9911796707
TMI Blog1998 (3) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... irst respondent completed the assessment and taxed the petitioner at the rate of 4 per cent. The case of the petitioner is that the assessing authority has not given exemption of the tax paid by the petitioner on the raw material purchased by it in the State of Karnataka on the ground that the exemption of tax paid on the raw material is available only when the raw material was purchased and the finished goods are manufactured in the State of Karnataka only. Therefore, the petitioner filed this writ petition assailing the constitutional validity of Explanation II to Schedule IV to the Karnataka Sales Tax Act, 1957 (hereinafter referred to as the Act ) and also section 5(4) of the Act and further praying that the assessment order may be qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be on the dealer claiming the reduction. By reading the above explanation it is manifest that the exemption of tax paid on the raw material is available only to those who manufacture the goods with the raw material within the State of Karnataka and not otherwise. Article 304 of the Constitution of India enables the State to impose tax on goods manufactured within the State as also goods imported from other Sates into the State. But, in doing so the State cannot discriminate between goods so imported and goods manufactured or produced locally. The scope of article 304 of the Constitution was considered by the Honourable Supreme Court in Firm A.T.B. Mehtab Majid Co. v. State of Madras [1963] 14 STC 355. The honourable Supreme Court he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds are sold within the State and, if the finished goods are manufactured outside Andhra Pradesh, the appellant/company therein is not entitled for exemption of the tax paid on the raw material. The honourable Supreme Court held therein that the said notification is violative of article 304(a) of the Constitution of India. 6.. The principle laid down by the honourable Supreme Court squarely applies to the present case. 7.. Then, the question is whether the entire explanation or a part thereof has to be held unconstitutional. The honourable Supreme Court has held that where it is unconstitutional only in part only that part of the notification be declared as unconstitutional and it is not necessary to declare the entire notification as ul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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