Administrative instructions cannot bind tax adjudication; orders based on them were set aside and remanded for fresh consideration.

Administrative instructions issued by the Commissioner, not under the statutory circular-making power, do not bind quasi-judicial assessing authorities and cannot sustain cancellation of concessional tax benefits or penalty orders. Orders passed on that basis were therefore unsustainable. The assessing authority also failed to consider objections on the applicability of the notification, the scope of the second proviso, and whether action against sellers was authorised at all. Because those legal and factual objections required independent examination, the impugned orders were set aside and the matters remanded for fresh adjudication after notice and hearing, leaving the underlying tax liability questions open.

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Issues: (i) Whether administrative circulars issued by the Commissioner, not under section 42-A, could bind assessing authorities or sustain cancellation of concessional tax benefit and penalty orders. (ii) Whether the impugned orders against manufacturers and selling dealers could stand when the objections on applicability of the notification and the authority to proceed against sellers were not considered.

Issue (i): Whether administrative circulars issued by the Commissioner, not under section 42-A, could bind assessing authorities or sustain cancellation of concessional tax benefit and penalty orders.

Analysis: The concessional levy scheme under section 5-B permits specified purchases against declaration forms, but the Commissioner's later communications were held to be administrative in character and not circulars issued under section 42-A. Such internal instructions do not have binding force on quasi-judicial assessing authorities. When the impugned orders were passed relying on those communications, the authorities acted on material that could not legally govern the adjudication. The earlier clarification and the later circulars were therefore not determinative of the petitioners' liability in quasi-judicial proceedings.

Conclusion: The circulars could not bind the assessing authorities, and the orders founded on them could not be sustained.

Issue (ii): Whether the impugned orders against manufacturers and selling dealers could stand when the objections on applicability of the notification and the authority to proceed against sellers were not considered.

Analysis: The record showed that the assessing authority did not consider the objections raised by the petitioners, including the effect of the Government notification, the scope of the second proviso, and, in the cases of sellers, whether the statute authorised action against them at all. Since the matter involved factual and legal questions requiring independent consideration, the orders were not fit to be sustained as they stood. The appropriate course was to set aside the orders and remit the matters for fresh adjudication after notice and opportunity of hearing.

Conclusion: The impugned orders were set aside and the matters were remanded for reconsideration.

Final Conclusion: The writ petitions succeeded to the limited extent of securing cancellation of the impugned orders and a fresh decision after hearing, but the substantive tax liability questions were left open for reconsideration.

Ratio Decidendi: Administrative instructions not issued under the statutory circular-making power do not bind quasi-judicial tax authorities, and orders passed in reliance on such instructions are liable to be set aside and remanded for fresh consideration.

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