LexSOUTHERN PHARMACEUTICALS & CHEMICALS TRICHUR & ORS. ETC. versus STATE OF KERALA & ORS. ETC.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
SOUTHERN PHARMACEUTICALS & CHEMICALS
TRICHUR & ORS. ETC.
v.
STATE OF KERALA & ORS. ETC.
September 1, 1981
(0. CHINNAPPA REDDY, A.P. SEN & BAHARUL ISLAM, JJ.]
519
Kera/a Abkari Act 1077 ( 1of1077), SS. 12A, 12B, 14( e}, {f} and 68A and
Kerala Rectified Spirit Rules. 1972, Rules 13 and 16-Validity of-State Govern-
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ment whether competent to enact law relating to medicinal and toilet preparations.
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Constitution of India 1950, Schedule Vil, List I, Entry 84, List II Entries 8
and 54-Scope of-State legislature whether competent to enact a law with respect
to <intoxication liquors' or for le11ying excise duty on alcoholic requirements for
human consumption.
Doctrine of 'occupied field'-App/ication of-Incidental encroachment on
forbidden field-Whether affects competence of legislature to enact Jaw-Necessity
for examination of the sche1ne of both enactments-Charging section of statute
index to the real character of tax.
Tax and Fee-Distinction ~between-Quid pro quo stricto sensu-Whether
sine qua non of'fee'.
Words and Phrases-' Shall have due regard to'-Meaning of.
The appellants, who were manufacturers of medicinal and toilet preparations
containing alcohol challenged the constitutional validity in their writ petitions
under Art. 226 of the Constitution of the provisions of ss. 12A, 12B, 14(e) and
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(f ), 56A and s. 68A of the Kerala Abkari Act, 1967 (Act No. X of 1967) and
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Rules 13 and 16 of the Kerala Recti11.ed Spirit Rules, 1973 and rr. 5, 6 and 7 of
the Kerala Spiritious Preparations Rules, 1969 on the ground that the State
Legislature had no power to enact a law relating to medicinal and toilet prepara-
tions as the topic of the legislation was within the exclusive domain of Parliament
under Entry 84, List I of the Seventh Schedule of the Constitution and also on
the ground that they were violative of Art. 19(1) (g) read with Art. 301 of the
Constitution. The High Court dismissed the writ petition holding that there was
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no conflict between the impugned provisions and the Central law, i.e., the
Medicinal and Toilet Preparations (Excise Duties) Act, 1955 or the Medicinal
and Toilet Preparations (Excise Duties) Rules, 1956 framed thereunder as they
dealt with different subjects. The High Court further held that the impugned
provisions do not offend against Art. 19(1) (g) or Art. 301 of the Constitution.
In the appeal and the special leave petition to this Court it was contended
on behalf of the appellants (1) The State Legislature had no legislative competence
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520
SUPREME COURT REPORTS
(1982] I S.C.R.
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to enact 1te irr.i:trr:cd rrc\'isicns tecsufe lhe fidd was occupied by the provisions
of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (The Central
Act) and the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956 (the
Central Rules), and alternatively, the impugned provisions are violative of the
fundamental right guaranteed in Art. 19(1) (g) of the Constitution. (2) ''Drugs
and Pharmaceuticals" having been declared by Parliament under s. 2 of the
Industries (Development and Regulation) Act, 1951 to be a scheduled industry,
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being item 22 of the First Schedule thereof, the power ·or the State Legislature
to make a law in respect of medicinal and toilet preparations containing alcohol
was taken away. (3) The provisions made ins. 14{e) of the Act for the collection
of supervisory charges was clearly invalid in as much as (a) they are in conflict
with r. 45 of the Central Rules, and (b) they could not be sustained as a fee as
there was no quid pro quo. (4) Rule 13 of the Kerala Rectified Spirit Rules,
1972, providing for the levy of excise duty as excess wastage of alcohol in the
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manufacture of medicinal and toilet preparations cannot be supported in terms
of the charging provision contained in s. 17 of the Act. (5) The power to restrict
the quantity of ayurvedic asavas and arishtas in which alcohol is self-generated
in the process of manufacture having regard to the total requirement of such
medicinal preparations for consumption or use in the State is an unreasonable
restriction on the fundamental right to carry on trade or business guaranteed
under Art. 19(1) (g) and was also violative of Art. 301 as there was demand for
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such medicinal preparations not only in the State but throughout the country.
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Dismissing t-he Appeal and Special Leave Petition,
HELD : (1) The Central and State Acts operateExcerpt shown. Read the full judgment & AI analysis in Lexace.