JUDGMENT

RANGANATHAN, J.:— The Civil Appeal and S. L.P. 12054/ 87 are by the State of Madhya Pradesh (M.P.). The respondents in these two matters and the petitioners in the other five Special Leave Petitions are certain concerns in M.P. assessable to sales tax (hereinafter compendiously referred to as the assessees). All these matters can be conveniently disposed of by a common judgment as they raise a common issue. ,

2. The assessees claim for exemption from sales tax for certain periods in question was accepted by the High Court in the case of G. S. Dhall & Flour Mills (reported in (1987) 20 STL 206) (Madh Pra) and, following it, in the case-of Mohd. Ismail (a case where the exemption sought for was originally granted but subsequently revoked). However, subsequently, a Full Bench of the High Court, in the case of Jagadamba Industries (reported in 1988 MPLJ 620) (FB), disapproved the view taken by the Division Bench in the G. S. Dhall & Flour Mills case and, following the Full Bench, the writ petitions filed by certain other assessees were dismissed by the High Court. The State is aggrieved by the judgment in the first two cases and the assessees by the High Courts decision in the other cases. Hence these appeals and Special Leave Petitions.

3. Before dealing with the appeals on merits, an important circumstance needs to be referred to, which is this: The judgment of the Full Bench in the case of Jagadamba Industries was itself the subject matter of Special Leave Petitions in this Court but those petitions (S.L.P. Nos. 15688-90/87) were dismissed, at the stage of admission, on 9-21988. with the observations : "We are in agreement with the views expressed by the High Court. The Special Leave Petitions are dismissed". In view of this, the State submits that C.A.2211/87 should be allowed and the assessees S.L.Ps. should be dismissed in limine. On the other hand, counsel for the assessees seek to distinguish the Jagadamba case by contending that this Court had refused leave against the Full Bench judgment on account of certain special facts which were considered sufficient to disentitle the assessees in those cases from claiming the exemption. They contend that, in view of this and the fact that the G. S. Dhall & Flour Mills case is in appeal before us, we may grant leave in the S. L. Ps. and dispose of all the appeals on merits. We accept this plea and grant leave in the S. L. Ps., condoning a delay in the filing of S.L.P. 12054/87. We shall, however, touch upon the above aspect of the matter in the course of our judgment.

4. The issue raised is, at first blush, a simple one. S. 12 of the M.P. Sales Tax Act (hereinafter referred to as the Act) enables the State Government to grant exemption from the levy of sales tax in certain circumstances. It says

"S. 12. Saving:- (1) The State Government may, by notification, and subject to such restrictions and conditions as may be specified therein, exempt, whether prospectively or retrospectively, in whole or in part -

(i) any class of dealers or any goods or class of goods from the payment of tax under this Act for such period as may be specified in the notification;

(ii) any dealer or class of dealers from any provision of the Act for such period as may be specified in the notification.

(2) Any notification issued under this section may be rescinded before the expiry of the period for which it was to have remained in force and on such rescission such notification shall cease to be in force. A notification rescinding-an earlier notification shall have prospective effect."

"In exercise of this power, the State Government issued the following notification on 23/ 26-10-1981 which it is necessary to extract in full here along with its Annexure. It reads:

"In exercise of the powers conferred by S. 12 of the Madhya Pradesh General Sales, Tax Act, 1958 (No..2 of 1959) the State Government hereby exempts the class of dealers specified in column (1) of the Schedule below who have set up industry in any of