JUDGMENT : K.M. Joseph, J. 1. The Special Appeals, three in number, being inter-connected, we are disposing of the same by this common judgment. 2. Special Appeal No. 159 of 2015 arises from the judgment passed in Writ Petition (MS) No. 532 of 2013. It relates to Assessment Year 2008-2009. Special Appeal No. 160 of 2015 arises from the judgment passed in Writ Petition (MS) No. 1526 of 2014. It relates to Assessment Year 2009-2010. Special Appeal No. 161 of 2015 arises from the judgment passed in Writ Petition (MS) No. 2282 of 2014. It pertains to Assessment Year 2010-2011. The appellant is the writ petitioner in all the three writ petitions. We are treating Writ Petition (MS) No. 532 of 2013 as the leading case. 3. The appellant Company, which has manufacturing unit in the State of Uttarakhand, purchases raw material and packing material for manufacture of soaps, detergents, creams and tooth-pastes. Towards the manufacture of the aforesaid products, it purchases raw material and packing material in the State of Uttarakhand. The Uttarakhand Value Added Tax Act, 2005 (hereinafter referred to as the “Act”) provides for Input Tax Credit (hereinafter referred to as “ITC”). The complaint in the writ petitions relate, essentially, to refusal to grant ITC in respect of packing materials purchased from within the State of Uttarakhand used in the manufacture of the products of the appellant, which products are, thereafter, transferred by way of stock transfer to outside the State of Uttarakhand. It is the case of the appellant that, after the Act came into force in 2005, assessments were completed for the years 2005-2006, 2006-2007 and 2007-2008, wherein returns were finalized, which countenanced grant of ITC in respect of packing materials of products, which were sent outside the State by way of stock transfer. A Circular was issued on 28.06.2008, which, according to the appellant, is issued under Rule 4 of the Uttarakhand Value Added Tax Rules, 2005 (hereinafter referred to as the “Rules”). The appellant understood from the Circular that ITC is available in respect of packing materials used for finished products, which are stock transferred and, accordingly, it arranged its affairs. It is, while so, that in relation to Assessment Year 2008-2009, which assessment proceedings took place in the year 2012, the officer purported to disallow the claim for ITC on packing materials. Thereafter, another Circular dated 23.01.2013 was issued. It is, while so, that in relation to Assessment Year 2008-2009, which assessment proceedings took place in the year 2012, the officer purported to disallow the claim for ITC on packing materials. Thereafter, another Circular dated 23.01.2013 was issued. The said Circular, which is impugned in the writ petitions, inter-alia, provides that ITC is not available in respect of packing materials when used for manufacturing products, which are stock transferred out of the State. It is, accordingly, that the writ petitions were filed by the appellant seeking the following reliefs (as mentioned in WPMS No. 532 of 2013): “(a) to issue a writ of certiorari and/or an order in the nature of certiorari and/or a writ of Mandamus or any other writ, order or direction calling for the records of the proceedings which culminated in order dated 29th November 2012, (received by the Petitioner on 17th January 2013) passed by the third Respondent and to set aside the said order and the demand pursuant thereto. (b) to issue a declaration that circular no. 46 dated 28th June 2008 issued by Commissioner of Commercial Taxes is binding on all subordinate authorities and that there is no power or jurisdiction vested in any authority to pass any order ignoring the said circular issued by the 2nd Respondent or contrary thereto. (c) to issue a writ of certiorari and/or an order in the nature of certiorari and/or a writ of Mandamus or any other writ, order or direction to quash and set aside Circular no. 4411 dated 23rd January 2013 issued by the 2nd respondent and to hold that the said circular in so far as it authorises discrimination between dealers of packing materials situated in Uttarakhand and those situated outside Uttarakhand, is impermissible and unconstitutional. (C-1) Section 6(3) in so far as it seeks to deny input tax credit in respect of packing material beyond the CST rate when finished goods are removed by way of depot transfer and thus effectively makes the packing material manufactured in Uttarakhand suffer higher rate of tax as compared to other States be declared unconstitutional being violative of Article 301 and 304 of the Constitution. (d) to restrain the Respondents from recovering the differential tax on the basis that no input tax credit is available on packing materials used in the manufacture of final products which are depot transferred and sold in other States. (d) to restrain the Respondents from recovering the differential tax on the basis that no input tax credit is available on packing materials used in the manufacture of final products which are depot transferred and sold in other States. (e) to declare and hold that in any event, the expression ‘raw materials’ would encompass within its ambit packing materials but for which goods cannot be brought into the market in marketable state. (f) to stay the operation of the Order dated 29th November, 2012 passed by Respondent No. 3 and the consequential demand issued by the 3rd Respondent as well as Circular dated 23rd January 2013 issued by the Second Respondent and allow the Petitioners to take benefit of input tax credit on packing materials used in the manufacture of depot transferred goods, pending disposal of the present petition.” 4. The learned Single Judge, however, took the view that there is no merit in the writ petitions and declined relief. Accordingly, feeling aggrieved, the appellant is before us. 5. We have heard Mr. C.S. Lodha, learned counsel appearing for the appellant and Mr. A.S. Rawat, learned Addl. Advocate General appearing for the State. 6. Mr. C.S. Lodha, learned counsel for the appellant, would submit that the appellant is entitled to full credit of tax paid on various inputs used in the manufacture of final products. The restriction was, however, that, qua such final products, which are cleared by way of depot transfer for eventual sale in other States, the ITC on raw materials was required to be restricted to the amount paid in excess of 2 per cent. Apparently, the State of Uttarakhand wanted to retain 2 per cent and permit ITC in respect of tax paid in excess of 2 per cent; but, there was no such restriction in respect of packing materials. He enlists the White Paper, which is issued by the Empowered Committee, as well as the provisions, which have been made by the other States in their respective laws. According to him, in all the other States, the position obtaining is that ITC is available in respect of packing materials in excess of the CST rate even for stock transfer outside the State. According to him, in all the other States, the position obtaining is that ITC is available in respect of packing materials in excess of the CST rate even for stock transfer outside the State. He would further submit that the Circular, which was issued in the year 2008, was relied upon by the parties, who arranged their affairs in terms thereof; and, for the Assessment Years in question, namely, 2008-2009, 2009-2010 and 2010-2011, in view of the effect of the Circular issued, which has been the subject matter of a catena of decisions of the Hon’ble Apex Court, it is not open to the State to deny the benefits of ITC. He would further submit that Section 6 of the Act must be read as not empowering the State to deny a level playing field to all in view of the mandate of Article 301, 303, read with Article 304, of the Constitution of India. He would further submit that, in fact, if Section 6 of the Act is properly appreciated, there would be no denial of the ITC in respect of the transactions involved in the cases. He would reiterate that the Circular issued in the year 2008 binds the officers and, hence, the writ petitions should have been allowed. 7. Per contra, Mr. A.S. Rawat, the learned Addl. Advocate General, would contend that the provision in question, namely, Section 6(3)(d) of the Act, is clear beyond the region of doubt in that ITC is vouchsafed in respect of packing materials used in regard to finished goods, where the packing material is purchased from the State of Uttarakhand only when there is an intra-State sale in the State of Uttarakhand or there is a sale in the course of inter-State trade or commerce. The State only intended to extend the benefit of ITC in respect of stock transferred materials by confining the benefit to the raw materials involved in the production of such goods, as is clear from the proviso. He also drew our attention to Section 6(8) (f) & (g), to which we shall make reference later. He would further submit that a reading of the Circular issued in the year 2008, relied on by the appellant, would not yield the result, which the appellant is canvassing for. He would also submit that the later Circular issued in the year 2013 was issued to clarify the position. He would further submit that a reading of the Circular issued in the year 2008, relied on by the appellant, would not yield the result, which the appellant is canvassing for. He would also submit that the later Circular issued in the year 2013 was issued to clarify the position. He would submit that the legislative competence of the State is not impugned and, therefore, the judgment of the learned Single Judge is only to be supported. 