TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 31
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....re paying surcharge on the balance amount after deduction of the entry tax paid on the motor vehicles. b) The Finance Department, Government of Orissa, by letter dated 20.11.2001, stated that the surcharge under the OST Act shall be calculated on the payable amount of tax due on the taxable turnover (Section 5 & 5A) instead of on the reduced Sales Tax amount after setting off of entry tax. c) On 30.03.2002, the Sales Tax Officer, Sambalpur-I Circle, passed an order under Section 12(4) of the OST Act wherein surcharge was levied under Section 5A of the OST Act on the gross sales tax payable by the respondent-Company. d) Being aggrieved by the demand notice dated 30.03.2002 as well as the letter dated 20.11.2001 issued by the Finance Department of the Government of Orissa, the respondent-Company filed a writ petition being No. 233 of 2002 along with a set of other writ petitions filed by the respondents herein before the High Court of Orissa at Cuttack. e) The Division Bench of the High Court, vide common judgment and order dated 05.01.2007, allowed the appeals filed by the respondents herein. (f) Being aggrieved by the judgment and order dated 05.01.2007, the appellants have pr....
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.... Bank Ltd. vs. The Third Income Tax Officer, Madurai (1975) 2 SCC 454, it was held as under:- "18. In CIT Kerala v. K. Srinivasan on which the appellant relies, this Court has traced the history of the concept of "surcharge" in the tax laws of our country. After considering the report of the Committee on Indian Constitutional Reforms, the provisions of the Government of India Act, 1935, the provisions of Articles 269, 270 and 271 of the Constitution and the various Finance Acts, this Court held, differing from the High Court, that the word "income tax" in Section 2(2) of the Finance Act, 1964 includes surcharges and the additional surcharge." (iii) In M/s Hoechst Pharmaceuticals Ltd. and Others vs. State of Bihar and Others (1983) 4 SCC 45, it was held as under:- "28. It cannot be doubted that a surcharge partakes of the nature of sales tax and therefore it was within the competence of the State legislature to enact sub-section (1) of Section 5 of the Act for the purpose of levying surcharge on certain class of dealers in addition to the tax payable by them..... 79. ....A surcharge in its true nature and character is nothing but a higher rate of tax to raise revenue for ge....
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....age and prevent evasion of tax. In interpreting such a provision, a construction which would defeat its purpose and, in effect, obliterate it from the statute book, should be eschewed. If more than one construction is possible, that which preserves its workability, and efficacy is to be preferred to the one which would render it otiose or sterile. The view taken by the High Court is repugnant to this cardinal canon of interpretation." 8) Learned senior counsel also relied upon a decision of this Court in Associated Cement Companies Ltd. vs. State of Bihar and Others (2004) 7 SCC 642, wherein this Court has held that a dealer is entitled to reduction in tax to the extent of tax paid under the Bihar Entry Tax Act while working out the tax payable by it under the Bihar Sales Tax Act. 9) Heard learned counsel for the parties and perused the records. 10) The sole question for consideration is whether the 'Surcharge' under Section 5A of the OST Act is to be computed on the gross amount of sales tax or on the net amount of sales tax after setting of or deducting the amount of entry tax? 11) Under Section 5 of the OST Act, Sales Tax is payable by a dealer on the taxable turnover at a ....
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....0,000/- 2) Entry Tax Payable @ 10% Rs. 20,000/- Total:- Rs. 2,20,000/- 3) Sale Price of the Motor Vehicle Rs. 2,20,000/- 4) (a) Sales Tax due @ 10% Rs. 22,000/- Deduct Entry Tax paid Rs. 20,000/- Sales Tax payable Rs. 2,000/- Total:- Rs. 2,22,000/- Note: If the sales tax payable on such motor vehicle is less than the entry tax paid, then the sales tax payable will be nil. (2) When an importer of goods specified in Part III of the Schedule to the Act other than motor vehicle, liable to pay tax under this Act is also a dealer liable to pay tax under the Sales Tax Act, then the Sales Tax payable on the sale of goods shall be reduced to the extent of entry tax paid in the same manner as illustrated under the sub-rule(1)." In view of the statutory provision contained in Rule 18 of the Rules, the tax payable under the said Act was to be determined after deduction therefrom the entry tax paid by a dealer importing vehicle into the State of Orissa. 14) Since the determination of surcharge payable under the OET Act was relatable and/or linked to the tax payable under the OST Act, a clarification was sought for by one of the dealers in motor vehicle....
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....HE COMMISSIONER OF COMMERCIAL TAXES: ORISSA: CUTTACK Dated: 20.11.01 Memo No. 24808/CT III(I) 207/2000 Copy forwarded to all ACCTs/All CTOs/All Addl. CTOs of Assessment Units for information and necessary action. The CTOs are requested to circulate the above clarification of Finance Deptt. to all the Addl. CTOs of their respective circles. Dd/- Addl. Commissioner of Commercial Taxes (Gen) Orissa, Cuttack" In the said letter, it was inter alia intimated that surcharge shall be calculated on the payable amount of tax due on the taxable turnover (section 5 and 5A) instead of on the reduced sales tax amount after setting off of Entry Tax. 17) On 30.03.2002, the Sales Tax Officer, Sambalpur-I Circle, Sambalpur passed an order under section 12(4) of the OST Act wherein surcharge has been levied under Section 5A of the said Act on the gross sales tax payable, without deducting the entry tax as required under Section 4 of the OET Act. As a result of this, excess surcharge to the tune of Rs. 21,25,117.37/- has been levied by the Sales Tax Officer. 18) It is well settled that an illustration given under the Rules does not exhaust the full content of the section which it illus....