A seven-judge Constitution Bench of the Supreme Court disposed of the 1999 Arjun Flour Mills reference regarding States' power to levy an additional sales tax or surcharge. Clarifying that such surcharges fall under Entry 54 of the State List (Seventh Schedule), the Court noted the reference became academic after GST replaced legacy sales taxes in 2017, while Justice K.V. Viswanathan affirmed S. Kodar v. State of Kerala (1974).
Key Facts
A 7-judge Constitution Bench: disposed of the 1999 Arjun Flour Mills reference challenging additional tax (10% and 15%) under the Odisha Sales Tax Act, 1947.
The Court clarified that: an additional tax/surcharge on sales tax is an enhancement of the sales tax rate under Entry 54 of the State List (Seventh Schedule), though the issue became academic after GST (2017).
Justice K.V. Viswanathan separately: affirmed that *S. Kodar v. State of Kerala* (1974) remains valid—additional sales tax is not a tax on dealers' income.
Static GK
101st Constitutional Amendment Act,: 2016 introduced GST (effective 1 July 2017) and Article 246A.
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Mains Questions (1)
115 Marks250 Words
Critically examine the constitutional division of taxation powers between the Union and the States with reference to judicial precedents on additional sales tax and regulatory surcharges.
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