(1.) Section 5 of the U.P. Trade Tax Act, 1948, grants authority to the State Government to reduce trade tax leviable on dealer. In exercise of such power, the State of Uttar Pradesh reduced the tax liability of the dealers by 25 per cent on goods having fly-ash contents between 10 to 30 per cent by weight and reduced the tax liability of the dealer by 50 per cent on goods having fly-ash contents exceeding 30 per cent by weight. At the same time, it stated that such reduction is available in the districts mentioned in column 2 to the annexure thereto for the period mentioned in column 3 of the said annexure. In column 2, the districts of the State of Uttar Pradesh, which later became part of the State of Uttarakhand, were mentioned and the period of rebate was directed to be twelve years. In the said schedule, various other backward districts of the State of Uttar Pradesh were mentioned and the period of rebate varied between eight years and twelve years. A bare reading of this notification will make it absolutely clear that the rebate was available only to those dealers, who were located in those districts. The appellant is a dealer, who is not located in any of those districts, mentioned in the said annexure. The appellant is a dealer situated at Jhansi, where he manufactures cement containing fly-ash. Having had manufactured the goods at Jhansi, the appellant used to get them transferred to its local offices situate at various districts of the State of Uttar Pradesh, which have now become the districts of Uttarakhand. Having had acted thus, the appellant sought rebate. That was allowed by the State of Uttar Pradesh. Later, the State of Uttar Pradesh recalled its previous decision and passed a fresh order on February 27, 1998. In this order, it was made absolutely clear that the dealer, who is entitled to such rebate, must have a manufacturing unit established in one of those districts mentioned in the annexure. With that, an addition was made that the fly-ash content of the goods must be sourced from a Thermal Power Station situate in Uttar Pradesh. Imposition of the condition that in order to have rebate, the dealer must be a manufacturer and his manufacturing unit must be located in one of those districts mentioned in the annexure, was challenged, as we have been told, before the honourable Allahabad High Court. We are told that the challenge also stood succeeded. We are told that an appeal against the judgment of the honourable Allahabad High Court is pending before the honourable Supreme Court and is likely to be taken up for hearing at any time. Before the State of Uttarakhand was created, the appellant obtained the benefit of the said decision of the State of Uttar Pradesh dated February 27, 1998, despite having no manufacturing unit situate in any of the districts mentioned in the annexure to the said decision of the Government. After creation of the State of Uttarakhand, the appellant continued to receive similar treatment from the State of Uttarakhand too. Subsequently, in the year 2004, the State of Uttarakhand, having noticed that the appellant does not have a manufacturing unit situate in any of the districts mentioned in the said Government decision dated February 27, 1998, called upon the appellant to refund the rebate that it has taken on the basis of the said decision of the Government dated February 27,1998 No doubt, in terms of the provisions contained in the Uttar Pradesh Reorganization Act, 2000, the decision of the Government of Uttar Pradesh dated February 27, 1998 continued to apply to the State of Uttarakhand in respect of the arrears of the State of Uttar Pradesh, which became part of the State of Uttarakhand. Therefore, there cannot be any question that the appellant, if entitled to the benefit of the said order dated February 27, 1998, it is entitled to the benefit of the said order for twelve years from February 27, 1998. The fact remains that the appellant is not entitled to the benefit of the said order, inasmuch as, the appellant does not have a manufacturing unit in any of the districts mentioned in annexure to the said order. The honourable Allahabad High Court has decided that having a manufacturing unit within the districts mentioned in annexure to the said Government order dated February 27, 1998 is discriminatory and contrary to article 304 of the Constitution of India. The judgment of the honourable Allahabad High Court is not binding on us. We, after having had read the judgment of the honourable Allahabad High Court, have not been able to persuade ourselves to follow the same for the simple reason that by the Government order dated February 27, 1998, no impost has been imposed, on the other hand, a concession has been given on the condition of having a manufacturing unit in the districts mentioned in the annexure and of using fly-ash sourced from a Thermal Power Station situate in the State. In the matter of grant of such concession not to everyone, a classification has been made. It is settled law that classification is permissible provided the distinction between the classes can be established. In the instant case, class of people chosen are required to have manufacturing units in those districts, which are backward. In addition to that, the manufacturing units are required to use fly-ash produced by Thermal Power Stations situated in the State, i.e., to ensure that fly-ash of Thermal Power Stations situated in the State are utilized in proper and suitable manner. In public interest under section 5 of the U.P. Trade Tax Act, 1948, the Government is competent to grant rebate. Therefore one has to look at public interest involved, if any, in the grant of rebate in the instant case. The fact remains that fly-ash produced by the Thermal Power Stations of the State will be taken care of. That will certainly serve public interest. Secondly, the units are to be established in backward districts, thereby the backward districts are attempted to be made economically progressive. That too is in public interest.
(2.) No rebate will be given if the fly-ash is imported. Article 304 of the Constitution of India does not say a word about grant of concession for utilization of a particular product available in the State and non-grant of similar concession in respect of a product available in another State.
(3.) The appellant approached this court by filing a writ petition seeking to declare that the demands made by the State of Uttarakhand are of no effect. The writ petition has been dismissed by the judgment and order under appeal. We have not been persuaded to take a different view. We, accordingly, dismiss the appeal. It appears that during the pendency of the appeal, the appellant was permitted to furnish bank guarantees in respect of the demands, for which the appellant approached this court. We direct the State Government not to encash those bank guarantees until such time the appeal pending before the honourable Supreme Court, as referred to above, is decided. In the event, the honourable Supreme Court decides the matter in favour of the appellant, it shall be open to the appellant to apply for review of this order.;