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Judgment
Assessment order for 1990-91 and proposition notice for 1991-92 beside the validity of Item 16-B of the Schedule to the Karnataka Tax on Entry of Goods Act, 1979 are assailed in this petition.
Entry 16-B of the Act provides tax on raw material and component parts and inputs used in the manufacture of intermediate or finished products. By Act 9 of 1990, Item 16-B was substituted increasing the scope for levy of tax in respect of processing, improvement or repairs of goods. Notification dated 28-3-1987 provided tax at the rate of 2%. It is submitted that since there is substitution of Item 16-B in the Schedule, the notification issued earlier ceases to exist and since no notifications have been issued subsequent to 1987 after substitution of new Entry 16-B, tax cannot be levied. Reliance is placed on the Full Bench decision of this Court in the case of Shaw Wallace and Company Limited, Bangalore v State of Karnataka, 1992(36) Kar. L.J. 411, where on account of change of legislation it was considered that the earlier notification ceases to be effective. It is stated that since there was a difference in the language used in Item 16-B, levy could not be continued under the earlier notification which was not consistent with the changed provision. Assent of the President, as held in State of Maharashtra v Central Provinces Manganese Ore Company Limited, AIR 1977 SC 879, is also stated to have been not obtained. Levy of tax on raw material is also stated to be without jurisdiction as the same are not consumed, sold or used in the local area.
Arguments of both the learned Counsel for the parties have been heard. Notification dated 18-11-1992 published on 21-11-1992 was issued with retrospective effect from 1-4-1990. In this notification the words ''processing, improvement or repair of goods'' have also been included. The contention therefore raised has no substance. Validity of this notification has not been disputed in this writ petition. As such, in view of the notification giving retrospective operation already been upheld in Raja Trading Company v Entry Tax Officer, 1998-99(3) KCTJ 298, this writ petition is dismissed.