In Brief
Motor vehicle dealers in Orissa were required to pay both entry tax (when importing vehicles) and sales tax (on resale). The dispute concerned whether the surcharge levied under the Sales Tax Act should be calculated on the gross sales tax or on the net sales tax after deducting entry tax already paid. The Supreme Court held that surcharge is an independent additional tax computed on the gross sales tax payable under the Sales Tax Act, not on the reduced amount after deducting entry tax. The Court rejected the dealers' argument that the Entry Tax Act and its Rules modified the surcharge calculation, holding that surcharge liability arises independently. The Court allowed the State's appeals, reversing the High Court's judgment favoring the dealers.
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