BHARAT MATCH WORKS VANARAMURTHI 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 manufactures 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 23-2-1982, on the ground of violation of the petitioners' fundamental rights under Arts. 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 moneys 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 in the Notification No. 22/82 [GSR 77 (E)/82] in regard to production and clearance also on the ground that it is arbitrary or irrational and discriminatory.

(3.) THE Government of India for the first time in 1967 made a classification of match manufacturing units namely mechanised and non-mechanised for levy of excise duty. A further larger exemption from duty to non-mechanised match manufacturers producing not more than 75 million match sticks per annum. This scheme continued till the year 1975. THE said Notification was continued subject only to a condition that the third category of match units, namely those producing less than 75 million sticks per annum should obtain a certificate from the Khadi and Village Industries Commission, hereinafter referred to as the KVIC that the units is abona fidecottage unit. On account of the concession shown to the non-mechanised sector, there was substantial increase in the production matches in the said sector from 1975 to 1980. In the year 1980 the Government of India issued Notification Nos. 98 of 1980 and 99 of 1980, dated 19-6-1980. While the first Notification continued the classification of mechanised and non-mechanised sector of the industry and provided for differential rates of effective excise duty, namely, Rs. 7.20 per gross of boxes of 50's matches for the mechanised sector and Rs. 4.50 per gross of boxes of 50's matches for the non-mechanised sector. Notification No. 99 of 1980 sought to give greater benefit by way of a larger exemption from excise duty to certain specified categories of match manufacturers. In Notification No. 99 of 1980 the Government fixed a norms of identifying a tiny sector through KVIC and the co-operative societies established and recognised by the State Government. THE said notification imposed certain conditions for the grant of exemption of excise duty in excess of Rs. 1.60 per gross boxes of 50's matches as against the statutory rate of Rs. 7.20 per gross. THE conditions imposed contained in the four provisos to the said notification. THE first proviso of the notification imposed a condition that the lowest rate of levy of excise duty would be allowed to a manufacturer whose factory is recommended by the KVIC for exemption under this notification. THE proviso also gave the power of identifying the tiny units to the State where the manufacturer is a member of the co-operative society and assisting exclusively manufacturers of such matches. THE second condition is contained in the next proviso which provided that the matches produced or sold by such units are through KVIC or the co-operative societies. THE third proviso related to the units recommended by the KVIC who have to use labels which are prescribed by KVIC or the co-operative societies. This condition was imposed lest the bigger units diversify themselves in small units and become eligible for the larger concessional rate, available in the notification. THE last proviso in the notification dealt with the manner in which the matches should be manufactured.