BALADEV SAHU & SONS Vs. STATE OF ORISSA

JUDGEMENT

(1.) IN this sales tax revision the following questions have been raised by the assessee :

(2.) THE facts and circumstances giving rise to this case are that the petitioner is a registered dealer under the provisions of the Orissa Sales Tax Act, 1947 (hereinafter referred to as, "the Act"). He is a manufacturer of out -still liquor in the district of Nuapada. In the course of its business the petitioner purchased mohua flowers for manufacturing out -still liquor as per the licence granted by the authorities of the Excise Department. The petitioner opted to pay compounding tax in respect of its business and payment of compounding tax is statutorily permitted as per rule 90AA of the Orissa Sales Tax Rules, 1947 (hereinafter referred to as, "the Rules"). The assessing authority for the assessment year 2002 -03 determined the sale turnover of country liquor of the petitioner at Rs. 16,38,000 being one -and -half times of the consideration money payable to the Government in the Excise Department for obtaining exclusive privilege licence vide order of assessment dated May 16, 2003 (annexure 1). In addition to the tax paid as per the compounding agreement the assessee was asked to pay the surcharge and some other additions were also made by the assessing authority.

(3.) THE learned counsel for the petitioner submits that as the Revenue has agreed to accept the proposal made by the assessee for making the payment of tax in lump sum/compounding manner, surcharge cannot be recovered over and above the same and it is inclusive in it for the reason that the lump sum agreement is made on the amount of tax payable under the Act. It is submitted that the word "tax" does not bear any definition under the Act. The further expression "tax payable" used in different provisions of the OST Act except in section 5A conveys an altogether different meaning, namely, tax including surcharge. Whereas, "tax payable" used in section 5A indicates merely tax payable but not surcharge. "Tax assessable on taxable turnover" is therefore to be read as meaning tax and surcharge assessable on taxable turnover. "Surcharge" is payable on "tax payable" under section 5A and "tax payable" is on taxable turnover as defined under sections 5(2)(A) and 5(2)(AA) of the Act. Therefore, the further expression "pay in lieu of" denotes a quantifiable sum of money the payment of which discharges a dealer of his tax liability under rule 90AA and the said amount which equates to 20 per cent of 1 1/2 times of the amount payable to Government (Excise Department) as a consolidated amount which cannot be understood to mean further levy of surcharge on the said amount. Therefore, the question has to be answered in favour of the assessee. On the contrary Mr. Dalai, learned counsel for the Revenue, has submitted that surcharge provided under section 5A of the Act, which provides for surcharge is an additional tax and it is to be calculated at the rate of 10 per cent of the tax payable by the assessee under section 5 of the Act. Therefore, the assessee cannot escape the liability of surcharge. Thus, the question has to be answered in favour of the Revenue.