Cross-adjustment between distinct tax statutes was impermissible where the refund and liability arose under different enactments.

Excess tax refundable under the Central Sales Tax Act could not be adjusted against amounts due under the Mysore Sales Tax Act under the proviso to rule 20 of the Mysore Sales Tax Rules, 1957. The adjustment power was confined to excess tax refundable under the State Act and liabilities arising under that same Act. Because the refund and the demand arose under different taxing statutes, the two levies were treated as distinct and the rule did not authorise cross-adjustment absent express statutory permission. The assessee was therefore entitled to refund of the excess amount, and the State sales tax demand had to be recomputed accordingly.

---

---

Issues: Whether excess tax refundable under the Central Sales Tax Act could be adjusted against amounts due under the Mysore Sales Tax Act under the proviso to rule 20 of the Mysore Sales Tax Rules, 1957.

Analysis: The adjustment provision in rule 20 was held to apply primarily to excess tax refundable under the State Act and to amounts due under that Act. The refundable sum in question arose under the Central Sales Tax Act, while the demand sought to be satisfied arose under the Mysore Sales Tax Act. The two levies were treated as distinct taxes imposed under different statutes, and the rule did not authorise cross-adjustment of a refund under one enactment against liability under another.

Conclusion: The adjustment was impermissible and the refund had to be made to the assessee.

Final Conclusion: The assessee was entitled to refund of the excess amount paid under the Central Sales Tax Act, and the State sales tax demand had to be recomputed accordingly.

Ratio Decidendi: A refund arising under one taxing statute cannot be set off against liability arising under a different taxing statute unless the governing law expressly permits such cross-adjustment.

---