M/S. WIDIA(INDIA) LTD. vs STATE OF KARNATAKA .

The Supreme Court upheld the constitutional validity of the Karnataka Tax on Entry of Goods into Local Areas for Consumption, Use or Sale Therein Act, 1979, stating that the tax is compensatory in nature and thus immune from challenge under Article 301 of the Constitution. The Court clarified that if a tax is not compensatory, the burden lies on the party defending its validity to prove compliance with Article 304. It was held that the amendments made to Section 3 of the Act, allowing for retrospective taxation, did not violate constitutional provisions as they were reasonable and in public interest, thus affirming the Act's validity post Presidential assent.