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New National Chemical and Pharmaceutical Works Vs. State of Rajasthan and ors. - Court Judgment

LegalCrystal Citation
SubjectOther Taxes
CourtRajasthan High Court
Decided On
Case NumberCivil Writ No. 227 of 1962
Judge
Reported inAIR1967Raj42
ActsConstitution of India - Articles 14, 226; Medicinal and Toilet Preparations (Excise Duties) Rules, 1956 - Rules 11, 12, 38, 59 and 127; Medicinal and Toilet Preparations (Excise Duties) Act, 1955 - Sections 2, 3, 19 and 21; State's Excise Act
AppellantNew National Chemical and Pharmaceutical Works
RespondentState of Rajasthan and ors.
Appellant Advocate Chandmal and; S.N. Anand, Advs.
Respondent Advocate A.R. Mehta, Dy. Govt. Adv.
DispositionPetition partly allowed
Cases ReferredH. C. and P. Works Ltd. v. State of Andhra Pradesh
Excerpt:
- industrial disputes act, 1947. section 2(s): [m.s. shah, sharad d. dave & k.s. jhaveri,jj] workman part time employees held, part time employees are not excluded from the definition of workman in section 2(s) merely on the ground that they are part time employees. the ex abundante cautela use of the words either whole time or part time by the legislature in the definition of working journalist in the working journalists and other newspaper employees (conditions of service and miscellaneous provisions) act, 1955, does not mean that the definition of workman in the prior act i.e. industrial disputes act, 1947 intended to exclude part-time employees from the definition of workman. the expression part time has nothing to do with the nature of appointment, but it only regulates the.....modi, j. 1. this is a writ petition by the new national chemical and pharmaceutical works, bharatpur, through its proprietor h. c. malhotra under article 226 of the constitution.2. it is admitted that the petitioner has been carrying on the business of manufacture of medicinal and toilet preparations since 1956. on the medicinal and toilet preparations (excise duties) act, 1955 (act no. 16 of 1955 hereinafter called the act) having come into force with effect from the 1st april, 1957, the petitioner obtained a licence in form l-1 in accordance with rule 83 of the medicinal and toilet preparations (excise duties) rules, 1956 (hereinfter called the rules) made under the aforesaid act. it is further admitted that the petitioner got his licence renewed from year to year until the 31st march,.....
Judgment:

Modi, J.

1. This is a writ petition by the New National Chemical and Pharmaceutical Works, Bharatpur, through its proprietor H. C. Malhotra under Article 226 of the Constitution.

2. It is admitted that the petitioner has been carrying on the business of manufacture of medicinal and toilet preparations since 1956. On the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (Act No. 16 of 1955 hereinafter called the Act) having come into force with effect from the 1st April, 1957, the petitioner obtained a licence in form L-1 in accordance with Rule 83 of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956 (hereinfter called the Rules) made under the aforesaid Act. It is further admitted that the petitioner got his licence renewed from year to year until the 31st March, 1960.

Before this licence expired, the petitioner had made an application on or about the 22nd February, 1960, to the Commissioner, Excise and Taxation of this State for renewal of his licence in form L-1. The petitioner's grievance, however, is that the licence was not renewed and instead he received a letter from the Deputy Commissioner Excise and Taxation, Ajmer Division, Jaipur, to the effect that a sum of Rs. 4637.98 paise was due from him to the department and that it should be paid immediately and further that his licence would not be renewed until such amount was paid. As the details of the aforesaid amount had not been furnished under the letter in question, the petitioner asked for the same and these were supplied to him under the letter of the Assistant Commissioner, Excise and Taxation dated the 27th July, 1960, Ex. 3. It was mentioned in this letter that out of the amount of Rs. 4637.93, a sum of Rs. 2.93 was due from the petitioner as cost of finished goods while the balance of Rs. 4635 was due as difference of duty short paid on certain goods.

