MANGALORE CHEMICALS & FERTILISERS LIMITED vs DEPUTY COMMISSIONER OF COMMERCIAL TAXES AND ORS.

The Supreme Court ruled that under Section 8A of the Karnataka Sales Tax Act, 1957, the initiation of recovery proceedings and demand notices for sales tax payment were illegal when the assessee's application for permission to adjust sales tax refunds was pending. The Court emphasized that the notifications dated 30th June, 1969, and 11th August, 1975, provided for reliefs and procedural adjustments, and that the requirement for annual permission was procedural, not substantive. The Court held that the appellant was entitled to adjust the refunds against sales tax due, validating the adjustments made during the interim period, and quashed the demand notices issued by the Revenue.