T.C. Shrivastava , J.
1. By this petition under Articles 226 and 227 of the Constitution of India, petitioner No. I Messrs Alembic Distributors, Ltd., Jabalpur, challenges the correctness of the order of the respondent, Assistant Commissioner of Sales Tax, Jabalpur, passed on 31st August, 1960, assessing sales tax on the sales made by him in the year 1957-58. Petitioner No. 2, Chemists and Druggists Association, Jabalpur, has been impleaded as a petitioner as they are stated to be interested in the result of these proceedings. In this order we will refer to petitioner No. 1 as 'the petitioner'.
2. The petitioner carries on business of selling medicinal preparations, and a notice was issued against him to pay sales tax on the turnover in the assessment year. The sales included some medicinal preparations containing alcohol. It is the assessment of sales tax on these medicinal preparations which is challenged in this petition. The amount comes to about Rs, 900 only.
3. The petitioner's case is that the State Government had power to levy excise duty on these preparations under the Central Provinces and Berar Excise Act, 1915 (Act No. II of 1915) (hereinafter referred to as the 'Excise Act') and therefore the sales were not liable to sales tax under entry 32 of Schedule II of the Central Provinces and Berar Sales Tax Act, 1947 (No. XXI of 1947) (hereinafter referred to as the 'Sales Tax Act').
4. In the return, the Assistant Commissioner of Sales Tax has stated that the State Government of Madhya Pradesh was levying excise duty on the liquor contents of medicines till the year 1955. After that, the Central Act known as the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (Act No. XVI of 1955) (hereinafter referred to as the 'Act of 1955') was passed and this Act took away the power of the State Government to charge excise duty in respect of medicinal and toilet preparations. These articles, therefore, ceased to be excisable articles and no duty was in fact levied or could be levied on such articles after the Act of 1955. Accordingly, these articles do not fall within entry 32 of Schedule II of the Sales Tax Act and were, therefore, rightly included in the assessment.
5. Before proceeding with the merits of the contentions raised in this petition, we may point out paragraph 4 of the petition in which the petitioner averred that excise duty on the alcoholic contents of the medicines had been collected by another Government and he filed exhibits P-2 and P-3 in support of this. It was. admitted before the Assistant Commissioner of Sales Tax and it has also been admitted in arguments before us by Shri R. K. Pandey, learned counsel for the petitioner, that during the year under assessment no excise duty was paid. Exhibits P-2 and P-3, which have been filed along with the petition, relate to duties paid in 1947-48. There is nothing to substantiate the statement that excise duty was paid to any Government in the year of assessment. The statement to that effect in paragraph 4 Of the petition is, to say the least, made carelessly.
6. The first contention of Shri R. K. Pandey is that the State Government has no power to levy sales tax on the sale of medicinal and toilet preparations. He relies on Entry 84 in List I of the Seventh Schedule of the Constitution, That entry gives power to the Central Government to impose duties of excise on 'medicinal and toilet preparations containing alcohol'. The power of the State Government to charge sales tax is based on Entry 54 in List II. It is true that under Entry 51, which relates to imposition of excise duty, the power of the State Government to impose excise duty on medicinal and toilet preparations has been taken away; but that does not affect the power of the State Government to charge sales tax on such preparations which is independently given to them under Entry 54. The attack on the ground of want of legislative power is, therefore, without any merit.
7. We shall now examine the second contention that medicinal and toilet preparations containing alcohol are exempt from sales tax under the provisions of the Sales Tax Act itself. Entry 32 in Schedule II of the Sales Tax Act reads as follows :
Goods on which duty is or may be levied under the Central Provinces and Berar Excise Act, 1915 (II of 1915), or the Central Provinces and Berar Prohibition Act, 1938 (VII of 1938), or the Opium Act, 1878 (I of 1878).
On reading this entry, we agree that it is not necessary that duty should have been actually levied on the goods to attract the application, of this entry. It is sufficient if there is power under the relevant Act to impose such a duty. In the present case, the material Act is the Excise Act. In Section 2(6), 'excisable article' has been defined to mean 'any alcoholic liquor for human consumption'. 'Liquor' as defined in Section 2(13) includes 'all liquid consisting of or containing alcohol', Reading these two definitions together, medicinal and toilet preparations, which are liquids and which contain alcohol, would be liable to excise duty.
