1991 (2) TMI 377 - HC - VAT and Sales Tax

Summary

Issues:
- Refund of local sales tax on purchased goods
- Application of Rule 27-A of the Andhra Pradesh General Sales Tax Rules

Refund of Local Sales Tax on Purchased Goods:
The petitioner, a trading firm dealing in seeds and foodgrains, purchased maize and til-seeds from registered dealers in Andhra Pradesh for the assessment year 1985-86. The goods purchased were subject to sales tax at the point of first purchase within the state. The petitioner subsequently sold these goods by way of interState sales and paid Central sales tax under the Central Sales Tax Act. The petitioner then applied for a refund of the local sales tax paid on these goods under Rule 27-A of the Andhra Pradesh General Sales Tax Rules.

Application of Rule 27-A of the Andhra Pradesh General Sales Tax Rules:
Rule 27-A provides for the reimbursement of tax collected on declared goods if subsequently sold in interState trade. The petitioner filed timely applications for refund as required by the rule. The assessing authority was obligated to process these refund applications within three months of receipt. The assessment order granted exemption on the grounds of second purchase, and cross-verification was conducted to ensure actual payment of sales tax by the dealers. The court found that there was no justification for withholding the refund and issued a writ of mandamus directing the respondent to refund the local sales tax collected from the petitioner within one month, along with interest calculated at 12% per annum from a specified date.

This judgment highlights the importance of timely processing of refund applications under tax rules and the obligation of authorities to verify and refund taxes collected on declared goods in interState transactions.