ORDER Anand Byrareddy - Heard the learned counsel for the petitioner and the respondent. The facts as are relevant for the disposal of this petition are as follows : The petitioner runs a cashew factory which was set up during the year 1999, in an industrial area notified by the Government of Karnataka, under its Industrial Policy Resolution of the year 1996. The commercial production of the unit was commenced on March 16, 1999. It is the claim of the petitioner that the petitioner was eligible for sales tax exemption and concession which was made available to "new units" under a Government order dated March 15, 1996. The petitioner, therefore, sought to avail of the facility before the Department of Industries and Commerce. The said Department issued a Fixed Asset Valuation Certificate (hereinafter referred to as, "the FAVC", for brevity) dated April 13, 1999, under which the petitioner was entitled to claim sales tax exemption for the period commencing from March 16, 1999 up to March 31, 2005. This benefit was conferred on the petitioner, according to the petitioner, both under the provisions of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as, "the KST Act" for brevity) as well as the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as, "the KVAT Act" for brevity) in terms of Notification No. FD 56 CSL 2005 (1), KG dated April 18, 2005. The Government issued a second notification under section 5(2) of the KVAT Act bearing No. 56 CSL 2005 (2), dated April 18, 2005, wherein the benefit of tax exemption given to new industrial units under the KST Act was extended under the provisions of the KVAT Act to the extent of the unavailed portion of the benefit. This was subject to certain conditions and procedures to be followed by a new industrial unit to avail of the benefit. One of the requirements was that the industrial unit should be one which had already claimed exemption of sales tax on the sale of goods manufactured by it under the notification issued under the KST Act referred to above. It was provided in the notification that an industrial unit was required to charge and collect tax payable under the KVAT Act on the sale of goods manufactured by it and pay the net tax payable along with the return prescribed. It was provided in the notification that an industrial unit was required to charge and collect tax payable under the KVAT Act on the sale of goods manufactured by it and pay the net tax payable along with the return prescribed. It is thereafter that the industrial unit was eligible to claim refund of tax paid under the KVAT Act. The refund was to be given within 35 days after the end of the month, to which the return related or within fifteen days from the date of filing the return. Interest was payable for delayed payment of refund. The Joint Commissioner of Commercial Taxes was empowered to issue a certificate of entitlement on an application made by a dealer under section 5 of the KVAT Act. The petitioner had therefore, filed an application in compliance with the notification before the said authority. A certificate of entitlement was issued dated July 30, 2005 granting exemption of value added tax payable under the KVAT Act, at Rs. 5,37,417. The petitioner therefore claims that the petitioner was eligible to claim VAT exemption of the said amount for the assessment periods 2005-06 and 2006-07. The petitioner filed an application under section 18 read with rule 166 of the Karnataka Value Added Tax Rules, 2005 (hereinafter referred to as, "the Rules", for brevity), seeking transitional relief on the stock in hand. The same was accepted and a certificate was issued granting rebate of sales tax paid on the goods held in stock. The value of rebate shown was at Rs. 7,10,678. The petitioner was granted liberty to claim that amount in six monthly instalments of Rs. 1,18,446. It is the petitioner's case that while filing the return, the petitioner was eligible to claim input-tax rebate as against the output tax payable as provided under section 10 of the KVAT Act and was only liable to pay the net tax, if any. It is also the petitioner's case that the petitioner was eligible to claim input-tax rebate by virtue of the certificate issued under section 18 of the KVAT Act. It is the further case of the petitioner that the business of the petitioner is seasonal. The petitioner had therefore no occasion to pay output tax until February 2006. The petitioner had collected and paid the VAT which was applicable. Hence, the petitioner filed an application seeking refund of Rs. It is the further case of the petitioner that the business of the petitioner is seasonal. The petitioner had therefore no occasion to pay output tax until February 2006. The petitioner had collected and paid the VAT which was applicable. Hence, the petitioner filed an application seeking refund of Rs. 5,37,417 that fell due to the petitioner as on March 31, 2006 by virtue of the certificate of