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Judgment
J.K. Ranka, J.—1. Instant writ petition is directed against order of the Rajasthan Taxation Tribunal, Jaipur dt. 17/12/1998 passed in Sales Tax Revision Application No. 34/1997.
The short controversy raised in the instant petition by the Revenue is whether surcharge could be levied on inter State sale of goods or not.
Brief facts noticed are that the respondent-assessee is a limited company manufacturing cement. The issue is relevant for the assessment year 1988-89. The Assessing Officer (for short, ''AO''), while framing assessment under the Central Sales Tax Act at the time of original assessment made on 23/10/1990, had noticed that since the sale was made by the assessee without ''C Form'', therefore, on the inter-State sale, surcharge, which was not levied at the time of original assessment, was required to be levied and it was held by the AO that surcharge also forms part of tax and once the surcharge is also part of the tax, then surcharge was leviable automatically taking clue from advise note No. 15/03/1990 of the Ministry of Law & Justice where it was observed that "surcharge forms part of the tax on sale or purchase of such goods, the same needs to be included in arriving at the rate."
Dissatisfied with the said order, the assessee preferred appeal before Dy. Commissioner of Appeals (for short, ''DC(A)'') who also upheld finding of the AO and dismissed the appeal.
On a further appeal before the Rajasthan tax Board, the Tax Board, however, vide order dt. 08/01/1997 held that surcharge is entirely different and cannot be treated at par with tax and accordingly allowed the appeal. The Revenue not being satisfied with the said, preferred a revision before the Rajasthan Taxation Tribunal which, as noticed earlier, was rejected.
Ld. counsel for the appellant-Revenue contended that surcharge is certainly part of tax and once the assessee has been found leviable to tax as admittedly ''C'' Form was not found, surcharge being automatic, it has rightly been levied by the AO and the Rajasthan Taxation Tribunal as well as the Rajasthan Tax Board have fallen in error in deleting the same. He further contended that the Taxation Tribunal relied upon the judgment in the case of CTO v. M/s. J.K. Synthetics and M/s. Modern Synthetics (India) Limited (Sales Tax Revision Application No. 12/1997 & Nos. 82, 83, 84, 85 and 86 of 1998) decided on 05/11/1998, which could not have been followed as uniform practice as it was decided on certain facts. He further contended that the judgment of the Apex Court in the case of Deputy Commissioner of Sales Tax v. Aysha Hosiery Factory (P) Ltd. , (1992) 85 STC 106, supports the contention canvassed by the Revenue and thus contended that the writ petition deserves to be allowed.
Despite notice, none appeared on behalf of the respondent-assessee.
We have heard counsel for the petitioner and have perused the impugned order as well as the other orders passed by the lower authorities and in our view, the order of the Rajasthan Taxation Tribunal is just and proper and is not required to be interfered with. As per the Shorter Oxford English Dictionary, the word ''surcharge'' stands for an additional or extra charge on payment. In the case of Bisra Stone Lime Co. Ltd. and Anr. v. Orissa State Electricity Board and Anr.:, 1976 (2) SCC 167 for surcharge, it was observed as under:--
"Surcharge is thus a superadded charge, a charge over and above the usual or current dues."
In the case of Commissioner of Income Tax, Kerala v. K. Srinivasan: , 1972 (4) SCC 526, it was observed as under:--
"The meaning of the word "surcharge" as given in the Webster''s New International Dictionary includes amongst 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."
The Apex Court in the case of Assistant Commissioner (Assessment), Sales Tax Special Circle, Trichur v. Janatha Expeller Co. and Ors.: (1992) 85 STC 105 was of the opinion and held that Sec. 8 of the Central Sales Tax Act, 1956 and the notification (Notification S.R.O. No. 117 of 1966 dated March 8, 1966) passed by Kerala Government u/Sec. 8(5) of the Act are absolutely clear and additional sales tax under the Kerala Additional Sales Tax Act, 1978, is not leviable on inter-State turnover of goods (e.g. Oil and cake) which are covered by that notification. The Hon''ble Apex Court in the case of Deputy Commissioner of Sales Tax v. Aysha Hosiery Factory (P) Ltd. , (1992) STC 106, has held that additional sales tax under the Kerala Additional Sales Tax Act, 1978, could be levied on inter-State sales or purchases of goods (the goods in these cases were goods other than declared goods) in regard to which no notification has been framed under section 8(5) of the Central Sales Tax Act, 1956, fixing as specific lower rate in the public interest.
