JUDGMENT [ENTITY], J.
1. This application under [SECTION] of the [ACT] has been filed to quash the order of assessment dated March 31, 1994, for the assessment year 1991-92 passed by respondent No. 1 rejecting the claim of the petitioners as regards higher depreciation by refusing to follow the circular dated July 29, 1991, and the circular dated June 14, 1993, issued by the Central Board of Direct Taxes clarifying about the rates of depreciation allowable in the case of assessees engaged in the business of transportation of goods on hire.
2. The circular dated July 29, 1991, is annexure-II to the writ application and that is quoted below (see [PRECEDENT] :
"Sub : Allowance of depreciation on motor vehicles owned and used by tour operators and travel agents in the business of running these vehicles on hire for tourists.
The second proviso to [SECTION] of the [ACT], which disallows depreciation on foreign motor cars, is reproduced below:
'Provided further that no deduction shall be allowed under this clause in respect of any motor car manufactured outside India, where such motor car is acquired by the assessee after the 28th day of February, 1975, and is used otherwise than in a business of running it on hire for tourists.
2. The intention behind this provision is to discourage use of foreign cars for the purposes of business or profession. However, in order to promote tourism industry, an exception has been made in the case of foreign motor cars used in a business of running them on hire for tourists, on which full depreciation is allowable.
2.2. Where tour operators or travel agents use certain foreign motor cars, owned by them, for providing transportation services to tourists, depreciation should be allowed on these cars. The position will not change even where such transportation services are provided as part of a package tour for tourists, which may include a number of other services like boarding and lodging, service of guides, etc. A tourist, who opts for a package tour, agrees to pay for a number of services including use of car provided to him by the tour operator or travel agent. Thus, it can be said that the car has been taken by him on hire from such tour operator or travel agent. Therefore, depreciation on foreign motor cars, owned by him and used for providing transportation services to tourists, whether in a package tour or otherwise, should be allowed.
3. Further, under [SECTION] to the [ACT], a higher rate of depreciation, namely, 50 per cent., is allowed on motor buses, motor lorries and motor taxis used in a business of running them on hire. Therefore, where a tour operator or travel agent uses such vehicles, owned by him, in providing transportation services to the tourists, higher rate of depreciation should be allowed on such vehicles. It is clarified that 'motor vans' are akin to 'motor lorries or 'motor buses' and, therefore, higher rate of depreciation will be allowed on motor vans also, if they are used for providing transport services to tourists."
3. The circular dated June 14, 1993, is annexure-IV to the writ application and that is quoted below (see [PRECEDENT] :
"Sub : [SECTION] of the [ACT] Rate of depreciation on motor lorries used in the business of transportation of goods Regarding.
Under [SECTION] to the [ACT], higher rate of depreciation is admissible on motor buses, motor lorries and motor taxis used in a business of running them on hire. A question has been raised as to whether, for deriving the benefit of higher depreciation, motor lorries must be hired out to some other person or whether the user of the same in the assessee's business of transportation of goods on hire would suffice.
2. In Board's Circular No. 609 dated 29th July, 1991 (see [PRECEDENT], it was clarified that where a tour operator or travel agent uses motor buses or motor taxis owned by him in providing transportation services to tourists, higher rate of depreciation would be allowed on such vehicles. It is further clarified that higher depreciation will also be admissible on motor lorries used in the assessee's business of transportation of goods on hire. The higher rate of depreciation, however, will not apply if the motor buses, motor lorries, etc., are used in some other non-hiring business of the assessee.
3. This may be brought to the notice of all the officers in your charge."
4. The assessment order is annexure-III to the writ application and the relevant portion of the same is quoted below :
"Less-Depreciation under [SECTION] :
The assessee has claimed depreciation on higher rates on trucks and imported trucks as per Board's Circular No. 609, dated July 29, 1991 (see [PRECEDENT]. But as per this circular, it is clear that the higher rate of depreciation is allowable to those assessees whose business is transportation of goods on hire. But in this case, the assessee is carrying on transportation business only. Hence, depreciation on higher rate is disallowed. Accordingly, depreciation is allowed at normal rate of 33 1/3 per cent. as per annexure enclosed at."
