1. Challenge in the above said appeals is to the legality of the common judgment and order dated 05.01.2007 rendered by a Division Bench of the High Court of Orissa at Cuttack in Writ Petition (C) being No. 233 of 2002 and connected matters wherein the High Court allowed the petitions filed by the Respondents herein.
2. Civil Appeal No. 5913 of 2008 is being treated as the leading case, hence, the facts of the said appeal are given below:
a) The Respondents are engaged in the sale and purchase of Motor Vehicles and are registered dealers under the Orissa Sales Tax Act, 1947 (in short 'the OST Act') as well as under the Central Sales Tax Act. The Respondents had been paying entry tax on the goods when they were bought into the State of Orissa Under Section 3(3) of the Orissa Entry Tax Act, 1999 (in short 'the OET Act'). However, they were paying surcharge on the balance amount after deduction of the entry tax paid on the motor vehicles.
b) The Finance Department, Government of Orissa, by letter dated 20.11.2001, stated that the surcharge under the OST Act shall be calculated on the payable amount of tax due on the taxable turnover (Section 5 & 5A) instead of on the reduced Sales Tax amount after setting off of entry tax.
c) On 30.03.2002, the Sales Tax Officer, Sambalpur-I Circle, passed an order Under Section 12(4) of the OST Act wherein surcharge was levied Under Section 5A of the OST Act on the gross sales tax payable by the Respondent-Company.
d) Being aggrieved by the demand notice dated 30.03.2002 as well as the letter dated 20.11.2001 issued by the Finance Department of the Government of Orissa, the Respondent-Company filed a writ petition being No. 233 of 2002 along with a set of other writ petitions filed by the Respondents herein before the High Court of Orissa at Cuttack.
e) The Division Bench of the High Court, vide common judgment and order dated 05.01.2007, allowed the appeals filed by the Respondents herein.
(f) Being aggrieved by the judgment and order dated 05.01.2007, the Appellants have preferred these appeals before this Court by way of special leave.
3. Learned senior Counsel for the Appellants have taken the stand that there is nothing in the provisions of the OET Act or the Rules made thereunder which would alter the mode of computation prescribed in Section 5A of the OST Act. Section 4 of the OET Act provides for reduction of the liability of a dealer under the Sales Tax Act to the extent of entry tax paid under the OET Act. This provision only appertains to reduction of entry tax. It has nothing to do with the computation of the surcharge under the OST Act. In any event, in terms of Section 4 of the OET Act, reduction<........