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2020 ] REAL PRINCE SPINTEX PVT. LTD. v. UNION OF INDIA 373
the Constitution of India, 1950 (in short the ‘Constitution’). The Circu-
lars cannot be given primacy over the decisions.
5. Learned Counsel for the assessee on the other hand submitted
that once the circular has been issued it is binding on the revenue au-
thorities and even if it runs counter to the decision of this Court, the
revenue authorities cannot say that they are not bound by it. The cir-
culars issued by the Board are not binding on the assessee but are
binding on revenue authorities. It was submitted that once the Board
issues a circular, the revenue authorities cannot take advantage of a
decision of the Supreme Court. The consequences of issuing a circular
are that the authorities cannot act contrary to the circular. Once the
circular is brought to the notice of the Court, the challenge by the rev-
enue should be turned out and the revenue cannot lodge an appeal
taking the ground which is contrary to the circular.
6. Circulars and instructions issued by the Board are no doubt bind-
ing in law on the authorities under the respective statutes, but when
the Supreme Court or the High Court declares the law on the ques-
tion 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. So far as
the clarifications/circulars issued by the Central Government and of
the State Government are concerned they represent merely their un-
derstanding of the statutory provisions. They 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 real-
ly no existence in law.
7. As noted in the order of reference the correct position vis-à-vis
the observations in para 11 of Dhiren Chemical’s case (supra) has been
stated in Kalyani's case (supra). If the submissions of Learned Counsel
for the assessee are accepted, it would mean that there is no scope for
filing an appeal. In that case, there is no question of a decision of this
Court on the point being rendered. Obviously, the assessee will not
file an appeal questioning the view expressed vis-a-vis the circular. It
has to be the revenue authority who has to question that. To lay con-
tent with the 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 this Court and the binding ef-
fect in terms of Article 141 of the Constitution.“
33. In the case of J.K. Lakshmi Cement Limited v. Commercial Tax Officer, Pali,
reported in 2018 (14) G.S.T.L. 497 (S.C.), the Supreme Court observed as
under :
“25. The understanding by the assessee and the Revenue, in the ob-
taining factual matrix, has its own limitation. It is because the princi-
ple of res judicata would have no application in spite of the under-
standing by the assessee and the Revenue, for the circular dated 15-4-
1994, is not to the specific effect as suggested and, further notification
dated 7-3-1994 was valid between 1st April, 1994 up to 31st March,
1997 (up to 31st March, 1997 vide notification dated 12-3-1997) and
not thereafter. The Commercial Tax Department, by a circular, could
have extended the benefit under a notification and, therefore, princi-
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