GUJCHEM DISTILLERS INDIA LTD. versus STATE OF GUJARAT AND ANR.

Citation: [1992] 1 S.C.R. 675 · Decided: 17-02-1992 · Supreme Court of India · Bench: P.B. SAWANT · Disposal: Dismissed

Cited by 3 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

' ..... 
GUJCHEM DISTILLERS INDIA LTD. 
v. 
STATE OF GUJARAT AND ANR. 
FEBRUARY 17, 1992 
[P.B. SAWANT ANDS. MOHAN, JJ.] 
Bombay Prohibition Act, 1949-Section 58(A)-Co11stinuio11a/ validity 
of-S11perifrion wider-Legality of 
Constitution of India, 195(}-Anic/e 136--Appeai-Matter not co11-
te11ded before High Co11n whether pcnnitred to collte11d i11 appeal. 
The appellant, a company registered under the Indian Companies 
A 
B 
c 
Act, 1956, W"ds using industrial alcohol as one of the raw materials for 
manufacturing resins, chemicals, sodium carboxy methyl, cellulose and 
certain other chemicals. In May, 1970, the company installed its own D 
distillery for the purpose of manufacturing industrial alcohol from mol-
lasses. 
The respondent No. 2 on 3.7.1969 issued a licence to the company 
for manufacturing spirit. In accordance with the conditions No. 2 and No. 
3, the respondent No. 2 appointed a 9 member supervisory staff consisting E 
of one Inspector, one Sub-Inspector, one Nayak, one Jamadar and five 
constables, to supervise Ute manufacture of the spirit in the company's 
distillery plant. The appellant-company was required to provide residen-
tial accommodation to the supervisory stafl'within its factory premises and 
to deposit supervisory charges from time to time. The company complied 
the requirements. 
In 1973 the appellant-company tiled a Civil Application in the High 
Court challenging the constitutional rnlidity of the Section 58(AJ of the 
Bombay Prohibition Act, 1949. 
The High Court dismissed the petition, hence this appeal by certifi-
cate granted by the High Court under Articles 132(1) and 133(l)(a) of the 
Constitution. 
F 
G 
The appellant-company contended that this Court in Symhctics and 
Chemic/as Ltd. case, (1989] Supp.I SCR 623 held that in respect of H 
675 
676 
SUPREME COURT REPORTS 
[1992] 1 S.C.R. 
A industrial alcohol, the States had no power to impose. the impost; that in 
•·iew of the judgment of this Court, the theory of privilege as adumbrated 
by the High Court could not be sustained, and that there was no quid pro 
quo. 
The .respondent-State submitted that the Synthetics and Chemicals 
B Ltd. case dealt merely with the vend fees, and not about supervisory 
charges. 
Dismissing the appeal, this Court, 
HELD: 1.01. The States have the power to regulate the use of alcohol 
C and that power must include power to make provisions to prevent and/or 
check industrial alcohol being used as intoxicating or drinkable alcohol. 
This is an added reasoning to uphold the validity of Section 58(A). 
[684D, F-G] 
D 
Synthetics & Chemicals Ltd. v. State of U.P. and Ors .. [1989] Supp.I 
SCR 623-Followed. 
1.02. Section 58(A) of the Bombay Prohibition Act creates a statutory 
duty or supervision and incidentally provides for recovering from a 
manuracturer or a businessman having been permitted under a licence to 
E carry on lawfully a business or industrial activity which would otherwise 
have been unlawful. [684G-685A] 
F 
1.(13. The mai.ntenance of the staff contemplated under Section 58(A) 
of the Act is primarily for the purpose or ensuring that while dealing with 
industrial alcohol, no attempt shall be made to divert non-potable alcohol. 
Therefore, by regulatory measures, the State sees to it that industrial 
alcohol is not diverted for the use as potable alcohol. Such a regulatory 
measure is perfectly valid. Hon·ever, such a power \\'~s sustained though 
not on police power but as a regulatory measure. [679C-D] 
G 
Sowhem P/iannace11tica/s & Chemicals v. State of Kera/a, AIR 1981 
S.C. 1863; Sh. Bileshwarkhand Udyog Khed11t Sahakari Mandali Ltd. v. The 
State of G11jarat & Anr., C.A. No. 503 of 1974-Followed. 
2. The appellants are precluded from contending that the services 
·did not make the impost, since the High Court has noted that it was not 
H contended before it that there was not sullicient quid pro quo between the 
GUJCHEM DISTILLERS v. STATE [MOHAN, J.] 
677 
quantum of impost and the services rendered to the manufacturer or A 
businessman. [679E-F] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 350 of 
1974. 
Appeal by Certificate from the Judgment and Order dated 29/30-8-
B 
1973 of the Gujarat High Court in Special Civil Application No. 163 of 
1973. 
M.H. Baig, Rajiv Shakdhar, R. Sasi Prabhu (for M/s S.A. Shroff & 
Co.) for the Appellants. 
P.S. Poti, Bimal Roy Jad. Anip Sachthey and Ms. Rashmi Dhariwal 
for the Respondents. 
The Judgment of the Court was delivered by 
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