8. It is necessary to refer to the relevant provisions of the Act. Section 6 deals with ITC. We deem it necessary to refer to Section 6(1)(2)(3) & (4). They read as follows: “Section 6: Input Tax Credit:- (1) Input Tax Credit shall be allowed only to a registered dealer, and for the purpose of calculating the net tax payable by a registered dealer for any tax period after being registered, an input tax credit as determined under the provisions of this Act shall be allowed to such registered dealer for the tax paid or payable in respect of all taxable sales other than sale of goods specified in Schedule III or any other sales as may be prescribed: Provided that no input tax credit shall be allowed in respect of the taxable purchases on which the tax is paid or payable under sub-section (10) of Section 3; Provided further that notwithstanding any thing contained in sub-section (1) or its proviso above, input tax credit in respect of purchases on which tax is paid or payable under sub-section (10) of Section 3, shall be allowed in the following circumstances- (a) purchase from a person who sells agriculture or horticulture produce grown by him or grown on any land in which he has an interest whether as a owner, unsurfructuary mortgage, tenant or otherwise, or who sells poultry or dairy products from fowls or animals kept by him, and such persons are, in respect of such goods, not treated as a dealer under the provisions of sub-section (11) of Section 2 of this Act; (b) purchase of any goods as may be notified by the State Government for this purpose, subject to such conditions and restrictions as may be specified in said notification. (2) The input tax credit to which the registered dealer is entitled shall be the amount of tax paid by the registered dealer to the seller, on his turnover of purchases made during the tax period, intended to be used for the purposes and subject to the conditions as specified in this section and calculated in such manner as may be prescribed. (3) Input tax credit shall be allowed for the goods purchased within the State of Uttarakhand, from a registered dealer holding a valid certificate of registration under Section 15 or Section 16, for the purpose of:- (a) sale in Uttarakhand; (b) sale in the course of inter-State trade and commerce; (c) sale in the course of export out of the territory of India; (d) use as raw material and consumables in manufacturing or processing of goods (other than those specified in Schedule I or Schedule III) and containers or other packing materials used for packing of such manufactured goods, for sale or resale within the State or in the course of inter-State trade or commerce; (e) use as raw material and consumables in manufacturing or processing of any goods (other than those specified in Schedule III) and containers and other packing materials used for packing of such manufactured goods, for sale in the course of export of goods out of the territory of India: Provided that with reference to clause (d) above, in case such finished products are dispatched outside the state other than by way of sale, a partial amount of input tax credit shall be allowed in respect of tax paid in excess of 2 percent on the raw materials used directly in the manufacture of such finished products. Provided further that partial input tax credit shall be allowed in respect of tax paid in excess of 2 percent on petroleum products used as fuel (other than Petrol Aviation Turbine Fuel, Natural Gas and Diesel) and other fuels used in production of taxable goods or captive power, but excluding fuel when used as fuel in motor vehicles. Provided further that partial input tax credit shall be allowed in respect of tax paid in excess of 2 percent on petroleum products used as fuel (other than Petrol Aviation Turbine Fuel, Natural Gas and Diesel) and other fuels used in production of taxable goods or captive power, but excluding fuel when used as fuel in motor vehicles. (4)(a) Where during a tax period a registered person purchasing goods (other than capital goods) on which an input tax credit is admissible under the provisions of this section, and the purchases are used partially for various purposes specified in sub-section (3), input tax credit shall be allowed proportionate to the extent they are used for the purposes specified therein, and such different purposes include:- (i) sales consisting of sale of taxable goods and sale of goods exempted from tax, (ii) sales outside the State consisting of sale of goods and dispatches of goods in the form of consignment or stock transfer to other States, (iii) inputs being used in the course of business and inputs being used for any other purposes; (b) Amount of input tax credit in respect of purchases of a particular commodity during the tax period shall be the aggregate of all amounts of input tax credit computed in respect of each purpose the commodity purchased is utilized. The total amount of input tax credit shall be the aggregate of input tax credit for all commodities; (c) The method that is used by a person to determine the extent to which goods are sold or supplied, or used or consumed in the manufacturing of goods, or intended to be sold or supplied, or used or consumed in the manufacturing of the goods, for different purposes, should be in an intelligible form and fair and reasonable in the circumstances: Provided that the State Government may, from time to time, frame rules consistent with the provisions of this Act for computation of input tax and when such rules are framed, no input tax shall be computed except in accordance with such rules.” 9. There are other restrictions, which do not appear to be put in issue before us. 10. There are other restrictions, which do not appear to be put in issue before us. 10. It is also necessary to refer to Rule 4 of the Rules, which provides as follows: “RULE 4: Commercial Tax Authorities and their powers:- (1) The Commissioner shall have jurisdiction over whole of the State and shall exercise all the powers conferred, and perform all the duties imposed upon him by or under the Act or these Rules; (2) Consistent with the provisions of the Act and these rules, the Commissioner shall have superintendence over all officers and persons employed in the execution of the Act and these Rules, and the Commissioner may from time to time issue such orders, instructions and directions as he may deem fit for the proper administration of the Act and for regulating the procedure to be followed in carrying out the provisions of the Act and these Rules: Provided that no such instructions or directions shall be given so as to interfere with the discretion of the Joint Commissioner (Appeals) in the exercise of his appellate functions. (3) The Commissioner shall have all the powers exercisable by his subordinate authorities other than the Appellate Authorities under Section 51.” 11. It is the case of Mr. C.S. Lodha, learned counsel for the appellant, that, if the proviso to Section 6(3)(d) is, for a moment, treated as not having been inserted, the Court may contemplate the effect. It is his case that, all that the Legislature intended, was that, in respect of packing materials, there was no limit to the claim of ITC and, even when the finished goods are dispatched by way of stock transfer, by the proviso to clause (d), all that is intended is that the ITC in respect of raw materials was sought to be restricted to the amount in excess of 2 per cent as the State wanted to retain the tax accordingly in respect thereof. He would submit that Section 6, which provides for ITC, on being read as a whole, provides in sub-section (1) and first sentence that ITC is to be determined as per the provisions of the Act in respect of taxable sales and it provides, inter-alia, that it shall be allowed to the registered dealer for the tax paid or payable in respect of all taxable sales other than the sale of goods specified in Schedule III or any other sales as may be prescribed. He would, therefore, submit that the Court must proceed on the basis in the first place that the position is as obtaining in sub-section (1). Therefore, a proper construction of the statute would mean that, since packing materials are purchased and tax is paid in respect of the said purchases, therefore, there cannot be a denial of ITC and it is only in respect of the raw materials used in the manufacture of finished products that ITC is confined to the amount of tax paid in excess of 2 per cent. He would seek to buttress his view with reference to provisions of Section 6(4)(a)(ii). According to him, the presence of the words “or stock transfer to other States” among different purposes would show that the Legislature clearly contemplated that, when goods are sent by way of stock transfer to other States, there cannot be a denial of ITC on the packing materials. 