State Of Andhra Pradesh vs Itc Bhadrachalam Paper Boards Ltd., ... on 29 January, 1999

[Cites 22, Cited by 1]

Andhra HC (Pre-Telangana)

State Of Andhra Pradesh vs Itc Bhadrachalam Paper Boards Ltd., ... on 29 January, 1999

Equivalent citations: 1999(2)ALD31, 1999(1)ALT704

1. Petitioner is the State of Andhra Pradesh, represented by the Principal Secretary to Government, Revenue Department, Secretariat, Hyderabad. The first respondent is M/s. ITC Bhadrachalam Paperboards Limited, Sarapaka, Khammam District. The second respondent is Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad. The third and fourth respondents being Additional Commissioner (CT) & Joint Commissioner (Legal), Andhra Pradesh, Hyderabad and the Commercial Tax Officer, Kothagudem, respectively.

2. The State of Andhra Pradesh has chosen to challenge the orders of the Additional Commissioner (CT) & Joint Commissioner (Legal) - third respondent herein, dated 23-11-1992 as confirmed by the second respondent dated 27-11-1993 through which orders a refund of more than Rs.3.70 crores was ordered to be paid to the first respondent.

3. Few facts which are relevant for the purpose of disposal of this writ petition are set out as under:

The first respondent - M/s. ITC Bhadrachalam Paperboards Limited, Sarapaka, Khammam District is an assessee on the rolls of the fourth respondent for the assessment years 1982-83,83-84, and 84-85. The assessee was assessed by the fourth respondent on the turnovers reported by the assessee under the Central Sales Tax Act, which are as under:

 Year           Turnover            Tax

1982-83     Rs.31,90,80,471.00     Rs. 1,3 3,54,932.32
1983-84     Rs.,36,56,62,095.70    Rs. 1,49,56,354.00
1984-85     Rs.44,20,68,510.00     Rs. 1,79,79,268.00

4. The first respondent-Company is located in Sarapaka area of Khammam District which is a scheduled area (agency area) as notified by the Government of Andhra Pradesh through G.O. Ms. No.606, dated 9-4-1981. As per the said G.O., certain concessions are extended to the industrial units which are established in agency areas. According to the said G.O., 50% of rate of reduction on the purchase of raw material by the industrial units located in the scheduled areas and total exemption from payment of sales tax on the sales of finished products manufactured by such industrial units for a period of five years from the date of commencement of commercial production, was allowed to the industrial units located in the said area. The exemption was granted under the Andhra Pradesh General Sales Tax Act, 1957 ( for short "APGST Act"). The first respondent has made sales locally as well as inter-state wise. According to the petitioner, exemption of payment of tax under Central Sales Tax Act was not available to the first respondent though the first respondent is entitled for benefit of tax exemption under APGST Act. The first respondent collected tax on the inter-state transactions under the Central Sales Tax Act upto September, 1984 and paid the same to the Department. Since exemption was available to the first respondent only under the APGST Act, the assessing authority assessed the first respondent for the sales made under the Central Sales Tax Act till September, 1984 and a final assessment order was passed for the assessment years 1982-83, 83-84, and 84-85 on 30-3-1987, 23-7-1987 and 30-8-1988 respectively. The first respondent accepted the assessment and did not file any appeal insofar as it relates to seeking of exemption under the Central Sales Tax Act, but however, filed appeal before the Appellate Deputy Commissioner, Warangal only on the penal rate of tax imposed by the assessing authority on the inter-state not covered by C-forms.

5. Petitioner submits that the first respondent has chosen to file a revision petition on 21-2-1991 under Section 20(2) of the APGST Act before the third respondent herein disputing the levy of tax under the Central Sales Tax Act on the ground that the exemption granted under APGST Act is general in nature and therefore, the same benefit should be extended under Section 8-2(A) of the Central Sales Tax Act also for the assessment years 1982-83, 1983-84 and 1984-85. The third respondent allowed the said revision petition on 23-11-1992 and ordered refund of an amount of Rs.3.70 crores to the first respondent.

6. According to the petitioner, this order dated 23-11-1992 passed by the third respondent is illegal, improper and without jurisdiction. Petitioner complained that the final assessment orders were passed on 30-3-1987, 23-7-1987 and 30-3-1988 and the third respondent allowed the revision on 23-11-1992 i.e., after more than four years. According to the petitioner, as per the provisions of Section 20(3) of the APGST Act, the power of revision under Section 20( 1) and (2) of the said Act can be exercised only within such period not exceeding four years and therefore, the order dated 23-11-1992 passed by the third respondent is clearly time barred. Further, according to the petitioner, the powers under Section 20(1) & (2) of the APGST Act can be exercised suo motu and not otherwise. Petitioner states that this suo motu powers can be exercised if the order is prejudicial to the interests of the revenue. However, in this case, the third respondent has not exercised the said powers suo molu but has exercised the same at the instance of the first respondent which is impermissible under the APGST Act. It is further complained that though the assessment orders passed by the fourth respondent are not prejudicial to the interests of the revenue, yet the third respondent exercised his suo motu revisional powers under Section 20(1) and (2) of the APGST Act, at the instance of the first respondent-assesses after a lapse of four years from the date of service of the order copies on the first respondent-assessee.