entitlement. This amount, according to the petitioner, was due as on March 31, 2006 for the assessment period 2005-06. The petitioner did not receive any reply or a refund order from the respondents. It is only much later that the petitioner was informed that since the petitioner had failed to file the revised returns claiming refund, the petitioner was not entitled to the same. The petitioner was also informed that the petitioner could claim set-off of the refund against the subsequent tax liabilities. Accordingly, the petitioner while filing returns for the subsequent tax periods, namely, March 2006, July 2006, and August 2006, had computed the tax liability and claimed set-off of the refund due against the tax payable for the said periods. It was also informed by the petitioner that the refund due shall be adjusted against the taxes payable by the petitioner for those months and the balance, if any, be carried forward. The petitioner therefore claims that it is eligible for refund of Rs. 5,37,417 as per the entitlement certificate and of Rs. 7,10,678 by virtue of transitional relief. It then transpires that the first respondent had issued a notice dated October 19, 2006 calling upon the petitioner to pay taxes as per the returns filed for the year 2005-06 and to pay VAT at 12.5 per cent, including interest. The petitioner replied and submitted that the petitioner is entitled to a refund of Rs. 5,37,417 and requested the authority to drop further proceedings. In the meanwhile, there was an inspection of the business premises of the petitioner by the second respondent. The petitioner was thereafter called upon to furnish further documents in support of the refund claim made in the return of turnover. This was duly furnished. 5,37,417 and requested the authority to drop further proceedings. In the meanwhile, there was an inspection of the business premises of the petitioner by the second respondent. The petitioner was thereafter called upon to furnish further documents in support of the refund claim made in the return of turnover. This was duly furnished. On receipt of the Intelligence Report, the Assistant Commissioner of Commercial Taxes, had issued a proposition notice under section 39(1) of the KVAT Act and the books of account of the petitioner were inspected and twelve consecutive tax periods were audited for the period 2005-06 and thereafter, the petitioner was called upon to show cause as to why input-tax rebate claimed on the consignment sales of cashew kernels should not be rejected in view of the restrictions provided under section 11(a)(i) and 11(a)(v) of the KVAT Act read with section 17 of the said KVAT Act and rules 131 and 132 of the KVAT Rules. The petitioner replied to this reiterating that there is no excess claim of input tax-credit and that at the time of filing return of turnover, the petitioner had not foreseen the subsequent consignment sales effected through its agents outside the State and that the proposition to disallow the claim includes the intra-State sales. The petitioner places reliance on a circular issued by the Commissioner of Commercial Taxes in No. KSA.CR. 105/2005-06, dated June 26, 2006, wherein all the officers of the Department were instructed not to levy penalty in cases involving trading in cashew. Therefore, the petitioner sought to justify its case. However, reassessment was completed without appreciating the claim of the petitioner and an additional tax liability of Rs. 7,29,955 along with penalty of Rs. 1,45,991 was sought to be imposed and the petitioner was placed on notice to pay taxes pursuant to the reassessment order. A detailed reply was filed to reiterate the petitioner's case. The VAT officer responded to state that the credit of Rs. 5,37,417 had already been adjusted against tax dues in the returns filed by the petitioners for the tax periods March 2006, July 2006 and August 2006. The petitioner however requested for proper adjustment of tax rebate in view of the second respondent, by a notice dated September October 19, 2006 had stated that the petitioner had not paid any tax as per the returns filed. The petitioner however requested for proper adjustment of tax rebate in view of the second respondent, by a notice dated September October 19, 2006 had stated that the petitioner had not paid any tax as per the returns filed. And once that is rejected there ought to have been a fresh determination. But, recovery notices were issued to the petitioner demanding payment of tax pursuant to the reassessment orders and the petitioner filed a representation requesting that the recovery proceedings be kept in abeyance. And also filed an application requesting the Assistant Commissioner of Commercial Taxes (hereinafter referred to as, "the ACCT", for brevity) to rectify the mistakes apparent on record whereby the disallowances made on input-tax claim and levy of additional tax apart from the penalty levies were required to be deleted. During