12. Mr. C.S. Lodha would submit that the Circular, which is issued in the year 2008, is in keeping with the aforesaid construction of the provisions. The English version of the relevant portions of the Circular dated 28.06.2008, which he relies on, is as follows: “5. The extent of ITC claimed by the dealer should be verified. In this verification it should be seen whether the claimed ITC is admissible under law or not. It should be seen whether items for which ITC is claimed are eligible or not. Besides, in respect of stock transfer/consignment sale of inputs it should be examined as to what is the status of ITC and whether it is admissible or not. If the Dealer is a manufacturer, then the benefit of ITC for raw materials and packing materials purchased for such manufactured goods will be available as per provisions of Section 6, beyond the CST rate effective from 1st April, 2008. If the Dealer is a manufacturer, then the benefit of ITC for raw materials and packing materials purchased for such manufactured goods will be available as per provisions of Section 6, beyond the CST rate effective from 1st April, 2008. No ITC will be available on goods used for exempt goods. If the dealer, in addition to the sale of finished goods also stock transfers the goods or makes consignment sale or sells taxable goods as well as tax exempt goods then the benefit of ITC will be available under Section 6(4). Provisions relating to ITC are contained in Section 6.” 13. He reminds that the assessments were completed for the year 2005-2006 till 2007-2008 by giving the benefit of ITC in respect of packing materials on stock transferred goods and it is, thereafter, that the Circular followed as aforesaid. The appellant, without any fault attributable to it, arranged its affairs on the strength of the understanding of the law, which was also, apparently, shared by the authorities themselves and, therefore, he would submit that, in such circumstances, the Circular must, at any rate, hold the field in regard to the years in question. He relied on the following judgments: (i) State of Kerala & others vs. Kurian Abraham (P) Ltd. & another, reported in (2008) 3 SCC 582 . (ii) Commissioner of Customs, Calcutta vs. Indian Oil Corporation Ltd. reported in 2004 (165) ELT 257 (SC). (iii) Union of India vs. Arviva Industries (I) Ltd. reported in 2007 (209) ELT 5 (SC). (iv) Poulose and Mathen vs. Collector of Central Excise & another, reported in (1997) 3 SCC 50 . (v) Collector of Central Excise, Patna vs. Usha Martin Industries, reported in (1997) 7 SCC 47 . (vi) Ranadey Micronutrients vs. Collector of Central Excise, reported in (1996) 10 SCC 387 . (vii) Paper Products Ltd. vs. Commissioner of Central Excise, reported in 1999 (112) ELT 765 (SC). (viii) H.M. Bags Manufacturer vs. Collector of Central Excise, reported in 1997 (94) ELT 3 (SC). (ix) Binani Industries Limited, Kerala vs. Assistant Commissioner of Commercial Taxes & others, reported in (2007) 15 SCC 435 . (x) Commissioner of Sales Tax, UP vs. Indra Industries, reported in (2000) 9 SCC 66 . (xi) Collector of Central Excise, Vadodra vs. Dhiren Chemical Industries, reported in (2002) 2 SCC 127 . (ix) Binani Industries Limited, Kerala vs. Assistant Commissioner of Commercial Taxes & others, reported in (2007) 15 SCC 435 . (x) Commissioner of Sales Tax, UP vs. Indra Industries, reported in (2000) 9 SCC 66 . (xi) Collector of Central Excise, Vadodra vs. Dhiren Chemical Industries, reported in (2002) 2 SCC 127 . (xii) State of Tamil Nadu & another vs. India Cements Limited & another, reported in (2011) 13 SCC 247 . (xiii) UCO Bank, Calcutta vs. Commissioner of Income Tax, W.B., reported in (1999) 4 SCC 599 . (xiv) Fenner India Ltd. vs. Collector of Central Excise, reported in (2004) 10 SCC 554 . (xv) Collector of Central Excise, Meerut vs. Maruti Foam (P) Ltd. reported in (2004) 6 SCC 722 . (xvi) State of Tamil Nadu & another vs. India Cements Limited & another, reported in (2011) 13 SCC 247 . (xvii) Damodar J. Malpani vs. Collector of Central Excise, reported in 2002 (146) ELT 483 (SC). 14. The above judgments are all for the purpose of contending that the Circulars, which are issued, are binding. As already noted, he contended that, even if this Court takes the view that the provisions of the Act have been correctly interpreted in the later Circular, which is issued in the year 2013, as far as the assessment years involved in these cases, namely, 2008-2009, 2009-2010 and 2010-2011 are concerned, appellant must be given the treatment vouchsafed on an understanding of the law as done in the Circular of 2008. 15. Mr. C.S. Lodha would next contend that it is impermissible to discriminate between goods manufactured locally and those manufactured outside, as it would violate the mandate of Article 301 of the Constitution of India. He takes us to the following case law in this regard: (i) Firm ATB Mehtab Majid & Co. vs. State of Madras, reported in AIR 1963 SC 928 . (ii) West Bengal Hosiery Association & others vs. State of Bihar & another, reported in 1988 (4) SCC 134 . (iii) Weston Electroniks & another vs. State of Gujarat & others, reported in 1988 (2) SCC 568 . (iv) M/s. Weston Electroniks & another vs. State of Maharashtra & another, reported in 1988 (3) SCC 16 . (v) State of U.P. & another vs. Laxmi Paper Mart & others, reported in 1997 (2) SCC 697 . (iii) Weston Electroniks & another vs. State of Gujarat & others, reported in 1988 (2) SCC 568 . (iv) M/s. Weston Electroniks & another vs. State of Maharashtra & another, reported in 1988 (3) SCC 16 . (v) State of U.P. & another vs. Laxmi Paper Mart & others, reported in 1997 (2) SCC 697 . (vi) Shree Mahavir Oil Mills & another vs. State of J&K & others, reported in 1996 (11) SCC 39 . (vii) State of Uttar Pradesh & others vs. Jaiprakash Associates Limited, reported in 2014 (4) SCC 720 . 16. He would submit that the Hon’ble Apex Court has held that differential treatment, be it by the grant of an exemption or a tax rebate, besides of course the actual differential treatment in taxation, is frowned upon having regard to the clear mandate of Article 301 that there shall be freedom of trade and commerce throughout the territory of India. He would ask us to postulate whether, when it is not open to the State to treat goods brought from outside differently in the field of taxation from the goods which are produced within the State, would it be open to the State of Uttarakhand to attempt to attain the same by granting full credit for the ITC in respect of raw materials, when all the other States have, in fact, adopted a uniform practice of giving ITC in excess of 2 per cent in respect of stock transferred goods. Even that would be impermissible, he contends. Equally, he would submit, afflicted with the vice of unconstitutionality as it would fall foul of Article 301 would be the Act if it were not read down to mean that ITC is also available to a manufacturer within the State of Uttarakhand, who purchases packing materials from the State of Uttarakhand and utilizes the packing materials for dispatch outside the State along with the finished goods by way of stock transfer for ultimate sale in the other parts of India. Therefore, he would submit that a view should be taken of the provisions, which harmonises them with the command of Articles 301, 303 and 304. Effect of Section 6(3) of the Act 17. Let us, first examine the scope of the provisions of the Act, as they stand, without alluding to the Circulars, which have been issued. Therefore, he would submit that a view should be taken of the provisions, which harmonises them with the command of Articles 301, 303 and 304. Effect of Section 6(3) of the Act 17. Let us, first examine the scope of the provisions of the Act, as they stand, without alluding to the Circulars, which have been issued. A Circular cannot deprive the court of its power or, rather, detract from the duty of the court to construe the provisions and to interpret the law. Section 6(1), undoubtedly, provides that ITC is available only to a registered dealer. It further provides that ITC is to be determined under the provisions of the Act to the registered dealer and for the tax paid or payable in respect of taxable sales other than sales specified in Schedule III or any other sales as may be prescribed. There are certain exclusions from the ambit of sub-section (1) of Section 6, as provided in the provisos, which may not be relevant for our purpose. Sub-section (2) of Section 6 provides that ITC to which the registered dealer is entitled shall be the amount of tax paid to the seller on his purchases intended to be used for the purposes and further it would be subject to the conditions, which are specified in Section 6 and calculated in such manner as may be prescribed by Rules. After having provided that the credit is to be on the turnover of purchases during the tax period, which are intended for the purposes, the Legislature took care in providing in sub-section (3) of Section 6 the purposes, which will entitle a registered dealer for ITC. Under clause (a), if goods are purchased for sale in Uttarakhand, they qualify for the benefit of ITC. Likewise, if goods are purchased for sale in the course of inter-State trade and commerce, it is a recognised purpose. Likewise, if it is intended for sale in the course of export out of the territory of India, the dealer concerned