854 and Turner Morrison and Co. Ltd. v. Hungerford Investment Trust Ltd. [1972] 85 I.T.R. 607 (S.C.) The matter has been elaborately reviewed recently in Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. [1979] 44 S.T.C. 42 (S.C.), a judgment dated 12th December, 1978, in C. A. No. 1597 of 1972. In that case the assessee proceeded to establish a vanaspati factory in Kanpur, on the basis of an intimation received from the Chief Secretary to the Government of U. P. in December, 1968, that no sales tax would be levied for a certain period, if he started a vanaspati industry in the State. However, in January, 1970, the State Government proposed to levy sales tax at certain rates. Later on, on 12th August, 1970, the State Government changed its decision of giving a concessional rate of tax, and was seeking to rescind even the concession, which was given out in January, 1970. It is at that stage that the company came forward with a writ petition. While pointing out that the Government would be subject to the rule of promissory estoppel and the Government could be compelled to carry out the promise made by it, the Supreme Court observed as follows:

Of course, it may be pointed out that if the U. P. Sales Tax Act, 1948, did not contain a provision enabling the Government to grant exemption, it would not be possible to enforce the representation against the Government, because the Government cannot be compelled to act contrary to the statute, but since Section 4 of the U. P. Sales Tax Act, 1948, confers power on the Government to grant exemption from sales tax, the Government can legitimately be held bound by its promise to exempt the appellant from payment of sales tax. It is true that taxation is a sovereign or governmental function, but, for reasons which we have already discussed, no distinction can be made between the exercise of a sovereign or governmental function and a trading or business activity of the Government, so far as the doctrine of promissory estoppel is concerned. Whatever be the nature of the function which the Government is discharging, the Government is subject to the rule of promissory estoppel and if the essential ingredients of this rule are satisfied, the Government can be compelled to carry out the promise made by it. We are, therefore, of the view that in the present case the Government was bound to exempt the appellant from payment of sales tax in respect of sales of vanaspati effected by it in the State of Uttar Pradesh for a period of three years from the date of commencement of the production and was not entitled to recover such sales tax from the appellant.

27. The period of three years referred to in the above passage is the period for which the exemption was originally held out by the Chief Secretary.

28. In the present case, the Central Government is not authorised to grant any exemption or concession.. Under Section 9(3), as it was in force prior to the amendment by central act 28 of 1969, it was provided that the authorities for the time being empowered to assess, collect and enforce payment of any tax under the general sales tax law of the appropriate State should, on behalf of the Government of India and subject to any rules made under the Act, assess, collect and enforce payment of any tax, including any penalty payable by a dealer under the Act in the same manner as the tax on the sale or purchase of goods under the general sales tax law of the State was assessed, paid and collected. All the procedural provisions under the State law would apply in relation to the liability under the Central Sales Tax Act. The same provision appears in Sub-section (2) in a slightly more elaborate form, of the amended provision. There is no provision for grant of exemption under the Central Sales Tax Act. The Central Government could not have granted any exemption. The circular was at best advisory and had no other force.

29. Even otherwise, a plea of estoppel cannot be founded on the particular circular relied on by the petitioners in W. P. Nos. 689 of 1968 and 966 of 1969. As pointed out by the learned Additional Government Pleader, the transactions in question, the taxation of which the concerned assessees seek to resist on the basis of the doctrine of estoppel, arose during the years 1966-67 and 1967-68, whereas the Central Government's circular is dated 4th September, 1972. It is quite inconceivable that a trader should have arranged his sales tax affairs in a particular way and to his detriment, during the years 1966 to 1968 by reference to a Government circular which was not in existence at the time, and which was to come in the distant future, more than four years hence.

30. In the documents filed by the assessees before the Supreme Court, and made part of the record before us, reference was made not only to the above circular of the year 1972 but also to an earlier circular of 1958. This earlier circular is in the form of a letter, No. 4127 S. T. 58 dated 21st July, 1958, issued by the Government of India, Ministry of Finance, Economic Affairs Department. A perusal of the extract, as found in the record, shows that in this letter the authorities were minded to describe what are all the items of iron and steel goods that are covered by Section 14(iv) of the Central Sales Tax Act. It may be observed that the list of iron and steel goods set out in this explanatory letter did not adhere to the format or the enumeration in the several sub-clauses (a) to (d) of Clause (iv), but adopted a different method of serialisation. The intention behind this so-called explanation only seemed to be an elaboration of the items mentioned in Section 14(iv) and not an elucidation of that provision. The Finance Ministry's explanatory note by no means addressed itself to the question of the nature of the single point levy and its impact as between the several items found in the said provision.

31. There is also nothing in the record to show that the assessee's attention had been drawn to this explanatory letter and he had thereupon desisted from collecting sales tax from his purchasers on his understanding of what the letter said. It would, in any case, be too far-fetched to suggest that a mere official catalogue of iron and steel goods covered by Section 14(iv) in the gross, should have impelled any dealer in such goods to take any particular stand on the legal position in preference to another, on the question of single point levy of the goods listed in that circular.