the pendency of the application for rectification, an endorsement dated August 26, 2008, was issued by which tax of Rs. 3,70,093 collected and remitted by the petitioner was forfeited. Thereafter, there was a demand for a further sum from the petitioner. Being aggrieved by this, the petitioner approached this court by way of a writ petition in W.P. No. 12130 of 2008. This court, by its order dated January 21, 2009 (Vinayaka Cashew Exports v. Assistant Commissioner of Commercial Taxes), quashed the endorsement and issued directions to the respondents to consider the application filed by the petitioner under section 69 and to reconsider the benefit of entitlement certificate. Thereafter, the petitioner was called upon to file a reply by the second respondent while reiterating the contents of the endorsement issued earlier by the fourth respondent on August 26, 2008, which already stood quashed by this court. Proceedings were concluded on February 26, 2009 and it was held that the entitlement benefit could have been claimed either on purchase or on sales of a dealer and therefore the benefit has to be considered as VAT output. It was further observed that the petitioner ought to pay output tax and thereafter claim refund of the same. According to the petitioner, the petitioner has paid input tax at the time of purchase and has paid output tax after deducting the input tax and has sought for grant of benefit of sales tax and VAT exemption extended to it by virtue of the entitlement certificate. According to the petitioner, the petitioner has paid input tax at the time of purchase and has paid output tax after deducting the input tax and has sought for grant of benefit of sales tax and VAT exemption extended to it by virtue of the entitlement certificate. Therefore, the petitioner contends that it is inexplicable that the respondents have taken the above stand. It is in this background that the petitioner is before this court. While reiterating the above contentions, the learned counsel for the petitioner would contend that the respondents have misdirected themselves in interpreting the provisions of the KVAT Act. Section 38(1) specifically provides that every dealer shall be deemed to have been assessed to tax based on the returns filed by it under section 35. An exception is carved out from such deemed assessment, in that, the cases which are notified by the Commissioner for production of books of account shall not be considered as having been assessed under the deeming provisions. The petitioner, who is a trader in cashew is one among the dealers whose books are required to be audited by the prescribed authority. According to the petitioner, the Commissioner of Commercial Taxes has notified a list of dealers engaged in a few trading activities whose books shall be verified by the prescribed authorities under a notification dated May 17, 2005 and the petitioner is one of them and therefore, it was for the prescribed authority to summon the petitioner to furnish books of account and verify the returns. In the case on hand, the petitioner had filed returns of turnover. The petitioner had collected taxes on its sales and had remitted the same. The exemption provided to the petitioner is upon the tax payable. Since there were more inputs available to the petitioner including the transitional relief, the petitioner had claimed set-off of the tax payable against the input-tax rebate and the transitional relief. As a consequence, though the petitioner is liable to pay tax, the net tax payable by the petitioner has been substantially reduced, that necessitated the petitioner to claim the benefit under FAVC/entitlement certificate by way of refund. And the petitioner has filed an application seeking refund of tax on the basis of entitlement certificate. The respondents however contended that the petitioner ought to have claimed refund in the return of turnover filed by it and not by a separate application. And the petitioner has filed an application seeking refund of tax on the basis of entitlement certificate. The respondents however contended that the petitioner ought to have claimed refund in the return of turnover filed by it and not by a separate application. It is the petitioner's contention that if the respondents had acted promptly under the provisions of section 38(1) immediately after returns were filed by the petitioner and a refund application was made, the petitioner had an opportunity to rectify the claim by way of filing revised returns within six months from the end of the tax period. Therefore, the technical error in making a claim for refund cannot be a ground for rejecting a rightful claim. It is further contended that the KVAT came into operation with effect from April 1, 2005 and therefore, the dealers were not familiar with the provisions under the KVAT Act, which are not in pari materia with the provisions of the KST Act and in this view of the matter, a