Case: Epari Chinna Krishna Moorthy &amp; Another Vs. State of Orissa &amp; Others

confine the benefit of the said exemption only to persons who actually produce gold ornaments or employ artisans for that purpose. We do not see how any question of legislative incompetence can come in the present discussion. And, if the State Government was given the power either to grant or withdraw the exemption, that cannot possibly affect the legislatures competence to make any provision in that behalf either prospectively or retrospectively. Therefore, there is no substance in the argument that the retrospective operation of S. 2 of the impugned Act is invalid.8. Then, Mr. Sastri contends that this provision is discriminatory and as such, contravenes the equality before the law guaranteed by Art. 14. This argument is also misconceived. It is not seriously disputed that the petitioners belong to the class or traders or shopkeepers who are like commission agents. They give gold to the artisans, pay the artisans their labour charges and when the ornaments are thus produced, they charge commission before they are sold to the customers. In such a case, it is not easy to understand how this class of traders can be said to belong to the same class of persons who produce gold ornaments themselves or run manufactories where artisans are engaged for producing them. The counter-affidavit filed on behalf of the respondent State has also averred that the petitioners sometimes sell goods manufactured by firms outside the State of Orissa and in no case had they manufactured ornaments themselves. Whether the gold which they give to the artisans is their own or is supplied to them by customers is not a matter of any significance, because what is important in this, connection is that they are not directly concerned with the production of ornaments, and admittedly, they do not produce the said ornaments themselves. Therefore, the persons who get the benefit of the exemption notification as a result of the provisions of S. 2 of the impugned Act cannot be said to belong to the same class as that of the petitioners, and if that is so, the main argument on the basis of Art. 14 does not subsist.9. Besides, one of the objects of the impugned Act appears to be to make it clear that the legislature intends to benefit the goldsmiths who actually make gold ornaments and that object can be carried out only if exemption is granted to persons who keep in their continuous employment artisans who produce gold ornaments. If a person produces gold ornaments himself and if a person employs artisans to produce ornaments for him, they fall within the protection of the exemption. In the case of the petitioners, however, they do not keep any artisans in their continuous employment, and so, if the legislature thought it was not necessary to give them the benefit of the exemption, it cannot be said that the classification made by the legislature has no rational connection with the object intended to be achieved by it. This argument assumes that the petitioners belong to the same class as the persons to whom the benefit of the exemption is available. But as we have already stated, these two categories are distinct and there is no sameness or similarity between them.10. It was also suggested by Mr. Sastri that the result of the impugned provision is to deny the benefit of the exemption to the poorer classes of persons who are engaged in the business of manufacturing gold ornaments, and in that connection, he has commented on the fact that the notification gives the benefit of the exemption to persons who run manufactories but it denies that benefit to persons who carry on the work of producing gold ornaments on a smaller scale, and so, are unable to run a manufactory. This argument is fallacious. The notification as interpreted by S. 2 of the impugned Act benefits the artisans who produce ornaments themselves and that obviously covers a very large section of independent artisans engaged in the trade. The notification also benefits persons who run manufactories and that ensures the continuous employment of artisans. That is why it seems to us that the main object of granting exemption can be said to be achieved by holding that manufacturer means either a manufacturer properly so called or one who engages artisans to manufacture gold ornaments.11. Mr. Sastri also urged that the retrospective operation of the impugned section should be struck down as unconstitutional, because it imposes an unreasonable restriction on the petitioners fundamental right under Art. 19(1) (g). It is true that in considering the question as to whether legislative power to pass an Act retrospectively has been reasonably exercised or not, it is relevant to enquire how the retrospective operation operates. But it would be difficult to accept the argument that because the retrospective operation may operate harshly in some cases, therefore, the legislation itself is invalid. Besides in the present case, the retrospective operation does not spread over a very long period either. Incidentally, it is not clear from the record that the petitioners did not recover sales tax from their customers when they sold the gold ornaments to them. The counter-affidavit filed by the respondent State alleges that even where sales-tax has not been charged separately the price charged included sales-tax because it was the usual practice of every registered dealer doing similar business to collect sales-tax either by showing it as such separately and thereby claiming deduction of the sales-tax from the gross turnover to arrive at the taxable turnover shown separately or by including it in the price and thereby collecting it as a part of the price charged. In any event, we do not think that in the circumstances of this case it would be possible to hold that by making the provision of S. 2 of the impugned Act retrospective the legislature has imposed a restriction on the petitioners fundamental right under Art. 19(1)(g) which is not reasonable and is not in the interest of the general public.

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

Explanation:
0[ds]It is obvious that if the State Government which is the delegate of the legislature can withdraw the exemption granted by it, the legislature cannot be denied such right. But it is urged that once exemption was validly granted; the legislature cannot withdraw it retrospectively, because that would be invalidating the notification itself. We are not impressed by this argument. What the legislature has purported to do by S. 2 of the impugned Act is to make the intention of the notification clear. Section 2 in substance declares that the intention of the delegate in issuing the notification granting exemption was to confine the benefit of the said exemption only to persons who actually produce gold ornaments or employ artisans for that purpose. We do not see how any question of legislative incompetence can come in the present discussion. And, if the State Government was given the power either to grant or withdraw the exemption, that cannot possibly affect the legislatures competence to make any provision in that behalf either prospectively or retrospectively. Therefore, there is no substance in the argument that the retrospective operation of S. 2 of the impugned Act isargument is fallacious. The notification as interpreted by S. 2 of the impugned Act benefits the artisans who produce ornaments themselves and that obviously covers a very large section of independent artisans engaged in the trade. The notification also benefits persons who run manufactories and that ensures the continuous employment of artisans. That is why it seems to us that the main object of granting exemption can be said to be achieved by holding that manufacturer means either a manufacturer properly so called or one who engages artisans to manufacture goldis true that in considering the question as to whether legislative power to pass an Act retrospectively has been reasonably exercised or not, it is relevant to enquire how the retrospective operation operates. But it would be difficult to accept the argument that because the retrospective operation may operate harshly in some cases, therefore, the legislation itself is invalid. Besides in the present case, the retrospective operation does not spread over a very long period either. Incidentally, it is not clear from the record that the petitioners did not recover sales tax from their customers when they sold the gold ornaments to them. The counter-affidavit filed by the respondent State alleges that even where sales-tax has not been charged separately the price charged included sales-tax because it was the usual practice of every registered dealer doing similar business to collect sales-tax either by showing it as such separately and thereby claiming deduction of the sales-tax from the gross turnover to arrive at the taxable turnover shown separately or by including it in the price and thereby collecting it as a part of the price charged. In any event, we do not think that in the circumstances of this case it would be possible to hold that by making the provision of S. 2 of the impugned Act retrospective the legislature has imposed a restriction on the petitioners fundamental right under Art. 19(1)(g) which is not reasonable and is not in the interest of the general public.