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of <h1>Court rules contractors engaged by N.F. Railways entitled to refund due to unconstitutional sales tax deduction.</h1> The court ruled in favor of the petitioners, contractors engaged by N.F. Railways, in a case concerning the deduction of sales tax at source under the ... - Issues Involved:1. Legality of the deduction of sales tax at source by the N.F. Railways under the Assam General Sales Tax Act, 1993.2. Determination of whether the transactions in question constitute inter-State trade and commerce.3. Applicability of the Assam General Sales Tax Act, 1993 to the transactions in question.Issue-wise Detailed Analysis:1. Legality of the deduction of sales tax at source by the N.F. Railways under the Assam General Sales Tax Act, 1993:The petitioners, contractors engaged by N.F. Railways, challenged the deduction of sales tax at source from their bills under the Assam General Sales Tax Act, 1993. They argued that the contracts necessitated the movement of boulders from Arunachal Pradesh to Assam, thereby making the transactions inter-State in nature, which should be exempt from state sales tax under Articles 269 and 286 of the Constitution. The court noted that the contracts were for the supply and stacking of river boulders, and the movement of these boulders was an incident of the contract. Consequently, the court held that the transactions were inter-State sales and thus, the deduction of sales tax at source by N.F. Railways was unconstitutional and ultra vires the provisions of the Act of 1993.2. Determination of whether the transactions in question constitute inter-State trade and commerce:The court examined the contracts and the movement of goods, referring to the judgments in Oil India Ltd. v. Superintendent of Taxes and State of A.P. v. National Thermal Power Corporation Ltd. It concluded that the contracts occasioned the movement of boulders from Arunachal Pradesh to Assam, making them inter-State sales. The court emphasized that the movement of goods pursuant to the contracts was sufficient to classify the transactions as inter-State trade, regardless of the property transfer location. Thus, the transactions fell under the purview of inter-State trade and commerce as defined by Section 3 of the Central Sales Tax Act, 1956.3. Applicability of the Assam General Sales Tax Act, 1993 to the transactions in question:The court highlighted that the Assam General Sales Tax Act, 1993, explicitly excludes transactions of sale or purchase of goods conducted in the course of inter-State trade and commerce. Given that the transactions in question were deemed inter-State sales, the provisions of the Assam General Sales Tax Act, 1993, were inapplicable. Consequently, the actions of N.F. Railways in deducting sales tax at source were unauthorized.Conclusion:The court allowed all the writ petitions, declaring the actions of N.F. Railways in deducting or proposing to deduct tax at source as unconstitutional and ultra vires the Assam General Sales Tax Act, 1993. The court directed the refund of any tax deducted from the petitioners' bills, adhering to the provisions laid down in the Act of 1993.
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