KRISHNA AND COMPANY Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) In this batch of petitions under Art. 226 of the Constitution, the petitioners, who are dealers under the Karnataka Sales Tax Act, 1957 (hereinafter referred to as the 'Act'), challenge the constitutional validity of S. 8A(3A)ofthe 'Act' (at inserted by the Karnataka Silcs Tax (Amendment) Act, 1981 (Karnataka Act No. 7 of 1981) and the proceedings for revision, rectification or re-assessment, as the case may be. initiated against them and the notices issued in this behalf by the authorise, under the'Act' for the assessment periods from 1-4 1972 to 10-7-1981. In the case of some of the petitioners wliere these proceedings have been completed, the orders which the proceedings have culminated in are challenged by the petitioners concerned.

(2.) S. 8A(l)of the 'Act' empowers the State Government to make, by notification, exemption or reduction in the rate respecting any tax payable under the 'Act' on the sale or purchase of any specified goods or class of goods at all points, in the series of sales by successive dealers, or by any specified class of persons in regard to the whole or any part of their turnover. In exercise of this power the State Government issued the Notification S.O 2048 No. FD. 283 CSL 70 dated 10-9-1970 exempting with effect from 1-10-1970 the tax payable under S. 6 of the 'Act' on the purchases of articles of Gold and Silver (whether set with precious stones or not) by a manufacturer of such articles subject to the conditions stipulated in the said notification.

(3.) However, sub-sec. (3A) inserted in S. 8A of the Act by the said Amending Act 7 of 1981 provides that if the rate of tax payable under the 'Act' in respect of any goods or class of goods gets modified, notification, if any, issued in respect of such goods or class of goods under S. 8A(l)(a), shall, with effect from the date on which the modification of the rate of tax became effective, be deemed to be cancelled. By S. 4 of Act 7 of 1981 it is provided that said sub-sec. (3A) shall be deemed to have always been inserted. The rate of tax respecting the goods or class of goods covered by the notification dated 10-9-1970 came to be modified with effect from 1-4-1972 raising the rate of tax from 3% to 3-1/2%, The proceedings for revision, re-assessment of rectification of re-assessment impugned in these Writ Petitions were commenced on the ground that in view of S. 8A(3A) the said notification dated 10-9-1970 stood restrospectively cancelled with effect from 1-4-1972 when the rate of tax was modified and that accordingly the purchase turn-over relating to the goods referred to in that notification lost the exempttion from and become exigible to, tax from 1-4-1972,