8. Section 27-A was introduced in the Excise Act by the Adaptation Order, 1937. In Sub-section (2) the following was added as Clause (c) by the Adaptation Order, 1950, viz:
(c) any duty on medicinal or toilet preparations containing alcohol.
The effect of adding this clause was that the power of the State Government to levy such duty was preserved, if it was being so levied under the existing law prior to the commencement of the Constitution. This adaptation was obviously made to give effect to Article 372 of the Constitution which continued in force the laws existing prior to the Constitution. Under this adaptation made in 1950, the power of the State Government under the Excise Act to levy duty on medicinal and toilet preparations continued after the Constitution.
9. In the Return, the respondent has stated that no duty, was charged on medicinal and toilet preparations as such but only on the alcoholic contents thereof. That does not make any difference to the position that the power to levy excise duty on such preparations existed in the Excise Act and was continued after the Constitution.
10. However, in 1955, the Act of 1955 came into force. As the preamble of that Act indicates, it was 'an Act to provide for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol, opium, Indian hemp or other narcotic drug or narcotic'. This Act was in pursuance of the power in Entry 84 in List I of the Seventh Schedule of the Constitution. Section 21 of this Act provided for the repeal of the existing State laws as follows:
If, immediately before the commencement of this Act, there is in force in any State any law corresponding to this Act, that law is hereby repealed.
The object of this Act was to impose excise duty and the State Act which imposed similar duty would be a corresponding Act. We have no doubt that the effect of this repeal was. to do away with the power of the State Government to impose excise duty on medicinal and toilet preparations which existed under the Excise Act as continued by the adaptation under Article 372 of the Constitution. Even apart from the specific provision in the Act of 1955, the repeal follows from the provisions of Article 372 itself which provides that the laws in force before the commencement of the Constitution 'shall continue in force therein until altered or repealed or amended by a competent Legislature or other competent authority'. The Parliament was the competent Legislature to impose excise duty on medicinal and toilet preparations and as it framed the necessary law in 1955, the State law could no longer continue in force.
11. Shri R. K. Pandey contended that the repeal clause either had the effect of repealing the whole of the Excise Act or it repealed nothing. He points out that there is no specific enactment imposing excise duty on medicinal preparations in the Excise Act. This follows from the definitions and if these definitions are omitted, the Act cannot have any meaning. In other words, the provision is inseparable from the rest of the Act. He relies upon the decision in R. M. D. Chamarbaugwalla v. Union of India A.I.R. 1957 S.C. 628.
12. The argument proceeds on the assumption that a repeal clause must operate to take away some specific words, sentences or sections from the repealed Act. This assumption, in our opinion, is erroneous. It is permissible to repeal the effect of an enactment on a particular subject without disturbing its application to other subjects. In such a case, the text of the Act continues to stand as it is but its application becomes restricted. In the instant case, the effect of the Excise Act on medicinal preparations is taken away by the repeal and this result follows otherwise also by the distribution of legislative powers between the Centre and the States read with the transitory provisions in Article 372. We have no doubt that the effect of the Excise Act on medicinal preparations is severable from its effect on other articles and the repeal has the effect of making medicinal preparations no longer liable to State excise duty.
13. In this view, we agree with the learned Government Advocate that after the enactment of the Act of 1955 the power of the State Government to levy excise duty on medicinal preparations terminated and such articles, therefore, ceased to be leviable with excise duty under the Excise Act. Accordingly, entry 32 in Schedule II of the Sales Tax Act no longer applied to such preparations and the petitioner was liable to pay sales tax on the sale of these preparations.
14. Shri H. L. Khaskalam had also contended that the proper course to be followed by the petitioner was to file an appeal before the Commissioner of Sales Tax against the order of the respondent and as he has not done so, the petition should be rejected as premature. It is not necessary for us to examine this contention, as we find no substance in the petition on merits.
15. The petition is dismissed with costs. Hearing fee is fixed at Rs. 100 only. The outstanding amount of the security deposit, after deducting the costs, shall be refunded to the petitioner.