Skip to content


Kala Miah and ors. Vs. S.C. Roy and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtKolkata High Court
Decided On
Case NumberMatter No. 449 of 1963
Judge
Reported inAIR1964Cal409,68CWN669
ActsConstitution of India - Article 301; ;West Bengal Cattle Licensing Act, 1959; ;West Bengal Cattle Licensing Rules, 1960
AppellantKala Miah and ors.
RespondentS.C. Roy and ors.
Appellant AdvocateR. Choudhury and ;S.C. Basu, Advs.
Respondent AdvocateR. Mitter and ;B. Das, Advs.
DispositionApplication fails
Cases Referred & A) Ltd. v. Queensland
Excerpt:
- orderd.n. sinha, j. 1. the petitioners in this case are three in number. they are owners of cattle viz, cows and buffaloes. it is stated in the petition that for nearly 100 years they have been carrying on business in the sale and purchase of cattle and supplying milk in different parts of the city of calcutta, within the area known as 'saudagarpatty-cossipur-chitpur' area. the west bengal cattle licensing act (west bengal act i of 1959) (hereinafter referred to as the 'said act') came into operation on the 20th march, 1959. under the provisions of sub-section (2) of section 1 of the said act, it was to come into force in such urban areas and with effect from such dates as the state government may by notification in the official gazette, appoint. on 25th june, 1960 a notification was.....
Judgment:
ORDER

D.N. Sinha, J.

