JUDGMENT

SHARMA, J. :— This appeal arises out of a writ application allowed by the Madras High Court striking down Cl. (a) of the Proviso (3) of the Notification dated the Ist March, 1964 issued by the Union of India in the Ministry of Finance, under R. 8(l) of the Central Excise Rules, 1944 and granting consequential relief. The aforesaid notification granted certain exemption 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 business concern functioning under the name of M/s. Dhanalakshmi Paper and Board Mills, decided to set up a factory for the manufacture of paper and paper boards and allied products, and obtained a lease of certain premises in June 1963 and put up a suitable structure for the factory by August 1963. The necessary machineries for running the factor), however, were received in April 1964 and application for licence therefor was filed on 27-4-1964. The licence was granted on 6-5-1964 and production in the factory started the next day, i.e., 7-5-1964.

3. The 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 rate allowed by the Notification, relevant portion whereof reads as follows:-

"GOVERNMENT OF INDIA

MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) NEW DELHI,

THE I ST MARCH, 1964/PHALGUNA

11, 1885 (SAKA)

NOTIFICATION

CENTRAL EXCISE

CSR In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 57/60 Central Excise dated 20th April, 1960 and No. 37/63 Central Excise dated the Ist March 1963 the Central Govt. hereby exempts strawboard and pulpboard including, greyboard, calling under Sub-item (3) of Item No. 17 of the First Schedule to the Central Excises and Salt Act, 1944 (1of 1944), taken together up to the quantity prescribed in column (1) of Table- I (omitted), cleared by any manufacturer for home consumption during any financial year, from so much of the leviable thereon as is in excess of the amount specified in the corresponding entry in column (2) of the same Table :

Table- I (being not relevant, omitted) Provided that

(1) ................

(2) ................

Table-2 (being not relevant, omitted)

(3) nothing contained in this notification shall apply to a manufacturer who applied or applies for a licence on or after the9th day of November 1963, unless he satisfied the Collector of Central Excise.

(a) that the factory for which the licence was or is applied for was owned on the 9th day of November. 1963. by the applicant;"

The benefit of the Notification claimed by the respondent assesses was denied by the appellants on the ground that the factory did not come into existence on or before the 9th day of November, 1963, the date mentioned in the impugned clause (a). The respondent moved the High Court in its writ jurisdiction under Article 226 of the Constitution, and the application was allowed by a learned single Judge. An appeal therefrom under Clause 15 of the Letters Patent was dismissed in limine. The appellants have by special leave challenged the decision before this Court.

3A. The ground urged on behalf of the assesses which found favour with the High Court is arbitrary nature of the date, "9th of November, 1963" mentioned in the impugned clause (a). It has been contended that the said date does not have any significance whatsoever and does not bear any rational relationship to the object sought to be achieved by the Notification. The learned counsel for the appellants defended the validity of the impugned provision on the ground that the date (9-11-1963) was selected because an earlier notification bearing No. 110 has required applications to be made on or after 9-11-1963. This notification is not on the records of the ca