{"id":246595,"date":"1968-07-08T00:00:00","date_gmt":"1968-07-07T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/shanker-iron-and-steel-rolling-vs-union-of-india-and-ors-on-8-july-1968"},"modified":"2017-12-18T05:18:05","modified_gmt":"2017-12-17T23:48:05","slug":"shanker-iron-and-steel-rolling-vs-union-of-india-and-ors-on-8-july-1968","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/shanker-iron-and-steel-rolling-vs-union-of-india-and-ors-on-8-july-1968","title":{"rendered":"Shanker Iron And Steel Rolling … vs Union Of India And Ors. on 8 July, 1968"},"content":{"rendered":"
Punjab-Haryana High Court<\/div>\n
Shanker Iron And Steel Rolling … vs Union Of India And Ors. on 8 July, 1968<\/div>\n
Equivalent citations: AIR 1969 P H 50<\/div>\n
Bench: R Narula, S Sandhawalia<\/div>\n<\/p>\n
<\/pre>\n
JUDGMENT<\/p>\n
 1. The constitutionality of the last proviso to the gazette notification of the Central Government, dated June 13, 1962 (Annexure ‘A-1’) as amended by notification, dated  November 10, 1962 (Annexure ‘E’)  under sub-rule (1) of rule 8 of the Central Excise Rules, 1944 (hereinafter referred to as the 1944 Rules) providing that the exemption from liability  to pay excise duty under the  Central Excises and Salt  Act (1 of 1944)  (hereinafter called the Act) in respect of re-rollable scrap of iron and steel covered by item  No. 26 AA of the first Schedule  to the Act,  shall not be available for the benefit of persons who began to manufacture the relevant product on or after the 13th of June, 1962, has been called in question in this petition under Articles 226 an 227 of the Constitution of India.  On the ground that the said exception to the exemption suffers from invidious discrimination and amounts to an unreasonable restriction on the fundamental right of the petitioners guaranteed to them under Art . 19(1) (f) of the constitution.  The relevant facts leading to the filing of this petition ;which are not in dispute are set out herein below.\n<\/p>\n
     2. One Dev Raj  was carrying on business of re-rolling  used re-rollable scrap for the manufacture of iron bars  etc. for quite some time prior to April, 1962, under the name  and style of Shanker Iron and Steel Rolling Mills  at Amloh in district  Patiala.  The re-rolled product was for the first time subjected to excise duty under the Act with effect from April 24, 1962.  The levy of the excise  duty in question made it uneconomical for the smaller units of re-rolling  mills to compete with larger  units.  A representation on behalf  of such manufacturers was therefore, made to the Central Government  by the Northern India Steel Rolling Mills Association .  Dev Raj had in the meantime  made an application for a licence under section 6 of the Act on May 3, 1962 (Annexure “R-1)   The representation of the above mentioned association was favorably considered by the Government and notification, dated June 123, 1962 (Annexure ‘A-1”)  was issued by the Central Government   exempting with effect from the 24th of April, 1962 (with effect from the date of imposition of the excise duty on the product in question) iron or steel  products  in dispute from the levy of excise duty on the fulfillment of certain specified  conditions, viz.\n<\/p>\n
     (a) that the re-rolling product had been manufactured out of re-rollable scrap on which appropriate  amount of excise duty had already been paid;\n<\/p>\n
     (b) the person claiming the exemption under the notification must be only such who did not use more than one metric ton of billets in any calendar month or more than ten metric tons of billets in a year for re-rolling ; and<\/p>\n
     (c) Provided that the manufacturer of  the product in question had applied for a licence  under the Act  before 13th of June, 1962.\n<\/p>\n
     3. Out of the three conditions precedent for obtaining the requisite exemption mentioned in the notification of June 13, 1962, the one which is relevant for the purpose of this case is only the last one contained in the second proviso to the  notification to the effect that any manufacturer who had applied  for licence on or after the 13th of June, 1962, would not be eligible for the exemption.  A copy of the notification, dated June 13, 1962, was forwarded by the Government  of India to the Northern India Steel Rolling Mills Association  with the Government’s letter, dated 5, 1962 (Annexure ‘A’)   In response to the association’s representation Dev Raj applied for the exemption and his application was allowed on July 24th 1962.\n<\/p>\n
     The grant  of the exemption was communicated to the Shanker Iron and Steel  Rolling Mills (then owned exclusively by Dev Raj) in Government’s letter, dated July 26, 1962 (Annexure ‘B’)  It was stated in the letter  that the exemption would continue to operate  till the concern fulfilled the terms and conditions undertaken in the declaration filed on July 21, 1962, or till further orders.  It is not disputed that the declaration, dated July 21, 1962,  conveying the exemption could reach the addressee, Dev Raj  sold away his business concern  in question along with the good will and the firm name, to Ganga Deen  and others by a conveyance – deed, dated July 27, 1962  Letter Annexure ‘B’ which had been addressed to the firm name was received by Ganga Deen through  whom the present petition  has been filed on July 28, 1963.\n<\/p>\n