Against this order, the petitioner preferred an appeal to the Commissioner under Rule 127 of the Rules which appeal does not appear to have been disposed of as such. By another notice dated the 4th January, 1961, the Assistant Commissioner, Excise and Taxation, however notified to the petitioner that in addition to the aforesaid sum of Rs. 4637.93 paise, a further sum of Rs. 9965.68 paise, the total amounting to Rs. 14603.61 Paise was outstanding against the petitioner and that he should pay it immediately failing which coercive action would be taken against him. See Ex. 5. The particulars of the arrears due were given in the notice. It is also mentioned in this notice that the said demand had been made in accordance with the decision of the Commissioner. Excise and Taxation.

Against this demand notice, the petitioner went up in appeal to the State of Rajasthan under Rule 127 of the Rules on the 18th May 1961 vide Ex. 6. As this appeal was not decided by the Government, the petitioner thought fit to send two reminders thereto--one dated the 5th August, 1961, and the other dated the 10th April, 1962 vide Exs. 7 and 8. In reply the petitioner was informed by a letter dated the 26th April, 1962 (Ex. 9) from the Assistant Secretary to the Government in the Excise and Taxation Department that his appeal had been filed as incompetent. It was also mentioned in this letter that by an earlier letter dated the 13th June, 1961, the petitioner had been asked to specify under what rule the appeal had been filed before the Government and that as that letter had been received back undelivered to the addressee, that is, the petitioner, and the query made by the Government remained unanswered, the appeal had been filed as being not in order.

It may be conveniently pointed out at once that the petitioner had specified in the heading of his memorandum of appeal Ex. 6 that the appeal had been filed under Rule 127 (ii) of the Rules though it would have been more correct to mention that it had been filed under the proviso to Rule 127 (i). There can be no doubt, however, that the appeal did lie and a mere inaccurate mention of the particular provision under which it was filed cannot make any difference to its maintainability. In the meantime, a further notice Ex. 11 dated the 3rd June, 1961, was issued by the Assistant Commissioner to the petitioner whereunder a total demand of Rs. 16267.11 paise was raised against the petitioner and a direction was given to him that he should deposit the said amount within 15 days from the receipt of the notice failing which coercive action shall be taken against him under the Act (Ex. 11). It is in these circumstances that the petitioner came up with his present writ application to this Court on the 12th May, 1962.

3. In his petition, presented to this Court, out of the aforesaid amount of Rs. 16267.11, the petitioner has not contested before us items totalling Rs. 1272.28 paise but as respects the remaining items totalling Rs. 14994.83 paise, his contention is that these levies are absolutely illegal and ultra vires of the Act or the Rules, and. consequently, he is not liable to pay them.

The disputed amounts may be summarised somewhat like this, vide Ex. 11.

(1) (a) On account of duty short paid on manufacture and issue of AquaAnisi Concentrated Pharmacopoeial preparation .....

Rs. 3421.23

(b) On account of duty short paid oncertain other preparations......

Rs.1213.77 Rs. 4635.00(2) On account of duty payable on excess wastage

Rs.1213.77(3) On account of difference of dutypayable on Auristillae spiritus

Rs 335.50(4) On account of supervision charges for the years 1957-58,1959-60 and 1960-61 Rs 6308.38The total amounting toRs. 14,994.83.

4. The petitioner, therefore, prays that the respondents be prohibited from recovering the aforesaid amounts from him. In addition to this, the petitioner has also claimed refund of a sum of Rs. 7,000 paid by him as supervision charges from 1st April, 1957 to 31st March, 1960. He has further prayed that the opposite parties be directed to issue a licence to him under the Rules and to allow him to continue to function as a licensee.

