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2002 (9) TMI 494 - SC - VAT and Sales TaxValidity of retrospective operation of the explanation to the first proviso to sub-section (1-A) of section 5 of the Karnataka Sales Tax Act, 1957 which was inserted by Act No. 1 of 1996 on March 5, 1996 with effect from April 1, 1988 challenged Held that:- Appeal dismissed. It is a settled position that the Legislature can impose tax retrospectively though it cannot be arbitrary and unreasonable. On a closer scrutiny it becomes clear that till August 18, 1995 (date of pronouncement of High Court judgment) they could have and in fact collected the tax. The explanation was inserted on March 5, 1996 so, in effect, the retrospectivity which really affects them, is only for about six months. Even if they have not passed on burden of tax to the customers during that period, the effect cannot be said to be so unreasonable, arbitrary and harsh as to invalidate the explanation. Such occasional hiccups are not unusual incidents of business. However, having regard to the facts and circumstances of the case, we permit the appellants to pay sales tax levied/leviable during the period August 18, 1995 to March 5, 1996 in six equal installments, to be paid in each month commencing from October 1, 2002. If any of the appellants fails to pay any installment within two weeks of the same becoming due, it would be open to the concerned authority to collect the amount of tax due, in lump sum, in accordance with law.
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