Statutory exemption notifications and validation legislation under sales tax law: press notes did not defeat valid assessments or refund claims.

Press notes issued under the Orissa Sales Tax Act were treated as administrative directions, not statutory exemption notifications under section 7, because the later validating legislation restored taxability and the notes did not independently exempt liability. Assessments made after the Sales Tax Laws Validation Act were therefore upheld, and the earlier press note did not invalidate them. A refund claim for tax paid before assessment failed because the levy was legally payable after validation and the record showed no enforceable entitlement to recovery from the State. The assessment for the quarter ending 31 December 1953 was within the thirty-six-month period and not time-barred. There was also no basis to restrict assessments to actual collections on the ground of threat or coercion.

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Issues: (i) Whether the press notes dated 2 November 1955 and 31 December 1956 could be treated as statutory notifications under section 7 of the Orissa Sales Tax Act. (ii) Whether the assessments made during the period when the second press note was in force were invalid in view of that note. (iii) Whether the assessee was entitled to refund of tax paid before assessment in excess of actual collections in view of section 9-B(3) of the Orissa Sales Tax Act and the press notes. (iv) Whether the assessment for the quarter ending 31 December 1953 was barred by limitation. (v) Whether the assessments should be restricted to actual collections because the tax was paid under threat or coercion.

Issue (i): Whether the press notes dated 2 November 1955 and 31 December 1956 could be treated as statutory notifications under section 7 of the Orissa Sales Tax Act.

Analysis: The first press note could operate as an exemption direction only in the context of the then-prevailing legal position. The second press note, however, was issued when the relevant sales were already not taxable under the law as declared by the Supreme Court, so it could not be an exemption order under section 7. A measure that was merely administrative when issued did not become a statutory notification by reason of the later Validation Act. The third press note revoked the earlier note and directed the authorities to proceed with assessment and collection.

Conclusion: The press notes dated 2 November 1955 and 31 December 1956 were not statutory notifications under section 7 and did not exempt the tax liability.

Issue (ii): Whether the assessments made during the period when the second press note was in force were invalid in view of that note.

Analysis: Once Parliament enacted the Sales Tax Laws Validation Act, the earlier judicial position was overridden and the relevant explanation sales again became liable to tax. The assessment orders were passed after that validating legislation came into force, so the mere existence of the earlier press note did not affect the validity of the assessments.

Conclusion: The assessments were not invalid and were legally sustainable.

Issue (iii): Whether the assessee was entitled to refund of tax paid before assessment in excess of actual collections in view of section 9-B(3) of the Orissa Sales Tax Act and the press notes.

Analysis: Since the tax was held to be lawfully payable after validation, the basis for a refund claim failed. The third press note also stated that tax already deposited with Government or collected by Government would not be refunded. The record did not establish any legal entitlement to recover the amount back from the State.

Conclusion: The assessee was not entitled to refund.

Issue (iv): Whether the assessment for the quarter ending 31 December 1953 was barred by limitation.

Analysis: The relevant assessment was completed within thirty-six months from the material date, and therefore it fell within the permissible period for assessment.

Conclusion: The assessment was not barred by limitation.

Issue (v): Whether the assessments should be restricted to actual collections because the tax was paid under threat or coercion.

Analysis: There was no finding that the payments had been made under threat or coercion. In any event, the tax was found to be lawfully payable and had in fact been paid, so the assessee could not seek restriction of the assessment on that basis.

Conclusion: The assessments were not restricted to actual collections.

Final Conclusion: The references were answered against the assessee, and the tax assessments and collection directions were upheld.

Ratio Decidendi: An administrative suspension or direction does not become a statutory exemption notification merely because subsequent validating legislation restores taxability; where the levy is legally validated, assessments made pursuant to that validation remain valid and refund cannot be claimed on the basis of the earlier administrative arrangement.

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