5. The respondent State has filed a reply completely traversing the case of the petitioner. Two preliminary objections have also been raised before us on behalf of the State and before we deal with this application on the merits, we think it proper to immediately address ourselves to these. The first objection is that according to Rule 128 of the Rules, it was possible for the petitioner to prefer a revision to the Central Government for the reliefs which he has sought by his present application, and, therefore, it is contended that he is not entitled to any relief from this Court in the exercise of its writ jurisdiction. In the second place, it is urged that the petitioner had withdrawn his appeal before the Deputy Minister, Excise and Taxation, Rajasthan, vide his order dated the 21st March, 1963 Ex. A-3, and thereby also he has disentitled himself to any relief from the Court. We propose to take the second objection first.

6. From the narration of facts which we have given above and which are not disputed before us, it would be perfectly clear that the petitioner's appeal to the Government against what is said to be the order of the Assistant Commissioner but which was virtually the order of the Commissioner and which was filed on the 18th May, 1961. Ex. 6 came to be 'filed' or dismissed on or before the 26th April, 1962, Ex. 9, and, that being so, there was hardly any appeal alive before the Government on the 21st March, 1963, which could have been dismissed by the order of the Deputy Minister of that date. It will also be observed that by the time the so-called appeal thus came to be disposed of, the petitioner had already filed his writ application before this Court on the 12th May, 1962.

The petitioner has explained in his rejoinder that after he had filed his writ application, the Commissioner had summoned him and suggested to him that he should agree to with draw his writ application and that if he was willing to pay 50 per cent of the total demand unconditionally, his licence would be renewed, but the petitioner did not agree to this proposal. Thereafter somehow presumably on the Government having been intimated of this, the Deputy Minister purported to take up his appeal over again for decision and dismissed it. It is further submitted in this connection that all that the petitioner had stated before the Deputy Minister was that as he had already preferred a writ application before the High Court, he did not want to pursue his appeal filed earlier to the Government and that a submission of this nature in the circumstances explained above could not in fairness and justice be treated as being tantamount to this that he had unconditionally withdrawn his appeal and thereby given up his case.

7. A careful consideration of all these facts is sufficient, in our opinion, to warrant the conclusion that the order of the Deputy Minister dated the 21st March, 1963, cannot be allowed to have the effect which learned counsel for the State would like us to give it. As has been adverted to above, the position seems to us to be unassailable that the State Government had filed the petitioner's appeal because it thought that it was not in order as early as or even before the 26th of April, 1962, and it is nobody's case that the petitioner had ever applied for its restoration or being brought to its original number, and that being so, there was hardly any foundation upon which the order of the Deputy Minister dismissing the appeal dated the 21st March, 1963, could be made to rest. This order is, therefore, of no legal effect whatever and cannot be construed so as to disentitle the petitioner to the reliefs sought by him in so far as they may otherwise be sustainable on the merits. This objection, therefore, fails and is hereby repelled.

8. As for the second preliminary objection, there is no doubt that Rule 128 of the Rules provides that the Central Government may on the application of any person aggrieved by any decision or order passed under the Act or these rules, and, from which no appeal lies, reverse or modify such decision or order. Normally we would expect any person in the position of the petitioner if he was aggrieved by the order of the State Government to exhaust this remedy which has been provided by the Rules made under the Act. The question, however, still remains to consider whether in the circumstances of the present case we should throw out the petitioner's writ application on this ground alone.

9. On a careful and anxious consideration of the facts and circumstances surroundings this case, we have not felt persuaded to adopt this stringent course here. In the first place, this writ application was filed in this Court as early as the middle of 1962 and in our opinion, it would hardly be proper or desirable to throw it out on this preliminary ground at this distance of time. In the second place, we wish to observe that although as a general rule where an alternative remedy is open to a petitioner by the very statute whereunder he seeks redress, this Court will not come to his aid unless he has availed himself of such a remedy or for that matter exhaused all such remedies under the Act, this is not an absolute rule, and the Court may in its discretion think fit to grant him relief even where the alternative remedy has not been exhausted, provided the circumstances of a particular case render such a course expedient and take it out of the general rule that we have enunciated above

10. Again, it seems to us that where the remedy sought by the petitioner is with respect to the levy upon him of a tax or a duty which he contests to be illegal under the statute or where the law under which it is exacted is itself contested to be ultra vires, and where the relief sought is that the authority levying the same be prohibited from recovering it, then a case for the interference of the Court may readily be allowed, even without exhausting all the remedies under the Act being in the interest of speedy and efficacious justice, as the alternative remedy in such cases may not be equally speedy, convenient or beneficial.

