Refund by adjustment against future tax liability carries statutory interest until full discharge under the sales tax scheme.

Refund under the Andhra Pradesh General Sales Tax Act may be discharged by adjustment against future monthly tax liability where the assessee seeks that mode of payment and the refund has become due under an appellate order. The text also states that, under Sections 33-B and 33-F(1), delayed refund attracts simple interest at 12% per annum if it is not granted within six months from the appellate order, and interest runs until the refund is fully discharged, including by adjustment. The discussion therefore treats adjustment as a valid method of refund and interest as continuing until complete satisfaction of the refund claim.

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Issues: (i) whether the refund due pursuant to the appellate order could be directed to be made by adjustment against monthly tax liability for the subsequent year; (ii) whether the assessee was entitled to simple interest at 12% per annum on the delayed refund under the statutory scheme.

Issue (i): whether the refund due pursuant to the appellate order could be directed to be made by adjustment against monthly tax liability for the subsequent year.

Analysis: The appellate authority had set aside the levy on the disputed turnover and the assessee had specifically sought either refund or adjustment against future monthly tax dues. The refund had become due on the appellate order and the Court accepted the request for adjustment as an appropriate mode of discharging the refund amount.

Conclusion: The refund was directed to be made by way of adjustment against the monthly tax payable for the year 1988-89.

Issue (ii): whether the assessee was entitled to simple interest at 12% per annum on the delayed refund under the statutory scheme.

Analysis: Reading Section 33-B with Section 33-F(1) of the Andhra Pradesh General Sales Tax Act, 1957, the Court held that once refund became due and was not granted within six months from the appellate order, the assessee became entitled to simple interest at 12% per annum from the expiry of that period until the refund was fully discharged, including discharge by adjustment.

Conclusion: The assessee was held entitled to simple interest at 12% per annum on the refund amount from the expiry of six months after the appellate order until full discharge of the refund.

Final Conclusion: The writ petition succeeded, and the assessee obtained both refund by adjustment and statutory interest for the delayed period, with costs.

Ratio Decidendi: Where a refund becomes due under the appellate machinery and is not granted within the statutory period, the assessee is entitled to interest on the unpaid amount until the refund is fully discharged, and discharge may be effected by adjustment against future tax liability.

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