GSTR No. 6 of 2000 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH GSTR No. 6 of 2000 Date of Decision: 29.7.2010 M/s Jaico Steel Fastners Pvt. Ltd. ....Petitioner. Versus State of Haryana ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Avneesh Jhingan, Advocate for the petitioner. Ms. Ritu Bahri, Senior DAG, Haryana. ADARSH KUMAR GOEL, J. 1. The Sales Tax Tribunal, Haryana (in short “the Tribunal”) has referred following question of law for opinion of this Court arising out of its order dated 18.3.1997 for the assessment years 1987 to 1991:- “Whether in the facts and circumstances of the case, a surcharge of 10% is leviable over and above the rate of 10% prescribed by sec-8 (2) (b) of CST Act on sales made to unregistered dealers in the course of inter-state trade or commerce?” 2. The dealer is engaged in manufacture and sale of nut, bolts and fasteners, i.e. hardware goods. For sales within the State tax was levied at the rate of 8.8% and for sales in the course of inter-State trade GSTR No. 6 of 2000 -2- or commerce covered by the Central Sales Act, 1956, the tax was charged at the rate of 10% without surcharge. The revisional authority questioned the correctness of not levying surcharge on sales made in the course of inter-State trade or commerce to an unregistered dealer and accordingly levied surcharge under Section 16 of the Haryana General Sales Act, 1973 (hereinafter referred to as the “State Act”). On appeal, the Tribunal upheld the said levy. 3. We have heard learned counsel for the parties. 4. Section 16 of the State Act reads thus:- “16. Levy of Surcharge – (1) Notwithstanding anything to the contrary contained in this Act, there shall be paid by a dealer a surcharge at the rate of ten percentum on the amount of tax payable by him under this Act: Provided that the surcharge shall not be payable on the tax payable in respect of declared goods under this Act. (2) The provisions of this Act, shall, so far as may be, apply in relation to the surcharge payable under sub-section (1), as they apply to the tax payable under this Act.” 5. A plain reading of the aforesaid provision shows that levy of surcharge is clearly applicable only to tax payable under the State Act. While in the case of sale in the course of inter-State trade or commerce, no tax is attracted under the State Act and in such a case question of surcharge under Section 16 cannot apply. GSTR No. 6 of 2000 -3- 5. Learned counsel for the State submitted that sale was to an unregistered dealer but it has not been disputed and in fact it is assumed in the question itself that the sale is in the course of inter-State trade or commerce. It could not be shown on behalf of the State that to such a transaction any tax is attracted under the State Act. This being the position, there is no question of surcharge under the State Act which is attracted only to tax payable under the State Act. 6. We, thus, answer the question in favour of the dealer and against the revenue. (ADARSH KUMAR GOEL) JUDGE July 29, 2010 (AJAY KUMAR MITTAL) gbs JUDGE