     As the 1944 rules provided that on the transfer of a manufacturing unit, the licence granted to the transferor comes to an end, Ganga Deen and others made application, dated October 3, 1962  (Annexure ‘C’)  corresponding to ‘Annexure ‘R-3)  to th superintendent, Central Excise, Mandi Gobindgarh, intimating the fact of their  having purchased the good will as well as the proprietary rights of the petitioner concern and praying for the issue of the requisite licence for the remaining period of 1962 without payment a fresh licence fee as a licence for that period had already been issued to Dev Raj.\n<\/p>\n
     In the mean time a representation (Annexure ‘D’) had been made on behalf of the affected manufacturing  units  for extending the date fixed in the last proviso to the notification of June 13, 1962  as some small unit had not made an application for the requisite licence  before the 13th of June , 1962, on account of the very small period of time which elapsed between the 24th of April and the 13th of June, 1962.  It is on a consideration of the said representation that the impugned notification dated November 10, 1962 (Annexure ‘E’) was issued in which for the original second proviso contained in the notification of June 123m, 1962 , the following was substituted:\n<\/p>\n
     “provided further that the products manufactured by a person  applying  for licence on or after  the 13th June, 1962  shall not be eligible for the exemption  unless a penalty not exceeding an amount equal to the duty that would have been payable by him on the products manufactured during the period beginning with the 13th June, 1962, and ending with the date of application, is paid by him to the Collector concerned.\n<\/p>\n
     Provided also that the products manufactured by a person applying for licence on or after the 1st December, 1962, shall not be eligible for exemption.\n<\/p>\n
     Provided also that nothing contained  herein shall apply to the products manufactured by a person who began to manufacture such products on or after th 13th June, 1962.”\n<\/p>\n
     4. It is not disputed before us that the only ground on which the claim  for the requisite exemption was refused to the petitioners was that they fell within the mischief of the last proviso reproduced  above, i.e. on the ground that nothing contained in th notification granting the exemption could apply  to the products manufactured by Ganga Deen and others who now owned the Shanker  Iron and Steel Rolling Mills and who had begun to manufacture the products in question only on October 8, 1962, after having purchased the manufacturing unit by  sale deed, dated July 27, 1962.\n<\/p>\n
     It is further claimed on behalf of the petitioners that they submitted another application, dated November 30, 1962 (Annexure ‘F’) for a new licence  under the Act  for the year ending December  31, 1962 .  During the pendency of the application of the petitioners, they were allowed by the Government  (Vide Annexure ‘G’) to clear their goods on payment of excise duty or to execute a bond in the prescribed form.  The petitioners adopted the latter course.,  Ultimately  on April 3, 1963, the petitioners were informed (Annexure ‘H’)  that their claim for exemption had been rejected and  that they should clear their manufactured goods under the Excise  Rules ,  Their  representation to the Central Government was finally  rejected by order, dated May 4, 1963 (Annexure ‘R-7’)   The said order of the Central Government was couched in the following language:\n<\/p>\n
  “The last proviso of notification No. 131\/62, dated the 13th June, 1962. As amended by notification No. No, 192\/62 dated the 10th November, 1962, states that nothing contained therein shall apply to the products on or after the 13th June, 1962.  In the present case the  transferee started the production of products on the 8th October, 1962, and as such does not satisfy the conditions and is not entitled for the exemption.”\n<\/p>\n
Before the Central Government ‘s order could be communicated  to the petitioners, they had already filed on the same day , i.e. May 4, 1963, this petition praying fr a suitable writ, order or direction being issued to the respondents, (I)  Union of India, (ii) Deputy Superintendent, Central Excise, Gobindarh, and (iii) Assistant Collector, Central Excise, Chandigarh, to exempt the petitioners from payment of the excise duty in question and to re strain the respondents from levying the same on them  The said relief was claimed on two main grounds, viz., (a) that the petitioners had qualified themselves for the exemption in terms of the Central Government’s  notifications dated June 13, 1962, and November 10, 1962, and (b) the discrimination against the petitioners was hit by Article 14 of the constitution.  The petition was admitted by Falshaw, C.J. (as he then was) and Jindra Lal, J. on May 6, 1963.\n<\/p>\n
