- (1.) Leave granted.
(2.) The controversy in the present appeal lies within a narrow compass. The appellant is a dealer registered under the provisions of Andhra Pradesh General Sales Tax Act, 1957 (in short the 'Act') and the Central Sales Tax Act, 1956 (in short the 'CST Act'). The present disputes relates to the assessment years 1998-1999 and 1999-2000. The State Government in the Commercial Tax Department issued a letter to the Andhra Pradesh Backward Classes Cooperative Finance Corporation Limited (in short 'Corporation') directing that taxes are to be deducted at a source on the payments made by it to the appellant. It was stipulated that the amounts so deducted at source are to be deposited with the Commercial Tax Department. The Corporation directed to its Executive Director to credit sales tax deducted at source by Account Payee cheque in favour of the concerned Assessing Officer in terms of discussion held at a meeting held on 27.03.1999 where the Managing Director of the Corporation and the Commissioner of Commercial Taxes were present. The Corporation had floated a project known as Adarna for the purpose of ameliorating the conditions of poor backward class artisans. The Corporation had taken a decision to procure number of articles used by artisans. An agreement was entered into between the appellant and the Corporation for supply of milk cans, insulating boxes etc. Undisputedly, certain amounts had been deducted at source in respect of sales tax payable. The appellant brought it to the notice of the Corporation that by letter dated 7.7.1999 in view of the Circular issued by the Commissioner of Commercial Tax (in short the 'Commissioner') in terms Section 42-A of the Act, it was the responsibility of the Corporation to discharge the sales tax liability under the Act and CST Act. A Circular had been issued by the Commissioner directing all the Deputy Commissioners to implement the instructions issued in respect of payments made in the Adarna scheme. The Corporation in terms of Circular had deposited Rs.5, 50, 089/- which is a part of the amount deducted at source. The balance amount undisputedly is Rs.10, 44, 396/-. The Sales Tax Authorities wanted to recover the said amount from the appellant. Placing reliance on the Circular issued by the Deputy Commissioner on behalf of the Commissioner and Commissioner on 17.12.1998 and 7.7.1999 respectively, appellant requested the Sales Tax Authorities to collect the amounts from the Corporation. It appears that there was some dispute about the amounts payable to the appellant. The stand of the Corporation appears to be that payment in excess of the actual dues had been made to the appellant. The present dispute does not relate to the said controversy.
(3.) Undisputedly, arbitration proceedings have been initiated. The Commercial Tax Officer, respondent No- I issued notices of attachment to Lakshmi Vilas Bank Limited, Secunderabad to attach bank account of the appellant to the extent Rs. 1O, 44, 396/-. Writ Petition was filed before the High Court questioning the action. The High Court by impugned judgment dismissed the writ petition holding that there was no valid Circular in existence. The High Court was of the view that letter issued by the Deputy Commissioner, Commercial Taxes cannot be equated with the circular which the Commissioner alone could have issued. It is also not relevant that in the arbitration proceedings, Corporation has been held liable to pay amounts which have been deducted at source at tax as Commercial Tax Officer was not a party to such proceedings.;