would be entitled to claim the benefit of ITC. The next provision is what is relevant for our purpose. Likewise, if goods are purchased for sale in the course of inter-State trade and commerce, it is a recognised purpose. Likewise, if it is intended for sale in the course of export out of the territory of India, the dealer concerned would be entitled to claim the benefit of ITC. The next provision is what is relevant for our purpose. Clause (d) of Section 6(3) deals with purchase of goods from the State of Uttarakhand by a registered dealer and from a registered dealer holding a valid certificate of registration under Section 15 or Section 16 for the purpose of using the said goods as raw materials and consumables in manufacturing or processing of goods or for use as containers or other packing materials of such manufactured goods. However, the last limb of clause (d) puts the matter beyond the pale of doubt that it is not the mere use of the goods as raw materials or consumables or containers or packing materials that alone is required. The purpose is further explained; in that, the manufactured goods must be for sale or for re-sale within the State, or, sale or re-sale in the course of inter-State trade or commerce. It is also to be noted that the goods specified by the manufactured goods must be other than those specified in Schedule I or Schedule III. It is to be noted that Schedule I of the Act deals with goods on which no tax is payable either on the sale or purchase. In other words, they are exempted goods within the meaning of Section 4(2)(a) of the Act. Schedule III of the Act deals with goods, which are treated as special category goods, and, in respect of which, the point of taxation is the point, which is specified in Column (C) and at the rate which is provided therein. It is relatable to Section 4(2)(b)(ii) of the Act. Therefore, it is clear that ITC cannot be claimed in respect of either the raw material or packing material in regard to manufacture of exempted goods within the meaning of Schedule I. The purport of the proviso to Section 6(3)(d) 18. It is relatable to Section 4(2)(b)(ii) of the Act. Therefore, it is clear that ITC cannot be claimed in respect of either the raw material or packing material in regard to manufacture of exempted goods within the meaning of Schedule I. The purport of the proviso to Section 6(3)(d) 18. Now, if we turn to the proviso relevant to clause (d) of Section 6(3), it purports to state that with reference to clause (d) above, which, in our view, only means that the Legislature intended not to waste words and to identify the goods with reference to the wording of clause (d). In other words, it intended by the opening words of the proviso to refer to finished goods, which are as provided in clause (d), namely, it would not take in goods, which fall either in Schedule I or Schedule III and, thereafter, the legislature indicates its intention to be that, if such finished goods are dispatched outside the State other than by way of sale, then, the legislature vouchsafed the grant of ITC to the extent of amount paid in excess of 2 per cent on the raw materials, which are directly used in the manufacture of the finished products. 19. At this juncture, it is to be noted that the function of a proviso is normally to carve out an exception to the main provision. However, it could also in cases, which leave the court in no doubt, have the effect of being an independent enactment. It is apposite to refer to the following commentary in the book Principles of Statutory Interpretation by Justice G.P. Singh: “The normal rule is that it is “a very dangerous and certainly unusual course to import legislation from a proviso wholesale into the body of the statute” as to do so will be to treat it “as if it were an independent enacting clause instead of being dependent on the main enactment.” To read a proviso as providing something by way of an addendum or as dealing with a subject not covered by the main enactment or as stating a general rule as distinguished from an exception or qualification is ordinarily foreign to the proper function of a proviso. However, this is only true of a real proviso. However, this is only true of a real proviso. The insertion of a proviso by the draftsman is not always strictly adhered to its legitimate use and at times a section worded as a proviso may wholly or partly be in substance a fresh enactment adding to and not merely excepting something out of or qualifying what goes before.” 20. We would think, therefore, that the proper construction to be placed of Section 6(3)(d) in the context of the proviso, which refers to clause (d), is that the law-giver intended to include purchase of goods used as raw materials, consumables, containers and packing materials used for the packing of manufactured goods other than those following in Schedule I or Schedule III, when the manufactured goods are sold or re-sold in the State of Uttarakhand or in the course of inter-State trade or commerce. Dispatching of the goods by way of stock transfer is not to be confused with or treated as an inter-State sale. The Legislature has clearly not intended to given benefit of ITC in regard to packing materials used for packing of manufactured goods when they are dispatched outside the State by way of stock transfer. This effect is undeniable and flows clearly from the language used in Section 6(3)(d) of the Act. On the other hand, only if there is a intra-State sale or inter-State sale of the finished goods, will ITC be available on the tax paid on the packing materials used for packing of those manufactured goods covered by Section 6(3)(d). The proviso, in our view, is intended only to give a benefit not covered by clause (d) and it expressly relates only to the grant of ITC on the tax paid on the raw materials used in the manufacture of the finished products, which are referred to in clause (d). The words “packing materials” are conspicuous by their absence in the proviso. Thus, the inevitable conclusion would be that the Legislature has chosen in its wisdom to include purchase of goods to be used as ‘raw materials’ alone for the manufacture of finished products, which are covered otherwise by clause (d); in that, it does not fall under Schedule I or Schedule III, when they are dispatched outside the State which takes in dispatch by way of stock transfer in the proviso. The Legislature has used the words raw materials, consumables, containers or other packing materials in clause (d) in the context of an intra-State sale or inter-State sale; whereas, in the proviso, while a common factor is ‘the manufactured products’, which are common to both clause (d) and the proviso, the proviso relates only to dispatch of goods otherwise than by way of sale. The words used are “dispatched outside the State other than by way of sale.” Therefore, stock transfer being one of the transactions, which would be covered by way of dispatch outside the State other than by way of sale, the only conclusion possible is that a limited relief of ITC is available in respect of stock transfer of finished goods; in that, it is, in the first place, limited to the raw materials and, secondly, it is limited as regards the quantum, namely, the tax paid in excess of 2 per cent on the purchase of raw materials, which apparently is the CST (Central Sales Tax) rate, is allowed. Section 6(4)(a) and its impact 21. Though the learned counsel for the appellant Mr. Lodha tried to draw considerable substance from Section 6(4)(a), we are of the view that there is no merit in the same. According to the learned counsel for the appellant, the use of the words stock transfer to other States among the different purposes indicated would show that the Legislature intended to give the benefit of ITC in respect of stock transfer also. We would think that the interpretation placed by Mr. C.S. Lodha, learned counsel for the appellant, is misplaced. Section 6(4)(a) is intended to provide for a contingency when a registered dealer purchases goods (other than capital goods) on which he is entitled to ITC under the provisions of this Section and the purchases are used partially for various purposes as provided in sub-section (3) and he also uses it for other purposes [meaning the purposes which are not provided in Section 6(3)], then ITC is not to be denied totally. On the other hand, the Legislature intended that the dealer would be entitled to ITC in proportion to the extent that the goods are used for the purposes which are covered by Section 6(3) and, thereafter, the provision contains the words “and such different purposes include”. On the other hand, the Legislature intended that the dealer would be entitled to ITC in proportion to the extent that the goods are used for the purposes which are covered by Section 6(3) and, thereafter, the provision contains the words “and such different purposes include”. It must be, at once, noticed that the Legislature has used two words, namely, “various purposes” and “different purposes.” The words “various purposes” have been used in connection with sub-section (3) as that is made clear expressly in Section 6(4)(a) itself. The use of the purchases, which have been made, may be made by a dealer partially for the different purposes; but