(1) THE High court decided against the Sales Tax authorities basing itself upon a circular addressed by the Commissioner of Sales Tax to all Assistant Commissioners (Tax Assessment). The Sales Tax authorities challenge the High courts decision by special leave. On behalf of the Sales Tax authorities, it is contented that the said circular is contrary to the law and that, therefore, the High court should have decided the matter without reference to it. Reliance was placed upon the judgment of two learned judges of this Court in Bengal Iron Corporation & Anr. v. Commercial Tax Officer & Ors. JT 1993 (3) SC 134 = (1994 Suppl.(l) SCC 310). In Paragraph 18, it was said : "So far as clarifications/circulars issued by the central government and/or state Government are concerned, they represent merely their understanding of the statutory provision. They are not binding upon the courts. It is true that those not clarifications and circulars were communicated to the concerned deals but even so nothing prevents the State from recovering the tax, if in truth such tax was leviable according to law." (2) IT was submitted on behalf of the Sales Tax authorities that notwithstanding the said circular, they were entitled to recover the concerned tax from the respondent. (3) THE said circular issued on 19/01/1991 by the commissioner of Sales Tax remains in effect till date. It has not been shown that it has been withdrawn. It is, therefore, very remarkable that it should be contented on behalf of the very Sales Tax department whose Commissioner issued that circular that it is erroneous. It is very remarkable that the Sales Tax authorities should instruct their Assistant commissioners who deal with tax assessment in a manner which is according to them, contrary to the law. (4) 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. (5) THE observation in paragraph 18 of the judgment in Bengal Iron Corporation can at best apply only when a case of estoppel against a statute is made out. (6) THE civil appeals are dismissed with costs.