Case: Murthy Match Works, Etc. Etc Vs. The Asstt. Collector Of Central Excise, Etc

has not made the classification which commends to the Court as proper. Nor can the legislative power be said to have been unconstitutionally exercised because within the class a sub-classification was reasonable but has not been made.19. It is well established that the modern State, in exercising its sovereign power of taxation, has to deal with complex factors relating to the objects to the taxed, the quantum to be levied, the conditions subject to which the levy has to be made, the social and economic policies which the tax is designed to subserve, and what not. In the famous words of Holmes, J. in Bain Peanut Co. v. Pinson, (1930) 282 US 499; 501:"We must remember that the machinery of Government would not work if it were not allowed a little play in its joints."20. In the present case, a pertinent principle of differentiation, which is visibly linked to productive process, has been adopted in the broad classification of power users and manual manufacturers. It is irrational to castigate this basis as unreal. Indeed, the soundness of this distinction is not denied. The challenge is founded on the failure to mini-classify between large and small sections of manual match manufacturers. But ours is not to reason why, that being a policy decision of Government dependent on pragmatic wisdom playing on imponderable forces at work. Our jurisdiction halts where the constitution touchstone of a rational differntia having a just relation to the legislative end to revenue raising is satisfied. Gratuitous judicial advice on the socialistic direction of fiscal policy is de trop. We desist from that enterprise and leave the petitioners and men of his ilk to seek other democratic remedies in that behalf, it being beyond our area normally to demolish the tax structure because micro-classification among a large group has not been done by the State. Absolute justice to every producer is a self-defeating adventure for any administration and general direction, not minute classification, is all that can be attempted. For these reasons we find ourselves in agreement with the High Court in its refusal to strike down the notification under S. 3 of the Central Excises and Salt Act, 1944.21. Before concluding we may make a passing reference to the few decision cited by appellants counsel. In K. T. Moopi Nair v. State of Kerala, (1961) 3 SCR 77 = (AIR 1961 SC 552 ) Sinha, C.J., emphasized that Art. 14 may be violated even though the law may, on the face, be equal if in substance unequal things are treated equally. In State of Kerala v. Haji K. Haji Kutty Naha, Civil Appeals Nos. 1052 etc. of 1968 judgment D/- 13-8-1968 = (reported in AIR 1969 SC 378 ), Shah J., observed:"Where objects, persons or transactions essentially dissimilar are treated by the imposition of a uniform tax, discrimination may result, for, in our view, refusal to make a rational classification may itself in some cases operate as denial of equality."A similar view has been taken in Khandige Sham Bhat v. The Agricultural Income-tax Officer, (1963) 3 SCR 809 , 817 = (AIR 1963 SC 591 ).22. It is sound law that refusal to make rational classification where grossly dissimilar subjects are treated by the law violates the mandate of Art. 14. Even so, where the limited classification adopted in the present case is based upon a relevant differentia which has a nexus to the legislative end of taxation, the Court cannot strike down the law on the score that there is room for further classification. Refusal to classify is one thing and it bears on constitutionality, not launching on micro-classification to work out perfect justice is left to executive expediency and legislative judgment and not for forensic wisdom."The relationship between the legislative and judicial departments of Government in the determination of the validity of classification is well-settled .... the authorities state with unanimity that the question of classification is primarily for the legislature and that it can never become a judicial question except for the purpose of determining, in any given situation whether the legislative action is clearly unreasonable. The legislative classification is subject to judicial revision only to the extent of seeing that it is founded on real distinctions in the subjects classified, and not on artificial or irrelevant ones used for the purposes of evading the constitutional prohibition.