ARJUN FLOUR MILLS Vs. STATE OF ORISSA

JUDGEMENT

(1.) It becomes necessary to refer these appeals for hearing by a larger Bench in the following circumstances:

(2.) They challenge the validity of Section 5-A of the Orissa Sales Tax Act, 1947, which imposes a surcharge on the total amount of sales tax payable by a dealer. A similar provision was upheld by a Bench of three learned Judges of this Court in Hoechst Pharmaceuticals Ltd. v. State of Bihar (1983) 4 SCC 45 , but it is pointed out by learned counsel for the appellants, with some justification, that the judgment proceeded upon a concession that the provision was relatable to Entry 54 of List II of the VIIth Schedule of the Constitution. The judgment does, however, add that the surcharge partook of the nature of sales tax and, therefore, was within the competence of the State Legislature. Learned counsel for the appellants drew our attention to the judgment of a Bench of seven learned Judges of this Court in India Cements Ltd. v. State of Tamil Nadu (1990) 1 SCC 12 where the observations, particularly in paragraph 20, would seem to take very different view:a cess on the royalty payable for excavation of land was held to be, not a tax on land, but on the royalty, which was land revenue.

(3.) The papers shall be placed before the Hon'ble the Chief Justice for appropriate directions.