Full Judgment Text
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PETITIONER:
APHALI PHARMACEUTICALS LTD.
Vs.
RESPONDENT:
STATE OF MAHARASHTRA & ORS.
DATE OF JUDGMENT19/09/1989
BENCH:
SAIKIA, K.N. (J)
BENCH:
SAIKIA, K.N. (J)
OZA, G.L. (J)
CITATION:
1989 AIR 2227 1989 SCR Supl. (1) 129
1989 SCC (4) 378 JT 1989 (3) 720
1989 SCALE (2)617
ACT:
Medicinal and Toilet Preparations (Excise Duties) Act
1955-Amendment Act 19 of 1961--Finance Act 1962--Section 18
thereof-Levy of excise duty on the product "Ashvagandharist"
manufactured by the appellant--Whether permissible under the
schedule to the Act as amended--Effect and Interpretation of
Explanation I added to the Schedule of the Act by Finance
Act 1962--Circular dated May 31, 1962 issued by the Govern-
ment of Maharashtra----Whether in conformity with the provi-
sions of the Act and Explanation I of the Schedule.
Medicinal and Toilet Preparation (Excise Duties) Rules
1956-Rules 64 to 66 whether consistent with the schedule and
the circular dated 31.5.1962.
HEADNOTE:
The appellant is a company having its registered office
at Ahmednagar in Maharashtra. It carries on business as
manufacturers of Ayurvedic preparations including "Asvas"
and "Aristhas". At the material time the appellant was
manufacturing and selling an Ayurvedic product, "Ashvagand-
harist" which is a medicinal preparation containing self-
generated alcohol but not capable of being consumed as
ordinary alcoholic beverages.
Medicinal and Toilet Preparations (Excise Duties) Act
1955 came into force on 1.4.1957. The schedule to the said
Act contained two items specifying "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 bever-
age" and "medicinal and toilet preparations not otherwise
specified containing alcohol" as the commodities excisable
under the provisions of the Act. The said "Ashvagandharist"
was treated and accepted by the Excise Authorities as being
exempt from the payment of excise duty upon the basis and
footing that the same was an Ayurvedic preparation contain-
ing self-generated alcohol which was not capable of being
consumed as ordinary alcoholic beverage and which fell under
item 2(i) of the schedule in respect of which, the rate of
excise duty prescribed in the schedule was "Nil".
130
The Act was amended by Amendment Act 19 of 1961 whereby
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concept of "patent and proprietary" medicine was introduced
in the schedule. The Amendment Act, by an Explanation intro-
duced in the schedule the definition of "patent and proprie-
tary" medicine contained in the Drugs Act 1940. Despite the
said amendment in the schedule the appellants’ product
continued to be treated as exempt from the liability to pay
excise duty on the ground that it was covered under item
2(i) of the schedule which item was re-numbered as item 3(i)
of the schedule. Thereafter by section 18 of the Finance Act
1962, the Act was further amended by substitution of Expla-
nation I to the schedule of the Act. By the said explana-
tion, a "patent and proprietary" medicine was defined as a
medicinal preparation of the description and the type speci-
fied in the Explanation. The said Explanation was given
retrospective effect from April 23, 1962. In pursuance of
the said Explanation I brought by the Finance Act, Director
of Prohibition and Central Excise, Govt. of Maharashtra,
Bombay issued a circular dated May 31, 1962, which inter
alia directed that the medicinal preparations containing
self-generated alcohol but not capable of being consumed as
alcoholic beverage were to be treated as products falling
under Item No. I and not Item 3 of the schedule. As a result
of that circular, the Respondents levied excise duty on the
appellants’ product amounting to Rs.2, 18,282.16p. and
realized the same from the appellant. The appellant paid the
amount "under protest".
With a view to recover the aforesaid amount, which
according to the appellant, was illegally recovered by the
Respondents, the appellant filed a suit, being special suit
No. 23 of 1965 in the Court of Civil Judge Sr. Division,
Ahmednagar.
The Civil Judge by his order dated 27.3.69 decreed the
appellantplaintiff’s suit with interest at 6% per annum from
the date of the suit till realisation.
The Respondents appealed to the High Court against the
Order of the Civil Judge and the High Court allowed the
appeal, reversed the Judgment and decree passed by the Civil
Judge and dismissed the appellant’s suit. Hence this appeal
by the plaintiff-appellant by special leave.
