Surcharge computation under sales tax law must be made before entry tax set-off is applied.

Section 5A surcharge under the Orissa Sales Tax Act, 1947 is computed on the tax payable under the sales tax law before any deduction of entry tax. The entry tax set-off under Section 4 of the Orissa Entry Tax Act, 1999 and Rule 18 of the Odisha Entry Tax Rules, 1999 reduces the sales tax liability, but it does not alter the statutory base for calculating surcharge. A rule-based illustration cannot limit or expand the charging provision. The surcharge remains an additional levy, and the set-off mechanism operates only after surcharge liability is worked out.

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Issues: Whether surcharge under Section 5A of the Orissa Sales Tax Act, 1947 is to be computed on the gross amount of sales tax or on the net amount after deducting entry tax paid under the Orissa Entry Tax Act, 1999.

Analysis: Section 5A creates a liability to pay surcharge at a fixed percentage of the tax payable under the sales tax law. Section 4 of the Orissa Entry Tax Act, 1999 and Rule 18 of the Odisha Entry Tax Rules, 1999 provide for reduction or set-off of entry tax against sales tax liability, but they do not alter the computation of surcharge under the sales tax enactment. An illustration in the Rules cannot curtail or expand the scope of the statute. The surcharge is an additional tax and its assessment must follow the charging provision under the Orissa Sales Tax Act, 1947. The set-off mechanism under the entry tax law operates after the surcharge liability is worked out.

Conclusion: Surcharge was payable on the gross sales tax before deduction of entry tax, and the challenge to the levy failed.

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