the ITC is to be confined to the extent that they are used for those purposes, which are mentioned in Section 6(3) only and it is, thereafter, that Section 6(4)(a) provides that such different purposes include the various categories of transactions mentioned in clauses (i), (ii) & (iii). Therefore, the words “different purposes” are intended to differentiate between purposes, which are sanctioned under Section 6(3) as purposes, which will entitle the registered dealer to the benefit of ITC, and other purposes, which would not so entitle him. This is clear from a perusal of clause (i), which says that the sales may consist of sale of taxable goods and sale of goods exempted from tax. On sale of goods, which are exempted from tax, there cannot be a claim for ITC. It is, in the said fashion, that we must understand the words sales outside the State consisting of sale of goods and dispatch of goods in the form of consignment or stock transfer to other States. In this context, we may also notice Section 6(8)(a), (f) & (g), which read as follows: “6(8) No input tax credit shall be allowed on purchase of goods, other than the Capital Goods, when:- (a) goods not connected with the business of the dealer; (f) goods transferred outside the State, otherwise than by way of sale; (g) in respect of raw material used in manufacture or processing of goods where the finished products are dispatched outside the State other than by way of sales.” 22. At any rate, we would notice that, if the purchase of goods is for dispatch in the form of consignment, it is not a purpose, which is contemplated in Section 6(3). At any rate, we would notice that, if the purchase of goods is for dispatch in the form of consignment, it is not a purpose, which is contemplated in Section 6(3). So also if the goods are purchased and stock transferred outside the State, it would not fall in clause (b) of Section 6(3), as it contemplates a sale in the course of inter-State trade or commerce. Therefore, it would not be a purpose, which is sanctioned. Therefore, we would think that the Legislature intended to refer to purposes in connection with which ITC could be claimed as against the purposes which are not sanctioned under Section 6(3) when it used the expression “different purposes.” It is also noteworthy that the Legislature has used the word “include” which is before referring to clauses (i), (ii) & (iii). The Circulars of 2008 and 2013 23. In the context of the above interpretation, let us now examine the Circular of the year 2008, which is relied on by the appellant. The two portions of the Circular, which are relied on by the learned counsel for the appellant, are as follows: “If the dealer is a manufacturer, then the benefit of ITC for raw materials and packing materials purchased for the manufactured goods will be available as per provisions of Section 6, beyond the CST rate effective from 1st April, 2008.” 24. The further portion, which refers to Section 6(4), is contained in the following sentence: “If the dealer, in addition to sale of finished goods, stock transfers the goods or makes consignment sale or sells taxable goods as well as tax exempt goods, then the benefit of ITC will be available under Section 6(4).” 25. Taking the last sentence first, we are of the clear view that all that flows from the aforesaid portion of the circular is in keeping with the interpretation which we have placed. The author of the Circular intended to clarify that if ‘different’ or hybrid transactions falling under Section 6(3) and outside of Section 6(3) take place, the benefit would be available as provided in Section 6(4), namely, apparently, in tune with the proportion of the use for the sanctioned purposes. The author of the Circular intended to clarify that if ‘different’ or hybrid transactions falling under Section 6(3) and outside of Section 6(3) take place, the benefit would be available as provided in Section 6(4), namely, apparently, in tune with the proportion of the use for the sanctioned purposes. We see nothing in it, which could have created an impression in the mind of a dealer that could have led him to arrange his affairs on the basis of an understanding, which would be in the teeth of the clear provisions of Section 6(3)(d) or the proviso thereto. 26. No doubt, in the earlier portion, what is stated is that if the dealer is a manufacturer, then ITC will be available in respect of raw materials and packing materials as per the provisions of Section 6 beyond the CST rate effective from 1st April, 2008. The author has clearly referred to the entitlement of ITC for packing materials in terms of provisions of Section 6. Undoubtedly, ITC is available under Section 6(3)(d) in respect of packing materials; but confined only to cases, where the manufactured goods are sold by way of intra-State sale or inter-State sale. As far as ITC for raw materials is concerned, it falls into two parts as per Section 6(3)(d), read with the proviso. In respect of raw materials, which are purchased from the manufacturer of finished goods, as provided therein, for intra-State sale or inter-State sale, the dealer would be entitled to the benefit of ITC on the tax; whereas, in respect of raw materials, which are used for manufacture of finished goods, which are otherwise referred to in clause (d) and the finished goods are dispatched outside the State otherwise than by way of sale which would take in a stock transfer, the transaction would entitle the dealer to ITC in respect of tax paid in excess of 2 per cent. It is to be noted that the words “in excess of the rate beyond CST rate” are in keeping with “in excess of the rate prescribed under sub-section (1) of Section 8 of the Central Sales Tax Act” which were the words in the proviso to clause (d) till it was substituted vide Notification No. 22 dated 07.01.2010. 27. It is to be noted that the words “in excess of the rate beyond CST rate” are in keeping with “in excess of the rate prescribed under sub-section (1) of Section 8 of the Central Sales Tax Act” which were the words in the proviso to clause (d) till it was substituted vide Notification No. 22 dated 07.01.2010. 27. It could be said that there could be some confusion created by the sentence in the sense that if it is understood as meaning that the benefit of ITC is available for packing materials as also raw materials as provided in Section 6 under the proviso from 1st April, 2008 or, in other words, it could be urged that it is understood that, even though packing materials are not included in the proviso to Section 6(3)(d) and in the proviso and only raw materials are referred to; the author is stating that, even in respect of packing materials, it will be available as per the provisions of Section 6 having regard to the words “beyond the CST rate effective from 1st April, 2008”. “Beyond the CST rate effective from 1st April, 2008” is relevant and discernible only with reference to the proviso. There is no such restriction in Section 6(3)(d). But, we should also notice that, in the very same Circular, it is also provided in clause (11) as follows: “11. After the purchase of raw materials, the finished goods stock transfer or sale of the consignment the ITC benefit shall be given more than 4% up to 31.3.2008 and after 31.3.2008 more than the rate of CST.” 28. We also are conscious of the form under the Rules as hereunder: “(d) Tax paid in excess of 4% on purchase of raw material used in manufacturing or packing of such manufactured taxable goods in respect of Goods which are dispatched outside the State other than by way of sale.” 29. It may be true that it may give an impression that ITC is available even in respect of packing materials in regard to stock transferred goods. To our minds, the provision of Section 6(3)(d) and the cognate provisions contained in the proviso thereto, leave us in no doubt that the Legislature never intended to give the benefit of ITC in regard ‘packing materials’ in connection with stock transfer of finished products. To our minds, the provision of Section 6(3)(d) and the cognate provisions contained in the proviso thereto, leave us in no doubt that the Legislature never intended to give the benefit of ITC in regard ‘packing materials’ in connection with stock transfer of finished products. As we have noted, the Circular also cannot be clearly understood in the manner as it is suggested. At any rate, the Circular is not free from ambiguity for the reasons we have already indicated. The subsequent Circular of 2013, in fact, clarifies this aspect dispelling the doubts, which possibly could have been engendered in the minds of the assessees as a result of the stray sentence in the 2008 Circular. 