Syed Shah Mohammed Quadri, J.@mdashThese three writ petitions raise the same question of law, therefore they are heard together and are being disposed of by a common order.
2. W.P. No. 18001 of 1994 relates to the assessment year 1990-91; W.P. No. 18002 of 1994 relates to the assessment year 1991-92 and W.P. No. 5616 of 1995 relates to the assessment years 1989-90 and 1990-91. For appreciating the question involved in the case, we shall refer to the facts stated in the Writ Petition No. 18001 of 1994 :
The petitioner is a manufacture of hand pumps having its factory at Plot No. 16, Industrial Development Area, Balanagar, Hyderabad. It is a registered dealer under the Andhra Pradesh General Sales Tax Act and the Central Sales Tax Act with the first respondent-Commercial Tax Officer. The turnover in question relates to the sale of hand pumps to the Government departments. Having regard to the provisions of rule 17 of the Andhra Pradesh General Sales Tax Rules, the return should be accompanied by proof of payment of sales tax either by way of demand draft or crossed cheque in favour of the assessing authority. However having regard to the policy evolved by the Government as reflected in U.O. Note No. 24432/CT-II 2/87-10, dated September 12, 1989, the Government departments were authorised to deduct so much of the amount as represents the sales tax from the amount payable to the dealers and issue a certificate to that effect and they were to enclose such certificates with the returns. The petitioner says that accordingly, in respect of the sales tax deducted at source, it has obtained the certificates from various departments and enclosed them to the returns. The first respondent declined to accept the same filed by the petitioner for a sum of Rs. 8,07,157. The petitioner, therefore, seeks a writ of mandamus directing the first respondent to accept the deduction certificates filed by the petitioner, which account for the total sales tax payable by the petitioner amounting to Rs. 8,07,157.
In the counter-affidavit filed by the first respondent, issuance of the said U.O. note is not disputed. It is, however, pleaded that it is only when the certificates are accompanied by treasury challan/cheque/demand draft that certificates could be acted upon. In paragraph 7 of the counter-affidavit, the following three reasons are given :
(1) The certificates state that amounts have been deducted from the bills and will be paid to the Sales Tax Department. There is no mention of proof of having paid the amount. Hence, credit cannot be given as per the Act.
(2) There are some challans filed by the dealers which indicate that Panchayat Raj Department has paid the amounts direct into the treasury. The challans do not speak in whose favour the amounts have been paid. In the absence of the above information, the Commercial Tax Officer could not give credit.
(3) There are some copies of demand drafts filed by the dealer which are drawn in favour of the Commercial Tax Officer, Secunderabad, but not received in this office. As there are number of Commercial Tax Officers in Secunderabad, it is not known as to where these demand drafts have been sent.
On those facts, it is prayed that the writ petition may be dismissed.
3. Sri S. Krishna Murthy, learned counsel for the petitioner, submits that the departments/purchasers deduct the tax from the amounts payable to the petitioner from the bills representing the price of the water pumps supplied by it; how those departments remit the tax to the first respondent, is a matter between the first respondent and those departments and the petitioner cannot be made to file proof of remittances made by various departments to the first respondent and that the petitioner should be granted the relief on the basis of the certificates issued by the departments.
4. The learned Government Pleader contends that the petitioner has filed certain drafts, which are vague and from them, it is impossible to find out as to which remittance relates to which sale. Therefore, the petitioner was rightly asked to give proof of remittances.
5. It is a common case that the Government have issued U.O. Note No. 24432/CT-II 2/87-10, dated September 12, 1989. Paragraph 4 of the said U.O. note is relevant for our purpose. It reads as follows :
"4. All Government departments, companies, corporations and other organisations under the control of the State or Central Government, who are making bulk purchases of raw materials, intermediate parts and finished goods for their requirements from the general trade shall follow the procedure laid down below in making purchases of their requirements of rupees one lakh or more from the general trade :
(1) They shall make purchases from only registered dealers under the A. P. General Sales Tax Act and each supplier shall be asked to enclose an attested copy of the registration certificate under the Andhra Pradesh General Sales Tax Act along with his offer. Failure to enclose the certificate shall result in summary rejection of the offer. Placing orders with unregistered dealers shall be treated as a major financial irregularity on the part of the officer concerned.
(2) In case of the supply of materials, the sales tax element included in the supply bill shall be separated and deducted from each payment to be made to the supplying dealer and directly paid or remitted to the Commercial Taxes Department and to the credit of the supplying dealer under intimation to the supplier. Failure to do this shall be treated as a major financial irregularity on the part of the officer passing the bill.
(3) The department, company or organisation shall also give a certificate, in the pro forma enclosed, to the supplying dealer to the effect that the amount of sales tax mentioned in the bill has been deducted and directly remitted to the Commercial Taxes Department and in the certificate the challan number or the demand draft number in which the amount has been remitted to the Commercial Taxes Department on account of that particular dealer shall be mentioned. A copy of the same certificate shall be given to the appropriate authority (Commercial Taxes Department) of the supplying dealer.
(4) The Commercial Taxes Department shall give credit of the payment of this amount of tax by the purchasing Government department, corporation or company or other organisation owned by the State or Central Government to the supplying dealer and adjust these amounts from the balance payable by the dealer for the assessment year."
From a perusal of various clauses of paragraph 4 of the U.O. note extracted above, it is clear that the sales tax included in the supply bill has to be deducted from each payment to be made to the supplying dealer and directly paid or remitted to the Commercial Taxes Department and to the credit of the supplying dealer under intimation to the supplier. It is also clear that the Commercial Taxes Department is bound to give credit to the payment of the amount of tax deducted at source by the purchasing Government department, corporation and company owned by the State or Central Government to the supplying dealer and adjust those amounts as against the tax payable by the dealer for the relevant assessment year. Thus, it follows that the obligation of the dealer is to file a certificate issued by the departments as proof of deduction of tax at source. He is not required to pursue the matter further and then get the particulars from the concerned department with regard to the remittances of the tax by those departments to the commercial Taxes Department. Admittedly, in this case, the writ petitioner has filed certificates of tax deduction from various departments. Therefore, the petitioner is entitled to credit of the tax already deducted at source by various departments on the price of the goods supplied by it to those departments. If the petitioner has attempted to file copies of drafts sent by those departments, it was only meant to facilitate the first respondent as the petitioner would not be bound to produce the remittances of the tax deducted at source. The departments or corporations, which deduct the sales tax at source, have to pay the tax so deducted to the Commercial Tax Department and the first respondent has to deal with those departments directly on the basis of the certificate without requiring the petitioner to furnish the proof of remittances.
6. In this view of the matter, the writ petitions have to be allowed. Accordingly the writ petitions are allowed with costs and the first respondent - Commercial Tax Officer is directed to give credit to the petitioners in these writ petitions for the amounts indicated in the tax deduction certificates and accordingly adjust against the sales tax payable by them.
7. Writ petitions allowed.