Allowing the appeal, this Court,
HELD: From Explanation I of the Schedule of the Act as
substituted by Act 5 of 1964 it is clear that patent or
proprietary medicine
131
means any medicinal preparation which is not specified in a
monograph in a Pharmacopoeia, Formulary or other publica-
tions notified in this behalf by the Central Government in
the Official Gazette. [144C]
To be a patent medicine one would be required to have a
patent. A patented article means an article in respect of
which a patent is in force, [144D]
A patent medicine will, therefore, mean medicine in
respect of which a patent is in force. [144E]
Patent means a grant of some privilege property, or
authority, made by the Government or sovereign of a country
to one or more individuals. A proprietor is one who has the
legal right or exclusive title to anything. It is synonymous
with owner. A person entitled to a trade mark or a design
under the Acts for the registration or patenting of trade
mark or design is called a proprietor of the trade mark or
design. [144E-F]
A Schedule in an Act of Parliament is a mere question of
drafting. It is the legislative intent that is material. An
Explanation to the Schedule amounts to an Explanation in the
Act itself. [147F]
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The Schedule may be used in construing provisions in the
body of the Act. It is as much an Act of the Legislature as
the Act itself and it must be read together with the Act for
all purposes of construction. Expressions in the Schedule
cannot control or prevail against express enactment and in
case of any inconsistency between the schedule and the
enactment, the enactment is to prevail and if any part of
the schedule cannot be made to correspond it must yield to
the Act. [147H; 148A-B]
An explanation is different in nature form a proviso,
for a proviso excepts, excludes or restricts while an expla-
nation explains or clarifies. Such explanation or clarifica-
tion may be in respect of matters whose meaning is implicit
and not explicit in the main section itself. [149F]
Bihta Marketing Union v. Bank of Bihar, AIR 1967 SC 389:
[1967] 1 SCR 848; State of Bombay v. United Motors, AIR 1953
SC 252: [1953] SCR 1069; Collector of Customs v. G. Dass &
Co., AIR 1966 SC 1577; Burmah Shell Oil Ltd. v. Commercial
Tax Officer, AIR 1961 SC 315: [1961] 1 SCR 902; Dattatraya
Govind Mahajan v. State of Maharashtra, AIR 1977 SC 915
(928): [1977] 2 SCR 790 and Hiralal
132
Ratanlal v. State of U. P., [1973] 1 SCC 216.
Ex praecedentibus et consequentibus optima fit interpre-
tatio. The best interpretation is made from the context.
Injustum est nisi tota lege inspecta, de una aliqua ejus
particula proposita judicare Vel respondere. It is unjust to
decide or respond as to any particular part of a law without
examining the whole of the law. Interpretare et concordare
leges ligibus, est optimus interpretendi modus. To interpret
and in such a way as to harmonize laws with laws, is the
best mode of interpretation. [151G-H]
Jura eodem modo distituentur quo constitutuntur. Laws
are abrogated by the same means (authority) by which they
are made. [152A]
Every word in a Statute is to be given a meaning. A
construction which would leave without effect any part of
the language of a statute will normally be rejected. Every
clause of a statute is to be construed with reference to the
context and other clauses of the Act so as to make, as far
as possible, a consistent enactment of the whole statute.
[152B]
A specific provision to include Ayurvedic preparations
containing self-generated alcohol which are not capable of
being consumed as ordinary alcoholic beverages was neces-
sary. That having not been done by the Explanation itself,
it was not permissible to include it by the Circular. The
Explanation I could not have been in conflict with the
provisions of the Act and the Circular could not have been
in conflict with the Explanation, the Schedule, the Rules
and the Act. [152E-F]
The Court set aside the order of the High Court and
restored that of the Civil Judge decreeing the suit. [152G]
Inland Revenue Commissioners v. Gittus, [1920] I KB 563;
Baidyanath Ayurved Bhawan Pvt. Ltd. v. The Excise Commis-
sioner, U.P., [1971] 2 SCR 590; Mohanlal Maganlal Bhavsar v.
Union of India, [1986] 1 SCC 122; Commissioner of Sales Tax
v. The Modi Sugar Mills Ltd., [1961] 2 SCR 189 and Cape
Brandy Syndicate v. Commissioners of Inland Revenue, [1921]
1 KB 64, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1845 (N)
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of 1974.
From the Judgment and Decree dated 6/7.3.1974 of the
Bombay High Court in First Appeal No. 586 of 1969.
133
S.K. Dholakia and H.S. Parihar for the Appellant.
A.K. Ganguli, A.M. Khanwilkar, A. Subba Rao, C.V. Subba
Rao and A.S. Bhasme for the Respondents.
The Judgment of the Court was delivered by
SAIKIA, J- This plaintiff’s appeal by special leave is
from the Appellate Judgment and Decree of the High Court of
Judicature at Bombay reversing those of the trial court and
dismissing plaintiff’s special suit.
The appellant is a Limited Company registered under the
Companies Act having its registered office situate at Ahmed-
nagar within the State of Maharashtra. The appellant carries
on business, inter alia, as manufacturers of Ayurvedic
preparations including "Asavas", "Aristhas". At all times
material to this appeal, the appellant was manufacturing and
selling an Ayurvedic product called "Ashvagandhaarist" which
is a medicinal preparation containing self-generated alcohol
but not capable of being consumed as ordinary alcoholic
beverage.
