JUDGMENT

Shah, J.-The levy of entry tax on goods by the State of Karnataka has chequered history and the State had to face various litigations on this score. The constitutional validity of Karnataka Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1979 (hereinafter referred to as the Act ) and the notifications issued by the State Government in exercise of its powers conferred by Section 3 of the said Act were challenged before the High Court by filing writ petitions under Article 226 of the Constitution. The Act and the notifications issued thereunder were declared unconstitutional and mandamus was issued directing the State Government and its officers to forebear from enforcing the provisions of the Act. Against that judgment and order, the State Government preferred appeal before this Court. This Court in State of Karnataka and another v. M/s Hansa Corporation [(1980) 4 SCC 697] set aside the order passed by the High Court striking down the Act.

2. The Court negatived the contention that Section 3 of the Act was vague. The Court also held that it was settled law that if the tax is compensatory in character, it would be immune from challenge under A