1995 (1) TMI 332 - HC - VAT and Sales Tax

Summary

Issues:
Levy of surcharge under section 6-B of the Andhra Pradesh General Sales Tax Act, 1957 on goods subject to concessional tax under section 5-B of the Act.

Analysis:
The High Court of Andhra Pradesh considered the issue of whether surcharge under section 6-B of the Andhra Pradesh General Sales Tax Act, 1957 could be levied on goods eligible for concessional tax under section 5-B of the Act. The petitioner, a dealer in radios, televisions, and electrical goods, had surcharge levied on the sales tax payable during the assessment year 1981-82. The Deputy Commissioner (CT) Appeals held that the explanation to section 6-B included concessional tax within the meaning of "tax under this Act," making surcharge applicable. However, the Sales Tax Appellate Tribunal set aside this decision, ruling that section 5-B did not fall within the scope of section 6-B, thereby exempting the petitioner from surcharge.

The Government Pleader argued that surcharge under section 6-B is imposed on tax itself, and the benefit of concessional tax under section 5-B does not exclude the operation of surcharge. On the other hand, the petitioner's counsel contended that surcharge cannot be imposed on concessional tax based on the language of section 6-B. The Court examined the provisions of section 6-B, which mandated a surcharge of ten percent on the tax payable by a dealer on the sale or purchase of goods, with a proviso limiting the surcharge to four percent for declared goods. The explanation to section 6-B defined "tax under this Act" to include additional tax, concessional tax, and other taxes under sections 6 or 6-A.

The Court analyzed the interplay between sections 5-B and 6-B, concluding that concessional tax rates provided outside section 5-B would be subject to surcharge, while the concessional tax specified under section 5-B would be exempt from surcharge. Section 5-B aimed to incentivize manufacturers by providing a concessional tax rate on specific goods, thereby excluding such turnover from surcharge liability under section 6-B. The Court upheld the Tribunal's decision, finding no illegality, and dismissed the tax revision case without costs.