30. We may, now, refer to the Circular dated 23.01.2013. The English translation of the same reads as follows: “Letter Office of Commissioner of Tax (Law-Section) Dated: Dehradun : 23rd January, 2013 All Deputy Commissioner, Commercial Tax, Uttarakhand All Assistant Commissioner, Commercial Tax & Commercial Tax Officer, Uttarakhand It came into cognizance that in the self manufactured goods sent out of the state through Stock transfer/consignment, with regard to province purchase of used packing material, the Tax Assessment Officers are giving tax benefit in the form of I.T.C on the payment made more than the rate of C.S.T. Since on the goods sent through stock transfer/ consignment there is no any provision in Section 6 to give I.T.C benefit. The First restriction of section 6, Sub-Section 3 of Uttarakhand Value Added Tax Act 2006 are as under: “It is restricted that from the cross of above part (d), if such designated products have been remittance of sale are otherwise out of the province then in the manufacture of such designated product on the sale of the direct used raw material, under section (8) Sub section (1) of Central Sale Tax Act 1956, with regard to the tax paid more than the prescribed rate the benefit of partial input will be applicable. From the above provision it is clear that:- 1. With regard to the packing material used in the manufactured goods under Stock Transfer/Consignment the provision of giving I.T.C. benefit is not mentioned in first restriction part of above section 6(3). 2. The above restriction is only mentioned for raw materials on which according to the above mentioned section the trader shall be entitled to I.T.C. benefit on stock transfer/ consignment. 2. The above restriction is only mentioned for raw materials on which according to the above mentioned section the trader shall be entitled to I.T.C. benefit on stock transfer/ consignment. With regard to above all the Tax Assessment Officers are directed that:- If on the packing material used in Stock transfer/consignment the benefit is given under the above provisions, then in that case the same should be marked and listed and in these cases the I.T.C. be again calculated and ensure the further proceedings. With regard to above action the information be forwarded to the headquarter that in how many cases and on which amount the ITC benefit is given the trader. In addition to that in which cases the tax assessment is still to be taken, at the time of tax assessment the above points be taken into cognizance and according to direction the action be ensured. The most periodic statement was filed and in the aforesaid matter the packing material also 2% more benefit is given on stock transfer/consignment, its annual tax assessment/ temporary tax assessment as the case may be, priority should be ensured. The above directions be strictly complied. Sd/- (Saujanya) Tax Commissioner Uttrakhand.” 31. It is, now, ripe for us to consider the further arguments based on the effect of the Circulars. Circulars issued under Section 119 of the Income Tax Act and Section 37-B of the Central Excise Act have been in the forefront of provisions receiving judicial attention. In regard to Circulars issued under Section 37-B, we would think they fall in a special category. This is for the reason that Circulars have been issued in regard to the attainment of uniformity in classification of goods when the authorities themselves, on a conspectus of various entries, seek to guide the world by issuing Circulars indicating that a particular good would fall in a particular entry and the business world and those connected therewith, on scrupulously following the said Circulars, arrange their business affairs, it would be totally unfair to allow the interpretation to be supplanted at the hands of the officers, who are bound by such Circulars. 32. 32. We do also notice the following judgment of the Hon’ble Apex Court in Collector of Central Excise, Meerut vs. Maruti Foam (P) Ltd., reported in (2004) 6 SCC 722 , rendered in the context of circular issued by the Central Board of Excise and Customs (CBEC): “7. It is not in dispute that during the period in question in all these appeals there were circulars in operation issued by the Central Board of Excise and Customs (CBEC) which had specifically construed the phrase “already been paid” as occurring in Condition (i) against Sl. No. 3, to include cases where nil rate of duty had been prescribed. No doubt, this was done on the basis of the decision of this Court in Usha Martin, (1997) 7 SCC 47 . It is also true that the decision in Usha Martin was overruled by this Court in the decision of Dhiren Chemical Industries, (2002) 2 SCC 127 . However, in para 9 of Dhiren Chemical Industries the Constitution Bench of this Court has made it clear that regardless of the interpretation placed on the aforesaid phrase by this Court, if there were circulars which had been issued by CBEC which placed a different interpretation upon the phrase, that interpretation would be binding on the Revenue. This view has been reaffirmed in CCE vs. Dhiren Chemical Industries, (2002) 10 SCC 64 . Therefore, the circulars in question issued by CBEC construing the phrase “duty already paid” must be held to bind the Revenue as long as they were not withdrawn which they were but only in 2002. For the period in question the circulars were operative. The appeals are, accordingly, dismissed albeit for reasons which are different from those expressed by the Tribunal. We make it clear that this decision will not operate to reopen any assessment order nor will any duty already paid become refundable by reason of this judgment. There will be no order as to costs.” No doubt, this is a judgment rendered prior to the judgments in CCE vs. Ratan Melting & Wire Industries, reported in (2008) 13 SCC 1 and also in State of Tamil Nadu & another vs. India Cements Limited & another, reported in (2011) 13 SCC 247 . 33. There will be no order as to costs.” No doubt, this is a judgment rendered prior to the judgments in CCE vs. Ratan Melting & Wire Industries, reported in (2008) 13 SCC 1 and also in State of Tamil Nadu & another vs. India Cements Limited & another, reported in (2011) 13 SCC 247 . 33. In the case of Collector of Central Excise, Patna vs. Usha Martin Industries, reported in (1997) 7 SCC 47 , the Hon’ble Apex Court, no doubt, inter-alia, held as follows: “22. We may observe particularly that a special aspect highlighted by the Bench in Poulose and Mathen vs. Collector of Central Excise, 1997 (90) ELT 264 is apposite for fastening the revenue with binding force as regards the instructions issued, while constructing a notification which was not free from doubt, Learned judges in that decision have observed thus: (SCC p. 58, para 15) “15. One aspect deserves to be noticed in this context. The earlier tariff advice no. 83/81 on the basis of which trade notice No. 222/81 was issued by the Collector of Central Excise and Customs is binding on the department. It should be given effect to. There is no material on record to show that this has been rescinded or departed from, and even so, to what extent. Even assuming that the later tariff advice No.6/85 has taken a different view about which there is no positive material the facts point out that the concerned department itself was having considerable doubts about the matter. The position was not free from doubt. It was far from clear. In such a case, where two opinions are possible, the assessee should be given the benefit of doubt and that opinion which is in its favour should be given effect to. In the light of the above, it is unnecessary to adjudicate the other points involved in the appeal on the merits.” (Emphasis supplied)” 34. The Hon’ble Apex Court in Ranadey Micronutrients vs. Collector of Central Excise, reported in (1996) 10 SCC 387 , has held as follows: “15. There can be no doubt whatsoever, in the circumstances, that the earlier and later circulars were issued by the Board under the provisions of Section 37-B and the fact that they do not so recite does not mean that they do not bind Central Excise Officers or become advisory in character. There can be no doubt whatsoever, in the circumstances, that the earlier and later circulars were issued by the Board under the provisions of Section 37-B and the fact that they do not so recite does not mean that they do not bind Central Excise Officers or become advisory in character. There can be no doubt whatsoever that after 21.11.1994, excise duty could be levied upon micronutrients only under the provisions of heading 31.05 as “other fertilizers.” If the later circular is contrary to the terms of the statute, it must be withdrawn. While the later circular remains in operation the Revenue is bound by it and cannot be allowed to plead that it is not valid.” 