Under the provisions of the Medicinal and Toilet Prepara-
tions . (Excise Duties) Act, 1955, hereinafter referred to
as "the Act", which came into force on 1st April, 1957,
excise duties were levied on medicinal and toilet prepara-
tions specified in the Schedule to the Act, hereinafter
referred to as "the Schedule". The Act, as originally stood
in 1955, inter alia, contained two items in the Schedule
respectively specifying "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 beverage" and "medicinal and
toilet preparations not otherwise specified containing
alcohol", being the commodities excisable under the provi-
sions of the Act. The said "Ashvagandhaarist" was treated
and accepted by the Excise Authorities as being exempt from
the payment of any excise duty upon the basis and the foot-
ing that the same was an Ayurvedic preparation containing
self-generated alcohol which was not capable of being con-
sumed as ordinary alcoholic beverage, and which fell under
item 2(i) Of the Schedule in respect of which the rate of
excise duty postulated in the Schedule was "Nil".
The Act was amended by the Amendment Act 19 of 1961.
The amendment, inter alia, introduced the concept of "patent
and pro-
134
prietary medicine" in the Schedule. The amendment Act,
however, by an Explanation, introduced in the Schedule the
definition of the "patent and proprietary medicine" con-
tained in the Drugs Act, 1940. Even after the introduction
of the said amendment, the appellant’s aforesaid product
continued to be treated as exempt from the liability to pay
any excise duty on the self-same ground, namely, that it was
covered under item 2(i) of the Schedule which item 2(i) was
renumbered as item 3(i) of the Schedule as amended by the
Amendment Act of 1961.
By Section 18 of the Finance Act, 1962, the Act was
further amended by substitution of an Explanation No. 1 to
the Schedule of the Act. By virtue of and under the said
Explanation, a patent and proprietary medicine was defined
as a medicinal preparation of the description and the type
specified in the Explanation. The Explanation which was
brought in by the Finance Act was given retrospective effect
from April 23, 1962.
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In purported pursuance of the said Explanation and/or
upon the basis thereof, a circular dated May 31, 1962 was
issued by the then Director of Prohibition and Central
Excise, Government of Maharashtra, Bombay which, inter alia,
directed that the medicinal preparations containing self-
generated alcohol but not capable of being consumed as
alcoholic beverage were to be treated as products falling
under item 1 and not item 3 of the Schedule. consequent
thereupon, the respondents levied and recovered from the
appellant diverse sums aggregating to Rs.2, 18,282.16 being
the alleged amount of the excise duty payable in respect of
the product "Ashvagandharist". The amounts were paid by the
appellant "under protest".
With a view to enforcing their rights in respect thereof
and/or recovering the said amount illegally recovered by the
respondents, on July 14, 1965, the appellant filed a suit,
being Special Suit No. 23 of 1965 in the Court of Civil
Judge, Senior Division, Ahmednagar.
On March 4, 1966, the respondent No. 4 filed its written
statement and similarly on the 4th April, 1966 the respond-
ent Nos. 1 to 3 filed written statements. In the written
statements, filed on behalf of the respondents it was, inter
alia, contended that the said product of the appellant was
"the unrestricted ayurvedic preparations" manufactured by
the plaintiff (appellant) labelled and marked by the
135
plaintiff (appellant) under their brand name and trade mark.
This, therefore, fell within the scope of patent or proprie-
tary medicine as given in Explanation 1 below the Schedule
annexed to the Act, as inserted from April 23, 1962 by
Finance Act (No. 2) 1962.
By his Judgment and Decree dated March 27, 1969, the
learned Civil Judge was pleased to decree the appellant’s
suit for Rs.2,22,582.07 together with future interest at 6
per cent per annum from the date of the suit till realisa-
tion.
Aggrieved by the Judgment and Order dated March 27,
1969, the respondents (being the defendants therein) pre-
ferred an appeal to the High Court of Judicature at Bombay,
which was registered as First Appeal No. 586 of 1969. The
said appeal was heard by the High Court alongwith other
appeals being First Appeals Nos. 136 of 1968 and 93 of 1970
as also suits being Suit Nos. 230 of 1965 and 319 of 1965.
The appeals and the suits were heard together having regard
to the common questions of law involved therein. By its
judgment and decree the High Court was pleased to allow the
said first appeal of the respondents, reversing the judgment
and decree of the Trial Court and to dismiss the appellant’s
special suit. Hence this appeal by special leave.
