KAMAT AND CO Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) IN this petition, several petitioners numbering eighteen, have questioned the legality and correctness of the notification issued by the first respondent-State of Karnataka, in exercise of its power under section 8 (5) of the Central Sales Tax Act, 1956 (hereinafter referred to as "the Act" ).

(2.) THE petitioners have averred that they are all registered dealers under the Karnataka Sales Tax Act, 1957; that they purchase arecanut from local registered dealers by paying the sales tax on the first sale in the State and thereafter sell the same outside the State in the course of inter-State trade and commerce. Therefore, their sales in the course of inter-State trade and commerce is subject to tax under the Central Sales Tax Act at a specified rate. But, by virtue of the notification impugned as at annexure A to the petition, the Central Arecanut Marketing and Processing Co-operative Limited, Mangalore, are totally exempted from payment of Central sales tax subject to the only condition that their purchases or sales made by them within the State, have already been subjected to sales tax under the State's Sales Tax Act. Therefore, the petitioners contend that it not only impedes the inter-State sales effected by the petitioners, but also the notification is violative of article 14, inasmuch as it discriminates the petitioners who are also registered dealers in arecanut as against the second respondent, Central Arecanut Marketing and Processing Co-operative Limited (hereinafter referred to as "campcol" ).

(3.) ON 15th February, 1982, one of us who heard this, referred the matter for decision by Division Bench having regard to important question of law raised. Now the matter has come up for disposal before the Division Bench nearly seven years after it was referred.