1. The petitioners in this case are three in number. They are owners of cattle viz, cows and buffaloes. It is stated in the petition that for nearly 100 years they have been carrying on business in the sale and purchase of cattle and supplying milk in different parts of the city of Calcutta, within the area known as 'Saudagarpatty-Cossipur-Chitpur' area. The West Bengal Cattle Licensing Act (West Bengal Act I of 1959) (hereinafter referred to as the 'said Act') came into operation on the 20th March, 1959. Under the provisions of Sub-section (2) of Section 1 of the said Act, it was to come into force in such urban areas and with effect from such dates as the State Government may by notification in the Official Gazette, appoint. On 25th June, 1960 a notification was published, in an Extra ordinary issue of the Calcutta Gazette, being Notification No. 3406-Milk, whereby 15th July, 1980 was fixed as the date on which the said Act should come into operation in ward Nos. 3, 4, 5, 62, 63 and 64 referred to in Schedule V of the Calcutta Municipal Act, 1951. This covers the area to which the petitioners carry on their trade and business. An appeal was preferred to the Chief Minister of the State of West Bengal but it has been rejected. It is not clear from the pleadings as to why an appeal was preferred before the Chief Minister, because under the said Act, 'Appellate Authority' means an Appellate Authority as appointed by notification for any urban area or part thereof in which the said Act has come into force. There is nothing to show that the Chief Minister has been appointed as the 'Appellate Authority.' I might also mention that in the petition it has been stated that in the area in which the petitioners 'carry on business, a scheme has been framed under the Calcutta Improvement Act, 1911 and the petitioners were served with notice under section 45 of the said Act, as the entire area known as 'Saudagarpatty' is going to be acquired under a General Improvement Scheme No. LXXXVII. It has been stated that the petitioners were about to file their claim for compensation before the appropriate authority and it was in order to present them from doing so that action is sought to be taken under the said Act and the Rules framed thereunder. It is difficult to understand how the petitioners' claim to compensation would be affected. However, at the hearing of this application mo such point was pressed. Mr. Chowdhury appearing on behalf of the petitioners has taken before me a constitutional point and it is as follows : He argues that the said Act and the rules made thereunder impose a restriction on the petitioner' right and/or freedom to carry on their trade and/or business within the territory mentioned above, in violation of the provisions of Article 301 of the Constitution, and is not saved by Article 304(b) inasmuch as the bill which resulted in the said Act, did not have previous sanction of the President before it was introduced or moved in the State Legislature of West Bengal. Nor is the said Act saved by assent obtained subsequently under Article 255. Before examining the constitutional provisions mentioned above, it will be convenient at this stage to look at the Act and the rules made thereunder. The said Act is stated to be an 'Act to regulate the keeping of cattle in urban areas.' The preamble states that the enactment was made because at was expedient in the interest of public health and sanitation, to regulate the keeping of cattle in urban areas, and for that purpose to provide for the licensing of cattle. Under section 1(2) it is to come into force in such urban areas and with effect from such dates as the State Government may, by notification in the Official Gazette, appoint. Section 3 provides that after the expiry of a period of six months from the date on which the Act conies into force in any urban area, no person shall keep any cattle in such area except under a valid license. Under Section 4, there shall be two classes of licenses. In the first class, a license is granted to a householder in respect of cattle kept in his own premises, primarily for the consumption of the milk by himself or by members of his family and for the sale of surplus, if any, not exceeding five seers on any one day. In the second class a license is granted to any person in respect ofcattle kept in any premises or place for any purposesave as is the subject-matter of a license of the firstclass above mentioned. These licenses are respectively called licenses relating to Class A and Class B. Section 5 provides that any person intending to havea license shall apply to the licensing authority in the prescribed manner and the licensing authority may thereafter grant a license under this Act or may, after recording reasons therefor, refuse the application for a license. Section 6 provides that where the Licensing Authority has reason to believe that a person to whom a license has been granted has violated or failed to comply with the conditions of the license or any provisions of the said Act or the rules made thereunder, he may, after affording in the prescribed manner an opportunity to the licensee to show cause, cancel the license or refuse to renew it. Section 7 provides for an appeal to the Appellate Authority, which means an appellate authority appointed by notification for any urban area or part thereof, where the Act has come into force. Section 8 provides that no order made by, and no proceedings had before, a Licensing Authority or an Appellate Authority shall be called in question in any Civil or Criminal Court. Section 9 provides that the State Government may, at any time after the date on which the said Act had come into force in any area, declare, by notification, such area or any part thereof as a prohibited area if it thinks fit so to do in the public interest. No Class B license shall be issued in respect of any premises or place within a prohibited area and any such License already issued or in force in respect of any premises or place in such area shall stand cancelled on the expiry of six months from the date when the area has been declared as a prohibited area. Section 10 empowers the Licensing Authority or any officer authorised by him, by an order in writing, or any police officer of and above the rank of a Sub-Inspector, to enter or inspect at any time between sunrise and sunset, any premises or place situate in any area in which the Act has come into force, in order to view any cattle or the arrangements for keeping cattle, in respect of which an application for a License had been made or a license had been issued; or in order to ascertain if any cattle are being kept in violation of the conditions of a license or the provisions of the said Act and the rules made thereunder. Section 11 grants the power of seizure where an offence has been committed under the said Act. Section 12 deals with the penalties. Section 13 gives power to the State Government to make rules for carrying out the purposes of the said Act. Section 14 gives power to the State Government to exempt any institution, authority or person from the operation of the said Act. The said Act was passed by the West Bengal Legislature and the assent of the Governor was obtained, but it is admitted that the Bill was not placed before the President nor his assent obtained at any subsequent time, [n exercise of the power conferred by Section 13 of the said Act, rules have been promulgated, known as the 'West Bengal Cattle Licensing Rules, 1960' (hereinafter referred to as the 'said Rules'). Rule 3 provides that the nature and type of shed to be provided for keeping cattle under a license shall be as specified in Appendix I. Rule 4 prescribes the form for applications in respect of the issue of licenses under the said Act. Upon receipt of the application and the fee prescribed therefor, the licensing authority is empowered, either to scrutinise the same or hold an inspection of the shed in order to find out whether it conforms to the specifications in Appendix I. Sub-rule (3) of Rule 4 runs as follows:

'After such scrutiny, and after such inspection (if any), if the Licensing Authority is of opinion that the shed provided for cattle conforms to the specifications in Appendix I and there is no legal objection to the grant of the license, the Licensing Authority shall direct the applicant in writing to produce the cattle for identification marks being made on their bodies before such officer and on such date or dates and at such place or places as may be specified in the direction and the applicant shall comply with such direction. The Licensing Authority shall thereupon grant the license.'

