JUDGEMENT
Mathew, J. -
(1.)An agreement dated 14-1-1958 was executed by and between the Government of India, the Burmah Oil Company Ltd. and the Assam Oil Company Ltd. for the promotion of a new company inter alla with the object of obtaining mining lease for the production of petroleum and crude oil. The promotion agreement was later on modified by a supplemental agreement dated 15-2-1959. The petitioner company was incorporated in accordance with the promotion agreement as modified by the aforesaid supplemental agreement. By an adoption agreement dated 14-3-l959 the petitioner adopted the promotion agreement of 1958 as modified by the said supplemental agreement. The petitioner has its head office in the State of Assam and is engaged in the business of prospecting petroleum and also producing and transporting crude oil from the State of Assam pursuant to the prospecting licence and mining lease granted by the State of Assam. By a second supplemental agreement dated 27-1-1961 executed between the Government of India, Burmah Oil Company Ltd. and Assam Oil Company Ltd. and the petitioner, certain provisions of the promotion agreement dated 14-1-1958 were modified, Clause 7 of the second supplemental agreement reads as follows:
"7. All crude oil produced by Oil India excluding Assam Oil Company's entitlement in respect of Oil India's existing areas under clause 20 of the Promotion Agreement will (subject as hereinafter provided) be sold to and purchased by the Government of India PROVIDED that after meeting as a first call on such oil the joint annual requirements unto 2 3/4 million tons of Indian Refineries Limited's Barauni and Nunmati Refineries. Assam Oil Company's Digboi Refinery shall have the next call thereon up to a maximum of 435,000 tons per annum to the extent that it cannot be economically met from Assam Oil Company's leased areas."
(2.)The petitioner in pursuance to the provisions of clause 7 supplied crude oil to Barauni and Nunmati Refineries of Indian Oil Corporation (previously Indian. Oil Refineries Ltd.) and to Digboi Refinery of Assam Oil Company Ltd. through pipelines constructed and owned by the petitioner company. The Barauni Refinery is situated in Bihar while the other two refineries are situated in the State of Assam. At Barauni Refinery the crude oil which flows through the pipes from the oil fields of Assam is pumped into the Indian Oil Corporation's tanks and thereafter it is measured. After the measurements are agreed to by both the parties, namely, the petitioner and the Indian Oil Corporation the crude oil is taken delivery of by the Indian Oil Corporation on behalf of the Government of India.
(3.)The petitioner company has been filing regular sales tax returns before the Bihar Sales Tax Authorities under the Bihar Sales Tax Act and was being assessed under that Act for the supply of crude oil to the refinery at Barauni treating the supply as intrastate sales. For the period ending 30 September, 1964, the petitioner company sold crude oil worth Rs. 49,26,813.06 to the refinery at Barauni and the same was subjected to sales tax under the Bihar Sales Tax Act, In the year 1966, sales tax authorities in Assam issued notice to the petitioner stating that sales tax was payable on the supply of crude oil to the refinery at Barauni under the Central Sales Tax Act as according to them the sales were in the course of inter-State trade. The petitioner contended that sale were intra-state and not subject to tax under the Central Sales Tax Act. By the assessment order dated 31-3-1966, respondent No. 1 negatived the contention raised by the petitioner and held that by supplying crude oil to the refinery at Barauni the petitioner effected sales of oil to the Indian Oil Company and that they were sales in the course of inter -State trade and assessed the petitioner- company to pay a tax of Rs. 4,47,892.10 (Annexure J). By another order dated 31-3-1966, the petitioner was assessed to sales tax under Central Sales Tax Act to Rs. 12,23,072.90 by respondent No. 1 (Annexure K).
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