9911796707
TMI Blog2006 (4) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 7(4) of the OET Act and rule 10(2) of the OET Rules and demands have been raised to the tune of Rs. 1,79,62,793 and Rs. 1,02,33,947 for the assessment years 2003-04 and 2004-05, respectively and the petitioner has been directed to deposit the aforesaid tax. The grievance of the petitioner is that during the course of assessment the claim of the petitioner for deduction on the value of the scheduled goods brought to the State for exploration work has been rejected and entry tax has been levied by the assessing authority. The petitioner-company has been granted permission by the Central Government to drill and explore oil and natural gas on the offshore area identified as "Block NEC OSN-97/2 which includes the territorial waters, continental shelf and exclusive economic zone and the present offshore area is located at least 40 nautical miles away from the coast of Orissa and falls within the continental shelf. The petitioner for the purpose of carrying out the aforesaid exploration operation from the rig is required to bring the cargos of consumables, machineries and tools through Paradeep in Orissa. The said materials which are delivered at the rig are not used and/or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain enactments in force in India to the continental shelf and exclusive economic zone by way of notification. In the absence of such a notification, the claim of the opposite parties that the location of the rig is a part of local area is clearly illegal, invalid and not sustainable in law. In this regard our attention was drawn by the learned counsel for the petitioner to sub-section (6) of section 6 of the Maritime Zones Act, which has vested the Central Government with the power to extend the application of any enactment which is for the time being in force in India or any part thereof to the continental shelf or any part thereof including any designated area under sub-section (5) thereof. According to the learned counsel for the petitioner, it is an undisputed fact that the Central Government has not extended the application of the OET Act or Orissa Sales Tax Act, 1947 or Orissa Value Added Tax Act, 2004 or even the Central Sales Tax Act, 1956 to the continental shelf. According to the learned counsel for the petitioner, the orders of assessment are bad and are liable to be set aside. Opposite party Nos. 1 and 2, i.e., the assessing authority, Jagatsinghpur, Paradeep, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... local area have actually been taken out on his own account for which the petitioner is liable to pay entry tax on such goods unless the claim for deduction/non-liability to pay tax in respect of the goods conclusively proved by the petitioner. The further submission of the learned counsel for the opposite parties is that the contract with M/s. Baker Hughes Singapore Pvt. Ltd., reveals that the petitioner entered into an indivisible contract for the work to be executed and as per the terms of the contract, the contractor is liable to mobilise the mud materials, equipment, accessories and personnel, etc., but these goods have been brought by the petitioner on its own account into the local area. It is stated that as the admitted fact of the case is that the petitioner by itself has not executed the works but has engaged contractor for the purpose and that the goods claimed to have been sent outside the local area have been utilised in the works offshore, the conclusion would be that the petitioner has supplied the goods to the contractor on cost recovery basis for utilisation in the work and, therefore, the goods attract liability to tax in the hands of the petitioner and that too in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion issued by the Central Government in terms of section 6(6) of the Maritime Zone Act, extending the application of OET Act, we have to examine whether the goods which were taxed were sold, used or consumed within the local area as claimed by the opposite parties in their counter-affidavit. In the counter-affidavit a new plea has been taken by the opposite parties which we have stated in the foregoing paragraph that the petitioner had entered into a contract for mud engineering work with M/s. Baker Hughes Singapore Pvt. Ltd. This fact was not referred to in the orders of assessment and, in our considered opinion, this is totally a new plea taken by the State before this court in their counter-affidavit. Therefore, we have to consider the case in the premises of the facts which were taken into consideration at the time of passing the orders of assessment. The finding of the assessing authority is reflected in the order, relevant portion of which is quoted below: "As such section 6 of the Territorial Water, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 provides a limit on the continental shelf of 200 nautical miles from the baseline and declar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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