HINDUSTAN AERONAUTICS LIMITED Vs. STATE OF ORISSA

JUDGEMENT

(1.) THIS is an appeal by special leave from the order dated 31/12/1981 passed by the Sales Tax Tribunal, Orissa. The appellant who was the assessee under the Central Sales Tax Act, 1956 went up in appeal against the confirming orders of Assistant Commissioner in respect of the assessment years 1974-75, 1975-76 and 1976-77. The Sales Tax Officer, Koraput I Circle, Jeypore had made the orders under Rule 12(3) of the Central Sales Tax (Orissa) Rules, 1957 making demands of Rs. 1,21,38,586.00 for the year 1974-75, Rs. 1,29,64,637.00 for the year 1975-76 and Rs. 1,37,72,652.00 for the year 1976-77. The appellant is a dealer registered under Section 7(1) of the Central Sales Tax Act, 1956 under Koraput I Circle in the State of Orissa.

(2.) M/s. Hindustan Aeronautics Limited (hereinafter referred to as 'H. A. L.') of which appellant is a division was established on 1/10/1964. The objective of formation of the H. A. L. was to carry on in India and elsewhere the business, inter alia, in aeroplanes including manufacture, assembling, buying and selling etc. of the same. In its division at Sunabeda, manufacture of MIG engines for MIG aircrafts required for defence and overhauling of aero engines of Indian Air Force were undertaken. Some of the MIG engines manufactured by it were sent to Nasik Division of H. A. L. and some to Indian Air Force as per instructions from the Ministry of Defence. The appellant received payments from Government of India or Indian Air Force for the manufacturing programme. In respect of payments so received, the Sales Tax Officer, Koraput I Circle levied Central Sales Tax on the ground that the transactions were inter-State sales. This was disputed by the appellant according to whom the letter was only an agent of the Government of India. In the alternative it was contended that the transactions were nothing but works contract and as such not exigible to Central Sales Tax.

(3.) THE Government of the Union of Soviet Socialist Republics is being informed of this entrustment and they are being requested to co-operate and deal directly with Hindustan Aeronautics Limited. and do all things necessary for the effective operation of the said Agreement according to the terms thereof."