2023 (6) TMI 639 - HC - VAT and Sales Tax

Levy of surcharge under Section 5A of the Orissa Sales Tax Act, 1947 - tax payable under the OST Act is independent of the provisions of the OET Act or not - HELD THAT - The matter is no longer res integra. It stands covered against the dealer and in favour of the Department in view of the judgment of the Supreme Court of India in Commissioner of Commercial Taxes v. M/s. Bajaj Auto Ltd. 2016 (11) TMI 31 - SUPREME COURT where it was held that on a conjoint reading of Section 5 of the OST Act, Section 4 of the OET Act and Rule 18 of the Rules, we are of the considered opinion that the amount of surcharge under Section 5A of the OST Act is to be levied before deducting the amount of entry tax paid by a dealer. - the question is answered in favour of the Department by holding that the surcharge under Section 5A of the OST Act is to be levied before deducting the entry tax paid by the dealer pursuant to the Orissa Entry Tax Act, 1999. Whether on the facts and in the circumstances of the case the Tribunal is justified in determining the surcharge is to be levied after giving set off- of the entry tax paid by the dealer, when on the conjoint reading of Section 5 of the OST Act, Section 4 of the OET Act and Rule 18 of the Rules, the surcharge under Section 5A is to be levied before deducting the amount of entry tax paid by the dealer? - HELD THAT - The question is answered in the negative i.e. in favour of the Department and against the Dealer/Assessee. The impugned order of the Tribunal is accordingly set aside. The matter will now be remitted to the Assessing Officer to re-compute the demand - revision petition is disposed of.

Summary

Issues:
Interpretation of Section 5A of the Orissa Sales Tax Act, 1947 regarding the levy of surcharge and deduction of entry tax paid by the dealer.

Analysis:
The High Court framed two questions for consideration. The first question revolved around whether the surcharge under Section 5A of the OST Act should be levied after deducting the entry tax paid by the dealer. The Court referred to a Supreme Court judgment in Commissioner of Commercial Taxes v. M/s. Bajaj Auto Ltd. and concluded that the surcharge is to be levied before deducting the entry tax paid by the dealer. Therefore, the answer to question No. (i) was in favor of the Department.

In light of the answer to the first question, the second question was answered negatively, favoring the Department and going against the Dealer/Assessee. The Court set aside the Tribunal's order and directed the matter to be remitted to the Assessing Officer for re-computation based on the Supreme Court's judgment.

The revision petition was disposed of accordingly, and an urgent certified copy of the order was to be issued as per rules. The judgment clarified the application of Section 5A of the OST Act and highlighted the precedence set by the Supreme Court in similar matters, emphasizing the proper procedure for levying surcharge in relation to entry tax paid by dealers under the Orissa Entry Tax Act.