Court upholds validity of tax exemption notification for Export Oriented Units under State legislative power.

The Court dismissed the Writ Petition challenging a notification under Section 4-E of the Tamil Nadu General Sales Tax Act and Central Sales Tax Act. It held that the notification, granting exemptions to specific goods for Export Oriented Units, was valid as it fell within the State Government's legislative power. The Court emphasized that it cannot interfere with the Government's discretion in issuing such notifications and clarified that judicial review does not extend to directing the Government on the content of notifications. The Writ Petition was dismissed without costs.

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Issues:
Challenge to notification under Section 4-E of Tamil Nadu General Sales Tax Act, 1959 and Central Sales Tax Act, 1956 for being illegal and ultra vires.

Detailed Analysis:

1. Issue of Challenge to Notification: The petitioner sought a Writ declaring a notification as illegal and ultra vires of Section 4-E of the Tamil Nadu General Sales Tax Act, 1959 and Central Sales Tax Act, 1956. The notification in question granted an exemption in respect of the tax payable by any dealer on the sale of raw materials, packing materials, and consumable goods to registered 100% Export Oriented Units in the State and units located in the Chennai Export Processing Zone. The petitioner's contention was that the notification only exempted specific categories of goods, whereas Section 4-E mentioned "any goods," thus making the notification contrary to the Act.

2. Legislative Power and Judicial Review: The Court held that the notification was issued under Section 17(1) of the Act, which is an exercise of delegated legislative power by the State Government. It was emphasized that the Government has the authority to exempt any type or category of goods through such notifications. The Court clarified that it cannot interfere with the legislative powers of the Government under Article 226 of the Constitution of India. The scope of judicial review does not extend to directing the State Government to issue notifications in a particular manner.

3. Exclusion of Items in Notification: The Court highlighted that Section 4-E includes "any goods" subject to the exclusion of plant and machinery. Since the notification exempted raw material, packing materials, and consumable goods, the Court concluded that this selection for exemption did not violate Section 4-E of the Tamil Nadu General Sales Tax Act. The Court emphasized that it cannot dictate the inclusion of additional items for exemption through a Writ petition, as it is beyond the judicial function to legislate through such orders.

4. Dismissal of Writ Petition: Ultimately, the Court dismissed the Writ Petition, stating that the inclusion of specific items for exemption in the notification did not contravene the provisions of Section 4-E of the Act. The Court reiterated that it does not have the authority to direct the State Government to modify notifications in a specific manner as requested by the petitioner, as this falls under the legislative domain and is not subject to judicial review.

5. Conclusion: The judgment concluded by dismissing the Writ Petition without any costs, maintaining that the notification providing exemptions for certain goods to Export Oriented Units was within the legislative power of the State Government and did not violate the relevant provisions of the Tamil Nadu General Sales Tax Act.

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