5. The brief facts are as follows :
Petitioner No. 1 is a limited company and it carries on the business of transportation of goods on hire. The petitioner-company owns several trucks and sometimes depending upon the volume of business, hires trucks for transportation of goods. The petitioner-company is entitled to higher rates of depreciation as the company is involved in the business of transportation of goods on hire.
6. Under [SECTION] to the [ACT], a higher rate of depreciation is admissible on motor buses, motor lorries and motor taxis used in a business of running them on hire. The petitioner-company claims that the petitioner-company is entitled to this higher rate. On May 3, 1991, the Deputy Commissioner of Income-tax (Assessment), Special Range-I, Guwahati, allowed depreciation at the rate of 30 per cent. instead of 40 per cent. as allowed in the original assessment for the assessment years 1982-83 to 1985-86. The same was accordingly rectified for the assessment years 1982-83 to 1985-86 restricting the rate of depreciation to 30 per cent. An appeal was preferred against the said assessment before the Commissioner of Income-tax (Appeals) and the order of rectification was set aside. The Department preferred an appeal against the said order before the Tribunal and the Tribunal allowed the appeal and decided the matter against the petitioner-company. The Central Board of Direct Taxes, vide its Circular No. 609, dated July 29, 1991 (see [PRECEDENT], clarified that 50 per cent. depreciation is allowed on motor buses, motor lorries and motor taxis running on hire, that is, annexure-II to the writ application and that has been quoted above. On August 22, 1991, the Tribunal declined to refer the question of law to this court under [SECTION] of the [ACT]. The petitioner filed an application before this court under [SECTION] of the [ACT], for a direction to the Tribunal to draw up a statement of the case and refer the question of law to this court. This court, vide its order dated January 7, 1994, in [CASE NUMBER] directed the Tribunal to draw up a statement of the case and refer the question of law to this court On June 14, 1993, the Central Board of Direct Taxes, vide its [SECTION], dated June 14, 1993 (see [PRECEDENT], clarified that the higher rates of depreciation will also be admissible on motor lorries used by the petitioner-company on transportation of goods on hire. By order dated March 31, 1994 (the relevant portion of which has been quoted above), the claim of the petitioner-company as regards higher rates of depreciation was rejected in spite of the circular dated June 14, 1993 (see [PRECEDENT], on the ground that the petitioner-company is carrying on transportation business only. Hence, this writ application.
7. I have heard Mr. [ENTITY], learned counsel for the petitioner, and Mr. [ENTITY], learned counsel for the respondents.
8. The following points are urged by Mr. [ENTITY], learned counsel for the petitioner :
1. That the action of the respondents in disallowing depreciation at the higher rates in contravention of [SECTION] (see [PRECEDENT], issued by the Central Board of Direct Taxes is quite illegal and without jurisdiction.
2. That the petitioner-company being engaged in the business of transporting goods on hire, the petitioner-company is entitled to depreciation at a higher rate as per [SECTION] to the [ACT].
3. That the respondents are bound to follow the circular clarification and guidelines issued by the Central Board of Direct Taxes in exercise of the powers conferred under [SECTION] of the [ACT]. The petitioner having been carrying on the business of transportation on hire and having been using the vehicles for transportation of goods on hire, there is no basis and/or material and/or reasons for denying the benefit of higher depreciation to the petitioner-company.
4. That respondent No. 1 failed to take note of [SECTION], dated June 14, 1993 (see [PRECEDENT], issued by the Central Board of Direct Taxes while completing the assessment on March 31, 1994, and thereby erred in disallowing depreciation at a higher rate. The action of respondent No. 1 is contrary to the clarification issued by the Central Board of Direct Taxes under [SECTION] of the [ACT].