7. Petitioner states that the second respondent-Commissioner of Commercial Taxes, Government of Andhra Pradesh though sought to revise the order of the third respondent dated 23-11-1992 by invoking the powers under Section 20(1) of the APGST Act, the second respondent after issuing show-cause notice to the assessee on 4-9-1993 has dropped the revision proceedings holding that the notification issued granting exemption of payment of sales tax to the first respondent is general in nature and the first respondent-assessee is entitled to exemption from payment of Central Sales Tax under Section 8 (2-A) of the Central Sales Tax Act, the revisional order passed by the third respondent dated 23-11-1992 is within time and granting of refund ofRs.3.70 crores to the first respondent towards Central Sales Tax by the third respondent is in tune with the decision of the Supreme Court reported in Pine Chemicals Limited v. Assessing Authority, State ofJammu and Kashmir, 85 STC 432, dated 16-1-1992.

8. Petitioner further submits that subsequent to the order of the second respondent dated 27-11-1993 dropping the suo molu review proceedings against the order dated 23-11-1992 passed by the third respondent, the Supreme Court in a later decision reported in Commissioner of Sales Tax, Jammu and Kashmir v. Pine Chemicals Ltd., 96 STC 355, reviewed its earlier judgment Pine Chemicals Limited v. Assessing Authority, State of Jammu and Kashmir (supra) and reversed the same holding that the exemption granted was not general exemption as contemplated under Section 8 (2-A) of the Central Sales Tax Act.

9. Petitioner, therefore, submits that in view of the decision of the Supreme Court, Commissioner of Sales Tax, Jammu and Kashmir v. Pine Chemicals Ltd., cited (supra), the first respondent is not entitled to claim exemption on its inter-state sales under the Central Sales Tax Act and as such the order of the third respondent dated 23-11-1992 is incorrect, illegal and prejudicial to the interests of the State Revenue. It is further submitted that the order of the second respondent dated 27-11-1993 passed relying on the decision of the Supreme Court in Pine Chemicals Limited v. Assessing Authority, State of Jammu and Kashmir cited (supra) is also incorrect and prejudicial to the interests of the Revenue in view of the authoritative pronouncement of the Supreme Court in the decision Commissioner of Sales Tax, Jammu and Kashmir v. Pine Chemicals Ltd., (supra).

10. Under these circumstances, the State of Andhra Pradesh, represented by the Principal Secretary to Government, Revenue Department,. Hyderabad has presented the instant writ petition under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorari calling for the records in ref. No.L.V(2) 416/ 91 dated 23-11-1992 on the file of the third respondent and the proceedings in ref.No.L.111 (2)/L.V(2)416/91 dated 27-11-1993 on the file of the second respondent and to quash the same and a further consequential direction to direct the first respondent to remit the amount of Rs.3.70 crores which was refunded to it pursuant to the orders passed by the third and second respondents respectively.

11. Opposing the writ petition, the first respondent has filed a detailed counter justifying the orders passed by the third and second respondents respectively. In the counter, it is stated by the first respondent that the order passed by the third respondent dated 23-11-1992 is within the time permissible under Section 20(3) of the APGST Act. It is also averred that the second respondent is justified in dropping the review proceedings initiated by him against the orders passed by the third respondent dated 23-11-1992 keeping in view the law laid down by the Supreme Court in the decision Pine Chemicals Limited v. Assessing Authority, State of Jammu and Kashmir (supra). It is further averred in the counter that the State is not entitled to file the present writ petition as the State is not an aggrieved party. It is nextly stated in the counter that any subsequent law laid down by the Supreme Court cannot take away the benefit of the first respondent which accrued to it pursuant to the orders passed by the third and second respondents respectively and therefore, the writ petition is ill-conceived and is liable to be dismissed on the ground of non-maintainability. It is also alleged in the counter that the writ petition is filed belatedly and on this ground also, it is liable to be dismissed.

12. We have heard Sri M. Ramaiah, learned Special Government Pleader for Taxes on behalf of the writ petitioner and Sri K. Srinivasa Murthy, learned senior Counsel on behalf of the first respondent. Apart from making submissions, both the learned Counsel have also submitted written arguments.

