R VIJAYAKUMAR Vs. UNION OF INDIA

JUDGEMENT

(1.) THE Order of the Court is as follows :- In all these writ petitions, the petitioners are seeking to issue a writ of declaration, declaring Sl. No. III(b)(ii) and the portion of the explanation ".... in the preceding financial year" of Notification No. 41/99-Central Excise, dated 26-11-1999 issued by the 1st respondent as arbitrary, illegal and ultra vires Article 14 read with Article 39(c) of the Constitution of India.

(2.) THE petitioners are running tea factories, and in view of the impugned portion in the Notification, the petitioners are liable to pay excise duty for the financial year 1999-2000. Though many grounds have been raised in support of the prayer the learned counsel appearing for the petitioners has focussed his arguments only with respect to the restriction for getting the benefit of duty exemption to the extent that such factories should have worked for at least six months during 1998-99. THE learned counsel has submitted that such a restriction has no nexus to the object to be achieved, and it is arbitrary. According to the petitioners, a factory, even if it is closed during 1999-2000 will get exemption merely because they have been running the factory for six months during 1998-99. But, on the other hand, a person who was able to run a factory for five months or so during the year 1998-99 and continuously running the factory for the subsequent year, cannot get the benefit of exemption under the impugned Notification. So, according to him, the said restriction cannot be said to encourage to the existing factories, and, if such concession is not given to the factories which are continuously running, they cannot compete with others and survive.

(3.) THE learned counsel appearing for the petitioners has submitted that such a condition has no nexus to the object to be achieved. According to him the exemption is provided for only to encourage the industry, as also tea cultivation by small tea farmers. While doing so, the condition to run the factory for six months during the year 1998-99 has no nexus to the said object to be achieved by the Government. Merely because some factories were able to run for six months during 1998-99, it cannot be said that they will also run continuously for the subsequent year. According to the learned counsel, though the petitioners were not able to run the factories for at least six months during the year 1998-99 they were able to run the same for some period during the year 1998-99 and so in view of the restriction, they are not in a position to claim duty exemption. It is his further submission that the Central Government have no valid reason to introduce such restriction and so it is unreasonable.