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2012 (10) TMI 956 - KARNATAKA HIGH COURTConstitutional validity of the amendment to entry 22 in Part S of the Second Schedule to the Karnataka Sales Tax Act, 1957, by section 2(24)(xxi) of Karnataka Act No. 18 of 1994 - Held that:- The argument that all taxes should be governed by article 301 whether or not their impact on trade is immediate or mediate, direct or remote, adopts, in our opinion, an extreme approach which cannot be upheld. If the said argument is accepted it would mean, for instance, that even a legislative enactment prescribing the minimum wages to industrial employees may fall under Part XIII because in an economic sense an additional wage bill may indirectly affect trade or commerce. It cannot be said that levy of four per cent tax by the impugned amendment, on the sale of raw silk and silk yarn, imported from outside the country, could directly impede the free flow of trade and commerce in the aforesaid goods in the territory of India. Accordingly, the contention that the impugned amendment is violative of article 301 of the Constitution is devoid of merit. The object of article 304(a) is to prevent discrimination against goods imported from other States within the territory of India by imposing on them a tax higher than that borne by goods produced in the State. A plain reading of article 304 would show that it does not impose any restrictions on the Legislature of a State to make any law to impose tax on the sale or purchase of goods imported from outside the country. Hence, the contention that the impugned amendment is violative of article 304 is also devoid of merit. W.P. dismissed.
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