STATE OF ASSAM AND ORS. versus SH. NARESH CHANDRA GHOSE (D) BY LRS.

Citation: [2000] SUPP. 5 S.C.R. 296 · Decided: 01-12-2000 · Supreme Court of India · Bench: V.N. KHARE · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
STATE OF ASSAM AND ORS. 
v. 
SH. NARESH CHANDRA GHOSE (D) BY LRS. 
DECEMBER I, 2000 
B 
[Y.N. KHARE AND N. SANTOSH HEGDE, JJ.] 
Sales Tax: 
Assam Finance (Sales Tax) Act, 1956, Item 67 of the Schedule-
C Medicinal preparations-Classification based on strength of alcohol 
contents-Validity of-Spirituous medicinal preparation containing more 
than l 2% by volume of alcohol separately classified for levy of tax under Item 
67-Whether this type of classification which differentiates medicinal 
preparations based on content of alcohol in such preparations is a valid 
D classification - Held, Yes--Classification being based on intelligible differntia 
is a valid classification. 
The assessing authorities assessed the medicinal preparation 
'Mritasanjibani' manufactured by the respondent, to sales tax under the 
Assam Finance (Sales Tax) Act, 1956, under Item 67 of the Schedule to the 
E Act. The respondent filed writ petition challenging the assessment order. The 
High Court declared Item 67 of the Schedule as violative of Article 14 of the 
Constitution. Hence this appeal filed by the State challenging the judgment 
of the High Court. 
F 
Allowing the appeals, the Court, 
HELD : The Legislature has a wide discretion in selecting the persons 
or objects it wants to tax. Such a classification cannot be construed as an 
arbitrary classification. Definitely, a medicinal preparation containing over 
12% of alcohol stands as a separate class of medicinal preparation as 
compared to other medicinal preparations which either do not contain alcohol 
G or contains less than 12%. This classification based on the alcohol contents 
of the medicinal preparation is not confined to Ayurvedic, Homeopathic or 
Unani medicines alone but it encompasses all spirituous medidnal 
preparations which are prepared under any Pharmacopoeia and containing 
more than 12% by volume of alcohol. Therefore, the Legislature or its 
H delegates have not made any arbitrary classification for the purpose of levy 
296 
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) 
J 
S'f\TF v. !';.C. GHOSE [HEGDE, .T] 
297 
impugned. The said classification being based on intelligible differentia is, A 
therefore, valid classification. (299-F, G, H; 300-AI 
Ayurveda Pharmacy and Am: v. State of Tamil Nadu. (1989( 2 SCC 285, 
distinguished. 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 690-92 of B 
1991. 
From the Judgment and Order dated 11.4.90 of the Gauhati High Court 
in C.R. Nos. 368, 369178 and 310 of 1982. 
Vijay Hansaria, S. Borthakur and Amitesh Lal for M/s. Jain Hansarias & 
Co. for the AppeUants. 
C 
Bhaskar Prasad Gupta, Swapan Kumar Dutta, Deepak Kumar Jena, Ms. 
Mridula Ray Bhardwaj for the Respondents. 
The Judgment of the Court was delivered by 
SANTOSH HEGDE, J. The medicinal preparation 'Mritasanjibani' D 
manufactured by the respondent was assessed to sales-tax under the Assam 
Finance (Sales Tax) Act, 1956 (hereinafter referred to as 'the Act') under Item 
67 of the Schedule to the Act by the assessing authorities. The challenge to 
the said assessment order being dismissed by the appellate authority, the 
respondents filed 3 writ petitions before a Division Bench of the Gauhati High 
Court which, while allowing the said writ petitions, declared the said Item 67 E 
of the Schedule to the Act as violative of Article 14 of the Constitution. The 
State of Assam is in appeal before us, challenging the said judgment of the 
Division Bench of the High Court made in Civil Rule Nos.368, 369of1978 and 
310 of 1982 dated 11.4.1990. 
The High Court while entertaining the abovesaid writ petitions, considered F 
the following 3 arguments of the respondents and held the same against them: 
I. 
That no spirit being used in the preparation of Mritasanj ibani, it 
cannot be termed as "spirituous medicinal preparation"; 
2. 
That there being no Ayurvedic Pharmacopoeia in existence, in the G 
absence of any machinery to determine the alcoholic contents of 
a medicinal preparation, Item 67 cannot be given effect to; 
3. 
That there is no finding in the instant case that Mritasanj ibani 
contains more than 12% alcohol. 
However, it proceeded to consid~r the constitutional vatidity of Item 67 of the H 
298 
Sl:PRFVIE COCRT REPORTS [2000) SLIPP. 5 S.C.R. 
A Schedule to the Act, as stated above, and following the judgment of this 
Court in Ayurveda Pharmacy & An~ v. State of Tamil 11/adu, [ 1989] 2 SCC 285, 
it declared Item 67 of the Schedule to the Act as being violative of Article 
14 of the Constitution of

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