13, In the wake of the divergent stands taken by the parties, the following larger issues arise for consideration before us, viz., (1) Whether the instant writ petition filed by the State of Andhra Pradesh, represented by the Principal Secretary to the Government, Revenue Department, Secretariat, Hyderabad is maintainable?

(2) Whether the third respondent herein is justified in exercising suo motu powers under Section 20(1) & (2) of the APGST Act, 1957 at the instance of the first respondent?

(3) Whether the first respondent is justified in retaining an amount of Rs.3.70 crores collected towards Central Sales Tax from the customers and whether such retention amounts to unjust enrichment by the first respondent?

14. As issue Nos.1 and 2 are interconnected, we propose to decide them jointly.

15. Sri M Ramaiah, learned Special Government Pleader for Taxes, appearing on behalf of the petitioner has contended that the order dated 23-11-1992 passed by the third respondent allowing the revision filed by the first respondent disputing the levy of tax under the Central Sates Tax Act is illegal, improper and without jurisdiction inasmuch as the third respondent has exercised his revisional power under Section 20(2) of the APGST Act at the instance of the first respondent and not suo motu, which according to the learned Special Government Pleader is impermissible. He further contended that in terms of the provisions under Section 20(2) of the Act, the powers can be exercised only suo motu when the orders are prejudicial to the interests of revenue and not otherwise. Learned Government Pleader, therefore, contended that the order dated 23-11 -1992 passed by the third respondent as confirmed by the second respondent by his order dated 27-11-1993 be declared as illegal in view of the decision of the Supreme Court in the decision Commissioner of Sales Tax, Jammu and Kashmir v. Pine Chemicals Lid., (supra).

16. In order to appreciate this contention, it is appropriate to extract the relevant provisions enumerated under Section 20 of the APGST Act, 1957, which reads as under:

20. Revision By Commissioner of Commercial Taxes and other Prescribed Authorities (1) The Commissioner of Commercial Taxes may suo motu call for and examine the record of any order passed or proceeding recorded by any authority, officer or person subordinate to it, under the provisions of this Act, including sub-section (2) of this Section and if such order or proceeding recorded is prejudicial to the interests of revenue, may make such enquiry or cause such enquiry to be made and subject to the provisions of this Act, may initiate proceedings to revise, modify or set aside such order or proceeding and may pass such order in reference thereto as it thinks fit.

(2) Powers of the nature referred to in sub-section (I) may also be exercised by the Additional Commissioner, Joint Commissioner, Deputy Commissioner and the Commercial Tax Officer in the case of orders passed or proceedings recorded by authorities, officers or persons subordinate to them.

(2-A) .....

(3) .....

(4) .....

(5) .....

(6) .....

17. On a careful reading of the above provisions contemplated under sub-sections (1) and (2) of Section 20 of the APGST Act, 1957, it is manifestly clear that the Commissioner/Additional Commissioner/ Joint Commissioner/Deputy Commissioner/ Commercial Tax Officer, as the case may be, may suo motu call for and examine the record of any order/proceeding of their subordinate authority and if such order/ proceeding is prejudicial to the interests of the Revenue, may initiate proceedings to revise, modify or set aside such order/ proceeding. Furthermore, this provision only confers suo motu powers on the above authorities to call for and examine any record/ proceeding of their subordinate authorities and pass appropriate orders if such order/ proceeding is prejudicial to the interests of the Revenue.

18. Against this backdrop, we now proceed on to examine the factual aspects of the instant case.

19. It is interesting to note that though the fourth respondent passed final assessment orders for the years 1982-83, 83-84 and 84-85 on 30-3-1987, 23-7-1987 and 30-8-1988 respectively on the turnover reported by the first respondent-assessee under the Central Sales Tax Act, the first respondent did not choose to challenge the same before the appellate authority about levying of tax on the turnovers reported by the assessee under the Central Sales Tax Act. When it is the contention of the first respondent-assessee that G.O. Ms. No.606, dated 9-4-1981 is general in nature and extends the benefit of exemption to it under Section 8(2-A) of the Central Sales Tax Act also, the first respondent could have preferred an appeal against the said assessment orders before the appellate authority. However, without preferring any appeal, the first respondent allowed the assessment orders passed by the fourth respondent for the assessment years 1982-83, 1983-84 and 1984-85 to become final.

20. G.O. Ms. No.606 Revenue (S) Department, dated 9-4-1981 is issued by the Government of Andhra Pradesh providing 50% concession to the industrial units set up in scheduled areas (agency areas) of sales tax on the purchase of raw materials, machinery, equipment, etc., and complete exemption to the products of the industry from sales tax for a limited period of five years. Notification-Ill annexed to the said G.O. Ms. No.606 dated 9-4-1981 reads thus:

"In exercise of the powers conferred by sub-section (1) of Section 9 of the Andhra Pradesh General Sales Tax Act, 1957 (Andhra Pradesh Act No.VI of 1957), the Governor of Andhra Pradesh hereby exempts the sales of products of the industrial units set up on or after the 17th December, 1976 in the scheduled areas declared by the President of India as such under the Fifth Schedule to the Constitution of India from the tax payable under the said Act for a period of five years from the date of going into regular production by such industrial units.

