1982 (6) TMI 246

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....made to rule 25A of the Karnataka Sales Tax Rules, 1957, (hereinafter referred to as "the Rules") and as published in the Gazette dated 24th January, 1981, in Notification No. FD 70 CSL 80 the petitioners are no longer exempted from payment of tax under the Act as they have ceased to be village industries as defined in the new rule 25A of the Rules. 3.. Aggrieved by the same, the petitioners have approached this Court under article 226 of the Constitution, inter alia, contending that having been recognised by the Commissioner of Commercial Taxes in Karnataka as persons carrying on village industries and having regard to the language of section 8 of the Karnataka Sales Tax Act (hereinafter referred to as "the Act") which has the effect of e....

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....ds specified in the Fifth Schedule subject to the conditions and exceptions, if any, set out therein." In other words, what is clear from the language of section 8 is goods specified in the Fifth Schedule shall not be taxable under the Act subject to the condititions and exceptions, if any, set out in the Fifth Schedule itself. The Fifth Schedule to the Act contained originally as many as 44 entries; some of which have been deleted and some of them have been substituted by amendments subsequently. Entry 28, with which we are concerned, originally read as follows: "Products of village industries when sold by a bona fide producer recognised by the Commissioner, if necessary, after consultation with the Khadi and Village Industries Commissio....

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....................... 3. ...................... 4. ...................... 5. ...................... 6. Cottage oil industry." From the above it is clear that while undisputedly the petitioners carry on the business of cottage oil industry, they do not satisfy the requirement of sub-clause (a) of rule 25A of the Rules inasmuch as they are situated undisputedly within the city limits of Gadag-Betegeri Municipality. In other words, by amendment of the Rules, the village industry of the petitioners has ceased to get the benefit of exemption though it may remain a cottage oil industry, by virtue of the conditions prescribed by sub-clause (a) of rule 25A of the Rules. If that is the legislative intent, it is not open to the petitioners to cont....