Held by 5 Judge Bench, in the context of excise law:
(i) While circulars and instructions issued by the Board are binding on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view expressed in a decision of the SC or the High Court.
(ii) The clarifications/circulars issued by the Central & State Government merely represent their understanding of the statutory provisions and are not binding upon the court. It is for the Court to declare what the particular provision of statute says and it is not for the Executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law.
(iii) To say that a revenue authority cannot question a circular would mean that the valuable right of challenge would be denied to him and there would be no scope for adjudication by the High Court or the Supreme Court. That would be against very concept of majesty of law declared by the Supreme Court and the binding effect in terms of Article 141 of the Constitution.
Related Judgements
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As s. 35-G of the Central Excise Act (and s. 130 of the Customs Act) provides that an appeal to the High Court shall be filed within 180 days of the receipt of the order appealed against and there is no provision for condonation of delay the court has…
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March 31st, 2009 at 8:51 am
[...] Though the Circulars issued by the CBDT are not binding on the court as held in CCE vs. Ratan Melting & Wire Industries 231 ELT 22 (S.C.), it is binding on the authorities and while it is for the Court to read the [...]