Binding tax circulars remain enforceable until withdrawn, and reassessment cannot ignore valid administrative relief measures.

The Kerala General Sales Tax Act empowered the revenue board to issue administrative directions for proper tax administration, and a circular treating field latex and centrifuged latex as the same commodity was valid as a binding administrative measure. The circular could lawfully provide relief to avoid unfair or double taxation and did not amount to unauthorised legislation or encroachment on the legislative field. Tax authorities were bound by the circular until it was withdrawn or amended, so reassessment proceedings contrary to it were unsustainable. The later government notification did not negate the board's earlier administrative power or the binding effect of the circular.

---

---

Issues: Whether the Board of Revenue was empowered under the Kerala General Sales Tax Act, 1963 to issue Circular No. 16/98 treating field latex and centrifuged latex as the same commodity for administrative purposes, and whether reassessment proceedings could disregard that circular.

Analysis: Section 3(1A)(c) empowered the Board to issue orders, instructions and directions for the proper administration of the Act. The circular was issued by the competent revenue authority as an administrative measure and remained in force. The Court held that tax administration permits the Board to grant administrative relief in appropriate cases, including to avoid unfair or double taxation, even though exemption policy remains with the Government. The circular did not amount to unauthorized legislation or an impermissible encroachment on the legislative field. Binding circulars of this nature govern subordinate tax until withdrawn or amended, and assessments completed in reliance on such a circular could not be reopened on the footing that the circular was not binding. The later Government notification was treated as supporting the possibility of double taxation, not as negating the Board's earlier power.

Conclusion: The circular was valid and binding on the departmental authorities, and the reopening of assessments contrary to it was unsustainable; the decision was in favour of the assessee.

Final Conclusion: The Court upheld the High Court's interference with the reassessment notices because the revenue authorities were bound by the existing administrative circular until it was withdrawn or amended.

Ratio Decidendi: A revenue board empowered to issue directions for proper administration of a tax statute may issue binding administrative circulars granting relief or ensuring fair administration, and subordinate tax cannot ignore such circulars unless they are withdrawn or amended by the competent authority.

---