9. At the beginning, Mr. [ENTITY], learned counsel for the respondents, urges a preliminary objection that this application under [SECTION] of the [ACT] is not maintainable on the following grounds :
1. that there is an alternative, efficacious remedy ;
2. that it involves a disputed question of fact.
10. In support of his contention, Mr. [ENTITY] places reliance on the following :
1. [PRECEDENT], where in paragraph 18 (page 378) of the judgment, the Supreme Court pointed out as follows (at page 1690 of AIR 1988 SC) :
"Broadly speaking, the contention on behalf of the State Government is that relief under [SECTION] of the [ACT] is not available to enforce administrative rules, regulations or instructions which have no statutory force, in the absence of exceptional circumstances. It is well-settled that mandamus does not lie to enforce Departmental manuals or instructions not having any statutory force, which do not give rise to any legal right in favour of the petitioner. The law on the subject is succinctly stated in [ENTITY]'s Administrative Laws, second edition, at page 144 :
'Administrative instructions, rules or manuals, which have no statutory force, are not enforceable in a court of law. Though for breach of such instructions, the public servant may be held liable by the State and disciplinary action may be taken against him, a member of the public who is aggrieved by the breach of such instructions cannot seek any remedy in the courts. The reasons are, that not having the force of law, they cannot confer any legal right upon anybody, and cannot, therefore, be enforced even by writs under [SECTION].
The learned author, however, rightly points out at page 145 ;
'Even though a non-statutory rule, bye-law or instructions may be changed by the authority who made it, without any formality and it cannot ordinarily be enforced through a court of law, the party aggrieved by its non-enforcement may, nevertheless, get relief under [SECTION] of the [ACT] where the non-observance of the non-statutory rule or practice would result in arbitrariness or absence of fairplay or discrimination, particularly where the authority making such non-statutory rule or the like comes within the definition of "State" under [SECTION]'."
2. [PRECEDENT] where in paragraph 4 (at page 899), the Supreme Court pointed out as follows :
"The High Court dismissed the writ petition on the ground that it involved determination of disputed questions of fact. It was also observed that the High Court should not in exercise of its extraordinary jurisdiction grant relief to the appellant when he had an alternative remedy. After hearing Mr. [ENTITY] on behalf of the appellant, we see no cogent ground to take a view different from that taken by the High Court. There cannot, in our opinion, be any doubt, on the point that the extent of purity of the gypsum won by the appellant is a question of fact. It has also been brought to our notice that after the dismissal of the writ petition by the High Court, the appellant has filed a suit, in which he has agitated the same question which is the subject-matter of the writ petition. In our opinion, the appellant cannot pursue two parallel remedies in respect of the same matter at the same time."
3. [PRECEDENT], where the Supreme Court considered the order passed by the High Court. The order passed by the High Court is available at page 667 and that is quoted below :
"Having heard learned counsel for both the parties and having gone through the records, we are not inclined to interfere with the impugned order(s) in the exercise of our extraordinary jurisdiction since there is a right of appeal against the same. It is contended on behalf of the petitioner that the impugned order being a nullity the petitioner is entitled to invoke our extraordinary jurisdiction. We are not satisfied that this is a case of inherent lack of jurisdiction. There is no violation of the principles of natural justice."
