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2009 (1) TMI 792 - HC - VAT and Sales TaxValidity of assessment order under section 43 of the Orissa Value Added Tax Act, 2004 challenged on various grounds including the jurisdiction of the assessing officer to levy tax under section 12 of the OVAT Act on the raw materials purchased from outside the State of Orissa Held that:- The impugned order, levying taxes on purchases, admittedly made outside the State of Orissa and therefore, the assessing officer has proceeded on a complete misconception of the OVAT Act, as the sections thereof would only operate in case of transactions, sale or purchase within the State of Orissa. It cannot have extra territorial operation and cannot bring within its ambit transaction of "sale" or "purchase" made outside the State of Orissa. Levy of tax on said transactions would be violative of provisions of article 286 of the Constitution of India and even the State Legislature does not have competence to enact the law having operation outside the State in view of the provisions of article 245 of the Constitution. Such an imposition of tax contravenes section 4 of the CST Act, 1956 which expressly provides that a "sale" inside a particular State shall be deemed to have been made outside all other States. It also contravenes the provision of section 1 of the OVAT Act, which expressly provides that the Act extends only to the State of Orissa and assessment order is in violation of the true spirit of the definition of "sale" and "purchase" contained in section 2 of the OVAT Act. Thus the levy of tax by the State of Orissa under section 12 of the OVAT Act on such purchases is not sustainable in the eye of law. W.P. allowed.
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