Supreme Court Affirms State Authority to Impose Additional Sales Tax

Exam-focused facts from the 4 November 2026 current affairs briefing.

Key facts

The Supreme Court upheld states’ legislative competence to impose additional sales tax or surcharge calculated on dealers’ sales tax liabilities.
A seven-judge Constitution Bench treated the levy as an enhancement of sales tax under Entry 54 of the State List.
The court said the reference had little practical significance after GST replaced the relevant taxation framework.
The dispute arose from Arjun Flour Mills vs State of Odisha and Section 5A of the Odisha Sales Tax Act, 1947.
Questions about the Punjab surcharge and direct credit of cess proceeds to the Punjab Social Security Fund were left open.