Surcharge - Indian Laws - General

Meaning of the word surcharge In CIT v. K. Srinivasan - 1971 (11) TMI 2 - SUPREME COURT , a question arose whether the term income tax as employed in Section 2 of the Finance Act, 1964, would include surcharge and additional surcharge whenever provided. This Court while tracing the concept of surcharge in taxation laws of our country, has observed: The power to increase federal tax by surcharge by the Federal legislature was recommended for the first time in the report of the committee on Indian Constitutional Reforms, Vol. I Part I. From para 141 of the proposals it appears that the word surcharge was used compendiously for the special addition to taxes on income imposed in September 1931. The Government of India Act, 1935, Part VII, contained provisions relating to finance, property, contracts and suits. Sections 137 and 138 in Chapter I headed finance provided for levy and collection of certain succession duties, stamp duties, terminal tax, taxes on fares and freights, and taxes on income respectively. In the proviso to Section 137 the federal legislature was empowered to increase at any time any of the duties of taxes leviable under that section by a surcharge for federal purposes and the whole proceeds of any such surcharge were to form part of the revenue of the federation. Sub-section (3) of Section 138 which dealt with taxes on income related to imposition of a surcharge. It was further observed at page 315 of the report: (SCR p. 315 : SCC p. 530, para 10) The meaning of the word surcharge as given in the Webster s New International Dictionary includes- among others to charge (one) too much or in addition also additional tax . Thus the meaning of surcharge is to charge in addition or to subject to an additional or extra charge. In C.V. Rajagopalachariar v. State of Madras AIR 1960 Mad 543: (1959) in the context of the Madras Land Revenue Surcharge Act, 1954 and the Madras Land Revenue (Additional Surcharge) Act, 1955, it has been laid down: The word surcharge implies an excess or additional burden or amount of money charged. Therefore, a surcharge of land revenue would also partake the character of land revenue and should be deemed to be an additional land revenue. Although Section 4 of the two enactments referred to above only deems it to be recoverable as a land revenue it is manifest that the surcharge would be a part of the land revenue. The effect of the two Acts would be, therefore, to increase the land revenue payable by a landholder to the extent of the surcharge levied. If therefore, a surcharge levy has been made, the government would be enabled to collect a higher amount by way of land revenue from a ryotwari pattadar than what was warranted by the terms of the previous ryotwari settlement. On due consideration of meaning of surcharge in various decisions, nature of surcharge has to be considered as per intendment in which it has been used in the enactment. Surcharge is basically over and above main levy and is in the form of additional charge. It may carry different contours as per provisions of an enactment and different methodology for its determination. SAI BHASKAR IRON LTD. VERSUS A.P. ELECTRICITY REGULATORY COMMISSION ORS. - 2016 (7) TMI 1649 - SUPREME COURT