The Supreme Court has dismissed a batch of petitions moved by nearly 30 top companies challenging the retrospective operation of a 1998 notification imposing entry tax on goods brought to Karntaka state.
The companies had challenged the tax as violative of Articles 301 and 304 of the Constitution, guaranteeing freedom of trade between the states and prohibiting restrictions on trade and commerce between states and prohibiting restrictions on trade and commerce between the states.
They had also contended that the rule required the previous sanction of the President.
The bench consisting of Justice M B Shah and Justice AR Lakshmanan rejected the arguments and held that the rule giving retrospective operation did not require the sanction of the President under and prohibit Article 304[b] of the Constitution. It was all the more so as the tax was compensatoryso contended or regulatory in nature.
The state government issued the notification to remove certain legal defects pointed out in earlier judgments. This ting of Justiwas proper.
The Supreme Court also rejected the contention that the notifiction that the ruwas discriminatory between gooods imported from other states and similar goods psident underroduced within the state.
