MAHAVEER DRUG HOUSE Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THESE appeals are directed against the order dated June 30, 1997 passed by the learned single judge dismissing the writ petitions, whereunder the appellants had challenged the constitutional validity of section 6b (i), (ii) and (iii) of the Kanataka Sales Tax Act, 1957 (in short, "the Act")and the Notification No. FD. 49 CSL 96 (11) dated May 30, 1996 (annexure A to the writ petitions) issued under section 8a of the said Act. The appellants are wholesale distributors, stockists and/or manufacturers of drugs and medicines.

(2.) FOR appreciating the grounds taken by Mr. B. P. Gandhi, learned counsel appearing for the appellants, the scheme of taxation envisaged under the Act needs to be set out in brief.

(3.) SECTION 5 of the Act provides for levy of tax on sale or purchase of goods. Sub-section (1)thereof provides a general rate of tax at the point of first sale which, with effect from April 1, 1996, is 12 per cent. Sub-section (3) of the said section carves out an exception to sub-section (1)by providing that in respect of the goods mentioned in the Second Schedule, the rate of tax will be the one provided therein. Drugs and medicines finds place at Sl. No. 5 of Part M of the second Schedule and the rate of tax prescribed therein from April 1, 1996 is 8 per cent.