This Notification shall be deemed to have come into force on the 1st January, 1977."

21. As stated earlier, the first respondent-assessee did not chose to challenge the assessment orders for the Years 1982-83,1983-84 and 1984-85 passed on 30-3-1987, 23-7-1987 and 30-8-1988 respectively before the appellate authority in time but it is only on 21-2-1991 the first respondent-assessee filed a revision petition under Section 20(2) of the APGST Act before the third respondent herein, disputing the levy of tax under Central Sales Tax Act on the ground that the exemption granted under APGST Act is general in nature and that the benefit of exemption should be extended under Section 8(2-A) of the Central Sales Tax Act for the assessment years 1982-83, 1983-84 and 1984-85. It is, therefore, clear that the first respondent itself was not certain whether the exemption granted in terms of G.O. Ms. No.606 dated 9-4-1981 is general in nature or only specific about the exemption under APGST Act. However, on a plain reading of the Notification-Ill annexed to G.O.Ms. No.606 dated 9-4-1981 extracted above, it is abundantly clear that the industrial units set up on or after 17-12-1976 in scheduled areas are exempted from payment of tax on the sales of products under the APGST Act, 1957 only and not under Central Sales Tax Act. Had it been the intention of the Government to exempt the industrial units from payment of Central Sales Tax also, the said exemption could have been explicitly incorporated in the Notification-III annexed to the said G.O. Therefore, it is not open for the first rcspondent-assessec to import a new meaning which is not at all present in the said Notification.

22. Sri M. Ramaiah, learned Special Goveniment Pleader for Taxes has contended that the third respondent cannot exercise his suo motu revisional powers conferred on him under Section 20(2) of the APGST Act, at the instance of the first respondent-assessee. In support of his contention, he placed strong reliance on the decision of the Andhra Pradesh High Court reported in Kalluri Bheemalingam and others. In re, 19 STC 116, and a decision of the Supreme Court reported in State of Andhra Pradesh v, M/s. T.G. Lakshmaiah Self)' and Sons, . Counsel contended that the Supreme Court in the decision Stale of Andhra Pradesh v. M/s. T.G. Lakshmaiah Setty and sons (supra) has also considered the decision of the Andhra Pradesh High Court Kalluri Bheemalingam and others, In re (supra) and categorically held that under Section 20 of the APGST Act, 1957, an assessee cannot invoke the suo motu revisional powers of the Commissioner/Joint Commissioner as the suo motu powers are conferred on higher authorities to correct the errors of law or to correct improper or irregular procedure or illegality in the procedure to safeguard the interests of the Revenue.

23. The Supreme Court in the decision State of Andhra Pradesh v. M/s. T.G. Lakshmaiah Setty and sons (supra) has held thus:

"Accordingly we hold that the aggrieved assessee has only to pursue the remedies provided in the Act and he has no right to make an application under Section 20 of the Act seeking revision of the orders of assessments made under the Act by the original authorities."

24. Thus, it is clear from the above pronouncement of the Supreme Court that an assessee is not entitled to invoke the suo motu powers of the revisional authorities under Section 20 of the APGST Act.

25. In this case, admittedly, the third respondent has passed the order dated 23-11-1992 on a revision filed by the first respondent-assessee under Section 20(2) of the APGST Act, which order has also been confirmed by the second respondent by his order dated 27-1 i-1993, through which order the first respondent-assessee was ordered to be refunded an amount of Rs.3.70 crores towards the Central Sales Tax. As indicated earlier, Section 20 of the APGST Act, 1957 authorises the authorities mentioned therein to suo moiu call for and examine the record of any order/proceeding of their subordinate authority if such order/ proceeding is prejudicial to the interests of Revenue. Section 20 of the said Act does not contemplate that the authorities mentioned therein may exercise their suo motu revisional powers at the instance of the assessee.

26. Therefore, the exercise of suo motu revisional powers under Section 20(2) of the APGST Act by the third respondent at the instance of the first respondent is not permissible by law and is manifestly an unauthorised act.

