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Issues involved:
The issues involved in this judgment include the interpretation of sales tax statutes by State Governments in relation to the provision of telephone services by the Union of India, the assessment of sales tax on telephone rentals, the dismissal of writ petitions by High Courts suggesting statutory appeals as an alternative remedy, and the subsequent appeal to the Supreme Court challenging the High Courts' decisions. Interpretation of Sales Tax Statutes: The Union of India and its officers were discharging statutory functions under the Indian Telegraph Act, 1885 to provide telecommunication facilities, including telephone connections. The State Governments of Haryana, Orissa, Uttar Pradesh, and Andhra Pradesh made amendments to their sales tax statutes to redefine "purchase" and "sale" in line with the Constitution. Assessing authorities levied sales tax on telephone rentals, prompting the Union of India to file writ petitions in the High Courts challenging the levy. The High Courts dismissed the petitions, advising statutory appeals. The Supreme Court found the legal question fundamental and remitted the writ petitions back to the High Courts for decision, staying tax recovery until resolution. Writ Petitions and Statutory Appeals: The High Courts had writ petitions pending regarding the sales tax assessments on telephone rentals, directing the appellants to pay 50% of the demand before the petitions' disposal. The State Governments had filed counter-affidavits, and the appellants obtained stay orders from the Supreme Court. The Supreme Court reversed the High Courts' orders, instructing them to decide the writ petitions on their merits. The appeals were allowed, and no costs were awarded in these matters. This summary highlights the legal issues surrounding the interpretation of sales tax statutes in the context of telephone services provided by the Union of India, the dismissal of writ petitions by High Courts, and the subsequent appeals to the Supreme Court for resolution.
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