11. In page 668, the Supreme Court observed as follows :
"We are constrained to dismiss these petitions on the short ground that the petitioners have an equally efficacious alternative remedy by way of an appeal to the prescribed authority under [SECTION] of the Act, then a second appeal to the Tribunal under Sub-section (3)(a) thereof, and thereafter in the event the petitioners get no relief, to have the case stated to the High Court under [SECTION] of the Act. In [PRECEDENT], Lord [ENTITY] J., in delivering the judgment of the Board, observed that in the provenance of tax where the Act provided for a complete machinery, which enabled an assessee to effectively raise in the courts the question of validity of an assessment, denied an alternative jurisdiction to the High Court to interfere. It is true that the decision of the Privy Council in Raleigh Investment Co.'s case [CASE NUMBER] was in relation to a suit brought for a declaration that an assessment made by the Income-tax Officer was a nullity, and it was held by the Privy Council that an assessment made under the machinery provided by the Act, even if based on a provision subsequently held to be ultra vires, was not a nullity like an order of a court lacking jurisdiction and that [SECTION] of the [ACT], operated as a bar to the maintainability of such a suit. In dealing with the question whether [SECTION] operated as a bar to a suit to set aside or modify an assessment made under a provision of the Act which is ultra vires, the Privy Council observed (at page 336) :
'In construing the section it is pertinent, in their Lordships' opinion, to ascertain whether the Act contains machinery which enables an assessee effectively to raise in the courts the question whether a particular provision of the [ACT] bearing on the assessment made is or is not ultra vires. The presence of such machinery, though by no means conclusive, marches with a construction of the section which denies an alternative jurisdiction to inquire into the same subject-matter'."
(b) The Supreme Court also considered its earlier decision in [PRECEDENT] and pointed out as follows (at page 671) :
(a) that the rule which requires the exhaustion of alternative remedies is a rule of convenience and discretion rather than a rule of law ; in other words, it does not bar the jurisdiction of the court.
(b) The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under [SECTION] of the [ACT]. It is now well-recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of."
12. The Supreme Court further pointed out as follows (at page 671) :
"This rule was stated with great clarity by [ENTITY] J., in [PRECEDENT] at page 356 in the following passage :
"There are three classes of cases in which a liability may be established founded upon statute But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it the remedy provided by the statute must be followed, and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to'."
13. Mr. [ENTITY], learned counsel for the respondent, also relies on the following decisions to show that the circulars of the Central Board are in the nature of administrative instructions and they cannot be enforced by issue of a mandamus and in support of it, he relies on the following decisions :
1. [PRECEDENT]. That was not a case under the [ACT]. In paragraph 10 (at page 304) of the judgment, the Supreme Court pointed out as follows :
"In [PRECEDENT] at page 377; [PRECEDENT], this court, in considering the nature of the import trade policy said :
'Granting that it is executive in character, this court has held that the courts have the power in appropriate cases to compel performance of the obligations imposed by the Schemes upon the Departmental authorities.' To say that an administrative order can never confer any right would be too wide a proposition. There are administrative orders which confer rights and impose duties. It is because an administrative order can abridge or take away rights that we have imported the principle of natural justice of audi alteram partem into this area. A very perceptive writer has written :
'Let us take one of Mr. [ENTITY]'s instances, a regulation from the British War Office that no recruit shall be enlisted who is not five feet-six inches high. Suppose a recruiting officer musters in a man who is five feet-five inches only in height, and pays him the King's shilling; afterwards the officer is sued by the Government for being short in his accounts; among other items he claims to be allowed the shilling paid to the undersized recruit. The court has to consider and apply this regulation and, whatever its effect may be, that effect will be given to it by the court exactly as effect will be given to a statute providing that murderers shall be hanged, or that last wills must have two witnesses' ([ENTITY] on 'The Nature and Sources of the Law')."
14. This case instead of helping the respondents helps the petitioner.
2. [PRECEDENT], where in paragraph 12 (at page 1756), the Supreme Court pointed out as follows :
"(a) Before however, we consider the question whether instructions in the Code have been followed or not, we have to decide whether these instructions have any statutory force. If they have no statutory force, they confer no right on anybody and a tenderer cannot claim any rights on the basis of these administrative instructions. If these are mere administrative instructions it may be open to Government to take disciplinary action against its servants who do not follow these instructions but non-observance of such administrative instructions does not in our opinion confer any right on any member of the public like a tenderer to ask for a writ against Government by a petition under [SECTION].
