The main legal point established in the judgment is that the transaction involved the transfer of the right to use the equipment under a lease within the meaning of the Assam General Sales Tax Act, 1993.

Amitava Roy, J.

1. The challenge to deduction of tax under the Assam General Sales Tax Act, 1993 (hereafter referred to as, "the Act") by Oil India Limited, Duliajan (hereafter referred to as, "the OIL") from its bills for the services rendered under Contract No. OIL/CCO/GEOL/GLOBAL/07/98 having failed, the writ petitioner, M/s HLS Asia Ltd., is in appeal.

2. We have heard Dr. Todi, Senior Advocate assisted by Ms. D. Das, Advocate for the appellant, Mr. S. N. Sharma, Senior Advocate for OIL and Mr. D. Saikia, learned Standing Counsel, Finance Department, for the Revenue.

3. The appellant's pleaded version is that it is a public limited company registered under the Companies Act, 1956, engaged in contract business with OIL and provides highly professional and technical services in connection with extraction of oil and is also engaged in wire-line logging activities. It entered into a contract registered as above with OIL on September 10, 1999 for carrying out wire-line logging and perforation activities consisting of electronic/seismic scanning of subterranean strata and rock formation in the oil fields by utilising its own high tech equipment. In the process such equipment are to be released deep down into the subterranean region through drilled holes into the oil fields, which generate electronic/seismic impulses to be processed through special software and recorded through magnetic tapes. These equipment are owned and used by the company to be engaged for providing such services to OIL. In terms of the contract, the equipment remained in absolute possession of the company and used by it to provide the required data and other professional services. The equipment were operated by utilising the services of highly technically qualified and experienced personnel of the company. It has been categorically pleaded that the appellant-company used its own equipment, which were never handed over to OIL as stipulated in clause 7.13 of the contract agreement. The contract further contained clause 7.14 whereunder OIL was to deduct sales tax from the contractor while making payments. According to the appellant, this provision was unnecessary in view of the fact that no such tax was leviable considering the nature of the works to be rendered under the contract. However, in terms thereof, OIL deducted sales tax under the Act from its bills. Its representation that as in the face of the definition of "sale", "lease" and "operating lease" engrafted in Sections 2(3), 2(19) and 2(25), respectively, and the nature of the transaction visualised in the contract agreement did not contemplate transfer of right to use any goods, no such tax was payable, having failed to elicit any positive response, the appellant approached this Court for redress.

4. The respondent-OIL in its affidavit has questioned the bona fide of the appellant/writ petitioner contending that it had abided by clause 7.14 of the contract by charging sales tax at 8.8 per cent over and above their bills for the hire charges of its equipment and tools which on such realisation accordingly was paid to the Government during the entire period of the contract. While denying the assertion that the appellant-company was not liable to pay tax under the Act, it has been contended that it having submitted itself to the stipulations in the contract agreement including clause 7.14 it was estopped from assailing the validity thereof. The maintainability of the writ petition has been assailed referring to the alternative remedy by way of arbitration as per clause 13 of the general terms and conditions of the contract. Section 65A of the Act has also been referred to in this regard. OIL has further contended that the proceedings involve disputed questions of facts for which invocation of this Court's jurisdiction under Article 226 of the Constitution of India ought to be refused.

5. The learned single Judge on a survey of the various provisions of the contract agreement held the view that the equ