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TMI Blog1999 (11) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... etrospectively or prospectively by the State Government by notification, and different dates and different rates may be specified in respect of different goods or different classes of goods or different local areas." 2.2. Section 2(A)(5) of the Act defines local area as follows: "Local area" means an area within the limits of a city under the Karnataka Municipal Corporations Act, 1976 (Karnataka Act 14 of 1977), a municipality under the Karnataka Municipalities Act, 1964 (Karnataka Act 22 of 1964), a Notified Area Committee, a Town Board, a Sanitary Board or a Cantonment Board constituted or continued under any law for the time being in force and a Mandal under the Karnataka Zilla Parishads, Taluk Panchayat Samithis, Mandal Panchayats and Nyaya Panchayats Act, 1983 (Karnataka Act 20 of 1985) and panchayat area under the Karnataka Panchayat Raj Act, 1993 (Karnataka Act 14 of 1993). 2.3. Section 7(1) of the KTEG Act requires every dealer to file monthly returns of turnover and pay in advance the full amount of entry tax on the basis of the goods brought into the local area during the preceding month. Section 7(3) provides that if the return filed under section 7(1) appears to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cide this question, the background in which the matter came up for consideration before the division Bench requires to be noticed. 6.. Several persons having their industries within the KIADB industrial areas had earlier filed a batch of writ petitions, inter alia, seeking a declaration that KIADB industrial areas are not "local areas" as defined under section 2(5) of the KTEG Act and therefore entry of scheduled goods into that area would not attract the charging provisions under the KTEG Act. They also challenged the notifications issued by the State Government under section 3 of the Act providing for rate of tax on the goods brought by them as raw materials to their industrial units for consumption or use therein. Those petitions were disposed of by a learned single Judge of this Court reported in Falma Laboratories Pvt. Ltd. v. State of Karnataka [1997] 106 STC 442. The relevant contention urged by the petitioners therein, is noticed by the learned single Judge as follows: ".............The controversy between the parties to the lis is that since KIADB industrial area is not covered under the definition of "local area" under section 2(5) of the Act, the petitioners are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted". (Emphasis supplied) The petitions were rejected as a consequence of rejection of all contentions. 7.. The above decision of the learned single Judge was the subjectmatter of several appeals. The Division Bench allowed the appeals in part and the said decision is reported in Samyuktha Karnataka v. State of Karnataka [1998] 110 STC 226 (Kar). Though several contentions were urged in those appeals, what is relevant for the purpose of these petitions, is ground (e) extracted from para 4 of the decision: Here italicised. "The provisions of the Act do not apply to the industrial units situated within an 'industrial area' declared under section 3 of the Industrial Areas Act since such an area has not been included within the meaning of the 'local area' as defined under section 2(A)(5) of the Act." After referring to the decisions of the Supreme Court referred to by the learned single Judge and the decision in Housing Board of Haryana v. Haryana Housing Board Employees' Union (1996) 1 SCC 95 and the decision in Union of India v. R.C. Jain AIR 1981 SC 951 and the provisions of the KIAD Act, the division Bench held that the KIADB cannot be held to be a local authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for condonation of delay which the appellate authority will dispose of by keeping in view the pendency of the writ petition and appeal filed before this Court. However, there will be no order as to costs." 8.. The petitioners contend that the Act had been made by the State Legislature pursuant to entry 52 of the State List (List II of the Seventh Schedule to the Constitution), which reads, "Taxes on entry of goods into a local area for consumption, use or sale therein" and, therefore what could be taxed is what falls under entry 52 and unless the State is able to demonstrate that the tax under the Act fell within entry 52, it cannot be supported, and that as the division Bench has recorded a finding that the KIADB industrial areas wherein the petitioners' units are situated are not "local areas", and has allowed the appeals in part, there cannot be any levy of entry tax on goods brought by them to their industrial units. In other words, it is contended that entry of goods into a local area is the sine qua non for levy of entry tax and if the industrial area where the petitioners' premises are situated is not a "local area", as defined under the KTEG Act, there cannot be any l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defined in section 2(A) of the Act. Therefore, the Division Bench clearly stated "it is further held that the appellants are liable to be taxed on entry of goods in the local areas as defined under the said clause", thereby affirming the finding of the learned single Judge. If as contended by the petitioners, the Division Bench had held that the entry of goods into industrial areas was not exigible to entry tax, then the Division Bench obviously would not have stated that appellants were liable to be taxed on entry of goods in a "local area" as defined under the KTEG Act. 10.. The petitioners next contended that the fact that the appeals were allowed in part by the Division Bench indicated that the Division Bench had accepted their contention that the industrial area was not a local area and that if their contention had been rejected, then the appeals would have been rejected instead of being allowed in part. This contention has no merit. It is evident from the summing up by the Division Bench (extracted above), that the Division Bench had in fact accepted another contention of the appellants (in so far as it held that no tax could be levied on entry of raw materials in a loca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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