HINDUSTAN LEVER LTD. vs STATE OF KARNATAKA

The Supreme Court ruled that packing materials used for manufacturing tea qualify as raw materials under the Karnataka Tax on Entry of Goods Act, 1979. The Court held that the exemption from entry tax under Section 11A applies to the appellant's new unit, while the other units are subject to a reduced tax rate of 1% as per the notification dated 23.9.1998 under Section 3. Consequently, the appeal was partly allowed, affirming the exemption for the new unit and the reduced rate for the others.