Section 10 provides that the Appellate Authority shall give the appellant an opportunity of being heard before it passes any order. The specifications in Appendix I prescribe the nature and type of shed to be provided for cattle. There are different headings of cattle namely. Adult, Young Stock, Calves and Breeding Bulls. Detailed specifications are prescribed for the minimum floor space to be provided for housing each head of cattle, as also for feeding-passage, manger or trough, gutter,-dung channel, calf-pens, bull-pens, calving-box etc., and lays down specifications for the height and roof of the shed, laying down that under no circumstances thatched or bamboo structures are to be used for the construction of any part of the shed. It has further provided that the flooring of the shed shall be either paved or of cement concrete with proper drainage. There are provisions also for light and ventilation. The conditions of the licence lay down that the licensee shall not use, or permit the use of, such sheds for any other purpose than the housing of cattle. In order to understand the background in which the said Act came to be passed, and the evil which it was intended to remedy, it is permissible to look into the statement of objects and reasons, the relevant part whereof runs as follows :

'It is estimated that about 40,000 milch animals are kept in Calcutta and suburbs in most unsatisfactory and unhygienic conditions, often in ill constructed cattle sheds popularly known as Khatals, Maintained in insanitary conditions, where flies and germs of different diseases breed freely, the Khatals create serious problems of public health.

Because of dearth of space in the city of Calcutta, the Khatals are often located in highly congested areas. There are no arrangements for gutter-drains or for other sanitary measures in such Khatals with the result that stench from these Khatals causes great inconvenience to the people of the area and such Khatals are often the breeding grounds for various diseases like small pox and cholera that rage in epidemic form in Calcutta. The milk of animals kept and milked under such unhygienic conditions is contaminated or is likely to get contaminated with the result that they would have serious effect oa the public health of Calcutta. They, therefore, present a serious public health problem in the city.

All these considerations clearly indicate ,the necessity of regulating the keeping of cattle in Khatals under hygienic and sanitary conditions.

The existing legal measures have not however been found adequate for this purpose. The Calcutta Municipal Act or the Bengal Municipal Act provides for licensing of Khatals, but there is no control over milch animals maintained in unhygienic conditions for domestic milk supply. All such Khatals are not also liceused at all. As a result, whenever milch animals are seized by Corporation from unlicensed premises, they are certified often by influential public men, as animals maintained for domestic milk supply. It is, therefore, no wonder that the Calcutta Corporation's drive for removing milch animals from unlicensed premises has not been successful.

Government of West Bengal have, therefore, decided to assume power by legislation to regulate the keeping of cattle in urban areas for--

(i) better regulation of the conditions under which milch cows and buffaloes should be kept in Calcutta as defined iu the Calcutta Municipal Act, 1951, or within any municipality as defined in the Bengal Municipal Act, 1932 or within Chander-nagore as defined in the Chandernagore Municipal Act, 1955, or auy part or parts of such area and

(ii) prohibiting the keeping of milch animals without license in Calcutta and its suburbs and also any other urban areas.' (Calcutta Gazette Extraordinary dated 9-7-58).

2. I now come to the provisions of the Constitution. Part XIII of the Constitution deals with 'trade, commerce and intercourse within the territory of India'. Article 301 provides that subject to the other provisions of Part XIII, trade, commerce and intercourse throughout the territory of India shall be free. Article 302 confers right upon Parliament to make laws imposing restrictions on the freedom of trade, commerce or intercourse between one State and another or within one part of the territory of India or within any part of the terriloiy of India as may be required in the public interest. Article 303 prohibits any preference or discrimination between one State and another. Article 304(b) provides that notwithstanding anything contained in Article 301 or Article 303, the Legislature of a State may by law impose such reasonable restrictions on the freedom of trade, commerce and intercourse with or within that State as may be required in the public interest. provided that no Bill or amendment for the purposes of Clause (b), shall be introduced or moved in the Legislature of a State without the previous sanction of the President. Article 255(c) which appears in Part XI of the Constitution provides that no Act of Parliament or of a Legislature of a State and no provision in any such Act shall be invalid by reason only that some recommendation or previous sanction required by the Constitution was not given, if assent to that Act was given by the President. It is not disputed that if the assent of the President is required in respect of the said Act, it could be obtained even now.

