In Brief
Motor vehicle dealers in Orissa paid surcharge on net sales tax after deducting entry tax paid upon import. The state reversed course via a 2001 letter, claiming surcharge should apply to gross tax before any deduction. The dealers challenged this in the High Court, which allowed their petition. The Supreme Court reversed the High Court, holding that surcharge under the Sales Tax Act is an independent levy on the gross tax payable, unaffected by entry tax relief provisions. The Court reasoned that surcharge is a separate additional tax that must be computed before applying deductions. The appeals were allowed, upholding the state's revised position on surcharge computation.
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