MAHAVEER DRUG HOUSE Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THESE Writ Petitions call in question the Constitutional validity of Section 6b (i) (ii) and (iii) of the Karnataka Sales Tax Act, 1957 as amended by Karnataka Sales Tax Amendment Acts, 1987 and 1990. Also under challenge is the validity of Notification dated 30th of March and 30th of may 1996 whereby the Government have restricted the exemption granted to life saving drugs and withdrawn the reduced rate of turn over tax payable under Section 6b of the Act in regard to medicinal and Pharmaceuticals preparations. The controversy arises in the following backdrop.

(2.) BY a Notification dated 30th March 1996, the Government reduced with effect from 1st day of april 1996, turn over tax payable under Section 6b of the Act to 1% in respect of certain class of goods including medicinal and pharmaceuticals preparations. By another Notification of even date, the Government exempted with effect from 1st of April 1996, tax payable under Section 5 of the Act, in respect of sale of life saving drugs specified in the schedule to the said notification. Two months later by a third Notification dated 30th of May 1996, the Government amended with effect from 1st of June 1996 the earlier of the two Notifications mentioned above to the extent that the Sl. No. (iii) and the entries relating thereto were omitted from the same. The net result was that with effect from 1st of June 1996, the reduced rate of tax on the sale turn over of medicinal and pharmaceutical preparations, was no longer available. Aggrieved by the withdrawal of the said benefit as also the withdrawal of total exemption on sale of life saving drugs the petitioners have filed the present petitions questioning the constitutional validity of section 6b (i) (ii) (iii) of the Act and the Notification aforementioned.

(3.) APPEARING for the petitioners Mr. Gandhi strenuously argued that Notification dated 30th May 1996, was not one referable to the powers vested in the Government under Section 8a (3) of the act. He urged that even though the Government could invoke Section 8a (3) to cancel or vary a notification issued under Sub-section (1) and 2-A of Section 8a yet the impugned Notification did not either expressly or otherwise purport to do so. The argument was that since Notification dated 30th March 1996, granting reduction in the rate of turn over tax, continued to subsist the deletion of item (iii) from the same was not tantamount to a cancellation within the meaning of section 8a (3 ). Reliance in support was placed upon the decision of the Supreme Court referred in AIR 1951 SC 332.