27. Sri K. Srinivasa Murthy, learned senior Counsel appearing on behalf of the first respondent-assessec contended that in view of the decision of the Supreme Court Pine Chemicals Limited v. Assessing Authority, State of Jammu and Kashmir (supra), the third respondent is justified in exercising his powers of revision under Section 20(2) of the APGST Act at the instance of the first respondent and by his order dated 23-11-1992 has rightly ordered refund of an amount of Rs.3.70 crores to the first respondent-assessee. We are unable to record our concurrence to this submission advanced by the learned senior Counsel on behalf of the first respondent. As indicated in the foregoing paragraphs, Section 20 of the APGST Act envisages that certain authorities specified therein may exercise their powers under this Section only suo motu and not otherwise by calling for and examining the records/proceedings of their subordinate authorities if such orders or records/proceedings are prejudicial to the interests of the Revenue. Therefore, the authorities enumerated under Section 20 of the APGST Act are not empowered to entertain a revision under Section 20(1) and (2) of the said Act at the instance of an assessee.

28. The Supreme Court in the decision State of Andhra Pradesh v. M/s. T.G. Lakshmaiah Setly and Sous (supra) has also held the same view. In view of the law laid down by the Supreme Court, the exercise of revisional powers under Section 20(2) of the APGST Act by the third respondent at the instance of the first respondent-assessee is illegal and not authorised by law and as such, the contention of the learned senior Counsel appearing on behalf of the first respondent-assessee cannot be accepted.

29. Now, we proceed to examine the question of maintainability of the instant writ petition at the instance of the State.

30. Sri M Ramaiah, learned Special Government Pleader for Taxes appearing on behalf of the petitioner vehemently contended that all the assessing officers, revisional authorities and appellate authorities under the APGST Act discharge quasi-judicial functions under Sections 14, 15, 19 and 20 of the said Act which are different from administrative functions and as such, a writ of Certiorari is always available to the State which is the litigant before the revisional and appellate authorities. To buttress his contentions, learned Special Government Pleader appearing on behalf of the writ petitioner has placed strong reliance on the following decisions reported in Suraj Mall Mohla and Company v. A. V. Visvanatha Sastri, , State of Madhya Pradesh v. Babu Led and others, AIR 1977 SC 1718, Jam Chand Kalloo Ram v. Sales Tax Officer, Hapur Circle, Meerut, 13 STC 957, and in State of Uttar Pradesh v. Bahadur Singh, .

31. On the contrary, Sri K. Srinivasa Murthy, learned senior Counsel appearing on behalf of the first respondent-assessee contended that it is not open to the State to file this writ petition under Article 226 of the Constitution of India as no right has been conferred on the Government to invoke the jurisdiction of this Court under Article 226 of the Constitution of India inasmuch as the Government is not an aggrieved party in this case.

32. It is settled proposition of law that a writ of Certiorari is available for correcting the error of jurisdiction when an inferior Court or Tribunal acts without jurisdiction or in excess of it or fails to exercise it. A writ of Certiorari is also available for correcting the error of jurisdiction or if the order is illegal and without authority. In other words, a writ of Certiorari is available for rectifying the record and correcting the glaring irregularities committed by the lower authorities.

33. The Supreme Court in State of Madhya Pradesh's case (supra) has held thus:

"One of the principles on which Certiorari is issued is whether the Court acls illegally and there is error on the face of record. If the Court usurps the jurisdiction, the record is corrected by Certiorari."

34. In High Court of Madhya Pradesh v. Mahesh Prakash and others, the Supreme Court has held thus:

"The order that the first respondent challenged in the writ petition filed by him before the High Court was an order passed by the High Court on its administrative side. By reason of Article 226 of the Constitution, it was permissible for the appellant to move the High Court on its judicial side to consider the validity of the order passed by the High Court on the administrative side and issue a writ in that behalf."

In the said case, the first respondent Mahesh Prakash filed a writ petition under Article 226 challenging before the High Court on its judicial side the order passed by the High Court on its administrative side. A Division Bench of the High Court allowed the writ petition. The High Court on its administrative side preferred an appeal by special leave under Article 136 against the judgment of the High Court on its judicial side. It is in this background, the Supreme Court held that the appeal by the High Court on the administrative side against the judgment of High Court on judicial side is maintainable.

35. In Tara Chand Kallo Ram's case (supra) it is held thus:

"The functions which the Sales Tax Officers discharge in making assessments are judicial functions which must be faithfully and conscientiously discharged in respect of each assessee and not on any general instructions of their departmental officers or according to any set patterns or any pre-determined formula."

