JYOTHI HOME INDUSTRIES Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) By these writ petitions under article 226 of the Constitution of India, petitioners, who are traders and industrial manufacturers, challenge the validity of the Karnataka Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1979 ("principal Act"). The principal Act received the assent of the President on 17th May, 1979. It was published in the Gazette on 1st June, 1979. The legislation is a taxing measure referable to entry 52 of List II and envisages an impost of the nature of an entry tax, intended to raise finances substituting the old octroi till then being levied by the various local authorities and the municipal bodies in the State. There was earlier a large batch of writ petitions challenging the principal Act which ultimately went upto the Supreme Court. The legislative history; the nature and incidents of the impost and the constitutional validity of the charging section were considered by the Supreme Court in State of Karnataka v. Hansa Corporation AIR 1981 SC 463, (1980 )4 SCC 697 , [1981] 1 SCR 823 . The challenge to the constitutional validity of the charging section failed.

(2.) Thereafter a number of amendments to the principal Act were effected from time to time. Some of these amendments were again challenged in a large batch of writ petitions before this Court. The validity of these amendments were considered by this Court in Jyothi Home Industries v. State of Karnataka (printed at page 254 infra) (1984) 1 Kar LJ 394. In that batch one point was held against the State. Section 7(1)(a) and 7(15) of the amending Act (Act 13 of 1982) which brought to tax additional items of goods were held unenforceable for want of Presidential assent under the proviso to article 304(b). All other contentions were repelled. Both petitioners, whose challenge to the validity of the Act had failed and the State which felt aggrieved by the finding that some provisions of the amending Act 13 of 1982 were unenforceable as imposing additional restrictions on the freedom under article 301 and were unenforceable for want of Presidential assent, canvassed appeals before the Supreme Court in Civil Appeals No. 11455 of 1983 and connected appeals. The appeals were disposed of by the Supreme Court on 28th November, 1984. All the findings of this Court repelling the challenge to the various provisions of the Act were left undistributed. In the meanwhile, the provisions which were held unenforceable by this Court for want of Presidential assent, were substituted by appropriate provisions of Act 38 of 1984 which had received Presidential assent. In the light of this development, even the infirmity earlier noticed in Jyothi's case (printed at page 254 infra) (1984) 1 Kar LJ 394 did not survive. The State's appeals were, accordingly, allowed. The judgment of the Supreme Court is available in Shah Hirachand Babulal & Co. v. State of Karnataka (Civil Appeals Nos. 11455-83, 11484-885, 11886-90 of 1983).

(3.) We may now turn to the facts of a few cases which, in so far as the contentions raised and urged in this batch, are representative of all the petitions. In W.P. Nos. 11331 to 11350 of 1985, and W.P. No. 9673 of 1985, the petitioners are traders who, in the course of their trade, cause entry of the scheduled goods "iron and steel" into "local area". In W.P. No. 767 of 1985 the petitioner, M/s. Associated Cements Limited, whose factories are situated at Wadi and Shahabad in the District Gulbarga, are engaged in the manufacture of cement, in the course of which they cause entry of several items of raw materials, industrial machinery and other scheduled goods into "local area". Out of W.P. Nos. 11807 to 11820 of 1984, the first six petitioners (i.e., W.P. Nos. 19807 to 19812 of 1984) are dealers in beedies who, in the course of their business, cause entry of the scheduled goods "beedies", "beedi-leaves" and "tobacco" into "local areas". Petitioners in W.P. Nos. 19813 to 19817 of 1984 are owners of textile mills who cause considerable quantities of cotton to enter into local area for use or consumption. Petitioner in W.P. 19818 of 1984 owns a textile mill and causes entry, amongst others, of industrial machineries; industrial goods and products; industrial packaging materials; iron and steel; coke and coal, for use of consumption.