(b) . . . . But assuming that there has been any breach that is a matter between the State Government and its servant, and the State Government may take disciplinary action against the servant concerned who disobeyed these instructions. But such disobedience did not confer any right on a person like the appellant, to come to court for any relief based on the breach of these instructions. It is for this reason that we are not referring to the Code, though the High Court did consider whether there was any breach of these administrative instructions and came to the conclusion that there was no breach. In the view we take, it is unnecessary for us to consider this, for we are of opinion that no claim for any relief before a court of law can be founded by a member of the public, like the appellant, on the breach of mere administrative instructions."
15. On the other hand, Mr. [ENTITY], counsel appearing on behalf of the petitioner, relies on the following :
1. [PRECEDENT], where, the Supreme Court pointed out as follows (at page 207) :
"It is well-settled, however, that though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, it is well-settled, will issue appropriate orders or directions to prevent such consequences."
16. Regarding the binding nature of circulars, Mr. [ENTITY], learned counsel on behalf of the petitioner, relies on the following decisions :
1. [ENTITY] v. ITO [PRECEDENT], where the Supreme Court pointed out as follows (at page 612) :
"But the construction which is commending itself to us does not rest merely on the principle of contemporanea expositio. The two circulars of the CBDT to which we have just referred are legally binding on the Revenue and this binding character attaches to the two circulars even if they be found not in accordance with the correct interpretation of Sub-section (2) and they depart or deviate from such construction. It is now well settled as a result of two decisions of this court, one in [PRECEDENT] and the other in [PRECEDENT] that circulars issued by the CBDT under [SECTION] of the Act are binding on all officers and persons employed in the execution of the Act even if they deviate from the provisions of the Act."
2. [PRECEDENT], where the Supreme Court pointed out as follows (at page 921) :
"Now, coming to the question as to the effect of instructions issued under [SECTION] of the Act, this court observed in [ENTITY] v. K.K. Sen, AAC [PRECEDENT] :
'It is clear that a circular of the kind which was issued by the Board would be binding on all officers and persons employed in the execution of the Act under [SECTION] of the Act. This circular pointed out to all the officers that it was likely that some of the companies might have advanced loans to their shareholders as a result of genuine transactions of loans, and the idea was not to affect such transactions and not to bring them within the mischief of the new provision.
The directions given in that circular clearly deviated from the provisions of the Act, yet this court held that the circular was binding on the Income-tax Officer."
3. [PRECEDENT] where the Andhra Pradesh High Court pointed out as follows (at page 306) :
"The law is fairly settled that the instructions and directions given by the Central Board of Direct Taxes under [SECTION] of the Act are binding on all the subordinate officers in the execution of the Act. Reference may be invited to the decisions of the Supreme Court in [ENTITY] v. K.K. Sen, AAC [PRECEDENT], [PRECEDENT] and [ENTITY] v. HD [PRECEDENT]. In [ENTITY]'s case [PRECEDENT], the instructions given by the Central Board of Direct Taxes ran counter to the provisions of [SECTION] and [SECTION] of the [ACT]. Even so, the Supreme Court held that the instructions given by the Central Board of Direct Taxes were binding on the Revenue. Similarly, the instructions contained in the circular, which was considered by the Supreme Court in Ellerman Lines Ltd.'s case [PRECEDENT], were contrary to the provisions of the Act. Even so, the Supreme Court held that the circular was binding on the officials of the Income-tax Department. The following observations of the Supreme Court in Ellerman Lines Ltd.'s case [PRECEDENT] are relevant :
'Now, coming to the question as to the effect of instructions issued under [SECTION] of the Act, this court observed in [ENTITY] v. K.K. Sen, AAC [PRECEDENT], 203 (SC) :
"It is clear that a circular of the kind which was issued by the Board would be binding on all officers and persons employed in the execution of the Act under [SECTION] of the Act. This circular pointed out to all the officers that it was likely that some of the companies might have advanced loans to their shareholders as a result of genuine transactions of loans, and the idea was not to affect such transactions and not to bring them within the mischief of the new provision."
