Judgment:
A. Sambasiva Rao, C.J.
1. The relief now sought is in respect of a somewhat stale claim made by the sales tax department. As it is well-known, groundnuts are declared goods. If inter-State trade is made in respect thereof, Central sales tax also is leviable in respect of such trade. As laid down by section 15(b) of the Central Sales Tax Act and the proviso to section 6 of the A.P. General Sales Tax Act, such dealer should pay the State tax as well as the Central tax and then claim refund of the State tax. But the State Government issued on 14th July, 1964, G.O. No. 1094 exempting the declared goods from the levy of Central sales tax on condition that the dealers will not claim any refund of the State tax which they have paid. Evidently noticing the incongruity of such a notification, the State Government revoked it by a notification dated 26th November, 1970. Despite the revocation, it appears some of the sales tax authorities continued to collect only the State tax and the difference between the State tax and the Central tax whenever there is such difference, thereby dispensing with the need for refund of any amount. Despite the revocation, some of the sales tax authorities continued the same procedure and were not collecting the Central sales tax but were collecting only the State tax plus the difference between the two taxes.
2. For the year 1974-75 also, in so far as the present writ petitioner is concerned, he was a dealer in groundnuts. They were collecting the State tax and the difference between the State tax and the Central tax in monthly instalments. Towards the State tax that year, the petitioner paid Rs. 1,18,467. Sometime after the expiry of the assessment year 1974-75, a demand was made against the petitioner for payment of Rs. 1,30,180 towards the Central tax due for the assessment year 1974-75. It is undoubted that the petitioner paid the difference between the State tax and the Central tax due for that year on his dealings in inter-State trade. Now he claims that instead of his paying in the first instance a sum of Rs. 1,18,467 (sic) once again towards the Central sales tax for which demand was made and immediately thereafter claiming refund of precisely the same amount, the amount may be adjusted. He, therefore, seeks a direction that this cumbersome process may be avoided and the amount may be adjusted towards the balance of the Central tax which is due for the year 1974-75.
3. There is no doubt that as per the provisions of the Central as well as the State laws, both the taxes should be paid and then refund should be claimed of the State tax. Even though it is an empty formality, since the law requires this procedure, it will have to be followed. That is the undeniable legal position.
4. But in the peculiar circumstances of the case, we are inclined to grant the direction which the petitioner seeks. The period for which the demand was made had long ago expired. For years before that, by virtue of G. 0. No. 1094, the sales tax authorities were collecting from the petitioner only the State tax plus the difference between the State tax and the Central tax. That was continued even during the year 1974-75, despite the revocation of the above G.O. on 26th November, 1970. Since the authorities themselves demanded and collected the amount in the manner aforesaid and since the relevant period had long ago expired, it appears to us to be positively unreasonable to insist on the petitioner to pay the amount of Rs. 1,18,467 once again and then immediately thereafter claim refund of the amount. As we have said, that is the true legal position. But, in view of the lapse of so much time and the fact that the departmental authorities themselves collected the amount in the manner in which it was paid in view of G.O. No. 1094, we direct that the amount of Rs. 1,18,467 be adjusted by the respondent towards the demand made for the Central sales tax due from the petitioner for the assessment year 1974-75. We also direct that this amount be adjusted accordingly and that they shall not collect any amount in this behalf.
5. The writ petition is accordingly allowed. There will be no order as to costs. Advocate's fee Rs. 150,