JUDGMENT C. N. Ramachandran Nair – This writ appeal is filed against the judgment of the learned single judge upholding exhibits P5 and P5(a) orders issued by the assessing officer forfeiting collected tax under section 46A(1) of the Kerala General Sales Tax Act, 1963. We heard learned counsel appearing for the appellant and the Government Pleader for respondents. The petitioner, an SSI unit engaged in manufacture of wheat products was granted sales tax exemption under the notification for the periods 1991 to 1996. However during 1991-92 and 1992-93, the petitioner while supplying wheat products to Government for distribution under the public distribution system collected price including sales tax. Therefore the Civil Supplies Department directed the petitioner to deposit the collected tax to the Taxes Department and the petitioner remitted the amount. However after completion of the assessment the assessing officer issued separate orders above referred by which collected tax was forfeited under section 46A of the KGST Act. Forfeiture orders were confirmed in revision vide exhibits P6 and P7, against which a writ petition was filed by the appellant. The learned single judge upheld the impugned orders holding that tax collected during the period of exemption is liable to be forfeited. Counsel for the appellant contended that forfeiture affects the appellant adversely because forfeited tax is set off against exemption and therefore the appellant loses the benefit of tax exemption. The Government Pleader submitted that both forfeiture as well as set-off of the same against certified exemption amount are permissible under notification granting exemption. We notice that tax recovery is during the period prior to the date of issue of exemption order dated October 2, 1994. In fact during this period it was open to the petitioner to collect tax and remit the same because claim for exemption was only pending. However the petitioner has not disclosed the turnover as taxable turnover or paid tax voluntarily. On the other hand the Department pressed for remittance of tax by the appellant because they got information that supply under public distribution system involved collection of tax. Even though forfeiture is quite justified because the petitioner claimed exemption on the turnover and after getting exemption collected the tax. Therefore it has to be forfeited in terms of section 46A(1). On the other hand the Department pressed for remittance of tax by the appellant because they got information that supply under public distribution system involved collection of tax. Even though forfeiture is quite justified because the petitioner claimed exemption on the turnover and after getting exemption collected the tax. Therefore it has to be forfeited in terms of section 46A(1). However we feel forfeiture of the collected tax amount and again set off of the same against the total amount of exemption will lead to loss of the benefit for no fault of theirs. We therefore feel that the forfeited amount should not be set off from the total amount of exemption granted to the petitioner. We feel the full amount of exemption granted for the period provided in the certificate should be made available to the appellant that is without such amount being reduced by the amount of collected tax forfeited. Consequently writ appeal is disposed of by upholding the forfeiture but with a direction to the assessing officer to modify the assessments issued for 1991-92 and 1992-93 converting the supplies to Civil Supplies Department from exempted turnover to taxable turnover and grant consequential relief in later years. Once this is done there will be no justification to set off of tax paid on taxable turnover from out of the total amount of exemption granted under notification. We make it clear that the entire amount paid should be adjusted towards tax liability and interest if any payable under section 23(3A) of the Kerala General Sales Tax Act.