Entry tax liability extends to KIADB industrial areas that fall within a statutory local area despite the area's separate status.

Entry tax under the Karnataka Tax on Entry of Goods Act, 1979 applies when specified goods enter a defined local area for consumption, use or sale, even if the KIADB industrial area within that territory is not itself a separate local area. The prior Division Bench ruling in Samyuktha Karnataka was understood to mean only that an industrial area declared under the Industrial Areas Act is not, by itself, a local area; it did not exclude levy where the industrial area forms part of a municipality, panchayat or other statutory local area. On that basis, the challenge to the levy failed.

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Issues: Whether industrial units situated in KIADB industrial areas are outside the scope of the Karnataka Tax on Entry of Goods Act, 1979 merely because the industrial area itself is not a separate "local area".

Analysis: The Act levies entry tax on the entry of specified goods into a local area for consumption, use or sale therein. The definition of "local area" covers areas within the limits of municipalities, municipal corporations, notified areas, cantonments, town boards, sanitary boards and panchayat areas. The earlier Division Bench decision in Samyuktha Karnataka was read as holding that an industrial area declared under the Industrial Areas Act is not itself a local area, but that fact does not exclude levy where the industrial area forms part of a municipal, panchayat or other defined local area. The earlier decision also expressly stated that goods entering such local areas remain liable to tax under the Act.

Conclusion: The Act applies where the KIADB industrial area falls within a defined local area, and the challenge to levy on that basis fails. The petitioners' contention was rejected.

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