(American Jurisprudence 2d : Vol. 16 para 496)."In a classification for Governmental purposes there cannot be an exact exclusion or inclusion of persons and things. The constitutional command for a state to afford equal protection of the law sets a goal not attainable by the invention and application of a precise formula. Classification in law, as in the other departments of knowledge or practice, is the grouping of things in speculation or practice because they agree with one another in certain particulars, and differ from other things in those particulars. It is almost impossible in some matters to foresee and provide for every imaginable and exceptional case, and a legislature ought not to be required to do so at the risk of having its legislation declared void, although appropriate and proper upon the general subject upon which such legislation is to act, so long as there is no substantial and fair ground to say that the statute makes an unreasonable and unfounded general classification, and thereby denies to any person the equal protection of the laws. Hence, a large latitude is allowed to the States for classification upon any reasonable basis, and what is reasonable is a question of practical details into which fiction cannot enter." (ibid; para 504).23. We have said enough to delineate the finer frontiers of the jurisdiction of the Court and the legislature. Having sensitive regard to the obligation of the State to bring the law, including the tax law, into pulsing relationship with life, including the life of the countrys economy, we see nothing so grossly unfair as to attract the lethal power of the Court to strike down the notification under challenge.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]9. There is no doubt that in the past among themanufacturers of matches a further classification based on viability had been made. It is also true that the financial resources; the capacity to command a market on their own without depending on intermediaries, etc, marked off the B category from the C category. But then experience gathered subsequently disclosed certain evils which the state took note of and endeavored to set right. Ultimately, the present notifications was issued obliterating the distinction which gave a concessional edge to the C group over the Bbe, there is force in this grievance. Instead of protecting the tiny manufacturer from the injurious intermediary and inhibiting the larger producer from resorting to the device ofeve tactics, the State has resorted to a policy of equal levy from both which, according to the counsel hits the poor and helps theThis is criticism of legislative judgment, not a ground of judicial review.11. We agree that bare equality of treatment regardless of the inequality of realities is neither justice nor homage to the constitutional principle.The forensic focus turns on unconstitutionalof the "B" and "C" categories and the vice of lugging allproducers together into one mass. The Court is being invited to compel the legislative and executive wings to classify, but we feel that from the judicial inspection tower the Court may only search for arbitrary and irrational classification and its obverse, namely, capricious uniformity of treatment where a crying dismissilarity exists in reality.13. Right at the threshold we must warn ourselves of the limitations of judicial power in thisIn short, unconstitutionality and not unwisdom of a legislation is the narrow area of judicial review. In the present case unconstitutionality is alleged as springing from lugging together two dissimilar categories of match manufacturers into one compartment for likeCertain principles which bear upon classification may be mentioned here. It is true that a State may classify persons and objects for the purpose of legislation and pass laws for the purpose of obtaining revenue or other objects. Every differentiation is not a discrimination. But classification can be sustained only if it is founded on pertinent and real difference as distinguished from irrelevant and artificial ones. The constitutional standard by which the sufficiency of the differentia which form a valid basis for classification may be measured, has been repeatedly stated by the courts. If it rests of a difference which bears a fair and just relation to the object for which it is proposed, it is constitutional. To put it differently, the means must have nexus with the ends. Even so, a large latitude is allowed to the State for classification upon a reasonable basis and what is reasonable is a question of practical details and a variety of factors which the Court will be reluctant and perhapsto investigate. In this imperfect world perfection even in grouping is an ambition hardly ever accomplished. In this context, we have to remember the relationship between the legislative and judicial departments of Government in the determination of the validity of classification. Of course, in the last analysis courts possess the power to pronounce on the constitutionality of the acts of the other branches whether a classification is based upon substantial differences or is arbitrary, fanciful and consequently illegal. At the same time, the question of classification is primarily for legislative judgment and ordinarily does not become a judicial question. A power to classify being extremely broad and based on deverse considerations of executive pragmatism, the judicature cannot rush in where even the legislature warily treads. All these operational restrints on judicial power must weigh more emphatically where the subject is taxation.16. One facet of the equal protection clause, upheld by the Indian