( 1 ) AGAINST the orders made in the writ petitions these writ appeals are filed by the writ petitioners. The respective petitioners challenge the levy of surcharge levied on the amount of Agricultural Income-tax pursuant to the amendment effected to the Karnataka Agricultural income Tax Act, by Karnataka Ordinance 13 of 1980. Two contentions were raised by the petitioners viz. , 1) that the Ordinance having lapsed on 11-3-1981, could not be invoked and no tax be levied thereunder; 2) the Commissioner of Agricultural Income-tax had issued a circular on 13 th September, 1985 as per Circular no. 2/85-86 wherein he has clearly stated that in cases where assessments were pending the surcharge shall not be levied under lapsed Ordinance. ( 2 ) THE learned single Judge however did not agree with these contentions. On the first question the view expressed by the learned single judge may be stated in the words used in an earlier judgment quoted in the Order -1987 (1) Kar. L. J. 349 under appeals, as follows:-" Though the duration of the Ordinance is limited to the period laid down in clause 2 (a) of Article 213 of the Constitution, but its effect will endure even after the expiry of the Ordinance. In other words, matters governed by or affected by the Ordinance even if they are considered after the lapse of Ordinance, the Ordinance will have to be applied. Therefore, when the authority made the assessment for the assessing year 1980-81, it was required to take into consideration the Ordinance. The mere fact that the assessment order was passed subsequent to lapse of the Ordinance, did not enable the assessee to avoid the liability of surcharge imposed by the Ordinance for the period of assessment in question. That being so, the respondent was justified in imposing the surcharge. " ( 3 ) ON the second question, the learned single Judge observed that the Circular being contrary to law had no force of law and therefore the authorities were right in levying the surcharge, ignoring the Circular. ( 4 ) IN these writ appeals the learned Counsel for the appellants raised the same contentions. Having regard to the view we have taken in respect of the effect of the aforesaid Circular issued by the Commissioner, it is not necessary for us to express any opinion on the first-question. ( 4 ) IN these writ appeals the learned Counsel for the appellants raised the same contentions. Having regard to the view we have taken in respect of the effect of the aforesaid Circular issued by the Commissioner, it is not necessary for us to express any opinion on the first-question. ( 5 ) UNDER the Agricultural Income Tax Act, the legislature has created hierarchy of officials and the Commissioner has been entrusted with power of administering the Act. Section 17 (5) which is relevant reads:-"all Officers and persons employed in the execution of this Act shall observe and follow the orders, instructions and directions of the State Government and the Commissioner provided that no such order, direction or instructions shall be given so as to interfere with the directions of any appellate authority in exercise of its appellate functions". ( 6 ) FROM the above provision it is clear that the authorities acting under the Act are bound to follow the orders, instructions and directions issued by the Commissioner. Circular issued by the Commissioner certainly is either an order or a direction falling within the scope of the above provision. The said provision is similar to section 119 of the Income Tax Act, and circular issued under the relevant provisions of Income Tax act were considered by the Supreme Court in several cases. The earlier decisions were referred in Varghese case ie. , K. P. Varghese v I. T. Officer, Eranakulum, AIR 1981 SC page 1922. The Supreme Court held:-"but the construction which is commending itself to us does not rest merely on the principle of contemporanea exposition. The two circulars of the Central Board of Direct taxes 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 Navnitlal C. Jhaveri v K. K. Sen, ( (1965)56 ITR 198) : ( AIR 1965 SC 1375 ) and the other in Elleman Lines Ltd. v commr. It is now well settled as a result of two decisions of this Court, one in Navnitlal C. Jhaveri v K. K. Sen, ( (1965)56 ITR 198) : ( AIR 1965 SC 1375 ) and the other in Elleman Lines Ltd. v commr. of Income-tax, West Bengal, ( (1971) 82 ITR 913) : ( AIR 1972 SC 524 ) that circulars issued by the Central Board of Direct taxes, under Section 119 of the Act arc binding on all Officers and persons employed in the execution of the Act even if they deviate from the provision of the Act. The question which arose in Navnitlal C. Jhaveri's case (supra) was in regard to the constitutional validity of Secs. 2 (6a) (e) and 12 (1 B) which were introduced in the Indian income Tax Act, 1922, by the Finance Act, 1955 with effect from 1st April, 1955. These two sections provided that any payment made by a closely held company to its