     5. The common case of all the three respondents as disclosed in the written statement, dated September 25, 1963 is that the exemption in question had been granted on July 24th 1962 (intimation despatched on July 26th 1962) to Dev Raj , and that the mere fact that the said communication, dated July 26, 1962, was addressed to the Mills does not entitle the new properties to claim that the exemption had been granted to the Mills or to them as owners by purchase,  On the legal question, the impugned  order of the Government has been supported by the respondents on the  basis of the last  proviso  contained ;in the notification , dated  November  10, 1962, and it has been stated that in view of the said proviso the new proprietors f the Mills, who commenced the manufacture of the dutiable goods on the their own showing from October 8, 1962,   in any case from July 27, 11962, as is being now claimed in the writ petition, were not entitled to earn exemption as they were hit by the said proviso, which absolutely took away the right to claim exemption fro persons who commenced manufacture  of the products in dispute after the 13th of June, 1962.\n<\/p>\n
     It has been  added that no exemption at all  has been granted under the notification in question to any person  who was not manufacturing the dutiable goods in question prior to June 213, 1962.  In reply to the attack  under Article  14 of the constitution, the respondents have averred  that  the pre-June 13, 1962, manufacturers  constitute a class by themselves and the exemption from the excise duty in question subject  <\/p>\n
To the conditions contained in the two relevant notifications has been granted to all the members  of that class in order to protect  their very existence in the trade and to enable them to stand in competition with large units and as a result to protect the interest of the workers in those small units who it was apprehended would have been thrown out of employment in case the imposition f duty in question was insisted upon.\n<\/p>\n
     The exemption can be availed of only by such of the manufactures as answer to the decription mentioned in the notifications,  Exemptions, according to there turn of the respondents, was granted in favour of the members of the above said class  because it was considered that  the small units should be allowed to exist in  the national interest  and in so far as it was thought that the products manufactured by them were necessary to meet the requirements of th country.  It was added that the position of the small scale units who had already come into existence before the introduction of the duty stood on a different footing from that of those who came into the business later, and, therefore, with open eyes.\n<\/p>\n
    The case of the respondent is that while it was not the intention of the Government to unduly disturb the economy of the manufacturers owning small units and possibly to force their closure, it was considered undesirable on the ground of public policy to encourage further fragmentation of existing units by extending the benefit of such exemption to all new-comers as that would have in fact amounted to discrimination .  The classification contained in the impugned proviso has been justified as reasonable on the above mentioned  basis.  The return of the respondents continues to stage that n person or class of persons can claim exemption as a matter of right and in as much as the petitioners purchased the Mills after issue of the notification, they were  admittedly not the manufacturers  prior to the crucial date, i.e. prior to June 13, 1962.  An objection of a some what preliminary nature has been taken in paragraph 13 of the return to the effect that the petitioners have not availed of remedies by way of appeal and revision provided for by the Act.\n<\/p>\n
     6. When this petition came up before Shamsher Bahadur, J., on January  5. 1967 the learned Judge in a detailed order of reference observed that  the petitioners came within the mischief of th impugned proviso but made the reference as the issue of alleged discrimination on which much could be said for both sides had been raised  in the case and because  there was likely to be a Letter patent Appeal  against the decision of the single Judge in either  eventuality.  It is in pursuance of the said order of the learned single Judge that this case has come up for disposal before us.\n<\/p>\n