17. The directions given in that circular clearly deviated from the provisions of the Act, yet this court held that the circular was binding on the Income-tax Officers.'
18. The same view was reiterated by the Supreme Court in [ENTITY]'s case [PRECEDENT] above referred to. The above-mentioned three decisions of the Supreme Court set at rest any doubt as to the binding nature of the circulars issued by the Central Board of Direct Taxes so far as the officials of the Income-tax Department are concerned. We may also refer to two Bench decisions of this court in [PRECEDENT] and [PRECEDENT], which has taken the same view following the above decisions of the Supreme Court. Having regard to the above decisions we are unable to accede to the submission of learned standing counsel for the Revenue that departmental officials are not bound to implement the instructions of the Central Board of Direct Taxes, if such instructions deviate from the correct legal position. We may point out that the provisions of [SECTION] of the Act enjoin that the officers of the Income-tax Department are bound by the instructions and directions given by the Central Board of Direct Taxes. Wherever the instructions given by the Central Board of Direct Taxes to relieve hardship to an assessee are violated and if such instructions are issued in exercise of the powers vested in the Central Board of Direct Taxes under [SECTION] of the Act, it is certainly open to this court to compel the Income-tax Officer to follow the instructions of the Central Board of Direct Taxes. This is not to say that this court is bound by the instructions of the Central Board of Direct Taxes. All that is required to be said is that, so far as the officials of the Income-tax Department are concerned, it is not open to them to say that they would not follow the instructions of the Central Board of Direct Taxes and carry matters in appeals and references. Indeed, we do not know whether the Commissioner of Income-tax, who carried this matter in reference to this court, is aware of the above-mentioned circular and, if so, why he thought it necessary to seek a reference on this point to this court when the matter is clearly governed by the circular of the Central Board of Direct Taxes. We do not wish to say anything more."
19. In the background of this law, now let us have a look at the facts and circumstances of this case on hand. There is no denying the fact that against the order dated March 31, 1994, appropriate and efficacious remedy is available under the [ACT]. But that remedy was not pursued by the petitioner. Instead the petitioner came to this court. Earlier against the decisions in the assessment years 1982-83 to 1985-86 an appeal was filed before the Income-tax Appellate Tribunal at Guwahati which is annexure-I to the writ application and in that appeal the same question was considered by the authority in para 5 of the judgment. But it is not understood why this remedy was not pursued by the petitioner regarding the assessment order for the year 1991-92. The circular will show that the circulars dated June 14, 1993 (see [PRECEDENT] and July 29, 1991 (see [PRECEDENT] laid down certain conditions and these conditions were interpreted by the assessing authority and it was found that the higher depreciation was allowable in the case of assessees engaged in the business of transportation of goods on hire. But it was found that the assessee is carrying on transportation business only. That aspect of the matter was considered by the appellate authority, vide annexure-I to the writ application and was allowed by the authority on certain conditions. This matter cannot be decided in a writ application inasmuch as it involves disputed questions of fact. I am not inclined to hold that the order of assessment dated March 31, 1994, is without the authority of law. If this is the position, the question of interfering in the matter in exercise of the power under [SECTION] of the [ACT] does not arise. The petitioner must pursue his remedy in the appropriate forum. But it is made clear that the circular dated July 29, 1991 (see [PRECEDENT] and circular dated June 14, 1993 (see [PRECEDENT], shall be binding on the income-tax authority, but whether the petitioner will be entitled to the benefit of the circulars will have to be decided by the authority as and when the same is agitated before the authority.
20. In view of that matter, there is no merit in this writ application and the question of allowing the petitioner higher rates of depreciation on the vehicles utilised by them on the basis of the circulars mentioned above does not arise. I leave the parties to bear their own costs.