Binding High Court principle prevails over earlier administrative guidance in reassessment of sales tax deduction claims.

A subordinate tax authority, when rehearing an assessee's claim for deduction, must apply the governing principle declared by the HC and not an earlier administrative view that has been superseded. The Board of Revenue was therefore not justified in directing the Sales Tax Officer to proceed on the principle in its earlier Case No. 64 of 1948, because that principle no longer held the field after the High Court's ruling in the related tobacco manufacturers matter. The Sales Tax Officer was required to follow the High Court's principle and then determine entitlement to deduction under the Bihar Sales Tax Act, 1944.

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Issues: Whether the Board of Revenue, while remanding the case to the Sales Tax Officer to examine the assessee's claim for deduction under Section 5(2)(a)(ii) or Section 5(2)(a)(v) of the Bihar Sales Tax Act, 1944, was justified in directing the officer to act on the principle laid down in the Board's earlier Case No. 64 of 1948.

Analysis: The reference was narrowed to the legality of the direction accompanying the remand. The earlier principle relied upon by the Board had already been superseded by the High Court's decision in the related tobacco manufacturers case. A subordinate authority, while reconsidering the assessee's claim for deduction, was bound to apply the governing principle declared by the High Court and not an earlier administrative principle that no longer held the field.

Conclusion: The Board of Revenue was not correct in directing the Sales Tax Officer to act on the principle laid down in Case No. 64 of 1948. The Sales Tax Officer was required to follow the principle stated by the High Court and then decide the assessee's entitlement to deduction.

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