Retrospective tax levy on photo processing fails where the underlying entry had already been declared unconstitutional.

A retrospective amendment could not validly revive a levy on processing and supplying photographs, photo prints and photo negatives after the underlying entry had already been declared unconstitutional for want of legislative competence. The later legal development relied on by the State did not automatically restore the deleted entry, and no fresh valid re-enactment had been made to cure the earlier invalidity. As a result, the retrospective tax levy could not stand, and the assessments and demand notices founded on the impugned amendment and circular were invalid and set aside.

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Issues: Whether section 2(3) of the Karnataka Taxation Laws (Amendment) Act, 2004 could validly reintroduce, with retrospective effect, the levy on processing and supplying photographs, photo prints and photo negatives, and whether the assessments and demand notices issued on that basis were sustainable.

Analysis: Entry 25 of the Sixth Schedule to the Karnataka Sales Tax Act, 1957, which had treated processing and supplying photographs, photo prints and photo negatives as taxable works contracts, had already been declared unconstitutional for want of legislative competence in earlier proceedings, and that declaration had attained finality. The later decision in Associated Cement Companies did not automatically revive the deleted entry. Re-enactment was possible only if the earlier invalidity had been removed in the manner recognised by law, which had not occurred here. In the absence of a fresh valid basis restoring Entry 25, the State could not proceed as though the entry stood revived. The retrospective amendment therefore could not sustain the levy, and all consequential assessments and demand notices founded on the impugned circular and amendment were liable to fall.

Conclusion: The amendment was unconstitutional to the extent challenged, and the consequential proceedings, assessment orders and demand notices were invalid and set aside.

Ratio Decidendi: A provision earlier declared unconstitutional for want of legislative competence does not revive merely because a later decision states a different principle on a similar subject; unless validly re-enacted on a legally permissible basis, it remains unenforceable and cannot support retrospective taxation or consequential demands.

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