1986 (4) TMI 336 - HC - VAT and Sales Tax

Issues Involved:

1. Validity of the Karnataka Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein (Amendment) Act, 1981.
2. Compliance with Article 304(b) of the Constitution.
3. Validity of the three notifications issued on 13th November, 1984.
4. Whether the 1981 Act requires Presidential assent.

Detailed Analysis:

1. Validity of the Karnataka Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein (Amendment) Act, 1981:

The petitioners challenged the validity of the 1981 Act on the grounds that it was introduced without the previous sanction of the President and had not received the President's assent, thus impeding the freedom of trade, commerce, and intercourse throughout India as guaranteed under Article 301 of the Constitution. The respondents argued that the validity of the 1981 Act had been upheld by the court in previous cases (1st and 2nd Jyothi's cases) and that the President's assent to the 1984 Act should be deemed as assent to the 1981 Act. The court found that the point on which the present challenge was founded had not been raised, considered, and decided in the previous cases, and thus, the court was not precluded from examining the present challenge.

2. Compliance with Article 304(b) of the Constitution:

The petitioners argued that the 1981 Act was unenforceable for non-compliance with Article 304(b) of the Constitution, which requires the President's assent for any law that impedes the freedom of trade, commerce, and intercourse. The respondents contended that the assent given by the President to the 1984 Act should be treated as the President giving his assent to the 1981 Act as well. The court agreed with the respondents, citing the Supreme Court's rulings in Venkatrao Esajirao Limbekar v. State of Bombay and Kerala State Electricity Board v. Indian Aluminium Company Limited, which established that the President's assent to a later amending Act should be construed as assent to the entire Act and its earlier amendments.

3. Validity of the three notifications issued on 13th November, 1984:

The petitioners challenged the three notifications issued on 13th November, 1984, arguing that they were illegal and unenforceable as they were based on the 1981 Act, which had not received the President's assent. The court found that Section 3 of the Act, as originally enacted, did not empower the Government to issue notifications retrospectively. However, Section 3 of the 1981 Act expressly conferred power on the Government to issue notifications either prospectively or retrospectively. The court held that the three notifications were authorized, legal, and valid based on the terms of Section 6(3) of the 1984 Amendment Act and the Act as originally enacted.

4. Whether the 1981 Act requires Presidential assent:

The court concluded that the President, by giving his assent to the 1984 Act, had in law given his assent to the 1981 Act. This conclusion was based on the principles enunciated by the Supreme Court in Venkatrao's case and Indian Aluminium Company's case, which established that the President's assent to a later amending Act must be construed as assent to the Act and all its earlier amendments. The court rejected the petitioners' contention that there cannot be a "deemed assent" to an Act and that the assent must be real and factual.

Conclusion:

The court dismissed the writ petitions, upholding the validity of the 1981 Act, the compliance with Article 304(b) of the Constitution, and the validity of the three notifications issued on 13th November, 1984. The court directed the parties to bear their own costs.

← Previous Next →