TaxTMI 
TaxTMI 
2004 (1) TMI 643
X X X X Extracts X X X X
X X X X Extracts X X X X
....ave been filed for quashing the impugned notification dated February 27, 1998 (vide annexure 1 to the writ petition) insofar as the condition No. 1 in the said notification is concerned. 4.. The petitioners are public limited companies incorporated under the Indian Companies Act having their manufacturing units in Rewa in the State of Madhya Pradesh where the petitioners are carrying on the business of manufacturing of cement which is sold in several States. 5.. In para 5 of the petition it is stated that for the manufacture of cement in its factory at Rewa in Madhya Pradesh, the petitioners procure fly ash from the Thermal Power Station, Unchahar and Panki Power Station, Kanpur, in the State of U.P. A true copy of the statement of fl....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... have been established outside U.P. 8.. The short submission of Sri Shanti Bhushan, learned counsel for the petitioners is that condition No. 1 in the impugned notification dated February 27, 1998 is violative of articles 301 and 304(a) of the Constitution. The aforesaid condition in the said notification states: "Such goods shall be manufactured in a unit established in the areas mentioned in column (2) of the annexure." 9. In column (2) all the areas are in the State of Uttar Pradesh at the time when the said notification was issued (subsequently some areas have gone to the State of Uttaranchal). 10.. Learned counsel for the petitioner has submitted that there cannot be discrimination between the goods produced within U....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar goods in the State are subjected to similar taxes, so as not to discriminate between the goods manufactured or produced in that State and the goods which are imported from other States." 13.. Sri Shanti Bhushan then relied on the Supreme Court decision in Shree Mahavir Oil Mills v. State of Jammu and Kashmir [1997] 104 STC 148 where the Supreme Court has explained its earlier judgment in Video Electronics Pvt. Ltd. v. State of Punjab [1990] 77 STC 82. 14.. The decision in Video Electronics Pvt. Ltd. [1990] 77 STC 82 (SC), only carves out a very limited exception to the main rule of non-discrimination in respect of new units, and that too for a limited period established in a specified area. 15.. Under section 4-A of the U.P. Tra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Parliament. Hence the scheme of the Constitution shows that there is a difference between Parliamentary laws and laws made by the State Legislature so far as Part XIII of the Constitution is concerned. Greater latitude is given to laws made by Parliament in this respect as compared to the laws made by State Legislature. 20.. On the strength of the above authorities Sri Shanti Bhushan submitted that condition No. 1 in the impugned notification is violative of articles 301 and 304(a) of the Constitution. He submitted that this condition is severable from the other part of the notification. 21.. Learned Additional Advocate-General submitted that the doctrine of severability will not apply, and hence even if the impugned condition in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... down and not just a portion of it which is discriminatory as contended by the appellants. This question in relation to a taxing statute has been considered by this Court as far back as in 1953 in the case of State of Bombay v. United Motors (India) Ltd. [1953] 4 STC 133 (SC); [1953] SCR 1069 at 1097. If the taxing statute imposes tax on subjects which are divisible in their nature and if the covered subjects which are exempted by the Constitution are wrongly taxed, the entire taxing statute need not be declared as ultra vires because it is feasible to separate taxes levied on authorised subjects from those levied on exempt subjects and to exclude the latter in the assessment to tax. In such cases this Court has said the statute itself shou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....intention of the Government, that is, whether, had it been known that this differentiation was not permissible, it would yet have granted the rebate or not. For this proposition he has relied on the decisions of the Supreme Court in R.M.D. Chamarbaugwalla v. Union of India AIR 1957 SC 628, Sawai Bhawani Singh v. State of Rajasthan (1996) 3 SCC 105, DPP v. Hutchinson (1990) 2 All ER 836 (845) (HL) and Commissioner of Police v. Davis (1993) 4 All ER 476 P. 487 (PC), etc. 25.. To us it appears from the earlier notification dated June 18, 1997 vide annexure 4 to the writ petition (in which there was no such restriction of the rebate to goods manufactured in U.P.) that the intention was to grant the rebate to all the goods having fly ash cont....