Fiscal concession cut-off dates are valid when they rationally serve the exemption's object and prevent misuse by larger units.

A fiscal concession may validly be restricted by a cut-off date if the classification has a rational nexus with the object of the exemption. The notification aimed to benefit bona fide small manufacturers already in the field and to prevent larger units from restructuring merely to secure the concession; excluding manufacturers who entered later was treated as consistent with that purpose. The date-based distinction was therefore upheld as a valid classification and not violative of Article 14, and the challenge to the notification failed.

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Issues: Whether clause (b) of Notification No. 205/67-C.E. dated 04.09.1967, which limited the concessional excise duty to manufacturers who made the requisite declaration before that date, violated Article 14 of the Constitution of India.

Analysis: The concessional rate was intended only for bona fide small manufacturers in the field when the notification was issued and was meant to prevent larger units from splitting into smaller units merely to obtain the concession. The choice of 04.09.1967 as the cut-off date was adopted to achieve that object and to exclude manufacturers who came into the field later. In matters of fiscal concession and exemption, the Government has wide latitude, and a classification based on a date is not invalid merely because the date is fixed with some degree of arbitrariness. The relevant test is whether the classification has a rational nexus with the object sought to be achieved.

Conclusion: Clause (b) was held to be a valid classification and not violative of Article 14. The challenge to the notification failed.

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