Collateral challenge to sales tax assessment cannot defeat surcharge or additional tax computed under the principal assessment.

Surcharge under the Tamil Nadu Sales Tax (Surcharge) Act, 1971 is computed from the tax finally determined under the Tamil Nadu General Sales Tax Act, 1959, and a dealer cannot collaterally resist it by arguing that the turnover should have been treated as declared goods when the completed assessment did not do so. The same principle applied to additional sales tax under the Tamil Nadu Additional Sales Tax Act, 1970, which attaches to tax payable under the general sales tax law at the prescribed rate where the taxable turnover crosses the statutory limit. On the facts stated, both levies were sustained because no error was shown in the assessment basis or computation.

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Issues: (i) Whether surcharge under the Tamil Nadu Sales Tax (Surcharge) Act, 1971 could be resisted on the footing that the underlying turnover ought to have been treated as declared goods under the Tamil Nadu General Sales Tax Act, 1959. (ii) Whether additional sales tax under the Tamil Nadu Additional Sales Tax Act, 1970 could be displaced on the same footing.

Issue (i): Whether surcharge under the Tamil Nadu Sales Tax (Surcharge) Act, 1971 could be resisted on the footing that the underlying turnover ought to have been treated as declared goods under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: Section 3 of the Tamil Nadu Sales Tax (Surcharge) Act, 1971 makes surcharge payable by a dealer liable to tax under the Tamil Nadu General Sales Tax Act, 1959, and section 6 confines the surcharge to tax payable under that Act. The liability to surcharge is therefore worked out from the tax as finally determined under the general sales tax assessment. The assessment under the Tamil Nadu General Sales Tax Act, 1959 had not accepted the transactions as declared goods, and the court declined to go behind that assessment while considering surcharge. A plea that the goods were in fact declared goods, though not so treated in assessment, could not reopen the completed assessment for surcharge purposes.

Conclusion: The surcharge levy was valid and the contention based on declared goods failed.

Issue (ii): Whether additional sales tax under the Tamil Nadu Additional Sales Tax Act, 1970 could be displaced on the same footing.

Analysis: Section 2 of the Tamil Nadu Additional Sales Tax Act, 1970 attaches additional tax to the tax payable under the Tamil Nadu General Sales Tax Act, 1959 at the prescribed rate where the taxable turnover exceeds the statutory limit. The assessing authority applied the prescribed rate to the taxable turnover for the relevant period, and the same objection based on declared goods had already been rejected in relation to surcharge. No error was shown in the computation or in the statutory basis for the levy.

Conclusion: The additional tax levy was valid and the challenge failed.

Final Conclusion: The revisions failed because both levies were correctly computed on the tax and taxable turnover determined under the general sales tax assessment, and the assessment could not be reopened collaterally for the purpose of avoiding surcharge or additional tax.

Ratio Decidendi: Liability to surcharge or additional tax under the special enactments is to be determined on the basis of the assessment finally made under the principal sales tax Act, and a collateral challenge cannot reopen that assessment on a plea that the goods should have been treated differently.

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