     7.  In view of the clear language of the second proviso contained in the notification, dated November 10, 1962 (already reproduced in an earlier part of this judgment), and in view of the observations of Shamsher Bahdur, J., in this respect in his order of reference , Mr. Hira Lal Sibal, the learned  Counsel for the petitioners ,did not seriously press the first ground to the effect that the word “person” in the second proviso includes a transferee of the original manufacturer.  Even otherwise, there is no force in the said contention.  Section 3 of the Act provides that there shall be levied and collected in such manner  as maybe prescribed duties of excise on all  excisable goods (subject to certain exceptions) which are produced or manufactured in India at the rates set forth  in the First Schedule.\n<\/p>\n
     Section 6 of states inter alia, that the Central Government may be notification in the Official gazette provide that from such date as maybe specified in the notification, no person shall, except under the authority and in accordance with the terms and conditions of a licence granted under the Act, engage in the production or manufacture of any specified goods included on the first Schedule.,  it is common case of th sides that the description of the product in question is set out in the first schedule to the Act and that the relevant notification in respect thereof was issued by the Central Government under section 6 imposing the restriction under  that provision with the effect from April 24, 1962 Section 37 of the Act authorises the Central government  to  make rules fr carrying into effect the purpose of the Act.\n<\/p>\n
     In exercise  of the power conferred  by the said  section, the Central Government  framed the 1944  Rules  Rule 8 of the said  Rules  authorises the Central Government  to exempt, subject to such conditions as may be specified in the notification  in the official gazette,  any excisable  goods from the whole or any part of the duty leviable on such goods.\n<\/p>\n
     Chapter VII of the 1944 Rules commencing with rule 174  and ending with rule 181 A  deals with licensing Under  S.6   if the Act.  The purview of rule 174 provides that the manufacturers of excisable  goods except salt shall not conduct their business otherwise  than by the authority and subject to the terms  and conditions  of a licence  granted by a duly authorised  officer  in the proper form.  Rule 175 contains the procedure for obtaining the requisite licence.  Under rule 176. A form of application for has been prescribed .  The rule further directs that every application for a licence shall be submitted so as t reach the licensing authority at least one month  before the commencement of the  year for which it is required and shall be accompanied by the prescribed fee.  Rule 177 is not relevant for  our  purposes.\n<\/p>\n
     Sub-rule (1) of rule 178  states inter alia,  that every licence  granted or renewed under the 1944 Rules shall be for a period not exceeding one year  and shall expire on the date specified there in .  Sub-rules (2) to (6)  of rule 178 are quoted below verbatim:\n<\/p>\n
     “(2) Every licence shall be deemed  to have been  granted  or renewed personally to the licencee and no licence shall be sold or transferred.\n<\/p>\n
    (3) Where a licensee transfers his business to another person, the transfers shall obtain a fresh licence  under these Rules but it shall be granted free of fee for the residue  of the period covered by te original licence.\n<\/p>\n
     (3-A) Where  a licensee dies, the original licence shall be deemed to have been terminated and if more than one person claiming to be the heir  to the deceased apply for the grant of a fresh license  for the same premises…  The licence shall be granted  to the person  who in the opinion of the licensing authority is in actual possession of the said  premises, provided that the grant of the licence to such person  shall not prejudice the rights of any other person over the licensed business or the licensed  premises to which   such  person maybe lawfully entitled.\n<\/p>\n
     (4) If the holder of a licence enters into partnership in regard to the business covered by the licence he shall report the fact to the licensing authority  within thirty days of his entering into such partnership  and shall get  his licence suitably  amended.  Where  a partnership  is entered into, the partner as well as the original holder  of the licence  shall be bound  by the conditions of that licence.\n<\/p>\n
     (5) If a partnership is dissolved every person who was a partner  shall send a report of the dissolution to the licensing authority within ten days of such dissolution.\n<\/p>\n
     (6) If during the currency of a licence the licensee desires to transfer his business to  new premises, he shall intimate his intention  to the licensing authority at least fifteen days in advance, specifying  the address of the new premises, and get his licence suitably  amended.  The licence shall thereupon, hold good in respect of the new premises.”\n<\/p>\n
