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Sarabhai Chemicals Ltd. Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtGujarat High Court
Decided On
Judge
Reported in(1980)2GLR30
AppellantSarabhai Chemicals Ltd.
RespondentUnion of India (Uoi) and ors.
Cases Referred(Suhrid Geigy Ltd. v. Union of India
Excerpt:
- - very little is known about the sites and modes of action of tranquillizers, but it is generally agreed that the antipsychotic tranquillizers act solely on the brain itself, whereas antianxiety agents act on the spinal cord as well......has been paying excise duty levied under section 3 read with item 14e in the first schedule to the central excises and salt act, 1944. item 14e provides for levy of excise duty on patent or proprietary medicines not containing 'narcotic drug' or 'narcotic'. the first argument which mr. nanavaty has raised, therefore, is that these four medicinal preparations do not contain 'narcotic drug' or 'narcotic'. according to him, the very fact that the central excise authorities have treated, for the purpose of item 14e, these medicinal preparations as not containing 'narcotic drug' or 'narcotic' is enough to exclude the applicability to these medicinal preparations of item i (iii) in the schedule to the medicinal and toilet preparations (excise duties) act, 1955, because whereas item 14e in the.....
Judgment:

S.H. Sheth, J.

1. Sarabhai Chemicals Limited, the petitioner, has been manufacturing the following four medicinal preparations:

1. SIQUIL (Triflupromazine Hydrochloride).

2. ANATENSOL (Fluphenazine Hydrochloride)

3. DI-RAUDIXIN (whole root Rauwolfia Serpentina).

4. DI-RAUDTXIN FORTE.

It is un-disputed that they are all tranquillizers. The question which has been raised for our consideration is whether they are medicinal preparations containing 'narcotic drug' or 'narcotic' within the meaning of Item I (iii) in the Schedule to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, and are, therefore, liable to payment of excise duty thereunder. Mr. I.M. Nanavaty states to us that in respect of these medicinal preparations, the petitioner has been paying excise duty levied under Section 3 read with Item 14E in the First Schedule to the Central Excises and Salt Act, 1944. Item 14E provides for levy of excise duty on patent or proprietary medicines not containing 'narcotic drug' or 'narcotic'. The first argument which Mr. Nanavaty has raised, therefore, is that these four medicinal preparations do not contain 'narcotic drug' or 'narcotic'. According to him, the very fact that the central excise authorities have treated, for the purpose of Item 14E, these medicinal preparations as not containing 'narcotic drug' or 'narcotic' is enough to exclude the applicability to these medicinal preparations of Item I (iii) in the Schedule to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, because whereas Item 14E in the Schedule to the Central Excise and Salt Act, 1944, applies to patent or proprietary medicines not containing 'narcotic drug' or 'narcotic', Item I (iii) in the Schedule to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, applies to medicinal preparations containing 'narcotic drug' or 'narcotic'

2. The second argument which Mr. Nanavaty has raised is that all these medicinal preparations which are tranquillizers do not contain a 'narcotic' or a 'narcotic drug' within the meaning of the definition of that expression given in Item 2(h) at the relevant time. In Special Civil Application No. 912 of 1975 decided by us on 4th and 7th April 1980 (Suhrid Geigy Ltd. v. Union of India XXI (2) G.L.R., 16) we have taken the view upon interpretation of Section 2(h) that a 'narcotic drug' or a 'narcotic.' is one which produces in rising stages drowsiness, sleepiness, stupefaction 1. 1980(2) G.L.R, XXI (2) 16 and insensibility. In other words, a medicinal preparation can be said to contain a 'narcotic drug' or a 'narcotic' if it affects the central, nervous system.

3. Let us now turn to the nature and character of tranquillizers which all these medicinal preparations are. He has invited our attention to the Review of Medical Pharmacology, 5th Edition, by Meyers, Jawetz and Goldfien. Part III, deals with the central nervous system. Chapter 25 which is in Part III deals with Antipsychotic Tranquillizers. The behavioral effect of antipsychotic tranquillizers has been described in that book at page 249 in the following terms:

Even with the huge doses used in the treatment of psychotic patients, this sedation does not progress to anesthesia. The patient experiences a state of indifference or apathy, with a drowsy feeling and motor retardation, but be aroused even after large doses by ordinary stimuli.

He has then invited our attention to Encyclopaedia Britannica, Vol. 18, 15th Edition, page 595. Describing the nature of action which a tranquillizer produces, this is what has been stated in that book:

Very little is known about the sites and modes of action of tranquillizers, but it is generally agreed that the antipsychotic tranquillizers act solely on the brain itself, whereas antianxiety agents act on the spinal cord as well.

It has been further stated in that behalf:

The tranquillizers proved to be uniquely useful because of their ability to moderate anxiety while producing a minimum of other effects on the nervous system.