11. We should also like to observe in this connection that such a course despite the ordinary rule of non-interference in cases where an alternative remedy under the statute exists and has not been exhausted in the first instance, would be in line with several decisions of this Court and even of the Supreme Court where the peculiar circumstances of a given case have, in the judicial discretion of the Court made such a course eminently expedient and acceptable,

12. The earliest case of our Court that may be referred to in this connection is Madan Gopal Kabra v. Union of India, ILR (1951) 1 Raj 96: (AIR 1951 Raj 94 (2) ), wherein it was held that where the order sought is in the nature of a prohibition, it is open to the Court to issue such order in a proper case even if another remedy is available. This case was followed in Rang Raj v. Gram Panchayal, Khinwel, ILR (1952) 2 Raj 301: (AIR 1952 Raj 144) which was also a case of patent lack of jurisdiction and a writ of prohibition was asked for.

13. Again in Manohar Lal v. Custodian, Rajasthan, ILR (1953) 3 Raj 336: (AIR 1968 Raj 185), it was held that where the action of an authority is without jurisdiction regarding the recovery of the amount from the petitioner as arrears of land revenue, the mere fact that the petitioner has a remedy by way of a regular suit under Section 4 of the Revenue Recovery Act, 1899, is not sufficient to disentitle him to a writ of prohibition.

14. Again in Karam Chand Thappar v. Sales Tax Officer, ILR (1961) 11 Raj 688: (AIR 1968 Raj 51), it was held that where the impugned imposition of a tax was sought to be made under the Sales-Tax Act and the contention was that the sales-tax itself did not authorise any such imposition, the provision of remedy by way of appeal under the Act should not be allowed to stand as a plea in bar.

15. The same view appears to us to have been taken in Laduram v. Bhagchand, ILR (1963) 13 Raj 489.

16. The view taken by this Court in the cases referred to above, in our opinion, receives high support from several decisions of the Supreme Court among which reference may be made to Kailash Nath v. State of U. P. AIR 1957 SC 790 and A. V. Venkateswaran v. R. S. Wadhwani, AIR 1961 SC 1506.

It was held in the last mentioned case that the rule that the party who applies for the issue of a high prerogative writ should before he approaches the Court, have exahusted other remedies open to him under the law is not one which bars the jurisdiction of the High Court to entertain the petition or to deal with it, but is rather a rule which Courts have laid down for the exercise of their discretion. It was further held that the broad proposition that the existence of an alternative remedy is a bar to the entertainment of a petition under Article 226 of the Constitution unless (1) there was a complete lack of jurisdiction in the officer or authority to take the action impugned or (2) where the order prejudicial to the writ petitioner has been passed in violation of the principles of natural justice, cannot be accepted, and that the two exceptions are by no means exhaustive and that a discretion in the High Court vests even beyond them to entertain the petition and grant the petitioner relief notwithstanding the existence of an alternative remedy.

It was furthermore observed that:

'the broad lines of the general principles on which the Court should act having been clearly laid down, their application to the facts of each particular case must necessarily be dependent on a variety of individual facts which must govern the proper exercise of the discretion of the Court and that in a matter which is thus pre-eminently one of discretion it is not possible or even if it were, it would not be desirable to lay down inflexible rules which should be applied with rigidity in every case which comes up before the Court.'