In view of the clear statutory provisions contained  in sub-rule(3) of rule 178, it cannot be successfully argued on behalf f the petitioners that a transferee from an original  manufacturing licensee could be deemed to be a licence  even for the remaining period of the year in respect of which the original  manufacturer had taken out a licence.\n<\/p>\n
     Under sub rule (2) of rule 178, a licence granted to Dev Raj in the instant case was personal to himself,  and benefits of the same could not be transferred by him  to Ganga Deen  and others,  even if Dev Raj. Cannot  therefore, claim that they should be deemed to be  persons  who had been manufacturing the dutiable goods in question prior to June 13, 1962, though in fact they purchased the manufacturing  concern only in the end of July, 1962.\n<\/p>\n
     8. It is the second contention on which  lengthy and serious arguments were addressed by Mr.  Sibal.  He argued that n the construction which the respondents want to put on the impugned  proviso contained in the notification, dated November 10, 1962, the proviso becomes unconstitutional,  as the classification contained there in has no reasonable nexus with the objects of the grant of the exemption in question.  According to the written statement of  the respondents, submitted Mr. Sibal the object of the notifications in question  was to enable the small manufacturing units to continue tin existence to avoid their labour being thrown on the road to permit in the national interest  the production of the re-rolled iron bars etc.<\/p>\n
     Learned counsel submitted that it was not necessary for the fulfillment of any one of the above said objects that new manufacturing units  which come into existence which merely change  hands after 13-6-1962,  should be deprived of the exemption from the payment of exercise duty.  He first took up the analogy of the death of the original owner and the possibility of the son being deprived  of the exemption.  He then took up the example  of a partnership  concern  wherein some partners may be changed.  As already indicated  different rules apply to the case of death and  to the case of partnership  (Vide various  relevant clauses of rule 178 of the 1944 Rules) .  So far as transfer is concerned, the situation has to be viewed differently.\n<\/p>\n
     Nobody  can claim  exemption  from liability  to pay a tax or an excise  duty as a matter of right .  It is for the State to grant exemption  in suitable  cases to any particular class for cogent reasons.  There is no question of any equality  in the matter of a tax  or in the matter of grant of exemption from liability to pay a tax.\n<\/p>\n
     The object of granting  the exemption  in the instant  case was to protect  the smaller units of the existing industries  against their being forced  to be closed down n account f the additional  liability  which the owners  of those industrial  units could not have envisaged at the time of starting their business.  There could be no such justification for an exemption  in case of persons  who either  install a new unit or purchase an existing one with the full knowledge of excise duty  being leviable on persons who were not manufacturing  the  product  in question  prior to the 13th of June, 1962.  There is great force in the argument of Mr. C.D. Dewan, the learned  Deputy Advocate-General for the State of Haryana, who appears for respondents that the Government  could even  have said that the exemption would not  be granted to persons who commenced the manufacture after the 24th April, 1962, i.e.,  the date on which the duty  was levied on the article in question  and that the mere fact that the government allowed even those people who had  commenced the manufacture later  on up to the 13th of June  1962, should not invalidate the notifications.\n<\/p>\n
     Once it is seen that the object of granting the exemption was to benefit  only those persons who were already manufacturing the article  prior to June 13, 1962  it is obvious that the impugned proviso has a direct nexus with the object of the notifications.  Mr. Sibal is not quite  correct in contending that the government has taken away from the transferees the licence  which has been granted to the transferor.  The licence granted to Dev Raj was personal  to him  and  came  to an end by operation  of rule 178 immediately when he transferred the manufacturing units.  The vires  of rule 178 have not been challenged  by Mr. Sibal.\n<\/p>\n
     9. The guarantee of equal protection  of laws and equality before the law does not prohibit reasonable  classification.  It only forbids class legislation.  The only classification  which amounts in law to invidious discrimination  is the one between the object of which  and that  of the legislation in question  there is no rational relationship  or nexus.  Subject to the aforesaid  condition, valid  classification of persons or objects can be made by a law-making authority on any approved  basis, e.g. occupation, standing,  age, locality, point of time etc.  In other words the basis of classification may be historical, geographical, in view of difference  in time or locality ,. Difference in  th nature,  the trade, calling or occupation of persons sought to be affected by the legislation, difference in the position  or nature of different  business concerns, difference in the category of employers or employees,  difference in length  rnature  of service, difference in the nature and incidence of particular  rights, and various and other bases, which it is impossible to attempt to enumerate  exhaustively.\n<\/p>\n
