Recovery of concessional sales tax barred where assessees could not lawfully collect it from customers after notification quashing.

After concessional sales tax notifications were quashed, the State could not recover from assessees the tax amounts they had been prohibited from collecting from customers under the State Act. The Court noted that the assessees were not parties to the earlier proceedings and, under the relevant provisions, would have faced penalties if they had charged the concessional amount. Recovery in those circumstances would have been unfair and inequitable. The earlier order was therefore reviewed and clarified to prevent the State from collecting the tax that became payable only because of that order, with the result that recovery from the assessees was disallowed.

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Issues: Whether, after quashing the concessional sales tax notifications, the State could recover the sales tax amounts that the assessees had not been permitted to collect from their customers under the State Act.

Analysis: The concessional notifications had been intended to protect the local cement industry, and their quashing was meant to restore parity between local manufacturers and those outside the State. The assessees were not parties to the earlier proceedings and, under sections 30-B and 30-C of the Andhra Pradesh General Sales Tax Act, could not have collected the concessional amount from customers and would have faced penalties had they done so. In these circumstances, permitting recovery from them would produce an unfair and inequitable result. The matter was, therefore, suitably dealt with by reviewing the earlier order and adding a clarification that the State should not collect the tax that became payable only because of that order.

Conclusion: The State was not entitled to recover the concessional sales tax amounts from the assessees.

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