Supreme Court drops a Bombshell - Board Circulars not binding!
IT is now almost settled law that the Circulars and Instructions of the Board are binding on the subordinate officers of the Board, but in a recent judgement, the Supreme Court observed, "In our view, the departmental circulars are not binding on assessee or quasi judicial authorities or courts."
Now, is this an obiter dictum or a binding decision? If the Departmental Circulars are not binding on anyone, what would be the purpose of those circulars?
In Commissioner of Central Excise vs Ratan Melting & Wire Industries - , a Constitutional Bench of the Supreme Court held, "Circulars and instructions issued by the Board are no doubt binding in law 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 this Court or the High Court. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law."
Certainly, that decision of the five-judge bench of the Supreme Court will prevail over the present two-judge bench decision.
Please see Breaking News for the latest Supreme Court Judgement.