Mr. S.K. Dholakia, the learned counsel for the appellant
submits, inter alia, that the findings of the High Court are
repugnant to the relevant provisions of the Act and/or the
rules framed thereunder and/or the scheme, intendments and
purposes thereof. It is contended that the appellant’s
product "Ashvagandhaarist" fell squarely within item 3(i) of
the Schedule and as such wholly exempt from the payment of
excise duty; that in view of the admitted position that
until 1962 "Ashvagandhaarist" was exempt from the payment of
excise duty as being a commodity falling under item No. 2(i)
of the Schedule, simply by reason of the Explanation which
was introduced in the Act by the Finance Act of 1962, as the
explanation could never be considered to be or, in any
event, in the scheme of the provision of the Act, was not a
substantive provision of the Act and the explanation was not
intended to and it did not seek to disturb the enumeration
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of the categories or the respective fields assigned to the
various items of the schedule in existence prior thereto. It
is submitted that item 3 of the amended Schedule was a
specific item and enumerated categories of Ayurvedic medici-
nal preparations covered thereby and that being so, all
commodities answering description set out therein fell
within the
136
ambit thereof and was excluded from the purview of the other
items contained in the said schedule and that the express
language of item 3(i), namely, of "Ayurvedic preparations
containing self-generated alcohol which were not capable of
being consumed as ordinary alcoholic beverages" were exempt-
ed and that the appellant’s product "Ashvagandhaarist" was
admittedly and obviously an Ayurvedic preparation containing
self-generated alcohol which was not capable of being con-
sumed as ordinary alcoholic beverage and as such it could
not be made excisable on the ground that it fell within any
other item of the schedule but it constituted residuary
clause of the schedule in so far as the medicinal and toilet
preparations containing alcohol were concerned. Counsel
further submits that the expression "not otherwise speci-
fied" occurring in item 3 of the schedule did not restrict
the scope of the enumerated categories under item 3 but was
merely a marginal note showing that the said item 3 was
residuary item and comprised of three sub-groups of commodi-
ties specified therein; and that item No. 1 was not a speci-
fied item. Mr. Dholakia further submits that the interpreta-
tion that "ashvagandhaarist" fell within item No. 1 rendered
the provisions of item No. 3 wholly nugatory inasmuch as if
an Ayurvedic preparation containing self-generated alcohol
but incapable of being used as ordinary alcoholic beverage,
is treated as failing under item 1 there would be no
Ayurvedic medicine which would factually fail under item 3
of the schedule and that the Explanation newly introduced by
the Finance Act, 1962 could not add to, amend or alter or
vary the classification of the goods existing prior thereto
as covered by the various items of the said schedule; nor
could it otherwise nullify or add to, amend or alter or vary
the substantive provisions of the schedule and it could not
be considered to be a substantive provision of the Act nor
could it be allowed to abrogate the substantive provisions
of the Act. In other words, the submission is that in view
of the fact that the product of the appellant was exempt
from payment of duty because the duty against item No. 3(i)
in the amended Schedule of 1961 was mentioned to be ’nil’
the High Court ought to have held that the said legal and
factual position could not be transformed to the detriment
of the appellant by shifting the said commodity from the
field covered by item 3(i) to that covered by item 1 of the
Act merely on the basis of the Explanation which was intro-
duced by the Finance Act of 1962. Counsel argues that this
was more so because "ashvagandhaarist" was not a name within
the contemplation of the explanation but was merely a de-
scriptive appellation of the medicine manufactured and sold
by the appellant and it being a standard preparation accord-
ing to the Ayurvedic system could be manufactured by any one
conversant with the said system, and it did
137
not have a brand name in the hands of the appellant and the
High Court’s interpretation that a mere description is a
name is inconsistent with the scheme of the definition of
"patent and proprietary medicines" in the Explanation. This
was the reason, it is argued, why Asavas and Aristhas were
expressly made non-dutiable after 25.9.6,4. by subsequent
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amendment by the Government.
Mr. A.K. Ganguli, learned counsel appearing for the
respondents, demurring, submits that there can be no doubt
that "Asavas" and "Aristhas" fall under item 1 of the sched-
ule to the Act as substituted by Finance Act 2 of 1962 and
hence taxable at 10% ad valorem; and those being Ayurvedic
preparations are specified preparations and they could never
fail under item 3 or any part thereof which deals with
medicinal preparations not otherwise specified containing
alcohol. Item 1, Mr. Ganguli submits, specifically describes
that medicinal and toilet preparation which has alcoholic
contents and which alcohol comes to be present in those
medicines by use of one of the two methods described in that
item. First of such methods contemplates alcohol contents in
the medicine which is prepared by distillation and the
second method is addition of alcohol to the medicine. The
medicinal preparation which is prepared by distillation and
which contains alcohol and other medicinal preparations to
which alcohol is added fall in category I and such medicines
would cover medicinal preparations belonging either to
Allopathic or Ayurvedic system or I any other system of
medicines. For every system of medicines, counsel argues,
item No. 1 is not general item but it is a specific item in
the sense it covers only those medicines which are prepared
by distillation and contain alcohol and others to which
alcohol has been added. According to counsel, such medicines
belonging to any system whether indigenous or foreign are
covered by item 1 and would be taxable as per that item and
the disputed goods are undoubtedly medicinal preparations
and they are also patent and proprietary medicines in view
of the Explanation 1 and these Ayurvedic preparations are
medicinal preparations being patent or proprietary medicines
containing alcohol which are not capable of being consumed
as alcoholic beverages and as such they squarely fall under
item 1 of the Schedule, and the main Act and the Explanation
is a self-contained provision which eliminates the reference
either to Drugs Act or to the Rules made under the Act; and
one has to read only the provision of the Schedule as a
whole including the Explanation, and their meaning being
simple and plain, they must be given their full effect.