3. The argument of Mr. Chowdhury is briefly as follows : He argues that his clients the petitioners, carry on trade and commerce within the area known as 'Saudagarpatty' in Calcutta :in the purchase and sale of cattle as also in the sale of mitk. According to him the said Act and the Rules made thereunder have restricted the petitioners' freedom of trade, commerce and intercourse guaranteed under Article 201 of the Constitution. He points out that it may well be argued that the restrictions are reasonable restrictions, but in that case under Article 304(b) such reasonable restrictions could be imposed by the State Legislature, provided that before introducing the Bill in the State Legislature the previous sanction of the President had been obtained. He points out that such assent could be obtained even now under Article 255(c), but no such previous sanction was obtained to the Bill nor subsequent assent of the President has been obtained. Hence, the Act and the rules framed thereunder are in violation of the constitutional guarantee embodied in Article 301 and as such are void, and are not saved by Article 255(c). Both sides have drawn my attention to two decisions of the Supreme Court which will now have to be considered. The first case to be considered is Atiabari Tea Co. Ltd. v. State of Assam : [1961]1SCR809 . The facts in that case were as follows : The appellants were growers of tea in West Bengal or in Assam and carried their tea to the market in Calcutta from where it was sold for consumption in the country or exported for sale out of the country. The bulk of tea produced and manufactured was carried out of Assam either for internal consumption in India or for export abroad. Besides the tea carried by rail, a large quantity of tea was carried by road or by inland waterways from Assam to Bengal and in some cases from one part of West Bengal to another part of the same State through inland waterways, only a few miles of which passed through the territory of Assam. The Assam Legislature passed an Act known as the 'Assam Taxation (on Goods earned by Roads or Inland waterways) Act (Assam Act XIII of 1954) which came into force on 1st June, 1954. The purpose of the Act was to levy taxes on certain goods carried by road or inland waterways in the State of Assam. The appellants challenged the validity of the Act, urging that it violated the provisions of Article 301 of the Constitution. It was held by the majority judgment delivered by Gajendragadkar J., (as he then was) that the Act violated the provisions of Article 301 and since it did not comply with the provisions of Article 304(b) it was ultra vires and void. By a dissenting judgment, Sinha C.J. (as he then wag) held that the Act did not contravene Article 301, because the Act was a taxation statute simpliciter and freedom conferred by Article 301 did not mean freedom from taxation laws simpliciter but only from the erection of trade barriers, tariff walls and imposts which had a deleterious effect on the free flow of trade, commerce and intercourse. The impugned Act had been passed by the Assam Legislature in order to provide for the levy of a tax on certain goods carried by road or inland waterways in the State of Assam. The principal ground on which the vires of the Act was challenged was that it had violated the provisions of Article 301 of the Constitution, and since it did not comply with the provisions of Article 304(b) namely, that the assent of the President had not been obtain-ed, it was ultra vires and void. On behalf of the respondents it was argued that taxing laws stand by themselves and are governed by the provisions contained in Part XII of the Constitution and no provision of Part XIII can be extended to them. Alternatively, that the provisions of Part XIII should be applied only to such legislative entries in the 7th Schedule which deal with trade, commerce and intercourse, Gajendragadkar J., (as he then was) recalled the political and constitutional background in which Part XIII of the Constitution was enacted. He re-called that during the British rule, part of India was governed by Indian princes, some of whom purported to exercise legislative powers of imposing taxes in respect of trade, commerce, etc., so that in effect customs barriers were erected at several places in India. It was principally to combat this state of affairs that section 297 of the Government of India Act, 1935 and Part XIII of the Constitution were enacted. The learned Judge said as follows :

'The main object of Article 301 obviously was to allow free How of the system of trade, commerce and intercourse throughout the territory of India...free movement and exchange of goods throughout the territory of India is essential for the economy of the nation and for sustaining and improving living standards of the country.'

4. It was argued that the subject of taxation is dealt with in Part XII of the Constitution and the power of taxation cannot be cut down by Part XIII. The learned Judge proceeded to state as follows :

''The challenge to the vires of the Act on the ground that it contravenes Article 301 necessarily raises the question about the construction of the relevant provisions in the said part. Article 301 with which Part XIII begins provides that 'subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free.' The appellants contend that this provision imposes a limitation on the legislative power of the State Legislatures as well as the Parliament, and the vires of the Act will have to be judged on that basis, The words used in Article 301 are wide and unambiguous and it would be unreasonable to exclude from their ambit a taxing law which restricts trade, commerce or intercourse either directly or indirectly.

