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1998 (6) TMI 552 - HC - VAT and Sales Tax
Issues:
1. Validity of notification dated October 19, 1991 under section 8-A of the Karnataka Sales Tax Act. 2. Power of the State Government to retranspose an entry from Fifth Schedule to Second Schedule under section 8-A(2A) of the Act. Issue 1: Validity of Notification dated October 19, 1991: The controversy revolved around the wheat bran's tax liability or exemption based on the notification dated October 19, 1991. The petitioners argued on the existence of this notification and its repeal status, along with the State Government's power to retranspose entries between schedules. The notification abolished sales tax on wheat and wheat products until a necessary amendment was made in the Act itself. The notification automatically withdrew the exemption once the entry in the Fifth Schedule was added, as per the provisions of section 8-A(6) of the Act. The court noted that subsequent notifications and amendments were not relevant as the original notification clearly stated its end upon the necessary amendment. The court rejected the contention that the notification was still in existence, emphasizing that the exemption ceased once the necessary amendment was made. Issue 2: Power to Retranspose Entry by State Government: The second issue raised was regarding the State Government's power to levy tax from April 1, 1997, after a previous transposition of an entry in 1992. The State Government's power under section 8-A(2A) allows transposition of entries between schedules without enhancing tax rates. The court observed that the exemption given by a previous notification was canceled by a subsequent one, and a fresh notification exempting wheat bran was issued independently. The power exercised under section 8-A(1) could be re-exercised by canceling the previous notification under section 8-A(3). The court dismissed the argument that this power could not be exercised indirectly, as it was specifically conferred by the statute. The court highlighted that the entry regarding tax levy remained in existence, and the cancellation of the exemption notification did not violate the provisions of section 8-A(2A). In conclusion, the court dismissed the writ petitions as they lacked merit in both issues analyzed.
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