The main legal point established in the judgment is that a notification issued under Section 8-A of the Karnataka Sales Tax Act will be impliedly repealed or rendered ineffective when the Legislature amends the Act and introduces an Entry in the Schedule to the Act which relates to the class of goods to which exemption is given by the notification.

SHIVASHANKAR BHAT, J, J.

( 1 ) THE following Question has been Referred for the consideration of the Full Bench, by a Division Bench of this Court: "whether a notification issued by the State Government in exercise of the power conferred by Section 8-A of the Karnataka sales Tax Act, 1957, is impliedly repealed or rendered ineffective when the Legislature amends the Act and introduces an Entry in the Schedule to the Act, which relates to the class of goods to which exemption is given by the notification?"

( 2 ) THE relevant facts and the basis of the reference are found in the Order of Reference made by the Division Bench, which reads thus: "in this Sales Tax Revision Petition, we are concerned with entry 48-A (ii) of the II schedule to the Kamataka Sales Tax Act, 1957, which was inserted by Act No. 23 of 1983 (with retrospective effect from 1 st July 1974 ). Prior to the introduction of this Entry, the rate of tax applicable to chemical fertiliser mixtures was governed by a notification issued under the provi- sions of Section 8-A of the act, and to that notification dated 12th August 1971 was added a proviso, with effect from 1st June 1972, on 21st March 1972. The proviso provided that "if the chemical fertiliser mixture includes any component which is not chemical fertiliser, then the tax on such component shall be levied at the same rate and subject to the same conditions as if that component had been sold independently as a commodity. " one of the arguments advanced before us on behalf of the sales Tax Authorities is that the said notification with its proviso continues to remain effective inspite of the introduction of Entry 48-A (ii) so that Entry must be construed with reference to the terms of the proviso and a component of a chemical fertiliser mixture, which is not a chemical fertiliser must be taxed at the same rate and subject to the same conditions as if that compo- nent had been sold independently as a commodity. In support of this contention our attention has been drawn to the Division Bench Judgment of this Court in JANARDHANA ACHARYA vs STATE OF karnataka [ (1980) 46 STC 375]. The Division Bench held that a notification under Section 8-A (1) of the Act continued to be in force until it was modified or cancelled by the State Government by a notification issued under Section 8-A (3 ). The Division Bench took the view that the Decision of the single Judge that a notification issued under Section 8a (1) became invalid by enhancement of the rale of tax on the goods specified in the notification by a subsequent amendment on the ground of inconsistency was wrong. Such a notification did not in any way become inconsistent with the provisions of the Act. We have considered the view taken by the Division Bench. We have also read the judgment which was over-ruled by the Division bench. We have noted that on an earlier occasion a Division Bench had found it difficult to follow the judgment in JANARDHANA achraya's case (ibid) and had formulated a question for determination by a Full Bench. The Full Bench, by the order dated 27th June 1991 in SANDVIK ASIA LTD. vs THE STATE OF karnataka (W. P. No. 7085/86 and connected Writ Petitions), had not found it necessary to answer the question because of a certain amendment to the Act. Our attention has also been drawn on behalf of the assessee to the judgment of the Supreme Court in COMMISSIONER, SALES tax, U. P. vs AGRA BELTING WORKS (1987) 66 STC 1 ). By a majority, the Supreme Court held that when, after a notification under Section 4 granting exemption from liability to sales tax in respect of a certain class of goods, a subsequent notifi- cation under Section 3a prescribed the rate of tax leviable on an item of that class, the intention was to withdraw the exemption and make the sale liable to tax at the rate prescribed in the notification/the power both of granting exemption and of varying the rate of tax vests in the State Government and a notification recalling the exemption

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