Departmental circulars bind revenue officers when in force, and Form 37 relief applied to iron ore used as manufacturing input.

A generally issued departmental clarification permitting purchase of iron ore lumps against Form 37 under section 5-A of the Karnataka Sales Tax Act, 1957 binds the assessing authority while it remains in force. The court applied settled Supreme Court authority that a circular or instruction is not binding on the assessee or the court, but it is binding on the revenue administration and cannot be ignored by an assessing officer. Because the iron ore lumps were used as raw material in the manufacture of pig iron and cast iron, the clarification was treated as falling within section 5-A and had to be given effect to.

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Issues: Whether the Commissioner's clarification permitting purchase of iron ore lumps against form 37 under section 5-A of the Karnataka Sales Tax Act, 1957 was binding on the assessing authority.

Analysis: The clarification had been issued generally, had wide publicity, and was not shown to be merely a private communication. The Court relied on settled Supreme Court authority that a departmental circular or instruction, though not binding on the assessee or the court, binds the revenue administration so long as it remains in force. An assessing officer cannot adopt a view contrary to the departmental interpretation, particularly where the goods in question were used as raw material in manufacture. Since the lumps were used in the manufacture of pig iron and cast iron, the clarification fell within the scope of section 5-A and was required to be given effect to.

Conclusion: The clarification was binding on the assessing authority and the assessee was entitled to the benefit of form 37 under section 5-A.

Ratio Decidendi: A departmental clarification or circular, when generally issued and in force, binds the assessing authority and cannot be disregarded by the revenue, even though it remains open to challenge by the assessee.

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