STATE OF RAJASTHAN AND ORS versus VATAN MEDICAL AND GENERAL STORE AND ORS. ETC. ETC.

Citation: [2001] 2 S.C.R. 729 · Decided: 26-03-2001 · Supreme Court of India · Bench: A.S. ANAND · Disposal: Disposed off

Judgment (excerpt)

_, 
STATE OF RAJASTHAN AND ORS. 
A 
v. 
VATAN MEDICAL AND GENERAL STORE AND ORS. ETC. ETC. 
MARCH 26, 2001 
[DR. A.S. ANAND, CJ, R.C. LAHOTI AND SHIVARAJ V. PATIL, JJ.] 
B 
Excise Laws : 
Rajasthan Excise Act, 1950-Sections 3(14) and 3(15)-Rajasthan In-
toxicating Spirituous Preparations, Import, Export, Transport, Possession and 
Sales Rules, 1989-Rule 3(g)-Notification declaring all medicinal and toilet 
preparations and other spirituous Preparations containing more than 20% 
pivof alcohol to be liquor under the Rules-Writ Petitions challenging the 
Rules and the notificaJion-High Court allowing the Writ Petitions-Held, the 
decision of High Court cannot be sustained as doctrine of pith and substance 
not followed-Question of law kept open since subsequent events made deci-
sion academic-Constitution of India-Article 246-Seventh Schedule-Entry 
52 and 84 of List I-Entry 1, 6, 8, and 51 of List II-Entry 19 of List III. 
Petitioner-State Government, by a notification in May 1990, de-
clared all medicinal and toilet preparations and other spirituous prepara-
tions containing more than 20% proof alcohol to he liquor for the purpose 
of Rajasthan Excise Act, 1950 and Rajasthan Intoxicating Spirituous Prepa·· 
rations, Import, Export, Transport, Possession and Sales Rules, 1989. Writ 
Petitions were filed before High Court by respondents challenging the 
validity of the Rules and the notification of May 1990. The High Court 
allowed the Writ Petition striking down both the notifications as unconsti-
tutional. Hence the appeal. 
The State contended that the ambit and scope of a constitutional 
entry cannot he determined by reference to a Central enactment; that the 
power to make a law with respect to manufacture, production consump· 
tion and sale of intoxicating liquor lies with the State under Entry 8 List U 
of the Seventh Schedule to the Constitution; that no Central law, whether 
made under List I or List ID can afrect the validity of the State enactment; 
that if the State enactment, in pith and substance, is relatable to Entry 8 in 
List II, Article 246 of the Constitution cannot be brought in to hold that 
State Legislature is not competent to enact that law. 
729 
c 
D 
E 
F 
G 
H 
730 
SUPREME COURT REPORTS 
[2001] 2 S.C.R. 
A 
The respondents contended that the notifications were beyond the 
legislative competence of the State Government; that it constituted unrea· 
sonable restriction on fundamental right to trade and thus were violative 
of Article 19(1)(g) of the Constitution; that the impugned rules and notlfi. 
cation, if sustained, are liable to entail heavy financial burden since the 
B 
State may proceed to levy and recover excise duty or countervailing duty 
on the products under the Act. 
Disposing of the appeals, the Court 
HELD : 1. The decision of the High Court cannot be sustained. The 
c 
High Court proceeds upon a wrong premise that once a field is covered by 
Central legislation referable to List I, the power of State Government to 
legislate in the field covered by an Entry in List II is taken away without 
dealing with the doctrine of pith and substance and by ignoring the well 
settled position of law that the doctrine of covered field has to be applied 
~-
only to entries in List III. [74()..H; 741-A·B] 
D 
Southern Pharmaceuticals & Chemicals, Trichur & Ors. v. State of 
Kerala & Ors., AIR (1981) SC 1863 and State of A.P. & Ors. v. Mcdowell & 
Co. & Ors., [1996] 3 SCC 709, relied on. 
F.N. Balsara v. State of Bombay & Anr., [1951] SCR 682; Synthetics and 
E 
Chemicals Ltd v. State ofU.P., [1990] 1SCC109; Indian C & P Works v. State 
of A.P. & Ors., AIR (1966) SC 713; M.B.S. Oushadhalaya & Ors. v. Union of 
India & Ors., AIR (1963) SC 622; Shri Bileshwar Khand Udyog Khedut 
Sahakari Mandali Ltd. v. State of Gujarat & Anr., JT (1992) 1 SC 597; Mis. 
Dabur India Ltd. & Anr. v. State of U.P. & Ors., [1988] 1 SCC 264 and Mis. 
F 
Indian C & P Works v. State of A.P., AIR (1964) AP 430, referred to. 
2. This Court is n~t required to express any final opinion' on the 
issues arising for decision in these appeals because the decision is only 
academic in view of subsequent events and admitted facts. [740-A] 
G 
3. The apprehension of the respondents thatthe State may proceed to 
levy and recover excise duty or countervailing duty on the products under 
the Act, if the notifications are sustained, is premature and unfounded for 
! c
two reasons. Firstly, the Act·and the ltules take care of the resp

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