GOVT. OF INDIA, REPRESENTED BY SECRETARY, MINISTRY OF FINANCE AND OTHERS versus DHANALAKSHMI PAPER AND BOARD MILLS TIRUCHIRUPALLI

Citation: [1988] SUPP. 3 S.C.R. 1051 · Decided: 12-12-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

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Judgment (excerpt)

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GOVT. OF INDIA, REPRESENTED BY SECRETARY, 
MINISTRY OF FINANCE AND OTHERS 
A 
v. 
" 
DHANALAKSHMI PAPER AND BOARD MILLS 
TIRUCHIRUPALLI 
DECEMBER 12, 1988 
B 
[SABYASACHI MUKHARJI AND LALIT MOHAN 
SHARMA, JJ.] 
Central Excises and Salt Act, 1944 Central Excise Rules 1944: 
First Schedule Item No. 17(3)/Rule 8( I) and Notification dated March c 
1, J96<f-Strawboard and pulpboard-Ex'emption from duty-Clause 
(a) proviso (3) of Notification held ultra vires-Choice of date-
Relevancy of. 
;:_ 
The respondent-assessee built up a factory for the manufacture of 
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paper and paper boards, which started produciiOn on 7.s:1964. The 
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respondent claimed that the duty in respect of the paper boards 
. ) 
manufactured in the factory during the period 7.5.1964 to June 1966 
was payable at the concessional rates allowed by the Government of 
India notification dated lst March, 1964. The claim was how.ever 
rejected by the Revenue on the ground that the factory had not come 
into existence on or before the 9th day of November, 1963 as stipulated 
E 
in clause (a) of Proviso (3) of the said notification; 
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The respondent's writ application before the High Court was 
allowed by the Single Judge and the appellant's Letters Patent appeal 
was dismissed in limine. The High Court has accepted the respondent's 
contention that the date '9th of November, 1963' mentioned In the 
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notification was arbitrary. 
On behalf of the Revenue it was contended that the date 
(9.11.1963) was selected because an earlier notification bearing No. 110 
had required applications to be made on or after 9.11.1963. It was 
further contended that a statutory provision had necessarily to be 
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arbitrary In the choice of date and It could not be challenged on that 
ground. 
On behalf of the respondent It was contended that the said date did not 
have any significance whatsoever and did not bear any rational rela-
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tionship to the object sought to be achieved by the notification. 
H 
1051 
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1052 
SUPREME COURT REPORTS 
[1988] Supp .. 3 S.C.R. 
A 
Dismissing the appeal, it was 
HELD: I. A rule which makes a difference between past and 
present cannot be condemned as arbitrary and whimsical. [ I056D] 
2. In cases where choice of the date is not material for the object 
B to be achieved, the provisions are generally made prospective in 
operation. [I056D] 
3. The Revenue has not been able to produce notification 
No. 110. Unless the nature and contents of notification No. UO and its 
relevance with reference to the present notification are indicated, it is futile 
C to try to defend tbecbokeoftbedateindause (a) on its bam. [IOSSA; I056E] 
4. In the present case, the benefit of concessional rate was 
bestowed upon the entire group of assesses referred therein and by 
clause (a) of Proviso {3) the group was divided into two classes without 
adopting l\DY differentia having a rational relation to the object of the 
D 
Notification. [I057F] 
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5. Clause (a) of the Proviso (3) of the Notification was ultra vires 
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and the benefit allowed by the Notification would be available to the 
entire group including the respondent. [1057G J 
E, 
Union of India v. Mis. P: Match Works [1975] 2 SCR 573 Jagdish 
Pandey v. The Chancellor, University of Bihar, [1968] l SCR 237 and 
U.P. M.T. S.N.A. Samiti, Varanasiv.StateofU.P., [1987]2SCR453, 
distingilished. 
Dr. Sushma Sharma v. State of Rajasthan, [1985) Supp. SCC 45; 
F 
and D.S. Nakara v. Union of India, ll983] l SCC 3(;5 referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6 of 
1976. 
, iFrom the Judgment and Order dated 12.11.1973 of the Madras 
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High Court in Writ Appeal No. 390of1969. 
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V.C. Mahajan, C.V. Subba Rao and K.M.M. Khan for the 
Appellants 
K.N. Bhat and Vineet Kumar for the Respondent. 
(. .. 
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SECY., MIN. OF FINANCE v. DHANALAKSHMI PAPER [SHARMA,J.) 
1053 
The Judgment of the Court was delivered by 
SHARMA, J. This appeal arises out of a writ application allowed 
by the Madras High Court striking down Clause (a) of the Proviso (3) 
of the Notification dated the !st March, 1964 issued by the Union of 
India in the Ministry of Finance, under Rule 8(1) of the Central Excise 
Rules, 1944 and granting consequential relief. The aforesaid notifica-
B 
ti on granted certain exemptions from payment of excise duty, but the 
benefit was denied to the writ petitioner, respondent before this 
Court, in view of the impugned clause. 
2. The respondent assessee, a busi

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