5. In the result, the impugned Act was declared to be void. Shah J., agreed with this conclusion but his reasoning went much further. According to the learned Judge, freedom guaranteed by Article 301 was freedom in its widest amplitude, freedom from prohibition, control, burden or impediment in commercial intercourse. Freedom included not only freedom from the discriminative tariff and trade barriers but also from all taxation on commercial intercourse. As I have stated above, Sinha C. J., (as he then was) held that the Assam Act did not contravene Article 301 and was not ultra vires. The freedom conferred by Article 301 did not mean freedom from taxation simpliciter bat only from erection of trade barriers, tariff walls and imposts which had a deleterious effect on the free flow of trade, commerce and intercourse. Perhaps because of this conflict in the judgments, that the Supreme Court thought that the legal position should be reviewed and it was in fact, considered by a Bench of seven Judges presided over by S. K. Das J. in Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan, 0065/1962 : [1963]1SCR491 . Even there, the Judges were not unanimous. A majority of lour Judges held that the Rajasthan Motor Vehicles Taxation Act, 1951 did not violate the provisions of Article 301 of the Constitution, while the remaining three Judges held that the hnpugned Act offended Article 301 of the Constitution ana as steps were not taken under Article 304(b), the Act was ultra vires of the Constitution and void. The facts in that case were as follows : The appellants were carrying on the business of plying stage carriages in Ajmer. They held permits and plied their buses on diverse routes. There was one route which lay mainly in Ajmer but it crossed narrow strips of the territory of the State of Rajasthan. Another route was in Rajasthan itself. In 1951, the State Legislature of Rajasthan passed the 'Rajasthan Motor Vehicles Taxation Act 1951.' By virtue of the provisions of section 4 of the said Act read with the schedule, no one could use or keep a motor vehicle in Rajasthan without paying the prescribed tax for it and if he did so, he was made liable to the penalties imposed under section 11 of the said Act. The appellants challenged the legality of a demand for tax on the ground that section 4 of the said Act read with the schedule constituted a direct and immediate restriction on the movement of trade and commerce with and within Rajasthan inasmuch as the motor vehicles which carried passengers-and goods within or through Rajasthan had to pay tax, which imposed a pecuniary burden on a commercial activity and was therefore hit by Article 301 and was not saved by Article 304(b) inasmuch as its provisions were not complied with. Neither was the assent of the President taken under Article 255 subsequently. The respondents claimed that taxation, for the purpose of raising revenue for the maintenance of the routes etc., 'was not hit by Article 301 and that the Act did not constitute an immediate or direct impediment to the movement of trade and commerce. On behalf of the appellants it was argued that section 4 of the impugned Act read with the schedules constituted a direct and immediate restriction on the movement of trade and commerce inasmuch ns motor vehicles which carried passengers and goods within or through Rajasthan had to pay a tax which, it was stated, imposed a pecuniary burden on commercial activities and was, therefore, hit by Article 301. On behalf of the respondents and the interveners, various arguments were advanced. The first argument advanced was that taxation per se i. e., taxation for the purposes of raising revenue or for the maintenance of the routes etc, was not hit by Article 301 and the impugned provisions of the Act in question did not; constitute an immediate or direct impediment on the movement of trade and commerce. The case was sought to be distinguished from the case of Atiabari Tea Co., : [1961]1SCR809 (Supra) on the ground that in the latter case tax was on the carriage of goods whereas in the case under consideration the tax was a consolidated tax on the vehicle itself, like a property tax and therefore, did not relate to the movement of trade, commerce and intercourse, though it may have an indirect effect on trade and commerce by raising tariff or fare from passengers or goods. Next it was argued that freedom declared under Article 301 was not freedom from such regulatory measures as did not impede trade, commerce and intercourse, but rather facilitated the same, e.g. traffic regulations, regulations for safeguarding public health, such as, prohibiting sale of adulterated food etc. It was found as a fact that the tax in question was compensatory in nature, namely for the maintenance of routes on which traffic was to move etc. Another argument was that Article 301 speaks about the freedom of trade, commerce and intercourse based on geographical classifications only. Freedom thus secured is in regard to barriers (in the geographical sense) impeding trade, commerce and intercourse between one State and another or between one territory and another within or without the same State, and also against territorial discriminations in respect of trade, commerce and intercourse either inter-state or intra-state. As taxation was meant for raising revenue only, it did not operate as either an inter-state or inter-territorial barrier, and so did not come within Part XIII. The majority judgment stated that it was upholding and not differing from the Atitbari's case, : [1961]1SCR809 (Supra) but it distinguished the same, and ultimately held that the impugned Act was intra vires and did not violate the provisions of Article 301. But the learned Judges were unable to accept the extreme reasoning of Shah, J. in the Atiabari's case. : [1961]1SCR809 (Supra). Das, J. said as follows :

'It seems clear, however, that since the 'conception of freedom, of trade, commerce and intercourse in a community regulated by law pre supposes some degree of restriction upon the individual', that freedom must necessarily be delimited by consideration of social orderliness..... As the language implied in Article 301 runs unqualified the Court, bearing in mind the fact that the provision has to be applied in the working of an orderly society has necessarily to add certain qualifications subject to which alone that freedom may be exercised.'

