1998 (3) TMI 638

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....e iron scrap rerolled into bars and rounds, brought them back and sold them in the State of Karnataka. The first respondent completed the assessment and taxed the petitioner at the rate of 4 per cent. The case of the petitioner is that the assessing authority has not given exemption of the tax paid by the petitioner on the raw material purchased by it in the State of Karnataka on the ground that the exemption of tax paid on the raw material is available only when the raw material was purchased and the finished goods are manufactured in the State of Karnataka only. Therefore, the petitioner filed this writ petition assailing the constitutional validity of Explanation II to Schedule IV to the Karnataka Sales Tax Act, 1957 (hereinafter referre....

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....ady been paid and of establishing the exact quantum of tax so paid on such items of goods of iron and steel shall be on the dealer claiming the reduction."   By reading the above explanation it is manifest that the exemption of tax paid on the raw material is available only to those who manufacture the goods with the raw material within the State of Karnataka and not otherwise. Article 304 of the Constitution of India enables the State to impose tax on goods manufactured within the State as also goods imported from other Sates into the State. But, in doing so the State cannot discriminate between goods so imported and goods manufactured or produced locally. The scope of article 304 of the Constitution was considered by the Honourabl....