32. There is yet another consideration in this case which rules out the plea of promissory estoppel. The circulars relied on by the assessees, it may be noted, were not issued by the Tamil Nadu Government. They were opinions handed down by the Central Government. The circular of 1972 is addressed, in terms, to the Government of Mysore. And all it did was to offer an expression of opinion by the Finance Ministry, or rather, a communication of the opinion of the Law Ministry on the subject. While copies of this letter might have been circulated to other State Governments, there is no suggestion that the Tamil Nadu Government had itself issued a circular to the same effect and published it for the attention of the trade. It may be observed that the Central Government's circular was founded, out and out, on the decision of this Court in Pyarelal Malhotra's case [1970] 26 S.T.C. 416. This was the very case the State Government was even then fighting in appeal before the Supreme Court with a view to get the decision of the court overruled. In the context, it would be opposed to the facts to regard the State Government as having even impliedly adhered to the Central Government's circular or subscribed to its postulates. It seems to us that even on principle, to interdict assessments from being made by officers of the State Government on the basis of what the Central Government said in their circulars would be to apply wrongly the doctrine of promissory estoppel to affairs of a State founded under a federal Constitution.

33. In Robertson v. Minister of Pensions [1949] 1 K.B. 227, it was held that the opinion expressed by an official in one ministry would serve as an estoppel against action by another ministry on the principle that the two were but different limbs of the same Government. The rule, so stated, applied to the United Kingdom which had a unitary Government. In a federal set up the doctrine cannot be extended beyond interdepartmental level in the same Government and applied to ad hoc opinions of different Governments.

34. It was represented that ever since the decision of this Court in the Pyarelal Malhotra's case [1970] 26 S.T.C. 416 and till the Supreme Court reversed that decision in appeal, the assessing authority, apparently acting under orders, desisted from making any assessment. It seems to us that this cannot be a matter for complaint. For until the Supreme Court allowed the appeal, the decision of this Court held the field, and the State Government and its officers were bound to administer the relevant sales tax provision only in accordance therewith. It was, however, said that the State Government, while appealing to the Supreme Court in that case, had not applied for a stay of the operation of the judgment of this Court. The point of this argument is that if a stay had been obtained, that would have enabled the assessing authorities to proceed with the assessments even without waiting for the Supreme Court's decision in the appeal. As it happened, in the intervening time-lag, the pending assessments had considerably accumulated, putting the assessees to extreme difficulty and distress in the matter of finding ready means for payment, when they came to be completed after the Supreme Court's judgment.

35. It seems to us that the argument, though attractive is untenable. The decision of this Court in the Pyarelal Malhotra's case [1970] 26 S.T.C. 416 and the pendency of the appeal against that decision before the Supreme Court might well have had an impact in the way the assessees had decided to plan or provide for their sales tax liability. But the Government's obtaining or not obtaining a stay of the operation of the judgment, pending the appeal in the Supreme Court, could have little or nothing to do with any action that the assessees might have taken. The law as ultimately laid down by the Supreme Court could alone govern the question. The assessees took a risk, a calculated risk, that the law, as laid down by the highest Court, would not countenance a tax by the State authorities on their sales of steel bars and rods manufactured out of tax-paid steel scrap. As it turned out, they were wrong in making this presumption. We do not think that in this process any question of estoppel can be said to arise.

36. For all the above reasons, we hold that the doctrine of promissory estoppel against Government, as enunciated in the decision of the Supreme Court in Mottled Padampat Sugar Mills Co. Ltd. v. State of U. P. [1979] 44 S.T.C. 42 (S.C.) (C. A. No. 1597 of 1972) has no application to the present case and the State Government cannot be compelled to act contrary to the terms of the statute.

37. If the statute envisaged a liability, then the circular issued by the Government would not stand in the way of the statutory liability being imposed. The non-collection of tax by the assessee is no defence against an assessment. If he is liable to be taxed under the law, then he can be assessed, whether he collected tax or not.

38. The learned Government Pleader has no objection to the matter being enquired into by the appropriate assessing authority in the light of the judgment of the Supreme Court in the cases of the writ petitioners. The assessing authority will give the necessary opportunity to the assessees to place before him any material in support of the assessees' submission for any exemption in the light of the decision of the Supreme Court.

39. Subject to the above directions, the writ appeals (W. A. Nos. 344 and 349 of 1972) are allowed and tax cases (T. C. Nos. 114, 137 and 269 of 1971 and 106 and 130 of 1972) are also allowed. There will be no order as to costs. In W. P. Nos. 689 of 1968 and 966 of 1969 the assessing officer will decide in the light of the Supreme Court decision and are accordingly allowed. W. M. P. Nos. 18 and 19 of 1979 are allowed. No costs.