138
To appreciate the rival contentions we can appropriately
refer to the provisions and the Schedule of the Act and the
legislative changes thereof. The Act was meant to provide
for the levy and collection of duty of excise on medicinal
and toilet preparations containing alcohol, opium, Indian
hemp or other narcotic drug or narcotic. The statement of
objects and reasons as notified in Gazette of India of
16.9.1954, Part II, S. 2, Ext., page 596 said that by virtue
of entry 40 in List II in the Seventh Schedule to the Gov-
ernment of India Act, 1935, medicinal and toilet prepara-
tions containing alcohol, etc., were subjected to Provincial
excise duties. In order to secure uniformity the entry
relating to excise duty on medicinal and toilet preparations
containing alcohol, etc. were transferred under the Consti-
tution from the State list to the Union List. The Act was
intended to implement this provision in the Constitution and
proposed uniform rates of excise duty and a uniform proce-
dure for the collection thereof. The Act came in force on
1.4.57.
The Act in Section 2(a) defined "alcohol" to mean "ethyl
alcohol of any strength and purity having the chemical
composition C2H5OH"; and it defined "medicinal preparation"
in Section 2(g) to include "all drugs which are a remedy or
prescription prepared for internal or external use of human
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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". It did not define "drug". The
Drugs Act, 1940, as it was substituted by the Drugs (Amend-
ment) Act, 1955 (16.4.55) had defined "drug" in Section 2(b)
to include "(i) all medicines for internal or external use
of human beings or animals and all substances intended to be
used for or in the diagnosis, treatment, mitigation or
prevention of disease in human beings or animals other than
medicines and substances exclusively used or prepared for
use in accordance with the Ayurvedic or Unani systems of
medicine; and (ii) such substances (other than food) intend-
ed to affect the structure or any function of the human body
or intended to be used for the destruction of vermins or
insects which cause disease in human beings or animals, as
may be specified from time to time by the Central Government
by notification in the Official Gazette."
(Emphasis supplied)
Section 3(i) of the Act provides that "there shall be
levied duties of excise, at the rates specified in the
Schedule, on all dutiable goods manufactured in India."
The original Schedule to the Act in 1955 read:
139
THE SCHEDULE
(See section 3)
Item Description of dutiable Rate of
No. goods. duty.
1. Medicinal and toilet preparations, Rupees seven-
containing alcohol, which are prepared and annas eig-
which are prepared by distilation or ht per gallon
to which alcohol has been added, and of strength
which are capable of being consumed as of London
ordinary alcoholic beverages. proof spirit.
2. Medicinal and toilet preparations not
otherwise specified containing alcohol
(i) Ayurvedic preparations containing Nil
self-generated alcohol, which are
not capable of being consumed as
ordinary alcoholic beverages.
(ii) Ayurvedic preparations containing Rupees three
self-generated alcohol, which are per gallon.
capable of being consumed as
ordinary alcoholic beverages.
(iii) All others. Rupees five
per
gallon of the
strength of
London proof
spirit
3. Medical and toilet preparations, Nil
not containing alcohol, but containing
opium, Indian hemp, or other
narcotic drug or narcotic.
It would thus be clear that medicinal and toilet prepara-
tions were classified into those which were capable of being
consumed as ordinary alcoholic beverages and those which
were not capable of being consumed as ordinary alcoholic
beverages. Again, medicinal and toilet preparations contain-
ing alcohol prepared by distillation or adding alcohol is
differentiated from medicinal and toilet preparations ’not
otherwise specified containing alcohol’. Further, under this
’not
140
otherwise specified’ category Ayurvedic preparations have
been classified into three groups, namely, Ayurvedic prepa-
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rations containing self-generated alcohol not capable of
being consumed as ordinary alcoholic beverages, those capa-
ble of being consumed as ordinary alcoholic beverages; and
others. These three divisions were not drugs as defined in
Drugs Act then. The first category of Ayurvedic preparations
had not been subjected to duty while the other two catego-
ries had been.
Admittedly, under the above Schedule the product of the
appellant ’ashvagandhaarist’ was not dutiable which meant
that it was included in item 2(i). It would also be clear
that ’Ayurvedic preparations containing self-generated
alcohol which were capable of being consumed as ordinary
alcoholic beverages’ were dutiable at the rate of Rupees 3
per gallon and the third category of others was also dutia-
ble at the rate of Rupees 5 per gallon on the strength of
London proof spirit. Alcohol and self-generated alcohol were
treated differently.
The Schedule was amended by the Amending Act No. 19 of
1961 and the amended Schedule stood as follows:
Item No. Description of dutiable goods Rate of
duty
1. Medicinal preparations, being patent Ten per cent
or proprietary medicines, contain- ad valorem.
ing alcohol and which are not
capable of being consumed as
ordinary alcoholic beverages.
2. Medicinal preparations, containing Rupees three
alcohol, which are and eight
prepared by distillation or to which five naye
alcohol has been added, paise per
and which are capable of being litre of
consumed as ordinary alcoholic the streng-
beverages. th of Londo-
n proof spi-
rit.