35. The Hon’ble Apex Court in the case of Paper Products Ltd. vs. Commissioner of Central Excise, reported in 1999 (112) ELT 765 (SC) has held as follows: “4. The question for our consideration in these appeals is: what is the true nature and effect of the Circulars issued by the Board in exercise of its power under Section 37-B of the Central Excise Act, 1944? This question is no more res integra in view of the various judgments of this Court. This Court in a catena of decisions has held that the Circulars issued under Section 37-B of the said Act are binding on the Department and the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. These judgments have also held that the position may be different with regard to an assessee who can contest the validity or legality of such instructions but so far as the Department is concerned, such right is not available. [See Collector of Central Excise, Patna v. Usha Martin Industries, ( 1997 7 SCC 47 )]. In the case of Ranadey Micronutrients v. Collector of Central Excise, 1996 (87) ELT 19 , this Court held that the whole objective of such Circulars is to adopt a uniform practice and to inform the trade as to how a particular product will be treated for the purposes of excise duty. The Court also held that it does not lie in the mouth of the Revenue to repudiate a Circular issued by the Board on the basis that it is inconsistent with a statutory provision. (Emphasis supplied). The Court also held that it does not lie in the mouth of the Revenue to repudiate a Circular issued by the Board on the basis that it is inconsistent with a statutory provision. (Emphasis supplied). Consistency and discipline are, according to this Court, of far greater importance than the winning or losing of court proceedings. In the case of Collector of Central Excise, Bombay v. Jayant Dalal Pvt. Ltd. (1997) 10 SCC 402 , this Court has held that it is not open to the Revenue to advance an argument or even file an appeal against the correctness of the binding nature of the Circulars issued by the Board. Similar is the view taken by this Court in the case of Collector of Central Excise, Bombay v. Kores [India] Ltd. (1997) 10 SCC 338 .” 36. We may also notice that in State of Kerala & others vs. Kurian Abraham (P) Ltd. & another, reported in (2008) 3 SCC 582 , the Court inter-alia was dealing with the question arising out of a Circular issued by the Board of Revenue under Section 3 of the Kerala Sales Tax Act. The Hon’ble Apex Court inter-alia held as follows: “23. Tax administration is a complex subject. It consists of several aspects. The Government needs to strike a balance in the imposition of tax between collection of revenue on one hand and business-friendly approach on the other hand. Today, Governments have realized that in matters of tax collection, difficulties faced by the business have got to be taken into account. Exemption, undoubtedly, is a matter of policy. Interpretation of an Entry is undoubtedly a quasi-judicial function under the tax laws. Imposition of taxes consists of liability, quantification of liability and collection of taxes. Policy decisions have to be taken by the Government. However, the Government has to work through its senior officers in the matter of difficulties which the business may face, particularly in matters of tax administration. That is where the role of the Board of Revenue comes into play. The said Board takes administrative decisions, which includes the authority to grant Administrative Reliefs. This is the underlying reason for empowering the Board to issue orders, instructions and directions to the officers under it. 24. In the present case, we are not concerned with deciding the scope and extent of each item in Entry 110. The said Board takes administrative decisions, which includes the authority to grant Administrative Reliefs. This is the underlying reason for empowering the Board to issue orders, instructions and directions to the officers under it. 24. In the present case, we are not concerned with deciding the scope and extent of each item in Entry 110. We are essentially concerned in this case with the nature of the powers exercised by the Board/Commissioners under Section 3(1A). Take the case of centrifuged latex. It is a product made from field latex (raw-rubber). Even for the sake of argument and even assuming that centrifuged latex and field latex are two different items of taxation under the 1963 Act, as contended on behalf of the State, double taxation avoidance comes within the domain of the Board of Revenue. It was open to the Board to grant administrative relief vide Circular No. 16/98 if the Board in its expertise was of the opinion that treatment of field latex and centrifuged latex as separate and distinct items could result in double taxation. Therefore, the Board was entitled to give administrative relief to the business. In fact, what we have stated is borne out by Notification dated 13.11.2007 issued by the State Government. We are informed that in November, 2007, the Board of Revenue (Taxes) did not exist. However, the point to be noted that even the Notification dated 13.11.2007 indicates that there was a possibility of double taxation on centrifuged latex produced from field latex and, therefore, ultimately the Government had to step in and grant exemption under Section 10 of the 1963 Act. In this case, we are not concerned with the exemption. Power to grant exemption is certainly with the State Government. The point to be noted is that such exemption was not there during the assessment years 1997-98 and 1998-99. Therefore, the Board consisting of senior officers were aware about the propensity of double taxation. In such circumstances, it was not open to the State to contend before the High Court that the said circular No. 16/98 was not legal.” Therein, the Circular issued traced the history of the litigation, relating to taxation of latex and centrifuged latex and the entries inserted and clearly provided its view in the matter. 37. In such circumstances, it was not open to the State to contend before the High Court that the said circular No. 16/98 was not legal.” Therein, the Circular issued traced the history of the litigation, relating to taxation of latex and centrifuged latex and the entries inserted and clearly provided its view in the matter. 37. We may, however, notice the judgment of the Hon’ble Apex Court in State of Tamil Nadu & another vs. India Cements Limited & another, reported in (2011) 13 SCC 247 . Therein, a Bench of two Judges inter-alia held as follows: “29. In Commissioner of Central Excise, Bolpur Vs. Ratan Melting & Wire Industries, a Constitution Bench of this Court has clarified the confusion created on account of the view expressed in para 11 of Dhiren Chemical Industries (supra), on the question of binding effect of judgment of this Court vis-a-vis State and Central Government circulars thus: “7. Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the court. It is for the court to declare what the particular provision of statute says and it is not for the executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law.” 30. In the present case, it is not the case of the revenue that circular dated 1st May, 2000 is in conflict with either any statutory provision or the deferral schemes announced under the afore-mentioned government orders. We, therefore, hold that the said circular is binding in law on the adjudicating authority under the TNGST Act.” 38. This is not a case of classification of goods, which itself is a complex issue and capable of yielding different view points. We, therefore, hold that the said circular is binding in law on the adjudicating authority under the TNGST Act.” 38. This is not a case of classification of goods, which itself is a complex issue and capable of yielding different view points. The Circular, if it is understood in the manner propounded by the appellant, we would have no hesitation in holding that it is plainly opposed to the mandatory statutory scheme of Section 6 of the Act. 39. We have absolutely no doubt that the Circular, which has been issued in the year 2013, propounds the correct position in law and no case is made out for grant of relief against the same. Is Section 6(3)(d) violative of Article 301, read with Article 304? 40. The further remaining question relates to the effect of Articles 301 and 304 of the Constitution of India. We have already referred to the case law. They all related to cases, where the State made attempts to practice hostile discrimination against the goods, which were manufactured or procured from outside its boundaries. In other words, the State concerned sought to put the goods manufactured or brought from outside the State at a disadvantage. We may refer to the judgment in the case of Firm ATB Mehtab Majid and Co. vs. State of Madras and another, reported in AIR 1963 SC 928 . Therein, the Hon’ble Apex Court referred to the majority view in Atiabari Tea Co. Ltd. vs. State of Assam, reported in (1961) 1 SCR 809 and also Automobile Transport (Rajasthan) Ltd. etc. vs. State of Rajasthan, reported in AIR 1962 SC 1406 and held as follows: “9. The majority view in the Atiabari Tea Co. Case which has been accepted in the Automobile Transport Case (2) is, as expressed by Gajendragadkar, J., at p. 860 : "Thus considered we think it would be reasonable and proper to hold that restrictions freedom from which is guaranteed by Article 301, would be such restrictions as directly and immediately restrict or impede the free flow or movement of trade. Taxes may and do amount to restrictions; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of Article 301......... Taxes may and do amount to restrictions; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of Article 301......... We arc therefore satisfied that in determining the limits of the width and amplitude of the freedom guaranteed by Art. 301 a rational and workable test to apply would be : Does the impugned restriction operate directly or immediately on trade or its movement?...... Our conclusion therefore is that when Art. 301 provides that trade shall be free throughout the territory of India it means that the flow of trade shall run smooth and unhampered by any restriction either at the boundaries of the States or at any other points inside the States