Authority: Supreme Court of India

Order Date: 12-08-2026

Case Overview

  • Parties: Appellant – ARJUN FLOUR MILLS; Respondent – THE STATE OF ODISHA FINANCE DEPARTMENT, Secretary & Others.
  • Nature of Proceeding: Civil Appeal No. 8763/1994 with multiple related appeals and special leave petitions (C.A. Nos. 8909/1994, 7485/2001, 98/2003, etc.) and an Intervention Application (IA No. 238994/2023).
  • Background: Earlier orders dated 13.08.1998 and 06.10.1999 referred the matter to a seven‑judge bench because it raises the question of legislative competence of a State Legislature to levy an additional surcharge calculated on sales tax payable by a dealer.
  • Conflicting Precedents: The reference is prompted by divergent views in:
  • S. Kodar v. State of Kerala, 1975(1) SCR 121 (five‑judge bench);
  • Hoechst Pharmaceuticals Ltd. v. State of Bihar and others, 1983(4) SCC 45 (three‑judge bench);
  • Observations in India Cements Ltd. and others v. State of Tamil Nadu and others, 1990 (1) SCC 12 (seven‑judge bench).
  • Question of Law:

1. Whether the imposition of a surcharge/additional tax/levy/cess calculated on a validly levied sales/purchase tax is beyond the competence of the State Legislature.

2. Any other issue(s) that may arise during the hearing.

  • Counsel: For the appellant, counsel included Mr. Vinoo Bhagat (AOR), Mr. Varinder Kumar Sharma (AOR), Mr. Shantanu Sharma, Ms. Deeksha Gaur, Mr. K. R. Sasiprabhu (AOR), Mr. Vivek Jain (A.A.G.), Mr. Sadiq Noor, among others. For the respondent, counsel included Mr. Sandeep Sudhakar Deshmukh, Mr. Nishant Sharma, Ms. Adviteeya, Mr. Rakesh K. Sharma (AOR), and a long list of senior advocates and AORs representing the State of Odisha.

Procedural Directions

1. The Court reiterated that a seven‑judge bench must be constituted to adjudicate the above questions of law.

2. An earlier order dated 09.01.2024 had appointed Ms. Anindita Pujari as nodal counsel to compile a common compilation of submissions, pleadings, documents, and precedents, with written submissions to be filed electronically by 02.04.2024.

3. Ms. Anindita Pujari has since been designated a Senior Advocate. On the suggestion of the learned Senior Counsel/counsel for the parties, the Court appoints Ms. Samapika Biswal (email: samapikabiswal91@mail.com) as the new nodal counsel.

4. Parties are granted liberty to update their written submissions or file fresh written submissions by 15.09.2026. The newly appointed nodal counsel will assist in preparing a fresh common compilation of all materials.

5. The hearing before the seven‑judge bench is scheduled to commence post‑lunch from 2:00 PM on 22.09.2026 and is expected to conclude by 24.09.2026. The schedule is to be strictly adhered to, and counsel are directed to complete their arguments within the allotted time.

Final Outcome

  • The matter is formally referred to a seven‑judge bench of the Supreme Court to resolve the constitutional question of State legislative competence to levy a surcharge on sales tax.
  • Ms. Samapika Biswal is appointed as the nodal counsel to coordinate submissions.
  • Parties may file updated or fresh submissions by 15 Sept 2026.
  • The hearing will take place from 22 Sept 2026 to 24 Sept 2026, commencing each day at 2 PM, with strict compliance to the timetable.

Topics: Taxation, Legislative Competence