VARALAKSHMI SILK HOUSE Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THE validity of entry 22 of Part "s" of the Second Schedule of the Karnataka Sales Tax Act, 1957 substituted by section 2 (24) (xxi) of the Karnataka Taxation Laws (Amendment) Act, 1994 is challenged in this writ petition. The said entry has levied tax on raw silk and silk yarn imported from outside the country at 4 per cent. while entry 38-A in the Fifth Schedule of the Act has given exemption to all other raw silk and silk yarn.

(2.) THE arguments of the learned counsel for the petitioner are that there is violation of the provisions of article 304 (a) of the Constitution as the tax is sought to be levied on the imported goods alone. It is also stated that the free-flow of trade in the course of inter-State trade as well as intra-State trade is also affected by such levy and thus the provisions of article 301 of the Constitution are violated and the assent of the President has not been taken in the matter. It is also submitted that the levy is discriminatory inasmuch as the silk manufactured out of the country is subject to tax, whereas silk manufactured in India is not subjected to tax.

(3.) THE decision in the State of Mysore v. H. Sanjeeviah AIR 1967 SC 1189 is also relied which reads thus :