Binding Effect of circulars / orders / instructions - Indian Laws - General

Binding Effect of circulars / orders / instructions- The binding nature of circulars and instructions issued by the Central Board of Direct Taxes (CBDT) is an important aspect of tax administration in India. These circulars and instructions facilitate the clear administration of taxing statutes. They serve a clarificatory purpose, helping to elucidate the legislative intent or the context behind a particular law. As such, circulars can be considered contemporaneous expositio, providing valuable insights into understanding otherwise complex tax provisions. Binding nature of circulars on department : In Hindustan Aeronautics Ltd. Vs CIT, [2000 (5) TMI 3 - SUPREME COURT] - Held that, It is well settled that instructions/circulars cannot be inconsistent with the provision of the parent act when they seek to tone down the rigours of the Act. In any event, circulars/instructions are only binding on the Revenue, not on the assessees and certainly not on the Hon'ble Courts.