Circulars without statutory authority cannot override tax law; writ petitioners were relegated to the statutory revision remedy.

A circular issued without substantive statutory authority cannot override the Tamil Nadu Value Added Tax Act, and a circular contrary to the statute has no legal force. On the facts, the court noted that the earlier circular on synthetic tarpaulin did not examine the petitioner's product, while the later circular considered the specific commodity and treated it as taxable under the residuary entry. The challenge to the circular was rejected. For the assessment orders, the petitioners had an efficacious statutory revision remedy under Section 54, so the writ court declined interference and relegated them to revision with liberty to proceed within the time granted.

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Issues: (i) Whether the circular dated 25 March 2008 cancelling the earlier circular dated 31 May 2007 retrospectively, and the earlier circular itself, had binding legal force so as to govern the taxability of synthetic tarpaulin under the Tamil Nadu Value Added Tax Act, 2006. (ii) Whether the writ petitioners challenging the assessment orders were to be relegated to the statutory revision remedy under Section 54 of the Tamil Nadu Value Added Tax Act, 2006.

Issue (i): Whether the circular dated 25 March 2008 cancelling the earlier circular dated 31 May 2007 retrospectively, and the earlier circular itself, had binding legal force so as to govern the taxability of synthetic tarpaulin under the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The circular dated 31 May 2007 was issued in response to a request by an association of merchants and was not a clarification sought by or addressed to the petitioner manufacturing synthetic tarpaulin. It contained no detailed reasoning and did not examine the petitioner's product. The later circular dated 25 March 2008 considered the petitioner's specific request, examined the nature of the product, and concluded that synthetic tarpaulin was not an exempt commodity and was taxable at 12.5% under the residuary entry. The Court held that, on the date of the earlier circular, there was no corresponding statutory power under the Tamil Nadu Value Added Tax Act, 2006 enabling such clarification, and the saving clause and procedural rule could not confer independent substantive power. A circular contrary to statute or unsupported by statutory authority has no existence in law.

Conclusion: The earlier circular and the later circular were held to have no statutory validity, and the challenge to the impugned circular failed.

Issue (ii): Whether the writ petitioners challenging the assessment orders were to be relegated to the statutory revision remedy under Section 54 of the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The assessment-related writ petitions attacked the assessment orders themselves, and the petitioners had an efficacious alternative statutory remedy by way of revision before the Deputy Commissioner. The writ petitions had been filed within the limitation period for pursuing that remedy, and the Court accepted the position that the revisional authority could examine the matter on merits and in accordance with law without being influenced by the impugned circular.

Conclusion: The petitioners were relegated to the alternative statutory remedy, with liberty to file revision petitions within the time granted by the Court.

Final Conclusion: The challenge to the circular was rejected, the writ appeal was dismissed, and the assessment-related petitioners were directed to pursue the statutory revisional remedy.

Ratio Decidendi: An executive circular issued without substantive statutory authority cannot override or acquire the force of law, and where an efficacious statutory revision remedy exists, the writ court may decline interference and relegate the party to that remedy.

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