Surcharge on tax payable is not a change in tax rate, leaving a reduced-rate notification effective.

Levy of surcharge under section 6-C of the Karnataka Sales Tax Act did not amount to a change in the rate of tax, so section 8-A(3-A) was not attracted and the notification reducing tax on the goods remained effective. The surcharge operated as an addition to the tax payable, distinct from the tax rate itself, and the later amendment by Act No. 36 of 1986 was treated as clarificatory of that position. On that basis, the notice proposing reassessment lacked authority of law and was liable to be set aside.

---

---

Issues: Whether levy of surcharge under section 6-C of the Karnataka Sales Tax Act, 1957 amounted to a change in the rate of tax so as to attract section 8-A(3-A) and render ineffective the notification reducing tax on the goods in question, thereby sustaining the notice proposing reassessment.

Analysis: Section 6-C imposed a surcharge on the tax payable and did not itself alter the rate of tax on the goods. A surcharge on the tax liability is distinct from a change in the rate of tax, and therefore the notification issued under section 8-A reducing the tax rate continued to operate. The subsequent amendment made by Act No. 36 of 1986 merely clarified the legal position already implicit in the provision and confirmed that surcharge under section 6-C was not to be treated as a change in the rate of tax for the purposes of section 8-A(3-A).

Conclusion: The notice was without authority of law and was liable to be set aside.

Ratio Decidendi: A surcharge on tax payable does not amount to a change in the rate of tax, and a clarificatory amendment may confirm that section 8-A(3-A) is not attracted.

---