Exemption notifications must be applied on their own terms; writ relief and indexed base-clearance computation were upheld.

A tax demand that conflicts with the fundamental terms of an exemption notification is treated as action without jurisdiction, so writ relief may be available despite an appellate remedy. The commentary also explains that base clearances under the excise exemption had to be computed by adjusting assessable value with the wholesale price index under the notification's terms. No consumer-pass-on requirement could be implied where the delegated legislation did not impose one, and administrative directions could not add such a condition. The exemption therefore had to be applied according to its express language.

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Issues: (i) whether the show cause notices demanding differential excise duty were without jurisdiction so as to permit writ relief without first resorting to the statutory appeal remedy; (ii) whether, on a proper construction of the exemption notification, the petitioner's base clearances had to be computed by adjusting the assessable value under the wholesale price index and whether the exemption could be denied on the ground that the concession was not passed on to consumers.

Issue (i): whether the show cause notices demanding differential excise duty were without jurisdiction so as to permit writ relief without first resorting to the statutory appeal remedy.

Analysis: A challenge to action that is contrary to the fundamental terms of the governing notification is a challenge to action without jurisdiction, not merely to an error within jurisdiction. Where the demand itself is inconsistent with the notification that confers the exemption, the writ court may intervene notwithstanding the availability of the statutory appellate remedy. The presence of a threatened recovery of substantial duty on that footing attracted constitutional writ jurisdiction.

Conclusion: The writ petition was maintainable and the alternative statutory remedy did not bar relief.

Issue (ii): whether, on a proper construction of the exemption notification, the petitioner's base clearances had to be computed by adjusting the assessable value under the wholesale price index and whether the exemption could be denied on the ground that the concession was not passed on to consumers.

Analysis: The charging provision fixes duty on manufacture, while section 4 governs assessable value and the notification under rule 8(1) grants a partial exemption by reference to base clearances. The notification required the value for base-period comparison to be determined under section 4 as adjusted with the average index number of wholesale prices for manufactures. No distinction was created between manufacturers within the relevant categories for the method of adjustment. A consumer-pass-on condition could not be read into the notification when the notification itself did not impose such a restriction, and administrative directions could not add a condition inconsistent with the delegated legislation. Different treatment depending on whether duty was ad valorem or based on tariff value, weight or number would also be discriminatory.

Conclusion: The petitioner was entitled to compute base clearances on the adjusted value basis and could not be denied the exemption for failure to pass on the concession to consumers.

Final Conclusion: The impugned notices and consequential restraint were quashed, and the petitioner was allowed to continue clearing the goods under the notification as construed by the Court.

Ratio Decidendi: A tax exemption notification must be construed according to its own terms, and no additional condition can be imposed by administrative action or implication unless the notification itself expressly so provides.

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