N RAHMATH Vs. UNION OF INDIA

JUDGEMENT

(1.) SINCE the issues arising in all these writ petitions are the same, they are dealt with together.

(2.) THE petitioners in all these cases are manufacturers of matches and they have challenged the constitutional validity of Section 52 of the Finance Act of 1982 and the conditions imposed in Notification No. 22/82 [GSR 77(E)/82] dated 23rd February, 1982, on the ground of violation of the petitioners' fundamental rights under articles 14 and 19(1) (g) of the Constitution of India as also on the ground that it is beyond the legislative competence of the Parliament inasmuch as it purports to retain monies which are not tax collected under the authority of law as provided for in Article 265 of the Constitution of India. THE petitioners have challenged the conditions imposed 1n Notification No. 22/82[GSR 77(E)/82] in regard to production and clearance also on the ground thai it is arbitrary or irrational discriminatory.

(3.) THE petitioners' substantial grounds of attack in their petitions against Section 52 of the Finance Act of 1982 are these: (1) Section 52 contains a non-obstante clause to override the effect of any judgment [including the judgment of this Court dated 9th December, 1981 in W.P. No. 8845 of 1981 (batch) (R.M.S. Jamesv. Union of India] and in enacting Section 52, the Parliament has in fact exercised judicial power in the guise of exercising legislative power. Sub-section (2)(c) of Section 52 of the Finance Act of 1982 has made the intention of the Government very clear that no refund shall be made to the writ petitioners, notwithstanding the decision of this Court referred to above and it is not open to the Parliament to override the constitutional mandate as also the judicial pronouncements of the courts and by enacting Section 52, the Parliament has usurped the judicial power in a wholly undesirable manner and is liable to be declared null and void. THE retrospective effect given by Section 52 to Notification No. 22 of 1982 dated 23rd February, 1982, with effect from 19th June, 1980, is in effect and in substance a parliamentary declaration overruling the said judgment of this Court which has issued a positive mandamus to give effect to the scheme of exemption provided for in Notification No-99 of 1980 dated 19th June, 1980, without reference to provisos 1 and 2 thereto. THE parliament has thus assumed the powers of an appellate court over the judgments of courts. (2) THE Parliament by enacting Section 52 seeks to levy excise duty retrospectively from 19th June, 1980, and that is not permitted by Rule 8 of the Rules. (3) Retrospective validation of laws can be resorted to only if the fiction seeks to give effect to certain factual situation which was in existence in the relevant period but which is found by the court to be illegal. But what has been done in this case is not such validation as the old scheme of exemption has been superseded by a new scheme brought into force for the first time on 23rd February, 1982, and it is sought to be given retrospective effect from 19th June, 1980. Thus the alleged validation is not strictly a validation as understood in legal parlance. (4) Even assuming that Section 52 of the Finance Act of 1982 is constitutionally valid, the classification made in the notification dated 23rd February, 1982, for availing the concessional rate of duty is wholly arbitrary, unreasonable and unworkable. THEre is no difference between manufacturer and manufacturer in the non-mechanised sector, and even assuming that there can be a legitimate classification on the basis of the past production, the adoption of the production during 1979-80 as the base year for determining eligibility for availing of the lower rates of duty in the year 1980-81 or the adoption of the production of 1980-81 as the base year for determining the eligibility for the financial year 1981-82 is per se unreasonable, since the very notification has been given retrospective effect during the said period for meeting certain contingency arising out of the scheme which positively gave up any limits on production and having held out such a promise and goaded or lulled the manufacturers into the belief that they would be entitled to avail of the lower excise duty without any limit on production, it would be wholly unconscionable to bring through the backdoor and that too retrospectively a qualifying production limit which in effect nullifies the original scheme contemplated by Notification No. 99 of 1980. (5) Section 52 of the Finance Act, 1982, amounts to colourable exercise of legislative power as the true object behind Section 52 is to retain the citizen's monies illegally collected in the guise of helping the so-called cottage sector. THErefore Section 52 in so far as it operates retrospectively from 19th June, 1980, is violative of the petitioners' fundamental rights under Article 19(1) (g) of the Constitution and the same is not protected by Article 19(6) of the Constitution, as it has taken away the petitioners' right to get refund of the excise duty as per judgment of this Court.