Withholding of sales tax refund upheld where section 33-C approval was valid and rule 35 was only recommendatory.

Section 33-C of the Andhra Pradesh General Sales Tax Act, 1957 permits the assessing authority, with prior approval of the Deputy Commissioner, to withhold a refund when the refund order is under appeal or other pending proceedings and release may prejudice revenue. Where such approval and withholding order exist, refusal to refund is not illegal or arbitrary. Rule 35 of the Andhra Pradesh General Sales Tax Rules, 1957 is only recommendatory and does not override a valid withholding order under section 33-C. The Court therefore held that refund could not be directed in implementation of the appellate authority's order once a valid withholding order was in force.

---

---

Issues: Whether, after an order under section 33-C of the Andhra Pradesh General Sales Tax Act, 1957 withholding refund has been made, the Court can direct refund in implementation of the appellate authority's order.

Analysis: Section 33-C empowers the assessing authority, with previous approval of the Deputy Commissioner, to withhold refund where the refund order is the subject of appeal or other pending proceeding and the grant of refund is likely to adversely affect the revenue. The Court held that once such approval and withholding order are in force, the refusal to refund cannot be treated as illegal or arbitrary. It also held that rule 35 of the Andhra Pradesh General Sales Tax Rules, 1957 is only recommendatory and does not compel refund despite a valid order under section 33-C.

Conclusion: The Court answered the issue against the assessee and held that refund could not be directed after a valid order under section 33-C.

---