M/S BINANI INDUSTRIES LTD. KERELA vs ASSTT. C.C.T. VI CIRCLE, BANGALORE

The Supreme Court upheld the validity of the Circular dated 23.10.1999 issued under the Karnataka Sales Tax Act, 1957, which clarified that transactions could be taxed under Sections 5 and 5-C despite the earlier Circular dated 12.4.1996. The Court emphasized that the amendment to Section 5-C reinstating 'taxable turnover' was valid and that the earlier Circular did not reflect the correct legal position. The Court ruled that the revenue was bound by the incorrect Circular for the assessment years 1996-97 to 1999-2000, thus protecting the assessees from reassessment during that period.