1998 (9) TMI 608 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the notification issued by the State Government under the Karnataka Tax on Entry of Goods Act, 1979, is impliedly repealed or rendered ineffective by the amendment of the Act.
2. The applicability of exemption for component parts or goods made out of iron and steel under the specific notification.
3. The interpretation of legislative intent regarding the inclusion or exclusion of specific items in the amended Act.

Issue-wise Detailed Analysis:

1. Implied Repeal or Ineffectiveness of Notification by Amendment:
The primary issue is whether the notification issued by the State Government under the Karnataka Tax on Entry of Goods Act, 1979, is impliedly repealed or rendered ineffective due to the amendment of the Act. The court examined the legislative intent behind the Amendment Act 18 of 1989, which incorporated certain items of iron and steel from the notification dated November 27, 1984, into the main Act. The court concluded that the notification stands impliedly repealed or rendered ineffective whenever the Legislature intervenes and amends the Act relating to the same subject. This principle was supported by the Full Bench decision in Shaw Wallace & Co. Ltd. v. State of Karnataka, where it was held that a notification issued under the statute is impliedly repealed when the Legislature amends the Act and introduces an entry in the Schedule relating to the same class of goods.

2. Applicability of Exemption for Component Parts or Goods Made Out of Iron and Steel:
The petitioner, a company engaged in manufacturing electrical goods, claimed exemption from entry tax on component parts made out of iron and steel based on the notification dated November 27, 1984. The notification excluded certain iron and steel items and component parts from the definition of "raw materials, component parts, and inputs" under explanation II to entry 16-B of the Schedule. However, the Amendment Act 18 of 1989 incorporated only the 16 items of iron and steel into the main Act, omitting the component parts and inputs. The court held that the legislative intent was clear in excluding component parts and inputs from the list of exempted items, thereby rejecting the petitioner's claim for exemption.

3. Interpretation of Legislative Intent:
The court emphasized the importance of legislative intent in interpreting the amendment. It was noted that raw materials, component parts, and inputs in entry 16-B are distinct types of goods with different marketable values. The component parts made out of iron and steel are not considered the same as raw materials in common parlance. The court observed that the Legislature's decision to omit component parts and inputs from the amendment indicated a clear intention not to confer any exemption on these items. The court rejected the petitioner's argument that the notification still authorized exemption for component parts and inputs after the amendment, as it was contrary to the legislative intent expressed in the amendment.

Conclusion:
The court dismissed the revision petitions, upholding the assessment of entry tax on the component parts brought by the petitioner. The notification dated November 27, 1984, was deemed impliedly repealed or rendered ineffective by the Amendment Act 18 of 1989, which incorporated certain items into the main Act while excluding component parts and inputs. The legislative intent was interpreted as not providing exemption for component parts and inputs made out of iron and steel. The court relied on the Full Bench decision in Shaw Wallace & Co. Ltd. to support its conclusion.