Departmental circulars bind the Revenue until withdrawn, while their application must be tested on the facts before final assessment.

A departmental circular issued under the statutory clarification power was treated as binding on the Revenue while it remained in force, even if the Department later considered it inconsistent with the statute, until withdrawn prospectively. The Court also noted that whether the circular applied to particular dealers depended on the facts of each case and could not be conclusively decided at the show-cause notice stage. Accordingly, objections and supporting materials were to be placed before the assessing authority for a fresh decision on applicability in the assessment process.

---

---

Issues: (i) whether the departmental circular and clarification governing purchase tax on turmeric were binding on the Revenue; (ii) whether the applicability of the circular to the dealers could be decided conclusively at the stage of show-cause notice.

Issue (i): whether the departmental circular and clarification governing purchase tax on turmeric were binding on the Revenue.

Analysis: Section 7-A of the Tamil Nadu General Sales Tax Act was treated as a charging as well as remedial provision intended to prevent leakage of tax, while Section 8 exempted tax on goods in the Third Schedule and Section 28-A empowered the Commissioner to issue clarifications. The Court held that the power under Section 28-A(2) was wide enough to cover clarification on exemption-related matters and that a circular in force binds the Revenue, even if the Department later contends that it conflicts with the statute, until it is withdrawn prospectively.

Conclusion: The circular and clarification were binding on the Revenue.

Issue (ii): whether the applicability of the circular to the dealers could be decided conclusively at the stage of show-cause notice.

Analysis: The Court noted that the circular's application depended on the facts of each case and that the Revenue disputed its applicability to the dealers before any assessment on merits. In those circumstances, the Court declined to finally decide applicability at the notice stage and directed the dealers to place objections and materials before the assessing authority, which would be forwarded for decision by the Commissioner of Commercial Taxes.

Conclusion: The circular's applicability was left to be decided on the facts of each case in the assessment process.

Final Conclusion: The writ matters were disposed of by setting aside the impugned assessments made without reference to the circular, permitting objections and materials to be filed, and requiring a fresh decision on applicability in accordance with law.

Ratio Decidendi: A departmental circular issued under the statutory clarification power binds the Revenue while it remains in force, and its application must be tested on the facts of each case before final assessment.

---