Binding Nature of Departmental Circulars - Indian Laws - General

Apex Court in the case of: Bengal Iron Corporation Versus Commercial Tax Officer - 1993 (4) TMI 277 - SUPREME COURT OF INDIA has held that: So far as Clarifications/Circulars issued by the Central Government and/ or State Government are concerned, they represent merely their understanding of the statutory provisions. They are not binding upon the courts. It is true that those clarifications and circulars were communicated to the concerned dealers but even so nothing prevents the State from recovering the tax, if in truth such tax was leviable according to law. There can be no estoppel against the statute. The understanding of the Government, whether in favour or against the assessee, is nothing more than its understanding and opinion. It is doubtful whether such clarifications and circulars bind the quasi-judicial functioning of the authorities under the Act. While acting in quasi-judicial capacity, they are bound by law and not by any administrative instructions, opinions, clarifications or circulars.