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1983 Supreme(Mad) 433
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE RATNAM & THE HONOURABLE MR. JUSTICE RAMANUJAM
N. Rahmath and Others - Appellant
Versus
Union of India and Others - Respondent
Case No : Writ Petitions Nos. 4588, 4691 to 4693, 5171, 5172, 5207, 5208, 5325, 5457, 5794, 5796. 6609, 6885, 6886, 7439, 8783, 8785, 8974, 9277 and 10705 of 1982 and 240, 249, 392...........5397 of 1983
Decided On : 30 August 1983
The Parliament has the power to make retrospective laws and that the retrospective validation of a notification is necessary to correct a defect in the original notification that had resulted in unintended benefits being granted to certain manufacturers.
Headnote:
The court held that Section 52 of the Finance Act of 1982, which retrospectively validated Notification No. 22/82 issued under the Central Excises and Salt Act, 1944, was a valid exercise of legislative power and did not violate Articles 14, 19(1)(g), or 300-A of the Constitution of India. The court found that the Parliament had the power to make retrospective laws and that the retrospective validation of the notification was necessary to correct a defect in the original notification that had resulted in unintended benefits being granted to certain manufacturers. The court also held that the retrospective application of the notification did not violate the petitioners' right to carry on their trade or impose an unreasonable restriction on their right to property.
Fact of the Case:
The petitioners, manufacturers of matches, challenged the constitutional validity of Section 52 of the Finance Act of 1982 and the conditions imposed in Notification No. 22/82 issued under the Central Excises and Salt Act, 1944. They argued that the retrospective application of the notification violated their fundamental rights under Articles 14, 19(1)(g), and 300-A of the Constitution.
Finding of the Court:
The court found that Section 52 of the Finance Act of 1982 was a valid exercise of legislative power and did not violate Articles 14, 19(1)(g), or 300-A of the Constitution of India. The court found that the Parliament had the power to make retrospective laws and that the retrospective validation of the notification was necessary to correct a defect in the original notification that had resulted in unintended benefits being granted to certain manufacturers. The court also held that the retrospective application of the notification did not violate the petitioners' right to carry on their trade or impose an unreasonable restriction on their right to property.
Issues: 1. Whether Section 52 of the Finance Act of 1982 was a valid exercise of legislative power? 2. Whether the retrospective application of Notification No. 22/82 violated the petitioners' fundamental rights under Articles 14, 19(1)(g), and 300-A of the Constitution?
Ratio Decidendi: 1. The Parliament has the power to make retrospective laws. 2. The retrospective validation of Notification No. 22/82 was necessary to correct a defect in the original notification that had resulted in unintended benefits being granted to certain manufacturers. 3. The retrospective application of Notification No. 22/82 did not violate the petitioners' right to carry on their trade or impose an unreasonable restriction on their right to property.
Final Decision: The court dismissed all the writ petitions filed by the petitioners.
RAMANUJAM, J
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.For appeciating the petitioners' said challenge, it is necessary to set out the circumstances and the background in which the said Section 52 of the Finance Act came to be enacted giving retrospective effect to Notification No. 22/82 [GSR 77(E)/82] dated 23rd February, 1982. Historically there was no manufacture of safety matches in this country till about the year 1895. They were mainly imported from Sweden and Japan. For the first time a handful of 15 semi-mechanised safety match manufacturing industries came up and functioned during the period 1895 to 1923. In 1923 the Government of India imposed import duty as a revenue raising measure. After the imposition of import duty in 1923, a Swedish match company set up their fully mechanised match factory in India in the name and style of Western India Match Company Ltd. (WIMCO). At about the same time, some industrialists of Sivakasi in Tamil Nadu established a unit for the manufacture of hand-made safety matches in Sivakasi after adopting the know-how obtained from certain Japanese manufacturers who were working in Calcutta. Hand-made match sector gradually increased their production and widened their production centres and activities though the growth initially was confined to a few towns and villages in and around Sivakasi which was the pioneer match manufacturing centre. However, the hand-made sector of matches is now spread out widely throughout the country and there were as many as 10 to 11 thousand units in the non-mechanised sector, though the WIMCO continued to be the only company manufacturing matches in the mechanised sector in India. Till 1967, nearly 70 per cent of the manufacture of matches in India was controlled by WIMCO and the non-mechanised sector could not compete effectively in the manufacture of matches with WIMCO.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 refinement was made shortly thereafter by giving a 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 unit is a bona fide cottage unit. On account of the concession shown to the non-mechanised sector, there was substantial increase in the production of matches in the said sector from 1975 to 1980. In the year 1980, the Government of India issued Notifications Nos. 98 of 1980 and 99 of 1980 dated 19th June, 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 mechan