From the decision Tara Chand Kallo Ram's (supra) and also in view of the Sections 14, 15, 19 and 20 of the APGST Act, it is manifestly clear that all the assessing officers, revisional authorities and appellate authorities discharge quasi-judicial functions which are different from administrative functions. When these authorities discharge quasi-judicial functions, there are two parties before them, viz., the assessee and the State. As against the order of revision passed under Section 20 of the APGST Act, 1957, there is no provision for an appeal to the State Government. No provision is also shown to this Court under the APGST Act by virtue of which the State could prefer an appeal against an order passed under Section 20 of the said Act. Therefore, in the absence of any provision in the said Act providing for an appeal to the State Government against the orders of the revisional authorities under Section 20 of the Act, more particularly, when such orders of revisional authorities passed under Section 20 of the Act are illegal, without jurisdiction and smacks of irregularities, we are inclined to hold that the State is entitled to challenge the order passed by the third respondent dated 23-11-1992 as confirmed by the second respondent by his order dated 27-11-1993, invoking Article 226 of the Constitution of India before this Court.

36. Sri K. Srinivasa Murthy, learned senior Counsel appearing on behalf of the first respondent-assessee nextly contended that this writ petition is belated and barred by time and as such the same is liable to be dismissed.

37. In State of Uttar Pradesh's case (supra), the Supreme Court held that unlike in a case where two private parties where each would be prosecuting and watching the proceedings regularly, when the Government/ State is a party, the departmental authorities have to be appraised of the adverse decision and further decision has to be taken whether the case is required to be taken to a higher Court. The Supreme Court further held that one aspect that cannot be overlooked is that a departmental authority may delay the moving of a higher Court and if such case is thrown out merely on the ground of some delay which is also explainable, public interest may suffer. It is also categorically held by the Supreme Court that the relevant consideration in such cases is the public interest at large.

38. Keeping the above observations of the Supreme Court, we now examine the contention of the learned Counsel for the first respondent-assessee that the writ petition is liable to be dismissed on the ground of delay.

39. The third respondent through his order dated 23-11-1992 by exercising his powers under Section 20(2) of the APGST Act, at the instance of the first respondent has allowed the revision filed by the first respondent-assessee and has ordered refund of a whopping amount of Rs.3.70 crores to die first respondent-assessee. This order dated 23-11-1992 passed by the third respondent has been declared as erroneous, illegal and without authority by us in the foregoing paragraphs. As no provision for appeal is provided in the APGST Act against the order of the third respondent to the aggrieved party i.e., State, we have also held that a writ of Certiorari is available to the State against the order of the third respondent. When the first respondent-assessee has unjustly benefitted and enriched itself by an amount of Rs.3.70 crores as a result of an illegal and erroneous order of the third respondent, can this writ petition be thrown out on the ground of delay? We are afraid, we cannot do so having regard to the facts and circumstances of the case moreso when crores of public money is involved. We are fortified in our view by the decision of the Supreme Court in State of War Pradesh v. Bahadur Singh (supra) wherein it is categorically held that a case wherein public interest and public monies are involved, cannot be thrown out merely on the ground of delay. Even otherwise also, we are convinced that the petitioner has been able to explain the cause of delay satisfactorily following which this writ petition came to be admitted.

40. We, are therefore, inclined to hold that mere delay in filing the writ petition is not fatal to the case of the petitioner.

41. Having regard to the above discussion, we hold on issue No.l that the instant writ petition filed by the State of Aridhra Pradesh, represented by the Principal Secretary, Revenue Department, Secretariat, Hyderabad is maintainable and on issue No.2 we hold that the third respondent is not justified in exercising suo motu revisional powers under Section 20(2) of the APGST Act, 1957 at the instance of the first respondent-assessee.

42. Insofar as the issue as to whether the first respondent is justified in retaining the amount of Rs.3.70 crores collected towards tax on the inter-state transactions under the Central Sales Tax Act from the customers and whether such retention amounts to unjust enrichment, Sri M. Ramaiah, learned Special Government Pleader for Taxes, appearing on behalf of the petitioner contended that as the third respondent has erroneously and unauthorisedly exercised his suo motu revisional powers under Section 20(1) of the APGST Act at the instance of the first respondent and allowed the revision filed by the first respondent by his order dated 23-11-1992 and ordered a refund of Rs.3.70 crores to the first respondent and retaining of such a huge amount by the first respondent pursuant to the order of the third respondent tantamounts to unjust enrichment. He further contended that in view of the decision of the Supreme Court in Commissioner of Sales Tax, Jammu and Kashmir v. Pine Chemicals Ltd, (supra), the first respondent is not entitled to retain the said amount.

Elaborating further, learned Special Government Pleader for Taxes contended that Section 30-B of the APGST Act postulates prohibition against collection of tax in certain cases and Section 30-C of the Act provides for imposition of penalty for contravening certain provisions under the Act. It is contended that the first respondent collected the tax from the customers on behalf of the State, though initially paid the taxes so collected to the Government, it is only on the illegal order dated 23-11-1992 passed by the third respondent as confirmed by the second respondent, the first respondent got refund of Rs.3.70 crores and as such, the first respondent cannot illegally retain the public monies and unjustly enrich itself.