6. In the opinion of the learned Judge, that pro-vision which merely regulated any particular trade or commerce and in reality facilitated the carrying of trade and commerce rather than hampering them did not come within the prohibition laid down in Article 301. The learned Judge said as follows :

'that which in reality facilitates trade and commerce is not a restriction, and that which in reality hampers or burdens trade and commerce is a restriction. It is reality or substance of the matter that has to be determined. It is not possible a priori to draw a dividing line between that which would really be a charge for a facility provided and that which would really be a deterrent to a trade; but the distinction, it it has to be drawn, is real and clear. For the tax to become a prohibited tax it has to be a direct tax the effect of which is to hinder the move-meat part of trade. So long as the tax remains compensatory or regulatory it cannot operate as a hindrance.'

7. It was argued before the Supreme Court, as it has been argued before me, that anything which directly or indirectly affects trade and commerce will be hit by Article 301 and it restrictions are imposed, there is no difficulty because if they are reasonable restrictions, all that has to bo done is to have the bill placed before the President. It is argued that even now all that is needed is to place the Act for assent before the President. Mr. Chaudhuri has strenuously contended that this is a necessary safeguard based on the possibility of a real peril, of state Legislatures impeding the free carrying on of trade and commerce guaranteed by the Constitution. Speaking about this 'wide view' Das, J. said as follows :

'The most serious objection to the widest view canvassed before us is that it ignores altogether that in the conception of freedom of trade, commerce and intercourse in a community regulated by law freedom must be understood in the context of the working of an orderly society. The widest view proceeds on the footing that Article 301 imposes a general restriction on legislative power and grants a freedom of trade, commerce and intercourse in all its series of operations, from all barriers, from all restrictions, from all regulations, and the only qualification that is to be found in the article is the opening clause, namely, 'subject to the other provisions of Part XIII.' Thus in actual practice will mean that if the State Legislature wishes to control or regulate trade, commerce and intercourse in such a way as to facilitate its free movement, it must yet proceed to make a law under Article 304(b) and no such bill can be introduced or moved in the Legislature of a State without the previous sanction of the President. The practical effect would be to stop or delay effective legislation which may be urgently necessary. Take, for example a case where in the interests of public health, it is necessary to introduce urgently, legislation stopping trade in goods which are deleterious to health, like the trade in diseased potatoes in Australia. If the State Legislature wishes to introduce such a bill, it must have the sanction of the President. Even such legislation as imposes traffic regulations would require the sanction of the President. Such an interpretation would, in our opinion, seriously affect the legislative power of the State Legislatures which power has been held to be plenary with regard to subjects in list II.... If the widest view is accepted, then there would be for all practical purposes an end of state autonomy even within the fields allotted to them under the distribution of powers envisaged by our Constitution..... Even laws other than taxation laws, made under different entries in the lists referred to above, may indirectly or remotely affect trade and commerce. If it be held that every law made by the Legislature of a State which has repercussion on tariffs, licensing, marketing regulations, price control etc., must have the previous sanction of the President, then the Constitution in so far as it gives plenary power to the State and State Legislatures in the fields allotted to them would be meaningless.'

8. It was held that the impugned statute was only regulatory and therefore it did not contravene Article 301. It was held that the interpretation which was accepted by the majority Judges in Atiabari's case, : [1961]1SCR809 , (Supra) was correct but subject to the qualification that regulatory measure or measures imposing a compensatory tax for the use of trading ttcilities did not come within the purview of the restrictions contemplated by Article 301 and such measures did not come within the purview of the proviso to Article 304(b) of the Constitution. Dealing with the facts of the case, Das J. pointed out that there was evidence to show that the State of Rajasthan had been incurring expenses for making new routes and maintaining the existing ones, to the extent of about 60 lacs a year and the tax brought in no more than 50% of the expenditure involved. It was held that this was therefore a case of compensatory taxation, which instead of hindering trade, commerce and intercourse, facilitated them by providing routes and maintaining the routes in a good state. Subba Rao, J. agreed with the majority view but gave his own reasons. According to him, regulations such as provision for lighting, speed, good condition of vehicles, timings, rule of the road and similar others, really facilitated the freedom of movement rather than retard it. So too, a licensing system with compensatory fees was merely a regulatory provision. It was for the Court in a given case to decide whether a provision purporting to regulate trade was in fact a restriction on freedom. A colourable exercise of legislative rights would of course be struck down. According to him, we should not readily interpret such legislation by trying to bring it within the net of Article 304(b), as by such construction 'we would be making the Legislature of a State elected on adult franchise, the handmaid of the Central executive We would be re-writing the Constitution and introducing by sidewind, autocracy in the field of legislation allotted to the States, while our Constitution has provided meticulously for democracy.' The learned Judge proceeded to state as follows :

