Public Interest is essential :
The exemption notification can be issued only in public interest. Public interest means greatest happiness of greatest number. It is not necessary to disclose the exact nature of public interest of each notification. In India Cement v. State of AP (1988) 69 STC 305 (SC) = AIR 1988 SC 567, it was observed that exercise of power to tax may be normally presumed to be in public interest. Court will presume that the notification has been issued in public interest. Person challenging the tax has the heavy burden to prove that it is not in public interest.
In UOI v. Jalyan Udyog – AIR 1994 SC 88 = 1993 (68) ELT 9 (SC) = 1994 (1) SCC 319, it has been held that public interest is guiding factor in the notification. If public interest demands, the exemption can be given wholly or partly, and with or without any conditions. The condition specified can relate to a stage subsequent to the date of clearance, if public interest so demands. The guiding factor is ‘public interest’. – quoted with approval in UOI v. Paliwal Electricals P Ltd. (1996) 83 ELT 241 (SC) = 13 RLT 857 (SC) = AIR 1996 SC 3106 = 1996 AIR SCW 1570. Exemption given for a specific period can also be withdrawn earlier, if public interest so requires. In State of Rajasthan v. Gopal Oil Mills (1999) 115 STC 25 (SC), it was held that a benefit cannot be withdrawn unless public interest is shown.
Term ‘Public interest’ is not vague or uncertain – The phrase ‘public interest’ is not vague and indefinite. – * Maneka Gandhi v. UOI – (1978) 1 SCC 248 = AIR 1978 SC 597 = (1978) 2 SCR 621 (SC 7 member bench) * Premium Granites v. State of Tamilnadu (1994) 2 SCC 691 = 1994 AIR SCW 2048 = AIR 1994 SC 2233 * Orissa Textiles v. State of Orissa 2002 AIR SCW 333 (SC 5 member bench).