1978 (12) TMI 178 - HC - VAT and Sales Tax

Summary

Issues:
Claim for refund of State tax, levy of Central sales tax on groundnuts, revocation of exemption notification, demand for payment of Central tax, adjustment of tax amounts.

Analysis:
The judgment pertains to a dispute regarding the levy of Central sales tax on groundnuts and the subsequent claim for refund of State tax. The State Government initially exempted declared goods, including groundnuts, from Central sales tax under a notification issued in 1964. However, this exemption was revoked in 1970. Despite the revocation, some sales tax authorities continued to collect only State tax and the difference between State tax and Central tax. In the case of the petitioner for the year 1974-75, a demand was made for payment of Central tax after the petitioner had already paid the State tax and the difference amount. The petitioner requested an adjustment of the already paid amount towards the Central tax due for the same year to avoid the cumbersome process of paying and claiming a refund.

The court acknowledged that as per the relevant laws, both State and Central taxes should be paid, followed by a refund claim for the State tax. However, considering the peculiar circumstances of the case where the authorities had collected taxes in a specific manner even after the revocation of the exemption notification, the court deemed it unreasonable to insist on the petitioner to pay the amount again and then claim a refund. The court recognized the legal position but exercised its discretion to grant the petitioner's request for adjustment of the already paid amount towards the Central tax due for the assessment year 1974-75.

Therefore, the court allowed the writ petition, directing the respondent to adjust the amount already paid by the petitioner towards the Central sales tax demand for the specified year. The court further instructed that no additional amount should be collected in this regard. The petitioner's request for adjustment was granted based on the specific circumstances of the case, despite the general legal requirement of paying both taxes and claiming a refund. The judgment concluded with the allowance of the petition without any order as to costs, and the advocate's fee was fixed at Rs. 150.