Introduction

• This case deals with the constitutional validity of Entry 25 of Schedule VI of the Karnataka Sales Act, 1957.

Facts

• The case concerns the constitutional validity of Entry 25 of Schedule VI to the Karnataka Sales Tax Act, 1957, which levies sales tax on processing and supplying photographs, photo prints, and photonegatives at varying rates from 1987 to 1998 and thereafter.
• This was the third challenge to Entry 25, which had previously been declared unconstitutional twice by the courts.
• The High Court declared the provision unconstitutional then the State of Karnataka preferred an appeal before the Supreme Court.

Issue Involved

• Whether the Entry 25 of Schedule VI the Karnataka Sales Act, 1957 constitutionally valid?

Observations

• The Supreme Court upheld the constitutional validity of Entry 25 of Schedule VI to the Karnataka Sales Tax Act, 1957, allowing the state to levy sales tax on the processing and supplying of photographs, photo prints, and photonegatives.
• The Court found that the 46^th Constitutional Amendment, which introduced clause (29-A) in Article 366, empowers states to tax goods involved in works contracts, making the previous dominant intention test irrelevant.
• The Court also validated the retrospective imposition of the tax from 1989, stating it was justified to correct earlier judicial misinterpretations and did not violate Article 19(1)(g) of the Constitution, which guarantees freedom to practice any profession or business.

Conclusion

• Consequently, the Supreme Court set aside the Karnataka High Court's judgment and dismissed the writ petitions challenging Entry 25, confirming the state's legislative competence to enact the law with retrospective effect. No order as to costs was made.