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1988 (8) TMI 381 - HC - VAT and Sales Tax
Issues:
Challenge to the vires of sub-clause (iv) of the definition "sale" in Orissa Sales Tax Act, 1947. Legality and vires of the assessment regarding the operations carried out on high seas. Analysis: The petitioner, a company registered in Mexico, challenged the vires of sub-clause (iv) of the definition "sale" in the Orissa Sales Tax Act, 1947. The petitioner was engaged in drilling oil wells on high seas under a contract with Oil India. The petitioner claimed that the operations conducted on high seas were beyond the jurisdiction of the sales tax authorities. However, the Sales Tax Officer proceeded to assess the petitioner under the Sales Tax Act and raised demands and penalties. The petitioner contended that there was no transfer of goods or right to use goods, thus not falling under the definition of "sale." The court noted that the constitutional amendment and subsequent legislative action empowered the State Legislature to enact provisions related to the transfer of the right to use goods, as per entry 54 of List II of the Constitution. Therefore, the challenge to the vires of the provision was deemed futile. The court further addressed the legality and vires of the assessment, emphasizing that the statutory authorities were competent to adjudicate questions of law and fact related to the assessment. The court declined to interfere and directed the petitioner to exhaust the statutory remedy by filing appeals against the assessment orders within two weeks. The court stayed the demands pending appeal and directed the appellate authority to dispose of the appeals within three months from the filing date. The writ applications were disposed of with no costs, as per the unanimous decision of the judges. In conclusion, the judgment upheld the validity of the legislative provision regarding the transfer of the right to use goods and emphasized the importance of following the statutory appeal process in challenging tax assessments. The court provided clear directions for the petitioner to pursue the appeal process within the specified timeline, ensuring a comprehensive and efficacious resolution of the legal dispute.
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