Full Judgment
Puttaswamy, J.
1. In this petition under article 226 of Constitution, the petitioner has challenged the constitutional validity of section 6C of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as the Act), introduced by the Karnataka Taxation and Certain Other Laws (Amendment) Act, 1979 (Karnataka Act No. 21 of 1979) (hereinafter referred to as the amending Act.) and an assessment order made thereunder (annexure A).
2. But, at the hearing, Sri B. V. Katageri, the learned counsel for the petitioner, prays for permission to withdraw the challenge of the petitioner to the assessment order (annexure A) and pursue the legal remedy of appeal that is already pending against the same. I accord my permission to this request of Sri Katageri and reject the challenge of the petitioner to the assessment order (annexure A) as withdrawn by him.
3. Sri Katageri strenuously contends that section 6C introduced by the amending Act is violative of article 271 of the Constitution and is therefore liable to be struck down.
4. Section 6C introduced by the amending Act challenged by the petitioner reads thus :
'6C. Levy of Surcharge. - (1) The tax payable under sections 5, 6 and 25B shall be increased by a surcharge calculated at the rate of ten per cent of such tax :
Provided that, if, in the case of the declared goods specified in the Fourth Schedule, the tax payable under sections 5, 6 and 25B together with the additional tax payable under section 6B and the surcharge payable under this section exceeds four per cent of the sale or purchase price thereof, the rate of surcharge in respect of such goods shall be reduced to such an extent that the tax, additional tax and surcharge together shall not exceed four per cent of the sale or purchase price of such goods.
(2) The provisions of this Act and the Rules made thereunder including those relating refund or exemption from tax shall, so far as may be, apply in relation to the levy, assessment and collection of the surcharge payable under sub-section (1) as they apply in relation to the levy, assessment and collection of sales tax or purchase tax under this Act.'
Under this provision, surcharge is levied on taxes exclusively levied under the Act. A surcharge or overcharge levied is also an additional tax levied under the Act.
5. Article 271 of the Constitution empowers Parliament to levy surcharge on duties and taxes for Union purposes only. The surcharge levied under article 271 is not allocable between the Union and the States. The power conferred on Parliament under this article does not impinge on the plenary power of the State Legislature to legislate under article 246 on subject-matters falling in List II, State List of the Seventh Schedule to the Constitution. The plenary power of legislation available to the State Legislature is not controlled by article 271 of the Constitution. The two are separate and distinct and the power conferred on the State Legislature is not denuded by the power conferred on Parliament for a different purpose under article 271 of the Constitution.
6. Whenever additional tax or surcharge on sales tax is levied, what is really levied is a tax on sale or purchase and the same does not lose the character of a tax on sale or purchase : vide S. Kodar v. State of Kerala : [1975]1SCR121 . On any view of the matter, the Karnataka State Legislature was competent to enact section 6C of the Act and the same is not violative of article 271 of the Constitution. The challenge of the petitioner to section 6C of the Act is wholly misconceived and is devoid of merit.
7. In the light of my above discussion, I hold that this writ petition is liable to be rejected. I, therefore, reject this writ petition at the preliminary hearing stage without notice to the respondents.