3. Medicinal preparations not otherwise
specified containing alcohol-
(i) Ayurvedic preparations containing Nil
self’generated alcohol which are
not capable of being consumed as
ordinary alcoholic beverages.
141
(ii) Ayurvedic preparations, contain- Thirty eight
ing self-generated alcohol, which naye paise per
are capable of being consumed as litre.
ordinary alcoholic beverages.
(iii) All others. Rupee one and
ten naye paise
per litre of
the strength
of London proof
spirit.
Explanation I: "Patent or proprietary medicines" has the
same meaning as in clause (h) of Section 3 of the Drugs Act,
1940 (23 of 1940).
The statement of objects and reasons of the Amendment Bill,
as published in Gazette of India, 8.3.1961, Pt. II, S. 2,
Ext., page 106, said:
"Consequent on the decision to adopt metric
units from the 1st April, 1961, in the sale of
alcohol and collection of duty thereon, it is
proposed to provide for the levy and collec-
tion of excise duty on medicinal and toilet
preparations in terms of metric units.
............................................
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Under existing item 2(ii) of the
Schedule to the Act, Ayurvedic preparations
containing self-generated alcohol which are
capable of being consumed as ordinary alcohol-
ic beverages are subjected to duty at the rate
of Rs.3 per gallon. However, by virtue of the
provision contained in section 19(2)(xix) of
the Act, read with Rule 8 of the Medicinal and
Toilet Preparations (Excise Duties) Rules
1956, the rate of duty with respect to such
preparations has been reduced to Rs. 1.75 per
gallon with effect from the 10th September,
1960, and it is this reduced rate that is,
proposed to be expressed in terms of metric
units in the Bill."
It would thus be clear that the main purpose was the
levy and collection of excise duty on medicinal and toilet
preparations in terms of metric unit. while there was refer-
ence to them existing item 2(ii) of the Schedule of the Act,
namely, Ayurvedic preparations containing
142
self-generated alcohol which were capable of being consumed
as ordinary alcoholic beverages the duty whereof was reduced
to Rs. 1.75 per gallon from Rs.3 per gallon, there was no
mention that item No. 2(i) of the Schedule, namely, Ayurved-
ic preparations containing self-generated alcohol which were
not capable of being consumed as ordinary alcoholic bever-
ages was subjected to tax. The statement of object and
reasons was silent about item No. 2(i).
In the amended Schedule we find that item 1 for the
first time mentioned medicinal preparations being patent or
proprietary medicines, containing alcohol and which are not
capable of being consumed as ordinary alcoholic beverages
and the earlier item No. 1 has been re-numbered as item No.
2 and the earlier item No. 2(i), (ii) and (iii) remained as
they were as 3(i), 3(ii) and 3(iii). As regards levy of duty
item 2(i) of the old Schedule was kept duty free in item
3(i) of the Schedule. Thus, there has been no fresh charging
of duty on what was 2(i) and is now 3(i) under which catego-
ry the appellant’s product ’ashvagandhaarist’ was exempted
from duty before the amendment of the Schedule. There is,
therefore, no doubt that item 1 & 2(i) remained mutually
exclusive or in other words, they would not be overlapping.
Item 1 in the amended Schedule deals with medicinal prepara-
tions being patent or proprietary medicines and not medici-
nal preparations ’not otherwise specified.’
The Explanation I says that patent or proprietary medi-
cines has the same meaning as in clause (h) of Section 3 of
the Drugs Act, 1940. The High Court has found that re-num-
bered definition 3(h) was earlier 3(d) and read as follows:
"3(d) ’Patent or proprietary medicine’ means a
drug which is a remedy or prescription pre-
pared for internal or external use of human
beings or animals, and which is not for the
time being recognised by the Permanent Commis-
sion on Biological Standardisation of the
World Health Organisation or in the latest
edition of the British Pharmacopoeia or the
British Pharmaceutical Codex or any other
Pharmacopoeia authorised in this behalf by the
Central Government after consultation with the
Board."
Thus, patent or proprietary medicines meant a drug which was
defined in the Drugs Act and not in the Act. The High Court
rightly held that Ayurvedic medicine was not a drug at all.
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The definition of drug expressly excluded them. So the
definition of patent or proprietary medicine
143
was exclusive of Ayurvedic medicinal preparations, those
being excluded from the definition of drug. The definition
of patent and proprietary medicines till then did not apply
to Ayurvedic preparations. This position continued indeed
till the amendment of Drugs Act by the Drugs and Cosmetics
(Amendment) Act, 1964. Several amendments were effected by
that Amendment Act of 1964. Section 33A and Chapter IV A
were inserted. Section 33A said that Chapter IV was not to
apply to Ayurvedic (including Siddha) or Unani drugs. "Save
as otherwise provided in this Act, nothing contained in this
Chapter shall apply to Ayurvedic (including Siddha) or Unani
drugs". Chapter IVA made.provisions relating to Ayurvedic
(including Siddha) and Unani drugs. This shows that prior to
this amendment of 1964 Ayurvedic preparations were expressly
not drugs under the Drugs Act.