themselves. It is the free movement or the transport of goods from one part of the country to the other that is intended to be saved, and if any Act imposes any direct restrictions on the very movement of such goods it attracts the provisions of Article 301, and its validity can be sustained only if it satisfies the requirements of Article 302 or Article 304 of Part XIII." In the majority judgment in the Automobile Transport Case it was said at p. 1424: "The interpretation which was accepted by the majority in the Atiabari Tea Co. Case is correct, but subject to this clarification. Regulatory measures or measures imposing Compensatory taxes for the use of trading facilities do not come within the purview of the restrictions contemplated by Article 301." Earlier in the judgment it was observed, at p. 1422: "Such regulatory measures as do not impede the freedom of trade, commerce and intercourse and compensatory taxes for the use of trading facilities are not hit by the freedom declared by Article 301. They are excluded from the purview of the provisions of Part XIII of the Constitution for the simple reason that they do not hamper trade, commerce and intercourse but rather facilitate them." Subba Rao J., concurred in this view and said at p. 1436: "(1) Article 301 declares a right of free movement of trade without any obstructions by way of barriers, inter-State or, intrastate, or other impediments operating as such barriers. (2) The said freedom is not impeded, but, on the other hand, promoted, by regulations creating conditions for the free movement of trade, such as, police regulations, provision for services, maintenance of roads, provision for aerodromes, wharfs etc., with or without compensation." 10. It is therefore now well settled that taxing laws can be restrictions on trade, commerce and intercourse, if they hamper the flow of trade and if they are not what can be termed to be compensatory taxes or regulatory measures. Sales tax, of the kind under consideration here, cannot be said to be a measure regulating any trade or a compensatory tax levied for the use of trading facilities. Sales tax, which has the effect of discriminating between goods of one State and goods of another, may affect the free flow of trade and it will then offend against Article 301 and will be valid only if it comes within the terms of Article 304(a).” It is relevant to note paragraphs 15 & 16 also. They read as follows: “15. The fact that the impugned rule was made in order to prescribe the single point in the series of sales by successive dealers at which the tax on sale of hides or skins was to be levied, in view of ss. 3 and 5 of the Act, does not justify the making of such a rule which discriminates between the tax imposed on goods imported from outside the State and the goods produced or manufactured in the State. 16. Now, the only question that remains for consideration is whether this rule discriminates between hides or skins imported from outside the State and those manufactured or produced in the State.” 41. This was sought to be done by taxing the ‘outside goods’ at a higher rate, which objective was achieved by many devices. The tax was levied expressly on a discriminatory basis. This was sought to be done by taxing the ‘outside goods’ at a higher rate, which objective was achieved by many devices. The tax was levied expressly on a discriminatory basis. Subtle innovations at discrimination found expression in the form of concessional rates for locally manufactured goods as against higher rates on goods imported from outside the State [See : Weston Electroniks & another vs. State of Gujarat & others, (1988) 2 SCC 568 ]; exemption from tax in favour of home products [See : West Bengal Hosiery Association & others vs. State of Bihar & another, (1988) 4 SCC 134 ]; temporary exemption, i.e. exemption for a limited period [See : Shree Mahavir Oil Mills & another vs. State of J&K & others, (1996) 11 SCC 39 ] and also the device of tax rebate [See : State of Uttar Pradesh & others vs. Jaiprakash Associates Limited, 2014 (4) SCC 720 ]. The result was always placing the goods, which were brought from outside the State, at a disadvantage. In that, it became priced at a higher level in comparison to the goods internally produced. This was clearly anathema to the constitutional value of freedom of trade and commerce throughout the territory of India. Trade barriers in such forms discriminating between goods from outside have been frowned upon by the courts. 42. But, in this case, we do not see how the appellant can impugn the provisions contained in Section 6(3)(d) of the Act along with the proviso, as falling foul of Article 301 and Article 304. It may be an unwise move on the part of the State, which is also a criticism, which is levelled by Mr. C.S. Lodha that the States should encourage products from its own soil by giving concessions as are given all over the country by other States. Mr. Lodha would contend that the manufacturer in Uttarakhand is being put at a disadvantage as, in respect of stock transferred finished goods, if the interpretation is placed that it would not include right to ITC on packing materials, the result would be that the manufacturer would procure raw materials from other States. Likewise, when the manufacturer, after stock transfer, sells the product in the teeth of competition which he would face on account of higher prices, which it would have to demand on account of denial of ITC, it would suffer. Mr. Likewise, when the manufacturer, after stock transfer, sells the product in the teeth of competition which he would face on account of higher prices, which it would have to demand on account of denial of ITC, it would suffer. Mr. C.S. Lodha would, in fact, submit that the complaint of the State would appear to have been that, when packing material is procured and the finished goods are stock transferred and sold in another part of the country, insofar as there is no inter-State sale, the State is not getting any revenue in the absence of an inter-State sale and the State, therefore, cannot forgo its revenue by way of ITC being given on the packing material. He would point out that, in fact, the Court may bear in mind the legislative device, which has been adopted in regard to raw materials in the proviso to Section 6(3)(d), as, even in respect of raw materials, when the finished goods are stock transferred though there is no inter-State sale and there could be a complaint of loss of revenue, the Legislature has adopted the practice of retaining the tax to the extent of the rate under the Central Sales Tax Act. He poses a question as to how the State could not have the same policy/practice in respect of packing materials. 43. We are not impressed at all by the said arguments. We would think that to allege lack of wisdom is beyond the province of the court to probe. The Court is concerned only with constitutionality of the statute. It is not concerned with the policy behind the law. All goods, which are manufactured, which otherwise fall within Section 6(3)(d), are treated equally. The State only wished to provide the benefit of ITC in a limited manner even in respect of raw materials used for production of finished goods, which are stock transferred. We cannot deny the right of the State with its plenary powers of legislation within the field of legislation, which is admittedly and legitimately exercised by it otherwise, the right to raise taxes. The Court must strike a balance between the right of the State to raise taxes, which forms the major source of revenue for it for carrying out various public purposes, no doubt, while it stands ever vigilant against any move to treat goods manufactured from or brought from other States in a discriminatory manner. The Court must strike a balance between the right of the State to raise taxes, which forms the major source of revenue for it for carrying out various public purposes, no doubt, while it stands ever vigilant against any move to treat goods manufactured from or brought from other States in a discriminatory manner. 44. We see no merit at all in the contention that all the other States have provided for the benefit of ITC in respect of packing materials even on stock transferred products, or that the Committee of Ministers have provided for ITC on such transactions. We would think that none of these factors will detract from the width of the power of a sovereign Legislature exercising plenary legislative powers. 45. The result of the above discussion is that we would think that the appellant has not made out any case for interfering with the judgment of the learned single Judge. We have set out the effect of Section 6. Appellant is not entitled to the benefit of ITC in respect of packing materials used for its finished goods, which were stock transferred. Even the Circular of 2008, in our view, does not as such clearly provide for the grant of such benefit. Lack of clarity and place for doubt in a stray sentence in a Circular cannot be seized upon by the appellant to claim that, contrary to the clear mandate of the Legislature, it should be given the benefit of ITC for the years 2008-2009, 2009-2010 and 2010-2011. 46. In such circumstances, the appeals fail and they are dismissed. No order as to costs.