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1985 (4) TMI 66 - SC - VAT and Sales TaxWhether the Hansa Corporation judgment validated the action taken by the State? Held that - The judgment of this court in Hansa Corporation s case upholding the validity of the 1979 Act Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1979 is binding on all concerned whether they were parties to the judgment or not. Appeal dismissed.
Issues Involved
1. Constitutional validity of Karnataka Act No. 13 of 1982 and Karnataka Act No. 10 of 1984. 2. Binding nature of the Supreme Court's judgment in Hansa Corporation's case on other petitioners. 3. Effect of the writ of mandamus issued by the High Court in favor of the petitioners. Issue-wise Detailed Analysis 1. Constitutional Validity of Karnataka Act No. 13 of 1982 and Karnataka Act No. 10 of 1984 The appeals and writ petitions challenge the constitutional validity of s. 7 of Karnataka Act No. 13 of 1982 and ss. 2 and 3 of Karnataka Act No. 10 of 1984. These provisions were enacted following the abolition of octroi by the State of Karnataka to augment the resources of local bodies through the Karnataka Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1979 ("the 1979 Act"). The 1979 Act was initially struck down by the Karnataka High Court but later upheld by the Supreme Court in Hansa Corporation's case. The subsequent enactments and ordinances attempted to address the infirmities pointed out by the High Court and ensure the continuity of the tax regime. 2. Binding Nature of the Supreme Court's Judgment in Hansa Corporation's Case on Other Petitioners The core issue was whether the Supreme Court's judgment in Hansa Corporation's case, which upheld the validity of the 1979 Act, was binding on all petitioners, including those who were not parties to the appeal. The appellants contended that the writ of mandamus issued by the High Court in their favor remained effective since the State had not filed appeals against them. The Supreme Court, however, held that the law declared by it in Hansa Corporation's case was binding on all, irrespective of whether they were parties to the appeal or not. The Court emphasized that Article 141 of the Constitution mandates that the law declared by the Supreme Court is binding on all courts within the territory of India. 3. Effect of the Writ of Mandamus Issued by the High Court in Favor of the Petitioners The appellants argued that the writ of mandamus issued by the High Court forbidding the State from enforcing the provisions of the 1979 Act in their cases survived the Supreme Court's judgment in Hansa Corporation's case. The Supreme Court rejected this argument, stating that the mandamus was predicated on the High Court's view that the 1979 Act was constitutionally invalid. Once the Supreme Court declared the Act valid, the basis for the mandamus disappeared, rendering it ineffective. The Court explained that the law declared by the Supreme Court is binding on everyone, and the mandamus could not survive against the declaration of the Act's validity. Conclusion The Supreme Court dismissed the appeals and writ petitions, holding that the judgment in Hansa Corporation's case was binding on all concerned, whether they were parties to the judgment or not. The Court clarified that there was no inconsistency between the findings in Joginder Singh's case and Makhanlal Waza's case, as both established that the law declared by the Supreme Court is binding on all, irrespective of whether they were parties to the case. The writ of mandamus issued by the High Court became ineffective once the Supreme Court upheld the validity of the 1979 Act. The appeals and writ petitions were dismissed with costs quantified at Rs. 2,000 in each case.
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