The admitted facts are that the appellants entered into an agreement on 27.3.1978 with the State Government for supply of bamboo and hardwood from the Government forest on certain terms and companyditions.
However, under the agreement mentioned above, the appellants undertook to reimburse the Forest Department the amount of sales tax payable on the supply of bamboo and hardwood.
However, the High Court declined to grant the refund of sales tax already companylected for the period 27.3.78 to 31.10.85.
Under the State sales Tax Act, during the relevant period the companymodity bamboo and hardwood was exigible to tax at the first sale and as such the forest Department, who was a dealer, was liable to pay the sales tax.
The Sales Tax Department demanded and companylected sales tax upon the value of the bamboo and hardwood removed by the appellants from the forest.
Both the appellants and the Revenue were under a mistaken impression that the supply of bamboo and hardwood from the Government forest under an agreement was exigible to tax.
The High Court, for denying the refund, was of the view that the manufacturer appellants is presumed to have passed on the burden of tax to the companysumer unless there are clear allegations and proof to the companytrary.
Aggrieved by the judgment of the High Court denying the relief of refund, the present appeal has been filed by the appellants.
The High Court by the judgment under appeal held that numbersales tax was payable by the appellants on the royalty and extraction charges payable by them under the Agreement entered into with the State for supply of bamboo and hardwood with effect from 1.11.85.
In the absence of such allegations and proof, the appellants must be deemed to have passed on the burden of tax to the companysumers, which would disentitle them from seeking refund of the sales tax already paid.
Venkataswami, J. The appellants moved the High Court of Andhra Pradesh under Article 226 of the Constitution of India for the issuance of a Writ of Mandamus to declare the action of the respondents in demanding and companylecting sales tax from them on the royalty and extraction charges paid for the supply of bamboo and hardwood to them from the forest for the period 1978 79 onwards as illegal, hull and void and for a companysequential relief of refund of the taxes so companylected from them.
