Reading down delegated legislation to avoid absurdity allowed exemption eligibility to be preserved under the amended proviso.

A literal reading of the amended proviso to Notification No. 175/86-C.E., as introduced by Notification No. 174/89-C.E., would have required DGTD-registered manufacturers to have already availed the exemption in 1986-87, even though they were not eligible before the amendment. The Court treated that construction as impossible to apply, inconsistent with the purpose of the amendment, and likely to create an irrational distinction between similarly placed units. To preserve the validity and effect of the notification, the word "and" in the proviso was read down as "or", so the cumulative condition was not enforced and the exemption was available on the disjunctive reading.

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Issues: Whether the amended proviso to Notification No. 175/86-C.E., as introduced by Notification No. 174/89-C.E., could be construed to require a DGTD-registered manufacturer to have availed the exemption during the financial year 1986-87, and whether such construction was arbitrary, discriminatory and violative of Articles 14 and 19(1)(g) of the Constitution of India.

Analysis: The exemption notification initially applied only to small-scale units registered with the Director of Industries or the Development Commissioner, Small Scale Industries. By the 1989 amendment, DGTD-registered factories were brought within the fold of the exemption. A construction that still insisted on prior availing of the exemption in 1986-87 would make compliance impossible for such factories, because they were not eligible for the benefit before the amendment. That reading would defeat the purpose of the amendment, produce an absurd and unworkable result, and create an irrational distinction between units that existed before 1986-87 and those that came into existence later. In these circumstances, the expression "and" in the amended proviso was required to be read down as "or" to preserve the validity and purpose of the notification.

Conclusion: The amended proviso could not be read to impose both conditions cumulatively. It had to be construed disjunctively, and the petitioners were entitled to the exemption; the departmental interpretation was unsustainable.

Final Conclusion: The notification was saved from invalidity by a reading down of its language, and the petition succeeded on that construction.

Ratio Decidendi: Where a literal reading of delegated legislation produces an absurd, unworkable or constitutionally impermissible result, the Court may read down the language, including substituting "and" with "or", to give effect to the evident legislative purpose and sustain validity.

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