Retrospective withdrawal of entry tax exemption unenforceable without Presidential assent, preserving non-dealer relief for motor vehicle imports.

Retrospective deletion of section 28 of the Karnataka Tax on Entry of Goods Act could not be enforced because it withdrew a statutory exemption and imposed an additional restriction on trade and commerce, attracting the constitutional requirements of prior Presidential sanction or subsequent Presidential assent. In the absence of such compliance, the amendment was treated as unenforceable. As a result, non-dealers importing motor vehicles into local areas continued to enjoy the section 28 exemption from entry tax, and refusal to register vehicles on the basis of the unenforceable amendment could not stand.

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Issues: (i) Whether the retrospective deletion of section 28 of the Karnataka Tax on Entry of Goods Act, 1979 by the Karnataka Taxation Laws (Amendment) Act, 1996 could be enforced without prior Presidential sanction or subsequent Presidential assent under the Constitution of India; (ii) Whether, in the absence of such constitutional compliance, non-dealers importing motor vehicles into local areas remained exempt from entry tax and could be denied vehicle registration on that basis.

Issue (i): Whether the retrospective deletion of section 28 of the Karnataka Tax on Entry of Goods Act, 1979 by the Karnataka Taxation Laws (Amendment) Act, 1996 could be enforced without prior Presidential sanction or subsequent Presidential assent under the Constitution of India.

Analysis: The deletion of section 28 withdrew the statutory exemption previously available to persons who were not dealers and thereby subjected that class to entry tax on motor vehicles brought into local areas. That change imposed an additional restriction on the freedom of trade, commerce and intercourse within the meaning of article 301 of the Constitution of India. A legislative measure of that character required compliance with the proviso to article 304(b) of the Constitution of India, or assent under article 255 of the Constitution of India. As no such compliance was shown, the amendment could not operate.

Conclusion: The deletion of section 28 was held to be not enforceable.

Issue (ii): Whether, in the absence of such constitutional compliance, non-dealers importing motor vehicles into local areas remained exempt from entry tax and could be denied vehicle registration on that basis.

Analysis: Since the deletion of section 28 was held unenforceable, the legal position continued to be governed by the earlier declaration that only dealers within the meaning of section 2(4) were liable to pay entry tax on motor vehicles. Persons not falling within that category remained entitled to the exemption under section 28, and the petitioners' challenge to the refusal of registration succeeded to that extent.

Conclusion: Non-dealers continued to be exempt from entry tax, and the refusal to register their vehicles on the footing of an unenforceable amendment could not stand.

Final Conclusion: The writ petitions succeeded in part. The amendment deleting section 28 was treated as unenforceable for want of constitutional compliance, and the petitioners, being non-dealers, retained the benefit of the statutory exemption from entry tax.

Ratio Decidendi: A State amendment that withdraws a tax exemption and thereby imposes an additional restriction on the freedom of trade and commerce cannot be enforced unless it satisfies the constitutional requirement of prior Presidential sanction or subsequent Presidential assent.

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