     10. The basis of the classification contained in the impugned proviso is in point of time.  The validity  of such a classification, would, in my opinion , depend  on whether the date fixed for the impugned piece of legislation which acts as the dividing  line between two sets of persons is or  is not elated to the objects of the legislation.  If a haphazard date is fixed for which no justification  can be given and which  no justification can be given and which  has no relationship with the objects of the legislation, it may possibly  be open to an attack under Article 14 of the Constitution .  As already as stated,  however,  the basis  on which the dividing line contained  in the date June 13, 1962, has been fixed in this case, is too obvious  to need any detailed  discussion that was the date of the first notification granting the exemption.\n<\/p>\n
     It was clearly intended that only those persons who were already manufacturing  the goods up  to that date, on certain conditions be exempted from liability  of paying the excise duty.  If thus safeguard  had not been taken, it would have enabled some of the bigger units to split themselves up into smaller units after June 13, 1962 to obtain benefit of the exemption  and thus defeat the very object of the legislation,.  The classification   of the legislation. The classification pre-June 13, 1962  owners  of manufacturers, and post-June 13, 1962, owners of manufacturing units is in these circumstances demonstrably related to the object sought to be achieved by the original notification i.e. to exempt  only those persons who were actually manufacturing the article prior to June 13,  1962.  This classification was in fact not introduced for the first time in the notification, dated November 10,1962.\n<\/p>\n
     The restriction contained in the impugned proviso was inherent even  in the original notification of June 13, 1962 Any person  who was not manufacturing the product in question  prior to June 13, 1962, could not possibly  have applied  for a licence  before that date.  The notification of 13th of June provided  that the benefit of exemption  would not be available to persons who had not applied for a licence before June 13, 1962.\n<\/p>\n
     11.  The object of issuing the second notification  (dated November 10, 1962) was not to enlarge the scope  of the  class of persons so as to permit  manufacturers who were not in the trade prior to June 13, 1962 to take benefit  of the exemption.  The obvious  object of the second were actually manufacturing the product  prior to June 13, 1962, but who had by chance not applied for a licence up to that date to take benefit of the exemption on certain conditions provided they applied  for the licence up to December 1, 1962.\n<\/p>\n
    In these circumstances, it is impossible to hold that the impugned  proviso is hit  by; Article 14 of the Constitution.  It is not for the first time that  classification  has been made from the point  of tim.  Such a classification  was upheld  in Ramjilal v. Income-tax Officer<\/a> , Mohinder Garh, AIR  1951 SC 97, in M\/s. Hathising Manufacturing Co., Ltd.  Ahmedabad v. Union of India AIR 1960 SC 923, and in  various other cases.,  In the last mentioned case it was authoritatively held by their Lordship  of the supreme Court that by  enacting  a law which applies generally to all persons who come on which it becomes operative, no discrimination is practiced.\n<\/p>\n
     12. Mr. C.D. Dewan was correct  in submitting on the basis of the Division Bench judgment of the Madras High Court in K. Rangaswami  Chettiar and Co. v. Government of Madras, AIR  1957 Mad 301 (at p. 309)  that the principle  that in case of ambiguity a taxing statute should be construed in favour f the tax-payer does not apply  to a provision giving a tax payer relief imposing a liability . His submission based on the Division Bench  judgment  of this Court in Jaswanyt Sugar Mills Ltd., Meerut v. Union of India, New Delhi , ILR 1964 Punj 192, to the effect that one who assails a classification  must carry the burden of showing that it does not rest on any reasonable basis and if any state of facts can reasonably be conceived to sustain a classification, the existence of that state of facts  must be assumed, is not without force.\n<\/p>\n