Bearing these principles in mind and the peculiar features of the instant case, to which we have drawn attention above, we have arrived at the conclusion that we would be prefectly justified in entertaining this petition and granting such relief to the petitioner to which he may be entitled in accordance with law in spite of the consideration that he had an alternative remedy under the statute of which he had not availed himself. We, therefore, overrule this preliminary objection also.

17. This brings us to the merits of the application. We shall take up the objections of the petitioner with respect to the various levies in the order in which we have set them out above.

1. Re. Levy of short payment of duty on Aqua Anisi Concentrated amounting to Rs. 8421.23 Paise :

18. The case of the department is that a duty of Rs. 5 per Gallon of London Proof Spirit was charged erroneously on this medicinal preparation as on 'Aqua Anisi, while the correct duty chargeable on Aqua Anisi concentrated should have been recovered at the rate of Rs. 17-8-0 per Gallon of the strength of London Proof Spirit. This imposition has been attacked before us on a two-fold ground. In the first place, it is contended that dutiable goods containing alcohol under the Act have been classified under the Schedule enacted under Section 3 of the Act as (1) medicinal and toilet preparations containing alcohol, which are prepared by distillation or to which alcohol has been added and which are capable of being consumed as ordinary alcoholic beverages and (2) medicinal and toilet preparations (except certain Ayurvedic preparations with which we are not concerned) which are not capable of being consumed as ordinary alcoholic beverages. By this schedule, on the former class of preparations, a duty of Rs. 17-8-0 per gallon of the strength of London Proof Spirit has been prescribed while in the case of all other preparations except Ayurvedic preparations which have been differently provided for, a duty of Rs. 6 per L. P. gallon has been prescribed.

The ease of the petitioner further is that in the Schedule under the Act which gives the list of medicinal and toilet preparations containing alcohol which are capable of being consumed as ordinary alcoholic beverages, 'Aqua Anisi Concentrated' finds no place under subhead 'Aquas' under the main head 'Pharmacopoeial preparations,' whereas 'Aqua Anisi' has been shown as a medical preparation under the head 'Non-Pharmacopoeial Preparations', and so the contention is that there was and can be no justification for the State charging an excise duty on Aqua Anisi Concentrated at the rate of Rs. 17-8-0 per L. P. Gallon on the footing that it is a preparation which is capable of being consumed as an ordinary alcoholic beverage which It is not. This contention does not appear to us to be without force and we are disposed to think the absence of any provision in the schedule for treating the preparation in question as one capable of being consumed as an ordinary alcoholic beverage that it was correctly chargeable as Aqua Anisi at the rate of Rs. 5 per L. P Gallon only.

19. There is, however, another attack on this levy and that has been argued before us as covering the entire amount under this head. This other ground is that assuming that there was an erroneous under-charge of duty with respect to certain goods under the Act, that could not be ordered to be made good after a period of six months from the date on which the duty or the charge was short-paid or adjusted, as the case may be, Reliance is placed in support of this proposition on Rule 11 of the Rules. This rule reads as follows:

'Recovery of duties or charges short-levied or erroneously refunded. When duties or charges have been short-levied through inadvertence, error, collusion or mis-construction on the part of an excise officer, or through mis-statement as to the quantity or description of such goods on the part of the owner, or when any such duty or charge, after having been levied, has been, owing to any such cause, erroneously refunded the person chargeable with the duty or charge, so short-levied, or to whom such refund has been erroneously made, shall pay the deficiency or repay the amount paid to him in excess, as the case may be on written demand by the proper officer being made within six months from the date on which the duty or charge was paid or adjusted in the owner's account-current, if any, or from the date of making the refund.

