Surcharge under Orissa Sales Tax Act to be levied before Deducting Entry Tax paid by Dealer: Orissa HC [Read Order]

A division bench of the Orissa High Court has held that 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.

A bench of Chief Justice S Muralidhar and Justice M.S. Raman was considering an appeal by the department against the Tribunal’s decision favouringM/s Dua Auto Agency wherein it was held that 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

The department contended that the surcharge under Section 5A of the Orissa Sales Tax Act, 1947 is to be levied after deducting the amount of entry tax paid by the dealer pursuant to the Orissa Entry Tax Act as decided by the learned Tribunal, when Section 5A of the OST Act is a self-contained provision and is leviable on the tax payable under the OST Act and the tax payable under the OST Act is independent of the provisions of the OET Act.

Allowing the department’s appeal, the division bench held that “As far as the first question is concerned, 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. AIR 2016 SC 5014. Consequently, question No.(i) above 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.”

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates