SHREE RENUKA SUGARS LTD Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) Writ petitioner, who is a dealer under the provisions of the Karnataka Value Added Tax Act, 2003, (for short 'the Act') is a manufacturer of Sugar and incidentally produces molasses which is a bye-product from which it is claimed by the writ petitioner that denatured spirit is manufactured and in the sale of which the petitioner has found many stumbling blocks, the latest according to the writ petitioner being levy of tax at 20% under the Act, as amended by the Amendment Act No. 6/2007, with which the petitioner is aggrieved.

(2.) It is the apprehension of the writ petitioner that the provisions of this Act was brought into force in terms of the notification dated 30-3-2007 published by the 2nd respondent will be an act adverse and in fact detrimental to the industrial and business activity of the petitioner and having regard to the background leading to this legislation, petitioner has approached this Court questioning the constitutional validity of the Act as amended in Amendment Act 6/2007 insofar as it relates to the inclusion of the denatured spirit at Serial No. 4 to the IV schedule of the Karnataka Value Added Tax Act, 2003, contending that inclusion of denatured anhydrous alcohol at Serial No. 3 in Schedule-IV to the said Act as unconstitutional and ultra vires of the Constitution of India. Petitioner has also sought for an incidental prayer to quash the notification (column-2) at Annexure-J bearing No. FC 115 CSL 2007 (5) dated 30-3-2007 published by respondent No. 2, which is one for withdrawing an earlier exemption, which the petitioner enjoyed prior to the introduction of this amending Act.

(3.) Submission of Sri. K. G. Raghavan, learned Sr. Counsel for the petitioner, is that if one should look at the background of the facts and circumstances leading to the above legislation and also the background of litigation that ensued between the petitioner and the State, it is very obvious that the demand is nothing but an attempt to regulate the activity of manufacture the denatured spirit by the writ petitioner, which is clearly an instance of colourable exercise of legislative power as the State Government does not have the legislative competence to regulate either the manufacture or the trade of denatured spirit which is exclusively within the province of the union parliament.