43. On the contrary, Sri K Srinivasa Murthy, learned senior Counsel appearing on behalf of the first respondent contended that in view of the decision Pine Chemicals Limited v. Assessing Authority, State of Jamniu and Kashmir (supra), the third respondent lias rightly allowed the revision filed by the first respondent. He further contended that in view of the decision of the Supreme Court in Mafatlal Industries Limited v. Union of India, , the petitioner is not entitled for refund of the amount of Rs.3.70 crores from the first respondent.

44. It is an admitted fact that the first respondent had collected the tax from the purchasers of the goods towards Central Sales Tax. Therefore, the first respondent has passed on the tax liability to the customers, collected the same from them in the name of the State and paid the same to the Government forthe years 1982-83, 1983-84 and 1984-85 pursuant to the final assessment orders passed by the fourth respondent. The first respondent accepted the said assessment orders and did not file any appeal. However, the first respondent only filed a revision petition before the third respondent, as indicated in the foregoing paragraphs, on 21-2-1991 invoking the powers of the third respondent under Section 20(2) of the APGST Act, pursuant to which the first respondent allowed the said revision by his order dated 23-11-1992 and ordered a refund of Rs.3.70 crores to the first respondent. This order of the third respondent dated 23-11-1992 granting a refund of Rs.3.70 crores to the first respondent has been declared by us as illegal and erroneous on the basis of our discussion on issue Nos.l and 2. When the order dated 23-11-1992 passed by the third respondent itself has been declared by us as illegal and erroneous, can the first respondent still be entitled to retain the said amount of Rs.3.70 crores which it got by way of refund on the basis of such illegal and erroneous order? We are of the view, having regard to our discussion in the foregoing paragraphs, the first respondent is not entitled to retain the said amount of Rs.3.70 crores which it got as a refund. It is also admitted by the first respondent that it has collected the tax from the customers and the persons who have paid the tax have also not come forward claiming refund nor it is the case of the first respondent that it would refund the said amount to the customers.

45. Though the learned senior Counsel appearing on behalf of the first respondent has cited the decision in Mafatlal Industries Limited v. Union of India (supra), in support of his contention that the petitioner is not entitled to seek the said amount of Rs.3.70 crores, we are not inclined to record our concurrence to the said contention inasmuch as the facts and circumstances in the said decision are totally different from the instant case. In the said decision, the Supreme Court has held that an assessee is entitled to seek refund provided that the assessee has not passed on the burden of duty to customers.

46. Admittedly, in the instant case, the first respondent has collected the tax on inter-state transactions under the Central Sales Tax Act upto September, 1984 and paid the same to the Department. But it has got the refund to a tune of Rs.3.70 crore pursuant to an erroneous and illegal order passed by the third respondent dated 23-11-1992 under Section 20(2) of the APGST Act. Therefore, the decision of the Supreme Court in Mafatlal Industries Limited v. Union of India (supra), cannot lend any assistance to the case of the first respondent.

47. We have already held on issue Nos.l and 2 that the order dated 23-11-1992 passed by the third respondent under Section 20(2) of the Act at the instance of the first respondent, ordering refund of a huge amount of Rs.3.70 crores is illegal and without jurisdiction. The amount of Rs.3.70 crores refunded to the first respondent pursuant to the illegal order dated 23-11 -1992 is the public money which is to be spent for welfare activities. When such a huge amount is retained by the first respondent, the State is deprived of the said money which legitimately belongs to the State and therefore, the first respondent is not justified to retain the huge amount of Rs.3.70 crores and such retention amounts to unjust enrichment by the first respondent. In this view of the matter, we answer this issue against the first respondent-asscssee.

48. It is lastly contended by Sri K. Srinivasa Murthy, learned senior Counsel appearing on behalf of the first respondent-assessee that though the second respondent initiated suo motu revision proceedings against the order passed by the third respondent dated 23-11-1992 by issuing a show-cause notice to the first respondent on 4-9-1993, but in view of the decision of the Supreme Court in Pine Chemicals Limited v. Assessing Authority, State of Jammu and Kashmir (supra), the second respondent dropped the said revision proceedings holding that the first respondent-assessee is entitled to seek refund of the Central Sales Tax paid by it. Learned senior Counsel stated that as on the date of the order passed by the second respondent, the decision of the Supreme Court in Pine Chemicals Limited v. Assessing Authority, State of Jammu and Kashmir (supra), was holding the field and therefore, it was binding on every body including the State. Learned senior Counsel contended that the second respondent was justified in confirming the order passed by the third respondent dated 23-11-1992 while dropping the revision proceedings initiated by him in the light of the decision of the Supreme Court in Pine Chemicals Limited v. Assessing Authority, State of Jammu and Kashmir (supra). It is also contended that on the basis of the decision of the Supreme Court in Pine Chemicals Limited v. Assessing Authority, State of Jammu and Kashmir (supra), the first respondent is legally entitled for retention of the Central Sales Tax amount under Section 8(2-A) of the Central Sales Tax Act, 1956. It is further contended that the petitioner cannot claim the amount of Rs.3.70 crores from the first respondent only on the basis of the later decision of the Supreme Court in Commissioner of Sales Tax, Jammu and Kashmir v. Pine Chemicals Ltd., (supra) which is dated 24-10-1994. It is also contended that if the submissions made on behalf of the writ petitioner are to be accepted to say that since there is a change in law, the earlier benefits given to parties should be withdrawn, it would create chaotic situation and therefore, the first respondent is legally entitled to retain the refund amount of Rs.3.70 crores.