The Drugs and Cosmetics Act in the amendment First
Schedule after the amendment Act of 1964 included Ayurvedic
(including Siddha) and Unani system drugs prepared under
Section 3(a) which contains the definition: "Ayurvedic
(including Siddha) or Unani drugs includes all medicines
intended for internal or external use of human beings or
animals and all substances intended to be used for or in the
diagnosis, treatment, mitigation or prevention of disease in
human beings and animals, mentioned and process and manufac-
ture exclusively in accordance with the formula prescribed
in the authoritative book on Ayurvedic (Siddha) Unani system
of medicines specified in the first schedule." This defini-
tion was also inserted by Drugs and Cosmetics (Amendment)
Act, 1964 (13 of 1964) Section 2(a)(i) with effect from
15.9.1964.
The same exclusion remained in the related Central Acts.
For example, the Drugs Control Act, 1950 (Act 26 of 1950)
replaced the Drugs Control Ordinance, 1949 (6 of 1949) which
was promulgated on 3.10. 1949 in order to ensure that cer-
tain essential imported drugs and medicines were sold in the
reasonable price in the Chief Commissioner’s provinces.
Similar ordinances were issued by all the provinces. The
necessity for continuing price control of these essential
drugs continued. That was an Act to provide for the control
of sale, supply and distribution of drugs. Drug meant any
drug as defined in clause (b) of Section 3 of Drugs Act,
1940, in respect of which a declaration had been made under
Section 3 which defined drug. It may be noted that Pharmaco-
poeia authorised for the purpose of Section 3(h) of the
Drugs Act, 1940, were: The Indian Pharmacopoeia, the Pharma-
copoeia of the United States, the National formulary of the
United States, the International Pharmacopoeia and the State
Pharmacopoeia
144
of the Union of Soviet Socialist Republics, vide S.O. 701
Gazette of India, 1961, Pt. II, S. 3(ii), p. 725. There was
thus no Ayurvedic Pharmacopoeia prescribed for the purpose
of that Act. Pharmacopoeia is a book containing the list of
drugs with directions for use. The fact that no Ayurvedic
Pharmacopoeia had been notified at the relevant time was
because Ayurvedic preparations were not drugs for the pur-
pose of Drugs Act and, for that matter, of Medicinal and
Toilet Preparations (Excise Duties) Act, at the relevant
time. It could be for this reason that in the original
Schedule the expression medicinal and toilet preparations
’not otherwise specified’ was used and Ayurvedic prepara-
tions of different categories were put under item 2. In the
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Schedule as amended by the 1962 Act, this expression contin-
ued in item 3, The same definition of ’drug’ also continued
in the Drugs Act.
From the Explanation I of the Schedule of the Act as
substituted by Act 5 of 1964 also it is clear that patent or
proprietary medicine means any medicinal preparation which
is not specified in a monograph in a Pharmacopoeia, Formu-
lary or other publications notified in this behalf by the
Central Government in the Official Gazette.
To be a patent medicine one would be required to have a
patent. A patented article means an article in respect of
which a patent is in force. "Patent" means a patent granted
under the Indian Patent and Designs Act, 1911, and now the
Patent Act, 1970. A patent medicine will, therefore, mean
medicine in respect of which a patent is in force. "Proprie-
tary" means of a proprietor, that is, holding proprietary
rights. Patent means a grant of some privilege, property, or
authority, made by the Government or sovereign of a country
to one or more individuals. A proprietor is one who has the
legal right or exclusive title to anything. It is synonymous
with owner. A person entitled to a trade mark or a design
under the acts for the registration or patenting of trade
mark or design is called a proprietor of the trade mark or
design. Under the Trade and Merchandise Marks Act, 1958,
"trade mark" means:
"(i) in relation to Chapter X (other than
section 81), a registered trade mark or a mark
used in relation to goods for the purpose of
indicating or so as to indicate a connection
in the course of trade between the goods and
some person having the right as proprietor to
use the mark; and
(ii) in relation to the other provisions of
this Act, a mark used or proposed to be used
in relation to goods for the
145
purpose of indicating or so as to indicate a
connection in the course of trade between the
goods and some person having the right, either
as proprietor or as registered user, to use
the mark whether with or without any indica-
tion of the identity of that person, and
includes a certification trade mark
registered as such under the provisions of
Chap. VIII."
As defined in s. 2(a), registered proprietor in relation to
a trade-mark means a person for a time being entered in the
register as proprietor of the trade-mark. A registered
trade-mark means a trade-mark which is actually on the
register.