shareholder by way of advance or loan to the extent to which the company possesses accumulated profits shall be treated as dividend taxable under the Act and this would include any loan or advance made in any previous year relevant to any assessment year prior to the assessment year 1955-56, if such loan are advance remained outstanding on the 1st day of the previous year relevant to the assessment year 1955-56. The constitutional validity of these two sections was assailed on the ground that they imposed unreasonable restrictions on the fundamental right of the assessee under article 19 (l) (f) and (g) of the Constitution by taxing outstanding loans or advances of past years as dividend. The revenue however relied on a Circular issued by the central Board of Revenue under Section 5 (8) of the Indian Income Tax, 1922 which corresponded to Section 119 of the present act and this Circular provided that if any such outstanding loans or advances of past years were repaid on or before 30th June, 1955, they would not be taken into account in determining the tax, liability of the shareholders to whom such loans or advances were given. This circular was clearly contrary to the plain language of Section 2 (6a) (e) and Section 12 (1b), but even so this Court held that it was binding on the revenue and since "past transactions which would normally have attracted the stringent provisions to Section 12 (1 B) as it was introduced in 1955, were substantially granted exemption from the operation of (he said provisions by making it clear to all the companies and their shareholders that if the past loans were genuinely refunded to the companies they would not be taken into account under Section 12 (1 B),"sections 2 (6a) (e) and 12 (1b) did not suffer from the vice of unconstitutionality. This decision was followed in Ellerman Lines case ( AIR 1972 SC 524 ) (supra) where referring to another circular issued by the central Board of Revenue under Section 5 (8) of the I. T. Act, 1922 on which reliance was placed on behalf of the assessee, this court observed (at p. 528):"now, coming to the question as to the effect of instructions issued under Section 5 (8) of the Act, this Court observed in navnit Lal, C. Jhaveri v K. K. Sen, Appellate assistant Commissioner, Bombay. "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 5 (8) 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 Officers. " the two circulars of the Central Board of Direct Taxes referred to above must therefore be held to be binding on the revenue in the administration or implementation of sub-section (2) and this sub-section must be read as applicable only to cases where there is understatement of the consideration in respect of the transfer. " the two circulars of the Central Board of Direct Taxes referred to above must therefore be held to be binding on the revenue in the administration or implementation of sub-section (2) and this sub-section must be read as applicable only to cases where there is understatement of the consideration in respect of the transfer. ( 7 ) THE Supreme Court referred to the two circulars issued by the Central Board of Direct taxes and observed that the said two Circulars departed or deviated from the construction of sub-section (2) of Section 52 involved therein, but held that the Circulars issued by the Central board of Direct Taxes were binding on all officers in the execution of the Act even if they deviate from the provisions of the Act. Therefore it was held that the two circulars were binding on the Revenue in the administration or implementation of provisions of the Income Tax act. ( 8 ) APPLYING the same principle to the instant appeals, it has to be held that the circular issued by the Commissioner of Agricultural Income Tax was binding on the subordinate Officers, and the assessing authorities under the Karnataka agricultural Income Tax Act were bound to give effect to the said circular issued by the commissioner. ( 9 ) THE learned single Judge has proceeded on the assumption that the circular was not binding on the authorities since it was contrary to law. With utmost respect we are not in agreement with this view. The interpretation given to the ordinance and the effect of its lapsing as understood by the Commissioner and as stated in his circular is a matter relevant to the enforcement of the provisions of the Act. The validity of the view expressed by the Commissioner is not before Court; none has challenged it. It is binding on all the subordinate authorities. ( 10 ) THEREFORE in respect of the pending assessments, no surcharge could be levied by the assessing authorities. In view of the above, these writ appeals arc entitled to succeed. The impugned orders in the writ petitions, Annexurcs-A, B and C are hereby quashed so far as they relate to the levy of surcharge under the Ordinance aforesaid. The writ petitions are also allowed. Rules made absolute. No costs. Writ Petition allowed. --- *** --- .