It may be pointed out at this place that it is the admitted case of the parties that this charge is being laid for the short levies which were made during the period 1st April 1957 to 24th September, 1959. It is also admitted before us that the first notice by the department for the recovery of this short levy was given on the 27th May, 1960, which is certainly beyond six months of the last date mentioned above that is the 24th September, 1959. As we read Rule 11 in so far as it is material for the present purpose, its plain meaning is that when duties have been short-levied through inadvertence, error, collusion or misconstruction on the part of an excise officer or through mis-statement on the part of the owner, then the person chargeable with the duty or charge so short-levied must pay the same on proper demand by the officer, but such demand must be made within six months from the date on which the duty or charge was short-paid. This inevitably seems to us to lead to the result that if the further charge or duty is demanded after six months from the date on which it was short-paid then it would not be capable of being recovered under the Rules.

The learned Deputy Government Advocate has not been able to satisfy us that this rule is not attracted into application in the present case. All that he did was to invite our attention to Rule 12 of the Rules But that rule on its very language provides for a residuary power for recovery of sums due to Government in cases where the Rules do not make any specific provision for the collection of any duty, or, of any deficiency in duty or of any other sum of any kind payable to the Government under the Act or the Rules and so we are unable to hold that Rule 12 can come into application where Rule 11 is attracted. In this state of the law, we hold that the recovery of Rs. 4635 on account of difference of duty short-paid under this head is not a valid charge against the petitioner and cannot lawfully be recovered from him.

2. Re: Rs. 3716 on account of excess wastage in the manufacture of certain toilets and medicinal goods:

20. The petitioner relies in support of his case on this point on Rule 38 of the Rules. This rule in so far as it is material for our purposes provides as follows;

'The Central Government or the State Govt. with the prior approval of the Central Government may, from time to time, fix the percentage of wastage in the production of a particular medicinal or toilet preparation, any wastage that exceeds the allowable limit and is not properly accounted for shall be charged with the duty together with such penalty not exceeding the duty leviable thereon as the Excise Commissioner may deem fit.' Now it is admitted before us that the percentage of wastage was not fixed under Rule 38 before the 16th September, 1960, and that being so no additional duty or penalty could be charged for wastage that occurred prior to that date. It is also not in dispute between the parties that the charge on account of wastage in the present case is being levied for the period extending from the 1st April, 1957 to the 31st March, 1960. In these circumstances, we are unable to see on what basis the petitioner can be extra-charged for wastage in manufacture.

The only basis that could have existed for such a levy would have been an order of the Central Government or of the State Government with the prior approval of the Central Government relevant to the period in question. But admittedly no such order existed relative to that period. Under the circumstances, we are constrained to hold that the charge in question is arbitrary and cannot be sustained.

Learned counsel for the petitioner also tried to argue that any charge under this rule could not be legally levied because it gave an uncanalised discretion to the Excise Commissioner for the levying of such a charge, and, therefore, it was unconstitutional being violative of Article 14 of the Constitution. We are unable to agree with this contention. For, in our opinion, the discretion which has been vouchsafed to the Commissioner is not an unguided one. In the first place, the rule imposes a duty of fixing the percentage of wastage in the production of certain medicinal or toilet preparations on the Central Government or the State Government with the prior approval of the Central Government. Such a percentage would clearly represent the maximum wastage permissible in the case of a particular preparation. The Rule further provides that if the licensee incurs a greater wastage than the maximum so prescribed, then he will have an opportunity of properly accounting for it, and it is only when he is unable to so account for that he shall be charged with the duty on the excess wastage.

There can he no uncertainty about the duty chargeable because it is prescribed under the Act. Again so far as the penalty is concerned, it has also been laid down that it will not exceed the amount of the duty leviable on such excess wastage As we look at the rule, it makes adequate provision for all the matters sought to be regulated by it and it would be going too far to hold that it is bad because it does not prescribe the penalty imposable in each case with greater precision than has been done by the rule as in the very nature of things it would be impossible to do so. The maximum penalty leviable has been limited by the rule and whether anything short of it will meet the requirements of any particular case is bound to depend on its peculiar facts and circumstances We, therefore, see no force in this particular objection, but, as already stated above, we hold that this charge is not leviable in the absence of any order within the meaning of Rule 38.

