Entry Tax in different states in India - Part 5 - Karnataka
The Karnataka High Court, while delivering the judgement in Bharat Earth Movers Ltd vs State of Karnataka & Others [2007] 8 VST 69 (Karn), held that Karnataka Special Tax on Entry of Certain Goods Act, 2004 is unconstitutional and invalid.
The High Court held that the Act was not compensatory as no special services were provided to those from whom the tax was collected. The Act was held to impede interstate trade and commerce. The prior assent of the President was not obtained as required by Article 304(b) of the Constitution.
The High Court declined to follow the decision of the Gujarat High Court ruling in Eagle Corporation Pvt Ltd vs State of Gujarat [2007] 6 VST 560 (Guj).The decision of the Supreme Court in Shaktikumar M Sancheti vs State of Maharashtra [1995] 96 STC 659 (SC) was differentiated as the violation of Article 304(a) was not agitated in that case and hence the Supreme Court had not examined this question.
Date of decision: 29th March 2007