'The question whether a law imposes a restriction or not depends on the question where the said law imposes directly and immediately a limitation on the freedom of movement of trade. If it does, the extent of the impediment relates to the question of degree rather than to the nature of it. If it is a restriction, it must satisfy the conditions laid down in Article 302 of the Constitution.'

9. The minority judgment pronounced by Hida-yatullah J. disagreed on the point as to whether the impugned statute was regulatory or not. It was held that trade, which consisted of making use of motor vehicles for carriage of passengers or goods, could be carried on only if taxes were paid and, therefore, there was an impediment in carrying on trade and commerce and it was not a case of mere compensatory taxation. It was held that the Act was not in its true character regulatory, because there was no provision therein, which could be regarded as regulatory of motor vehicles.

10. Before I proceed to consider the facts of the instant case, I shall refer to a decision of the Privy Council upon which Mr. Chowdhury relies strongly. It is the well-known decision of James v. Commonwealth of Australia, (1936) A. C. 578. Section 92 of the Australian Constitution provides that commerce and intercourse among the States shall be 'absolutely free'. The Dried Fruits Act, 1928-35 passed by the Commonwealth Parliament and the Dried Fruits (Inter-State Trade) Regulations, Statutory Rules, 1934 prohibited inter-state trade entirely if there was no license taken out as prescribed therein, and partially prohibited it if a license was granted. It was held that they contravened the provisions of Section 92 and were void. Lord Wright M. R. recognised the rule of interpretation that freedom of trade and intercourse as envisaged in the Australian Constitution was not unlimited and whether there was a violation of the constitutional provisions depended on the facts of each case. The learned Judge said as follows :

' 'Free' in itself is vague and indeterminate. It must take its colour from the context. Compare, for instance, its use in free speech, free love, free dinner and free trade. Free speech does not mean free speech; it means speech hedged in by all the laws against defamation, blasphemy, sedition and so forth ; it means freedom governed by law, as was pointed out in M'Arthur (W & A) Ltd. v. Queensland, (1920) 28 C L R 530 (Aus.). Free love, on the contrary, means license or libertinage, though, even so, there are limitations based on public decency and so forth. Free dinner generally means tree of expense, and sometimes a meal open to any one who comes, subject, however, to his condition or behaviour not being objectionable. Free trade means, in ordinary parlance, freedom from tariffs.'

11. According to the learned Judge, the law concerned being one related to inter-state trade, the true criterion seemed to be freedom at the frontier while goods were passing into or out of one state into another. Inasmuch as the impugned Act and regulation either prohibited inter-state trade entirely if there was no license or if a license was granted, partially, it was held that there was a case of restriction on inter-state trade and there was a violation of Section 92, rendering the impugned Act and regulation void. Mr. Chowdhury has argued that in the instant case also there was a provision for license and consequently there was a restriction and violation of the provisions of Article 301.