Courts and relevant to the present case, is that while similar things must be treated similarly, dismilar things should not be treated similarly. There can be hostile discrimination while maintaining a facade of equality.Another proposition which is equally settled is that merely because there is room for classification it does not follow that legislation without classification is always unconstitutional. The Court cannot strike down a law because it has not made the classification which commends to the Court as proper. Nor can the legislative power be said to have been unconstitutionally exercised because within the class awas reasonable but has not been made.19. It is well established that the modern State, in exercising its sovereign power of taxation, has to deal with complex factors relating to the objects to the taxed, the quantum to be levied, the conditions subject to which the levy has to be made, the social and economic policies which the tax is designed to subserve, and what not. In the famous words of Holmes, J. in BainPeanut Co. v. Pinson, (1930) 282 USe must remember that the machinery of Government would not work if it were not allowed a little play in its joints.In the present case, a pertinent principle of differentiation, which is visibly linked to productive process, has been adopted in the broad classification of power users and manual manufacturers. It is irrational to castigate this basis as unreal. Indeed, the soundness of this distinction is not denied. The challenge is founded on the failure tobetween large and small sections of manual match manufacturers. But ours is not to reason why, that being a policy decision of Government dependent on pragmatic wisdom playing on imponderable forces at work. Our jurisdiction halts where the constitution touchstone of a rational differntia having a just relation to the legislative end to revenue raising is satisfied. Gratuitous judicial advice on the socialistic direction of fiscal policy is de trop. We desist from that enterprise and leave the petitioners and men of his ilk to seek other democratic remedies in that behalf, it being beyond our area normally to demolish the tax structure becauseamong a large group has not been done by the State. Absolute justice to every producer is aadventure for any administration and general direction, not minute classification, is all that can be attempted. For these reasons we find ourselves in agreement with the High Court in its refusal to strike down the notification under S. 3 ofthe Central Excises and Salt Act, 1944.21. Before concluding we may make a passing reference to the few decision cited by appellants counsel. In K. T. Moopi Nair v. State of Kerala, (1961) 3 SCR 77   = (AIR 1961 SC 552  ) Sinha, C.J., emphasized that Art. 14 may be violated even though the law may, on the face, be equal if in substance unequal things are treated equally. In State of Kerala v. Haji K. Haji Kutty Naha, Civil Appeals Nos. 1052 etc. of 1968 judgment D/= (reported in AIR 1969 SC 378  ), Shah J.,objects, persons or transactions essentially dissimilar are treated by the imposition of a uniform tax, discrimination may result, for, in our view, refusal to make a rational classification may itself in some cases operate as denial ofsimilar view has been taken in Khandige Sham Bhat v. The AgriculturalOfficer, (1963) 3 SCR 809  , 817 = (AIR 1963 SC 591  ).22. It is sound law that refusal to make rational classification where grossly dissimilar subjects are treated by the law violates the mandate of Art. 14. Even so, where the limited classification adopted in the present case is based upon a relevant differentia which has a nexus to the legislative end of taxation, the Court cannot strike down the law on the score that there is room for further classification. Refusal to classify is one thing and it bears on constitutionality, not launching onto work out perfect justice is left to executive expediency and legislative judgment and not for forensicrelationship between the legislative and judicial departments of Government in the determination of the validity of classification is.... the authorities state with unanimity that the question of classification is primarily for the legislature and that it can never become a judicial question except for the purpose of determining, in any given situation whether the legislative action is clearly unreasonable. The legislative classification is subject to judicial revision only to the extent of seeing that it is founded on real distinctions in the subjects classified, and not on artificial or irrelevant ones used for the purposes of evading the constitutional prohibition.We have said enough to delineate the finer frontiers of the jurisdiction of the Court and the legislature. Having sensitive regard to the obligation of the State to bring the law, including the tax law, into pulsing relationship with life, including the life of the countrys economy, we see nothing so grossly unfair as to attract the lethal power of the Court to strike down the notification under challenge.