     In that case it was further held  that the limit of an exemption from excise  duty  had to be drawn  somewhere  and the Court, though bound  to examine  the effects of the limits so fixed and its incidence on the various types of producers,  could not  substitute its own  judgment  for that of the Executive.  In Mohmedalli v. Union of India, AIR<\/a> 1964 SC 980 (at p. 986,) , it was held that classification  between  establishment which had been in existence for less than three years and those which had been in existence  for less than three years and those which had been in existence for less than five years was an understandable  classification with a view to save newly started  establishments  from the additional burden  of making contribution to provident fund in respect of its employees under the Employees’ Provident Funds Act , 1952.  In orient  Weaving Mills (P) Ltd. v. Union of India, AIR<\/a> 1963 SC 98, Sinha, C.J. (as he then was),  who wrote the judgment  of the Supreme Court held that the notifications  under rule 8 n(1) of the 1944 Rules granting  exemption to certain classes of persons were not bad in so far as they exempted only the  classes  of persons whose liability it was to pay the tax and not the class of goods in respect of which the  tax  had to be paid, as the duty of excise is payable by the persons  producing the goods though it is on the production of the goods.\n<\/p>\n
     On that basis it was held that the exemption is also refused to such goods  as come within  the description  of excisable goods, but it is valid classification to exempt  one set of producers of the same goods  and not another set of producers when the two sets (Co-operative  societies  alone  were exempted) fall in a distinct  class. From a study  of the case law on the subject referred to above, it is clear that the classification contained in the impugned  proviso is not hit by Article 14 and is a valid and permitted classification .  For the same reason  the proviso does not impose any unreasonable restriction on the fundamental rights of th petitioners  and is not hit by; Article 19 of the Constitution.\n<\/p>\n
     13. Though a taxation law must also pass the test of Article 14, but in deciding  whether such a law is discriminatory or not, it is necessary to bear in mind  that the State has a wide  discretion  in selecting  persons or bodies it will tax and  that a statute is not open  to attack  on the ground that ittaaxdes some persons or bodies and not others. It is only when within the range of its selection the law operates unequally or when classification cannot be justified that the law would be violative of kArticle 14 (judgment of the Supreme Court  in East India Tobacco Co. etc. v. State of Andhra Pradesh , AIR 1962 SC 1733).\n<\/p>\n
     14. In the view we have taken of the main contention advanced by Mr. Sibal in this case, it is unnecessary  to deal  with an objection  of somewhat  preliminary nature  which was raised towards the end of his submissions by Mr. C.D. Dewan, learned  counsel for the respondents, to the effect that we should dismiss this writ petition  on the short ground that the petitioners have not availed  of the alternative remedy by; way of a statutory appeal  against  the order of  the collector  refusing  to grant  the petitioners the exemption dispute.  Reliance was placed  by Mr. Dewan for this contention on the judgment  of the Allahabad High Court  in Naini Glass Works, Allahabad,  v. Collector , Central Excise , Allahabad , AIR 1965  All 305 , and on the authoritative pronouncement of the Supreme Court  in Shivram Poodar v. Income -Tax Officer , central Circle II , Calcutta, AIR 1964 SC 1095 .  It is, however, significant to note in this case that though it was not some mentioned  in this writ petition the case had gone right up to the Central Government  which had also rejected  th claim of the Petitioners by order  Annexure ‘R-7’  a copy of which has been placed on the record of this case by the respondents themselves.\n<\/p>\n
     15. No other point having been argued before us in this case, the writ petition fails  and is accordingly  dismissed though without any; order  as to costs.\n<\/p>\n
     16. Petition dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"
Punjab-Haryana High Court Shanker Iron And Steel Rolling … vs Union Of India And Ors. on 8 July, 1968 Equivalent citations: AIR 1969 P H 50 Bench: R Narula, S Sandhawalia JUDGMENT 1. The constitutionality of the last proviso to the gazette notification of the Central Government, dated June 13, 1962 (Annexure ‘A-1’) as amended […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,28],"tags":[],"class_list":["post-246595","post","type-post","status-publish","format-standard","hentry","category-high-court","category-punjab-haryana-high-court"],"yoast_head":"\nShanker Iron And Steel Rolling ... vs Union Of India And Ors. on 8 July, 1968 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/shanker-iron-and-steel-rolling-vs-union-of-india-and-ors-on-8-july-1968\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Shanker Iron And Steel Rolling ... vs Union Of India And Ors. on 8 July, 1968 - 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