lapse which is sought to be rectified at a later point of time cannot be shut out to deny the petitioner's dues. The petitioner who was eligible to claim transitional relief as per the certificate issued, having paid the taxes on purchases under the KST Act, could not avail of the set-off in view of the change in the law. It was on account of this eventuality, that the State Legislature had provided the benefit of transitional relief which was claimed by the petitioner in its return of turnover against the tax payable. It is contended that the respondents have assumed that the petitioner was making a dual claim of input-tax credits while the relief claimed by the petitioner is only in respect of credit to the taxes paid by the petitioner as against the taxes payable and nothing more. It is the petitioner's contention that it is the inaction on the part of the respondents which has created a stalemate for the petitioner. It is pointed out that the first refund application was made by the petitioner as on June 10, 2006, on which date, the petitioner had lodged its claim for refund. It is the petitioner's contention that it is the inaction on the part of the respondents which has created a stalemate for the petitioner. It is pointed out that the first refund application was made by the petitioner as on June 10, 2006, on which date, the petitioner had lodged its claim for refund. If the respondents had acted prudently and had immediately communicated their view of the legal position, to the effect that the refund claim should have been made in the returns, the petitioner had enough time to file revised returns and make a revised claim for refund in the revised returns. However, the respondents had informed the petitioner to claim a set-off of the amount against tax payable by it in the subsequent months. It is with this bona fide impression that the tax paid by it in excess or the benefit under the entitlement certificate due to it, were in fact being considered by the respondents and it is on account of that reasoning that the petitioner was mislead into not taking any precautions by filing a revised return. Hence, it is the petitioner's case that the respondents cannot now deny the petitioner its due on the ground that it had not claimed refund in the returns and therefore, was not capable of being considered. And hence prays that this court issue appropriate directions having regard to the facts and circumstances of the case. Per contra, the learned Government Advocate seeks to contend as follows : It is admitted that the petitioner's unit was eligible for sales tax exemption from March 16, 1999 to March 15, 2006, for a period of seven years equivalent to the amount of investment made in fixed assets amounting to Rs. 1,29,87,000. The petitioner had availed of sales tax exemption to the tune of Rs. 1,24,39,311 up to March 31, 2005 and the balance tax amount would be Rs. 5,47,689. It is thus stated that from April 1, 2005, the KVAT Act having come into force, the Government of Karnataka, had issued a notification dated April 18, 2005, which is referred to by the petitioner. That the exemption given to the new industrial units under the provisions of the KST Act had been extended under the KVAT Act to the extent of the unavailed portion. That the exemption given to the new industrial units under the provisions of the KST Act had been extended under the KVAT Act to the extent of the unavailed portion. As already stated by the petitioner, it does prescribe certain terms and conditions in order to avail of the benefit, which required that the industrial unit charge and collect tax under the said Act on the sale of goods manufactured by it under the KST Act and pay the net tax payable along with the return prescribed and thereafter claim refund. Further, the unit was also to obtain an entitlement certificate, to be issued by the Joint Commissioner of Commercial Taxes for the unavailed portion of the tax benefit. Accordingly, the petitioner had made an application for an entitlement certificate, which was issued and the certificate entitled the petitioner to a tax exemption of the unavailed portion to the extent of Rs. 5,37,417 and thereafter, the authority found that there was a glaring mistake while issuing the certificate. Therefore, a revised certificate was issued by an order dated August 3, 2009 and according to which, the petitioner was entitled to avail of the tax exemption up to March 15, 2006. This the petitioner could have availed of from the month of April 2005 itself by filing the monthly returns in Form VAT 100. The petitioner had not availed of the same in the monthly return of April 2005 up to February 2006. It is only in the month of February 2006 that the petitioner had made a request to adjust the tax benefit which is impermissible in law. In terms of the notification, the dealer had to pay net tax payable and secure refund upon filing monthly return in Form VAT 