3. Re. Rs 335.50 on account of short duty on Auristillae Spiritus:

21. The contention between the parties on this topic is that while the petitioner claims that it is a drug or a medicinal preparation under the Act and is, therefore chargeable at the ordinary rate of Rs. 5 per gallon of L. P. spirit, the respondents contend that it is not a medicinal preparation at all but a mere mixture of water and Aetheris alcohol, and is, therefore, chargeable as Indian made foreign liquor under the Rajasthan Excise Act, vide Government Notification No. F. 49 (8) SR/68 dated the 15th February, 1957 published in the Rajasthan Rajpatra dated the 28th February, 1957, at page 883 (Ex. A. 5), and is so chargeable at the rate of 60 rupees per gallon of L. P. spirit. The question to determine, therefore, is whether this is a medicinal preparation chargeable under the Act; for, if it is so, then there will be no legal justification for charging it under the Rajasthan Excise Act for purposes of excise duty.

22. Now Clause (g) of Section 2 of the Act defines 'medicinal preparation' as follows:

' 'medicinal praparation' includes all drugs which are a remedy or prescription prepared for internal or external use of human beings or animals and all substances intended to be used for or in the treatment, mitigation or prevention of disease in human beings or animals.'

We may read Rule 59 of the Rules also at this place as it has a bearing on the question for decision before us:

'59. Allopathic preparations--Allopathic preparations are medicinal preparations made according to the modern system of medicines and fall under the following two categories.

(i) Official allopathic preparations which are made strictly in accordance with the formulae given in the official current edition? of the undermentioned Pharmacopoeias and which are not likely to be used for any purpose other than as medicine:

(1) The British Pharmacopoeia.

(2) The British Pharmaceutical Codex.

(3) The Indian Pharmacopoeial List.

(4) The United States Pharmacopoeia.

(5) The National Formulary of the United States.

(6) Any other Pharmacopoeia that may be recognised under the Drugs Act, 1940 by the Government of India.

(7) Veterinary Codex recognised by the Government of India.

(ii) Non-official allopathic preparations hereinafter referred to as proprietary preparations which are made according to the modern system of medicines and such preparations-

(1) have no use other than for medicinal purposes; or

(2) are prepared for use according to allopathic system of medicines; and

(3) are made strictly according to formulae registered with and approved by the Central Drugs Laboratory, Calcutta.'

We have been also referred in this connection to the British Pharmaceutical Codex, 1949 Edition which was current at the relevant time. Under the head 'Auristillae Spiritus' at page 1066 of the book, the following formula has been given:

'Ear-drops Metruc of Spirit Imperial

Alcohol (95 per cent.) Water ... ... to Mix

50 ml. fl. oz.

100 ml. to fl. oz In dispensing a prescription for this preparation the alcohol (95 per cent.) may be replaced by industrial methylated spirit, provided that the law and the statutory regulations governing the use of industrial methylated spirit are observed.'

From this extract, (and nothing has been brought to our notice contrary to this) it clearly appears that Auristillae Spiritus is a medicinal preparation within the meaning of the Act. And that being so, we are entirely unable to understand how it could be charged for purposes of excise duty under any other Act than the Act with which we are concerned.

The contention of the learned Deputy Government Advocate appearing for the State is that this is really not a medicine at all and can be used for other than medicinal purposes, and, therefore, the charge which is sought to be levied against it at the rate of 60 rupees per gallon L. P. under the Rajasthan Excise Act is justified. A conclusive answer to this contention in our opinion is furnished by the decision of the Supreme Court in M. B. S. Oushadhalaya v. Union of India, AIR 1963 SC 622.