49. We are not inclined to appreciate the above submissions of the learned senior Counsel for the first respondent for more than one reason. In the foregoing paragraphs, having regard to our discussion on issues 1 to 3 we have already held that the third respondent exercised his powers under Section 20(2) of the APGST Act illegally and unauthorisedly at the instance of the first respondent and has passed the order dated 23-11-1992 through which he ordered refund of an amount of Rs.3.70 crores to the first respondent though the first respondent is not legally entitled to seek refund of the said amount. Though the second respondent initiated suo motu revision proceedings against the order passed by the third respondent dated 23-11-1992 by issuing show-cause notice to the first respondent, but has dropped the said revision proceedings in the light of the decision of the Supreme Court in Pine Chemicals Limited v. Assessing Authority, State of Jammu and Kashmir (supra) which held that the exemption of Central Sales Tax under Section 8 (2-A) of the Central Sales Tax Act is available to such of those industries which are governed by specific G.O.s as is made applicable to the case of the industries in the State of Jammu and Kashmir. However, at the instance of the State of Jammu and Kashmir, the Supreme Court has reviewed its earlier decision Pine Chemicals Limited v. Assessing Authority, State of Jammu and Kashmir (supra) on 24-10-1994 by rendering another decision Commissioner of Sales Tax, Jammu and Kashmir v. Pine Chemicals Ltd., (supra) holding lhat exemption under Section 8 (2-A) of the Central Sales Tax Act is not available to the assessees more so when specific exemption under the Central Sales Tax Act is not specified in the G.Os. governing the exemptions. In the light of the pronouncement of the Supreme Court in the decision Commissioner of Sales Tax, Jammu and Kashmir v. Pine Chemicals Ltd, (supra), in our view, the first respondent is not entitled to retain the amount of Rs.3.70 crores as a result of an illegal order dated 23-11-1992 passed by the third respondent. A party being a beneficiary of an order which is per se illegal, cannot get away with that benefit if it is found that the said party is not entitled to retain such benefit. Courts are entitled to examine whether such benefit obtained by a party is in accordance with law or not. If the initial benefit obtained by a party is found to be illegal, Courts in our view, shall not hesitate in ordering such party to remit the benefit to the real custodian. The second respondent by order dated 27-11-1993 confirmed the order of the third respondent dated 23-11-1992 granting refund of Rs.3.70 crores to the first respondent solely on the basis of the decision of the Supreme Court in Pine Chemicals Limited v. Assessing Authority, State of Jammu and Kashmir (supra). This decision of the Supreme Court in Pine Chemicals Limited v. Assessing Authority, State of Jammu and Kashmir (supra), was subsequently reviewed and reversed by the Supreme Court in the decision Commissioner of Sales Tax, Jammu and Kashmir v. Pine Chemicals Ltd., (supra), the first respondent-assessee is not entitled to retain the taxes so collected by it from the customers. In this view of the matter, we do not think the claim of the writ petitioner seeking remittance of Rs.3.70 crores from the first respondent could be said to be illegal.

50. Having regard to our above discussion and in the light of the pronouncements of the Supreme Court cited 2 to 8 supra, we set aside the orders dated 23-11-1992 and 27-11-1993 passed by the third and second respondents respectively. Consequently, we direct the first respondent to remit the amount of Rs.3.70 crores to the writ petitioner forthwith. We are also of the view that though the first respondent is not legally entitled to seek refund of the said amount of Rs.3.70 crores, but since it has enjoyed the said amount from the date of refund, the first respondent shall also pay interest to the writ petitioner on the said amount. Accordingly, we direct the first respondent to pay interest at 32 per cent per annum on the said amount of Rs.3.70 crores from the date of refund till the date of remittance of the said amount to the writ petitioner.

51. In the result, this writ petition is allowed with costs against the first respondent, quantified at Rs.10,000/- which shall be paid by the first respondent to the A.P. State Legal Aid Board within a period of four weeks from today.

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Andhra HC (Pre-Telangana)