100. There was no net tax liability, the dealer had to show the same as excess input tax, which is carried forward till the net tax liability arises. It is therefore contended that unless the dealer pays the net tax, the benefit could not be availed of under the entitlement certificate. The petitioner admittedly not having paid the net tax and having claimed refund, is not entitled for any benefit and therefore, the impugned order is in accordance with law. Under the KVAT Act, there is a provision under which, revised returns could be filed within six months. Even that opportunity has not been utilised by the petitioner. The petitioner admittedly not having paid the net tax and having claimed refund, is not entitled for any benefit and therefore, the impugned order is in accordance with law. Under the KVAT Act, there is a provision under which, revised returns could be filed within six months. Even that opportunity has not been utilised by the petitioner. It is further stated that the petitioner was entitled for sales tax benefit for a period of seven years and the remaining balance has been brought forward to the VAT regime and therefore, should have been claimed by filing monthly returns and the petitioner not having followed the procedure, the same has been rightly rejected. The petitioner, it is stated that has already filed an appeal before the appellate authority and also has raised this issue of availment of benefit of tax before the appellate authority and hence the same is not maintainable and the writ petition ought to be dismissed. As pointed out by the learned Government Advocate, the assessing authorities have strictly construed the provisions of the Act and have denied the benefit to the petitioner. This certainly cannot be faulted and therefore, any appeal that may have been filed by the petitioner on other aspects of assessment, the petitioner's claim for refund would meet the same fate, as the appellate authority is bound to strictly apply the provisions of the Act and it is in that circumstance that the petitioner is before this court. It is not in dispute that in terms of the notification under which the benefit of sales tax exemption was conferred on the petitioner, was not completely utilised by the petitioner and that there remained unavailed portion of amount which ought to have been claimed from April 2005 in its monthly returns. Since according to the petitioner there was no net tax liability, the petitioner ought to have shown the excess input tax paid as being carried forward till the net tax liability arose. This again was not complied with by the petitioner. It is on that footing that the petitioner is denied the unavailed portion of the "fixed assets valuation certificate" benefit brought forward in the VAT regime. This again was not complied with by the petitioner. It is on that footing that the petitioner is denied the unavailed portion of the "fixed assets valuation certificate" benefit brought forward in the VAT regime. From the sequence of events, it is apparent that at the first instance, when the petitioner requested that the above amount be adjusted towards the tax liability, the respondents did not immediately inform the petitioner of the lapse in not claiming the same in the monthly returns and after complying with the condition of payment of net tax. If this had been suggested to the petitioner and as rightly contended by the petitioner's counsel, the petitioner would have had an opportunity to file a revised return, within the time prescribed. Hence, the claim cannot be entirely based on the petitioner's lapse. The switch over to the VAT regime and the unfamiliarity with the procedures contemplated which are not in pari materia with the KST Act was also a factor which would have to be taken into consideration. If the benefit due to the petitioner is not in dispute, the manner of claim as prescribed under the Act not having been followed, may be a good ground for the authorities to have denied the benefit. But in the opinion of this court, interest of justice would require that the respondents afford this benefit which has remained unavailed by the petitioner and for a fault not entirely of that of the petitioner. It is necessary that the petitioner be conferred the benefit of this unavailed portion by permitting the petitioner to file revised returns, even at this late point of time in order to enable the petitioner to claim the benefit. Accordingly, the writ petition is allowed. Annexure Z is quashed. The respondents are directed to permit the petitioner to file revised monthly returns for the relevant period in order to avail of the benefit and the respondents shall make necessary adjustments insofar as the tax liability of the petitioner is concerned. This shall be taken into account in any further proceedings that may be pending insofar as the petitioner is concerned. This however shall not be treated as a precedent in any other case.