The Madras High Court in the case of Sree Ayyanar Spinning and Weaving Mills Limited v. State of Tamil Nadu (1998) 109 STC 205, exactly on identical issue held as under:--
"Allowing the petition, that from the language employed in the notification, it was clear that there were no areas of limitation therein, so as to restrict the operation of the notification, with reference to sub-section (1) of section 8 of the Central Sales Tax Act. The words or the expressions employed in clause (ii) of the said notification, were "the tax payable under the said Act" shall be calculated at the lower rate of two per cent. Section 8 of the Act prescribes the rate of tax on sales in the course of inter-State trade or commerce, while section 6 is a charging provision. The notification, did not at all say that the rate payable by dealers was with reference to subsection (1) of section 8 or with reference to subsection (2) of section 8 of the Act. But, the words employed, as already indicated, categorically indicated that the rate of tax payable under the said Act, meaning thereby- whether it be under subsection (1) or (2) of section 8- shall be calculated at the lower rate of two per cent. The power of the State Government under sub-section (5) of section 8 is wide enough to reduce the rate of tax either under sub-section (1) or (2) in respect of any dealer or in respect of sales of goods or sales of such class of goods by the issuance of a notification in the public interest, subject to such conditions, as may be specified therein, apart from the power to exempt payment of tax in respect of inter-State sales effected. While issuing such a notification covering the instant case, the State Government had exercised its power to the fullest extent possible and with intent to give relief to the tax-payers, like the petitioners, in the sense of calculating the levy at the lower rate of two per cent, even in cases governed by sub-section (2) of section 8 of the Act. Moreover it was impermissible to add additional sales tax to the lower rate of levy made in the public interest, in respect of the goods, to which a notification had been framed under sub-section (5) of section 8 of the Act. The order of the Tribunal, adding the rate of levy of two per cent, by way of additional sales tax to the lower rate of levy at two percent imposed, pursuant to the notification issued by the State Government, under sub-section (5) of section 8 of the Act was not sustainable in law."
Levy of surcharge is defined u/Sec. 13 of the Rajasthan Sales Tax Act, 1994 which provides as under:--
"13. Levy of Surcharge.--(1) Notwithstanding anything contrary contained in this Act, there shall be paid by a dealer a surcharge, from such date and at such rate not exceeding twenty five per cent, as notified by the State Government, on the amount of tax or any fee or sum in lieu of tax, payable by him, but the aggregate of tax, fee or sum and surcharge payable under this Act in respect of the goods declared by section 14 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956) to be of special importance in inter-State trade or commerce shall not exceed the tax calculated at the rate specified in clause (a) of section 15 of the aforesaid Central Act.
(2) The provisions as they are applicable to the tax payable under this Act, shall, so far as may be, apply in relation to surcharge payable under sub-section (1). "
In our view, surcharge referred to u/Sec. 13 of the Act, 1994 would only be in the nature of additional tax and if it is an additional tax, it cannot be said that the additional tax covers surcharge as well.
In our view, the judgment in the case of Aysha Hosiery Factory (P) Ltd. (supra) is distinguishable on facts for the reason that in the said case, under the Kerala Additional Sales Tax Act (20 of 1978) all taxable sales and purchases in the State including the local sales of coir, hosiery, rice, automobile parts, titanium dioxide, cement, paints and transformers etc. were subjected to ''additional sales tax'' @ 10% of the rate of tax already imposed under the Kerala General Sales Tax Act, 1963. The result of which was where the rate of tax was 2 per cent the tax payable became 2.2. per cent where it was 3 per cent it was 3.3 per cent, 10 per cent became 11 per cent, 15 per cent became 16.5 per cent. On such facts, the Hon''ble Apex Court held that the additional sales tax levied under the Karnataka Additional Sales Tax Act, 1978 is also sales tax of the same category as in the original Act and that both take the form of sales tax and in the case of assessment of local sales, it makes no difference whether it is called tax or additional tax or one higher percentage of tax whereas in the instant case, the question is about surcharge. Therefore, in our view, the judgment is entirely distinguishable.
In our view, under the Central Sales Tax Act, 1956 it contains no provision that surcharge would be automatic and would form part of tax.
Consequently, the writ petition for the reasons assigned herein before, has no merit and the Tribunal has given cogent reason and the writ petition is accordingly dismissed.