12. In the background of the state of the law delineated above, it will be necessary to look at the facts of the instant case. The impugned Act relates neither to the sale or purchase of cattle nor to the sale of milk. It is an Act to regulate the keeping of cattle in urban areas and has been enacted specifically in the interest of public health and sanitation. The extract from the objects and reasons set out above) to the enactment, clearly show the background in which the statute came to be enacted. Under Entry 6 in Schedule II of the Constitution, the subject of 'public health and sanitation' is a State subject. Upon this item, the State has plenary powers of legislation. The State in which cattle is kept in the city of Calcutta in insanitary Khatals, which constitute a breeding place for infectious diseases, is welt-known. If the State enacts a law to remedy this scandalous State of affairs, and purports to do so or the purpose of improving the health and sanitation of the city, it cannot be said that it is doing anything which is in excess of its legislative powers, and which impinges on the legislative powers of Parliament. What we have to see is the pith and substance of the impugned legislation. Of course, if it directly affects the flow of trade and commerce then it may be said that it has been done in excess of the powers given to the State Legislature and offends Article 301 of the Constitution. In this case, there is no impediment imposed upon the free flow of trade and commerce, either interstate or intra-state. Assuming that the trade or business in question is either the sale and purchase of cattle or the sale of milk, neither of these operations is res-tricted or impeded by the impugned legislation. It does not restrict either the purchase or sale of cattle or the sale of milk. In the Australian case 1936 A C 578 cited by Mr. Chowdhury which I have mentioned above, the license was on the free operation of inter-state trade itself and it might be said that a provision for licensing of all inter-state trade is a restriction which offended against the Australian Constitution. On the other hand, as explained by Das J. in the Automobile Transport case 0065/1962 : [1963]1SCR491 (supra), a legislation introduced in the interests of public health, stopping trade in goods which were deleterious to public health like the trade in diseased potatoes are not necessarily in violation of the freedom of trade and commerce conferred by the Constitution. If that were so, almost any legislation for the improvement of health and sanitation may be said to affect the freedom of trade and commerce. For example if one wishes to regulate congestion in building areas, it might be said to restrict the building trade, if the sale of adulterated food is prohibited it might be said to affect the catering trade and so on. The real test to be applied is as to whether the impugned statute aims at a restriction in the free flow of trade and commerce. Then again, as has been held in the Automobile Transport case 0065/1962 : [1963]1SCR491 (supra), a statute which regulates trade and commerce is not necessarily a restriction on its free flow. On the other hand, such restriction might facilitate the free flow of trade and commerce. In the instant case, if the salutary provisions of the Act and the rules are followed, it would inevitably result in an improvement in the health and quality of the cattle, in the quality of milk and so, instead of impeding the free flow of trade and commerce, it would be to its distinct advantage. Therefore, even if we take the provision to be of a regulatory nature, it passes the test of constitutionality. Mr. Chowdhury has strenuously argued that the provisions of the impugned Act and the rules cannot be said to regulate the free flow of trade and commerce, because there is no attempt in the Act or the rules to regulate the particular trade or business carried on by his clients. He argues that neither the Act nor the Rules purport to regulate such trade or commerce. Certainly, the preamble does not say so. But the argument might be said to cut both ways. If it is entirely divorced from any interference with the trade or business of the petitioners and is entirely devoted to the improvement of the health and sanitation of the city and the improvement of the health of cattle, then it is not restrictive of the free flow of any trade or business carried on by the petitioners. On the other hand, whether a particular provision in a statute is regulatory of trade and commerce must depend on the facts of each case. For that purpose, it will not do to look at the preamble of the Act only. It is permissible to look into the objects and reasons, and to find out the background of the impugned legislation, the evil that it was intended to remedy and examine the various provisions thereof. It has been clearly stated in the objects and reasons that it was intended to improve the quality of milch cattle. That is certainly regulatory of the business of selling milk. If by certain regulations, cattle are made healthy and of good quality, instead of being diseased, it certainly must result in an improvement in the trade or business of selling cattle or selling milk. If the quality of cattle is improved it must necessarily improve the flow of trade and business in the sale and purchase of cattle or milk. Looked at from this point of view it can be said that the provisions of the impugned Act and the Rules are regulatory of the particular trade or business carried on by the petitioners. The impugned legislation, therefore, passes the test of constitutionality as laid down in the Supreme Court decision mentioned above.

13. The position may be summarised as follows : Legislation which impedes the free flow of trade and commerce violates the provision of Article 301. Neither the Act nor the rules can be said to impede the free flow of any trade and commerce. A state Legislature in its own sphere of legislation has plenary powers. Such powers cannot be taken away because a law enacted by it is said to remotely violate a constitutional provision. The violation must be real and apparent, and a necessary result of the impugned legislation. The impugned Act has been enacted by the State Legislature by virtue of power conferred under Entry 6 in Schedule II--'Public Health and Sanitation'. The object of the legislation is to improve public health. None of its provisions impede the free flow of trade and commerce but on the other hand, by improving the quality of cattle and milk, facilitate the same. From that point of view its restrictions including the licensing provisions may be taken to be regulatory and therefore not violative of the constitutional guarantees, as they facilitate trade and commerce rather than impede the same.

14. It must be held therefore that the Act and the rules are intra vires and valid and do not violate the provision of Article 301 of the Constitution.

15. This application accordingly fails and the rule is discharged, interim orders if any are vacated. There will be no order as to costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //