Judgment

K. 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 collecting 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, null and void and for a consequential relief of refund of the taxes so collect­ed from them.

2. 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 conditions. The Sales Tax Department demanded and collected sales tax upon the value of the bamboo and hardwood removed by the appellants from the forest. Under the State Sales Tax Act, during the relevant period the commodity (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. However, under the agreement mentioned above, the appellants undertook to reimburse the Forest Department the amount of sales tax paya