In reply, Mr. Patel who appears on behalf of respondents Nos. 3 to 5 has invited our attention to Pharmacology and Pharmaco-Therapeutics by V. Iswariah and M.N. Guruswami, 1973 Edition. Referring to Chlorpromazine, this is what has been stated at page 147:

The drug markedly depresses an aggressive behavior in normal rhesus monkeys, and produces dreamy, apathetic behaviour. Sham rage in diencephalic cats is blocked by chlorpromazine. In man, the effects of the drug on abnormalities of mood or thought in disturbed psychotic individuals, have been studied but the reports on the effects on normal human subjects are inadequate.

Referring to the general actions of phenothiazine tranquillizers, this is what has been stated at page 144:

The phenothiazines induce their primary calming and antipsychotic effects by depressing the central nervous system in a manner which differs presumably from the depression produced by hypnotics in that no unconsciousness results. In addition to rapid control of deeply disturbed patients without danger of depression of vital centres, long range treatment is possible.

It has further been stated in that behalf as follows:

They appear to cause less drowsiness and fewer autonomic disturbance than chlorpromazine but give rise to a much higher incidence of parkinsonism.

4. The next text book to which Mr. Patel has invited our attention is The Pharmacological Basis of Therapeutics by Louis & Goodman & Alfred Gilman, Third Edition, at page 167, action at different levels in the nervous system has been described. It has been stated that 'The phenothiazines appear to produce change at all levels of the cerebrospinal axis.... Administration of large doses of chlorpromazine to man results in an EEG characteristic of drowsiness, with the appearance of slow theta waves, 5 to 6 per second, with low voltage.'

5. Mr. Patel has, therefore, argued that the tranquillizers act on the central nervous system inasmuch as they produce drowsiness. That, in our opinion, is not enough to brand tranquillizers as containing a 'narcotic drug' or 'narcotic' within the meaning of the definition of that expression given in Section 2(h) of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955.

6. In Special Civil Application No. 912 of 1975 decided by us on 4th and 7th April 1980 (supra), we have interpreted the definition of a 'narcotic drug' or a 'narcotic' which was in force at the relevant time that in order to be a 'narcotic drug' or a 'narcotic', it must produce in rising stages drowsiness, sleepiness, stupefaction and insensibility. We do not find tranquillizers producing such effects.

7. Out of the four medicinal preparation SIQUIL is used to control abnormal agitation without producing marked sedation or drowsiness. ANATENSOL is used for treatment or mild temporary behaviour problems in children, and, in case of adults, it is used for relieving anxiety and tension state. Two other medicinal preparations DI-RAUDIXIN and DI-RAUDIXIN FORTE are used for lowering systolic and diastolic blood pressure and they provide tranquillisation and induce a mild reduction pulse rate. The first two medicinal preparations belong to Phenothiezine group and the last two are exclusively anti-hypertensive products.

8. It is necessary in this behalf to note what the central excise authorities had to say about these medicinal preparations.

9. On 21st April 1969, the Inspector of Prohibition and Excise informed the petitioner that SIQUIL fell within the meaning of a 'narcotic drug' as defined by the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, and called upon the petitioner to pay 10% ad valorem excise duty thereon. On 15th January 1971, the Director of Prohibition held that 'SIQUIL' did not contain a 'narcotic' or 'narcotic drug'. On 31 st June 1969, the Inspector of Prohibition and Central Excise directed the petitioner to pay excise duty under Item 1 (iii) in the Schedule to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 on ANATENSOL. The Director of Prohibition by his order in appeal held that ANATENSOL did not fall under the said Item I (iii). In regard to two other medicinal preparations, the Inspector of Prohibition and Central Excise had issued a similar notice to the petitioner. The Director of Prohibition in appeal held that the other two medicinal preparations did not fall under the said Entry 1 (iii). However, on 21st July 1975, the Superintendent of Prohibition wrote a letter to the petitioner informing the petitioner that SIQUIL manufactured by the petitioner fell under the said Item 1 (iii) because it was a 'narcotic drug' or a 'narcotic' within the meaning of Section 2(h). Similar notices were also sent by the Superintendent in regard to three other medicines. The petitioner denied its liability to pay excise duty upon the aforesaid medicinal preparations under the said Item 1 (iii).

10. These facts make it clear that, in the first instance, the respondents thought that the aforesaid four medicinal preparations contained a 'narcotic' or 'narcotic drug', then thought otherwise then again changed their mind and decided that they contain a 'narcotic drug' or a 'narcotic.' It is this uncertainty which has caused this litigation.

11. For the reasons stated above, we are of the opinion that the aforesaid four medicinal preparations do not contain a 'narcotic' or a 'narcotic drug' as interpreted by us in the decision to which we have referred. They are, therefore, not liable to pay excise duty under Item 1 (iii) in the Schedule to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955.

12. In the result, the petition succeeds.

13. A writ of mandamus shall issue restraining the respondents from levying on the aforesaid four medicinal preparations and collecting from the petitioner excise duty under the said Item 1 (iii) in the Schedule to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. The notices issued by the respondents in that behalf are quashed. Rule is made absolute with costs.


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