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1960 (9) TMI 86 - SC - VAT and Sales TaxThe assessment orders for the quarters prior to and ending on December 31, 1949, are valid; but the assessment orders for subsequent quarters are invalid and must be quashed. The order of the High Court for refund of fees paid by the respondent is set aside. The certificate proceedings taken against the respondent must now be restricted to the tax payable for those quarters only for which the assessment orders are valid - Appeal allowed in part.
Issues:
1. Validity of sales tax assessment for the quarters prior to and ending on December 31, 1949. 2. Liability of the assessee for sales tax for post-Constitution quarters. 3. Legality of notification extending Orissa Sales Tax Act, 1947 to Kalahandi. 4. Refund of fees paid by the respondent. 5. Validity of fees realized under rule 59 of the Orissa Sales Tax Rules, 1947. The Supreme Court heard an appeal from the High Court of Orissa regarding the sales tax assessment of a forest contractor in Orissa. The contractor was assessed for sales tax for eight quarters, during which he collected goods from the forest and sold them outside Orissa. The High Court held that the notification extending the Sales Tax Act to Kalahandi was invalid, and the contractor was not liable for sales tax for quarters ending on December 31, 1949, and post-Constitution quarters under Article 286 of the Constitution. The High Court ordered a refund of fees paid by the contractor. However, the appellants argued that a previous decision set aside the High Court's ruling on the notification and that the contractor was rightly assessed for quarters before December 31, 1949. The Supreme Court found the assessment orders valid for quarters before December 31, 1949, but invalid for subsequent quarters. The High Court's order for fee refund was set aside, and the certificate proceedings were restricted to valid tax quarters only. The Supreme Court also clarified the validity of fees realized under rule 59 of the Orissa Sales Tax Rules, 1947. The appeal was allowed in part, with no order for costs in the Supreme Court.
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