The question for determination there was whether the three Ayurvedic preparations namely Mritasanjibani, Mrilasanjibani Sudha and Mritasanjibini Sura were medicinal preparations within the meaning of the Act or they fell outside it. It was held that they were, within the moaning of Section 2 (g) of the Act, and, that being so, they were liable to be taxed under the Schedule to the Act and not under the various Excise Acts of the different States concerned. It was also contended in that case that even if the three preparations in question were medicinal preparations, they would be liable to duty both under the Act as well as under the various Excise Acts But this contention was repelled and it was held that there could be no question of medicinal and toilet preparations being liable to duly under both the Acts and that they were properly dutiable under the Act only.

23. The ratio of this decision is that the power of the States to levy excise duties on medicinal and toilet preparations came to an end as soon as the Act was brought into force from April 1st, 1957, and the saving power in favour of the States to levy duties of excise under Article 277 of the Constitution would no longer be available once the Parliament made a provision to the contrary, which conclusion is also made clear by Section 21 of the Act which provides that

'if immediately before the commencement of the Act there is in force in any State any law corresponding to this Act, that law is hereby repealed.'

The effect of this repeal undoubtedly was that the Excise Acts of the various States under which duly was being levied on medicinal and toilet preparations containing alcohol must stand repealed in so far as they apply to such medicinal and toilet preparations it was further laid down in this case that it was not necessary that States should have had a separate law as such for levy of duties of excise on medicinal and toilet preparations, for the repeal in Section 21 of the Act to come into effect, for the Excise Acts of the various States under which duty was being levied on medicinal and toilet preparations containing alcohol must he deemed to correspond to the Act for the purposes of levy of duty on medicinal and toilet preparations, and, therefore, these must be held to have been repealed by Section 21 of the Act so far as medicinal and toilet preparations were concerned.

It was also laid down that the various Excise Acts of the States in so far as they impose duties on medicinal and toilet preparations containing alcohol are fiscal statutes for taxing these preparations and that the Act with which we are concerned is also a fiscal statute for taxing these very preparations enacted by Parliament under entry 84 of List I of the Seventh Schedule to the Constitution, and that being so, the Excise Acts which were the corresponding taxing statutes for these preparations must be held to be repealed so far as taxation on these preparations was concerned. In this view of the taw it was held that there could he no question of medicinal and toilet preparations being liable to duty under the Act as well as the various Excise Acts in force in the States.

24. This decision completely governs the case before us and we have, therefore, no hesitation in holding that the respondents can not be allowed in law to impose a duty on this preparation under the Rajasthan Excise Act. We hold accordingly.

25. This brings us to the last contention relating to the levy of (i) Rs. 6308/33 Paise as supervision charges which are still to be recovered from the petitioner and the refund of Rs. 7000, in this behalf, which have admittedly been already paid by him to the State. So far as the levy of this charge is concerned, it must be held as illegal in the light of the decision of the Supreme Court in H. C. and P. Works Ltd. v. State of Andhra Pradesh, AIR 1964 SC 1870. The present case is on all fours with the case before the Supreme Court, and that being so, the learned Deputy Government Advocate has conceded before us that this charge is not leviable. We, therefore, hold that the petitioner is not liable to pay any supervision charges for the staff appointed to supervise his manufacturing work at the relevant time,

26. This leaves us with the question of refund of Rs. 7000 which have already been paid by the petitioner under this head. So far as the question of refund is concerned, we think it best under the circumstances to direct the petitioner to apply to the Government and seek his relief there.

27. For the reasons mentioned above, we partly allow this writ application and hereby prohibit the State from recovering from the petitioner the sum of Rs. 14994/83 Paise under the various items which we have discussed at length above. As for the petitioner's prayer that we should direct the Government to renew his licence hereafter, we do not find it possible for us to grant this relief, for we do not know whether he has at all made an application for the current year and there is certainly some amount which is due from by him to the State and which does not appear to have been paid so far. We would, therefore, leave him to seek his relief in this behalf before the Government, and we have no doubt that if and when an application is made for this purpose, it will be dealt with on its merits. The petitioner will have his costs from the State.


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