New Delhi, The Supreme Court on Wednesday held that a 1974 Constitution Bench ruling upholding states’ power to impose additional sales tax or surcharge calculated as a percentage of the existing sales tax continues to hold the field, saying a reference on the issue had become academic.
“The question referred to is of no practical significance and now academic. the court clarified that the five-judge Constitution Bench ruling in S Kodar vs State of Kerala continued to hold the field While declining to undertake a fresh adjudication on the reference. The court further held that the question of the legislative competence of state legislatures to impose the surcharge would be governed by the law laid down in S Kodar. In S Kodar vs State of Kerala, a five-judge bench had upheld additional sales tax, ruling that a levy calculated with reference to the sales tax payable was an enhancement of the sales tax rate and not a tax on the dealer’s income.
A seven-judge Constitution bench headed by Chief Justice of India Surya Kant unanimously held that the legal question referred to it nearly 27 years ago no longer required adjudication, as the statutory provisions under challenge had since been replaced or amended and the Goods and Services Tax law had come into force. During the hearing on September 22, Solicitor General Tushar Mehta submitted that the controversy had largely become academic following the introduction of the GST regime in 2017, with relatively few disputes remaining pending.
Consequently, the question referred to does not survive for adjudication by a seven-judge Bench, and the reference has to be answered accordingly,” the CJI, who wrote the judgment on behalf of himself and five other judges, said.
The controversy stemmed from differing interpretations in earlier Supreme Court decisions.
