Binding tax circulars limit departmental action; later judgments cannot justify rectification of a completed assessment.

An existing tax circular issued by the competent authority bound departmental officers while it remained in force, even if it was later viewed as inconsistent with the statute or subsequently withdrawn. A contrary demand based on a later withdrawal was therefore unsustainable. Rectification was confined to a mistake apparent from the record as it stood when the original order was made, so a later judicial pronouncement could not justify reopening the assessment under the rectification power. The rectification order was held beyond jurisdiction, and the appellate order was restored in favour of the dealer.

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Issues: (i) Whether a circular issued by the Commissioner of Trade Tax that excluded additional tax from the computation of Central sales tax bound the departmental authorities while it remained in force; (ii) Whether the assessment could be reopened under the rectification provision on the basis of a later judicial pronouncement and a subsequent withdrawal of the circular.

Issue (i): Whether a circular issued by the Commissioner of Trade Tax that excluded additional tax from the computation of Central sales tax bound the departmental authorities while it remained in force.

Analysis: The circular was in force during the relevant assessment year and at the time of the original assessment order. A circular issued by the competent administrative authority for the proper administration of the Act binds the departmental officers so long as it remains operative, even if it is inconsistent with the statute. A demand or stand taken contrary to such an existing circular cannot be sustained merely because the circular is later found to be erroneous or is subsequently withdrawn.

Conclusion: The circular was binding on the authorities during its currency, and the departmental view contrary to it was unsustainable.

Issue (ii): Whether the assessment could be reopened under the rectification provision on the basis of a later judicial pronouncement and a subsequent withdrawal of the circular.

Analysis: Rectification is confined to a mistake apparent from the record existing on the date of the original order. A subsequent judgment or later withdrawal of a circular cannot create an apparent mistake in an order that was valid when passed. The rectification power cannot be used as a substitute for review or to alter an order on the basis of later developments.

Conclusion: The rectification order under the relevant provision was beyond jurisdiction and could not be sustained.

Final Conclusion: The order of the Tribunal was set aside, the appellate order was restored, and the revision was allowed in favour of the dealer.

Ratio Decidendi: An existing departmental circular governing tax computation binds subordinate authorities until withdrawn, and rectification is permissible only for a patent mistake apparent from the record as it stood when the original order was made.

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