STATE OF BIHAR AND ORS. versus SHREE BAIDYANATH AYURVED BHAWAN (P) LTD. AND ORS.

Citation: [2005] 1 S.C.R. 334 · Decided: 11-01-2005 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
STATE OF BIHAR AND ORS. 
V. 
SHREE BAIDYANATH AYURVED BHAWAN (P) LTD. AND ORS. 
JANUARY 11, 2005 
B 
[S.N. VARIAVA, DR. AR. LAKSHMANAN AND S.H. KAPADIA, JJ.] 
Excise Laws: 
Bihar Excise Act, 1915(as amended by Act No.6 of 1985): Sections 
C 2(12a), 5, 13, 19, 38, 39 and 90-1nclusion of 'medicinal and toilet 
preparations' containing alcohol defined under the Medicinal A ct in definition 
of word 'intoxicant' in Section 2(12a)-Notification thereunder seeking to 
licence and regulate on payment of fees, use and possession of Ayurvedic 
medicinal preparation containing alcohol-Validity of-Held: Bihar Act and 
D Notifications issued valid-Bihar Act covers use and possession of medicinal 
preparations containing alcohol, relatable to Entry 8 read with Entry 6 of List 
//-Medicinal Act provides for levy of excise duty on medicinal and toilet 
preparation containing alcohol, relatable to Entry 84 List I-Drugs Act regulate 
manufacture of Ayurvedic drugs for sale, relatable to Entry 19 of List.II/-
E Hence, subject matter of State Act and Central Acts operate in different fields 
and cannot coriflict-There is no incidental trenching-Bihar Act not repugnant 
to Medicinal Act and Drugs Act-Further, since licence and regulation of use 
and misuse of medicine an enormous activity involving heavy expenditure, the 
State and the Board competent to issue Notification under sections 5, 19(4), 
38, 39 and 90 of the 1915 Act-Notifications did not encroach upon field 
F occupied by Central Acts-Furthermore, fees levied being regulatory in nature 
for which quid pro quo not necessary and also not voilative of Article 301-
Exclusion of Unani medicines from the Notifications not violative of Article 
14-Medicinal and Toilet Preparation Excise Duties Act, 1955-Drugs Act, 
1940-Constitution of India, 1950-Articles 14, 245, 246, 254, 301 Schedule 
G VII List I Entry 84, List II Entry 6 and 8, Entry 19 List /JI. 
By Bihar Amendment Act No. 6of1985 word 'intoxicant' in section 
2(12a) of the Bihar Excise Act, 1915 was redefined by including therein 
"medicinal and toilet preparations" containing alcohol as defined under 
the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. 
H Thereafter, Notification No.2/23-3-88/1, 2/23-3-88/2, 2/23-3-88/3 dated 3rd 
334 
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y 
STATE r. BAIDYANATHAYURVEDBHAWAN(P)LTD. 
335 
August, 1988 were issued whereby State as well as Board of Revenue is A 
seeking to licence and regulate on payment of fees, use and possession of 
Ayurvedic preparation containing alcohol. Manufacturers of Ayurvedic 
medicinal preparation challenged the constitutional validity of section 
2(12A)(iv) of Bihar Act and also power of the State and the Board. High 
Court held that the State Legislature erred in including "medicinal B 
preparation~' within the meaning of the word "intoxicant" under section 
2(12a) of the Bihar Act as the said item has been set apart by the 
Constitution for Parliamentary legislation; that this exercise amounted to 
colourable exercise of the power, that the levy of fees wa~ in substance an 
excise duty, as such violated Article 301; that the exclusion of Unani 
medicines from the operation of the impugned notifications was violative C 
of Article 14 and hence, set aside the Notifications. Hence, the present 
appeals. 
Allowing the appeals, the Court 
HELD: 1. The Bihar Excise Act, 1915 is constitutionally valid and D 
also the imugned Notifiication/Communication No.2/23-3-88/l, 2/23-3-88/ 
2, 2/23-3-88/3 dated 3rd August 1988, are valid. 1359-GI 
2.1. The Scheme of the Bihar Excise Act, 1915 (as amended by Act 
No.6 of 1985) seeks to license and regulate use (including consumption) 
and possession of medicinal preparations containing alcohol as alcoholic E 
beverages. The 1915 Act regulates use, possession, transport, import and 
export of intoxicants. It regulates use and possession of medicinal and toilet 
preparation as alcoholic beverage. Section 2 (12a) of the Act defines the 
word 'intoxicant' to mean liquor or any substance from which liquor may 
be distilled or intoxicating drug or medicinal preparation as defined under F 
the Medicinal and Toilet Preparations Act, 1955. It is relatable to Entry 
8 (intoxicating liquor) read with Entry 6 (Public health) of List II in the 
Schedule VII. 1345-A; 346-D; 343-C; 346-DI 
2.2. The Scheme of Medicinal and Toilet Preparations Act, 1955 
provides for levy and collection of excise duty on medicinal and toilet 
preparations containing alcohol, opium or

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