Tax adjustment denied where exemption was restored but tax had already been collected from customers during withdrawal.

Exemption under the Karnataka Sales Tax Act was withdrawn, and during that period the petitioner collected tax from customers and deposited it with the Department. When the exemption was later restored, eligibility for adjustment depended on tax not having been collected on the relevant sales. Because the tax had in fact been collected, the amounts could not be treated as mere deposits for adjustment against tax due and payable. The authorities' rejection of the adjustment claim was upheld.

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Issues: Whether the petitioner was entitled to adjustment of the tax collected from customers during the period when the exemption stood withdrawn, after the exemption was restored by the Government Order.

Analysis: The exemption under the Karnataka Sales Tax Act, 1957 was initially granted for a specified period and was subsequently withdrawn. During the period of withdrawal, the petitioner collected tax from customers and deposited it with the Department. The Government Order restoring the exemption made eligibility dependent on tax not having been collected on the relevant sales. Since the tax had in fact been collected, the amounts could not be treated as mere deposits so as to qualify for adjustment against tax due and payable by the company.

Conclusion: The petitioner was not entitled to the claimed adjustment, and the rejection by the authorities below was upheld.

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