HC holds K'taka special tax law as violative of Constitution

Bangalore, Mar 29 (UNI) The Karnataka High Court today held section three of the Karnataka Special Tax on Entry of Certain Goods as violative of the Constitution.

Allowing a large batch of writ petitions filed by ITC Ltd, Pepsico India Holdings and others, challenging the constitutional validity of the said Act, Mr Justice Shylendrakumar held that the impugned provision impeded movement of goods and therefore was violative of the Constitutional provisions. The court also pointed out the distinction between Compensatory and Regulatory tax and held that it should not be confused with reasonable restriction under Article 304(b).

The petitioners contended that they were bringing some goods from outside the State for use and consumption and were levied with tax on such goods. But, tax was not collected on the very same goods which were produced inside the State. Hence, they argued that the levy and collection of tax on 29 goods brought from outside Karnataka, including electrical, electronic goods, furnace oil and building material, was illegal, arbitrary and violative of Articles 304(a) and 304(b) of the Constitution.

UNI