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Issues:
Challenge to the legality and validity of Notification No. 203 of 1987 dated September 9, 1987 and the letter dated October 28, 1987 regarding the withdrawal of `modvat' benefits for aerated waters. Detailed Analysis: 1. The petitioner, a private limited company manufacturing aerated waters, contested the withdrawal of `modvat' benefits through Notification No. 203 of 1987 and a subsequent letter dated October 28, 1987. The petitioner argued that while other articles continued to receive the benefit, aerated waters were singled out unfairly. 2. The court referred to the principle laid down by the Hon'ble Supreme Court in East India Tobacco Co. v. State of Andhra Pradesh, emphasizing that taxation laws are within the state's discretion. Unequal operation within a chosen range is necessary to establish discrimination under Article 14. 3. Citing Hind Plastics v. The Collector of Customs, Bombay, the court reiterated that the decision on what to tax is a matter for authorities, not the courts. The contention of discriminatory treatment due to the withdrawal of `modvat' benefits for aerated waters was dismissed. 4. The court also referenced a Delhi High Court decision that upheld the withdrawal of `modvat' benefits for aerated waters as a matter of policy not subject to judicial review under Article 226 of the Constitution. 5. The petitioner invoked the doctrine of promissory estoppel, citing Union of India v. Godfrey Phillips India Ltd., but the court found no promise or representation by the government to support this claim. 6. Regarding the withdrawal of benefits through delegated legislation, the court highlighted that the authority issuing notifications also holds the power to rescind them. The court emphasized that there is no estoppel from withdrawing benefits prospectively. 7. The petitioner's argument that the impugned notification could be challenged for arbitrariness was addressed by referring to Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of India, stating that subordinate legislation can be questioned for being manifestly arbitrary. 8. The court concluded that the challenge to the legality and validity of Notification No. 203 of 1987 failed. The issue of the letter dated October 28, 1987 was directed to be raised before the appropriate appellate authority, the Collector (Appeals), Allahabad. 9. The court rejected the petition concerning the constitutional validity of the notification but allowed the challenge to the letter dated October 28, 1987 to proceed before the appellate authority without limitation objections, emphasizing expeditious resolution.
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