Unconstitutional classification under an exemption notification could not defeat relief where the distinction lacked rational nexus with the object.

Notification No. 48/77 exempted clinical samples of patent or proprietary medicines subject to conditions. Explanation (a) distinguished between companies with no foreign shareholding and companies with a foreign element, but that classification had no rational nexus with the exemption's object and was treated as unconstitutional. In the absence of any material showing reversal or stay of that view, the condition in Explanation (a) could not be used to deny the exemption. The notification benefit remained available, and the Revenue's challenge failed.

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Issues: Whether the benefit of Notification No. 48/77 dated 01.04.1977 could be denied on the basis of Explanation (a), and whether that explanation was valid in light of Article 14 of the Constitution of India.

Analysis: The Notification was intended to exempt clinical samples of patent or proprietary medicines subject to conditions. The impugned Explanation (a) created a distinction between companies having no foreign shareholding and companies with a foreign element, but that distinction had no rational nexus with the object of the exemption. The relevant condition had already been held to be unconstitutional, and no material was shown to indicate reversal or stay of that view.

Conclusion: The condition in Explanation (a) could not be relied upon to deny the exemption, and the benefit of the Notification was available. The appeal by the Revenue failed.

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