By s. 18 of the Finance (No. 2) Act, 1962, the Schedule
to the Act was further amended substituting the Explanation
1 by the following:
"Explanation 1: "Patent or proprietary medi-
cines" means any medicinal preparation which
bears either on itself or on its container or
both a name which is not specified in a mono-
graph in a Pharmacopoeia, Formulary or other
Publications notified in this behalf by the
Central Government in the Official Gazette, or
which is a brand name, that is a name or a
registered trade mark under the Trade and
Merchandise Mark Act, 1958 (43 of 1958), or
any other mark such as a symbol, monogram,
label, signature or invented words or any
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writing which is used m relation to that
medicinal preparation for the purpose of
indicating or so as to indicate a connection
in the course of trade between as preparation
and some person having the right either as
proprietor or otherwise to use the name or
mark with or without any indication of the
identity of that person."
This amendment of the Explanation came into force in June,
1962 with retrospective effect from 23rd April, 1962.
The Director of Prohibition and Excise, for Maharashtra
State, Bombay, thereafter issued the circular dated 31.5.
1962 (Ext. 44). It said that the patent or proprietary
medicines as defined in clause (d) of s. 3 of the Drugs Act
of 1940 (23 of 1940) and falling under items No. 1 and No. 4
of the Act as substituted by the Amendment Act, 1961 were,
prior to 23rd April, 1962, subject to levy of duty at 10 per
cent ad
146
valorem by virtue of the Explanation I below the Schedule to
the Act which has now been deleted from 23rd April, 1962.
According to new definition of ’Patent and Proprietary
Medicines’ as given in the new Explanation as amended by
Finance (No. 2) Act, 1962 medicinal preparations containing
alcohol, opium, Indian hemp or other narcotic drugs or
narcotic falling under item 3(i), 3(iii) and 3(v) of the
said Schedule, were with effect from 23rd April, 1962 liable
to duty not under the said items but under item No. 1 or
item No. 4 of the said Schedule at 10 per cent ad valorem,
if such preparations are "patent or proprietary medicines"
as defined in the Explanation. Excise duty on all ’patent or
proprietary medicinal preparations’ (Alopathic, Ayurvedic,
Unani and Homoeopathic preparations) containing alcohol,
opium, Indian hemp or other narcotic drug or narcotic, which
fall within the purview of the new definition of ’patent or
proprietary medicines’ given in the Explanation, should
therefore, be recovered at the rate of 10 per cent ad valo-
rem from the holders of the licences granted under the said
Act and the rules thereunder in accordance with the instruc-
tions contained in their Circular No. DQ 64-31/61 dated 22nd
July, 1961. A note received from the Government of India,
explaining the scope of the new definition of ’patent or
proprietary medicines’ was also enclosed along with the
circular.
It is in evidence in the instant case that two bottles
containing Asavas were produced in the Court as Exhibit 42/1
and Exhibit 42/2. Both the bottles contained the same kind
of Asavas. The ingredients of the two were the same and the
preparation of the two was also the same. When the Asavas
were sold during the period beginning from June, 1962 to
February, 1964, no excise duty was levied because on the
label there was no trade mark of patent and proprietary
right printed. If the Asavas were sold in the bottle having
a label with no trade mark as at Exhibit 42/1, no duty was
recovered from the plaintiff. These Asavas were supplied to
Employees’ State Insurance as per their tender without the
trade mark on the label to see that the plaintiffcompany
were not taxed the excise duty which would have been charged
had they put the patent mark on the label. But in order to
fight for blemish of cheating, the plaintiff thought it
necessary to have the trade mark on such bottles without any
difference. As soon as the goods were sought to be sold in
the above manner the excise duty was levied and was sought
to be recovered from the plaintiff’s fund. No excise duty
was recovered after February, 1964 even though Asavas were
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sold with their trade mark. It is also in evidence that
there were two sub-groups in the group of Asavas and Aris-
thas known as ’restricted’ and ’unrestricted’. Restricted
means preparations which
147
could be used as alcoholic beverages. In this case the
period from 26.7.62 to 29.2.64 is alone material inasmuch as
by the Finance Act of 1964 with reference to item No. 1, the
Ayurvedic and Unani medicines containing self-generated
alcohol and which were not capable of being consumed as
ordinary alcoholic beverages were exempted from the levy of
excise duty. In other words, the position prior to Finance
Act of 1962 was continued and thereafter the medicinal
preparations, namely, Asavas and Aristhas ceased to be taxed
from 1964.
It would be noted that the Explanation itself did not
specifically mention "Allopathic, Ayurvedic, Unani and
Homoeopathic preparations" as was done in the Director’s
Circular. On a comparison of the earlier Explanation and the
substituted Explanation one would notice that earlier
"patent and proprietary medicines" meant a drug. In the
substituted Explanation it means any medicinal preparation.
However, it can not be lost sight of that the words "medici-
nal preparation" as continued to be defined in s. 2(g) of
the Act "includes all drugs which are a remedy or prescrip-
tion prepared for internal or external use of human beings
or animals and all substances intended to be used for or in
treatment, mitigation or prevention of diseases in human
beings or animals." We have already noticed that the Drugs
Act continued to exclude Ayurvedic preparations till its
amendment in 1964. It has been stated that even after amend-
ment of the Schedule after 1961 amendment the appellant’s
product was exempted from duty, till the Director’s Circular
disturbed the position.
This brings us to the question of interpretation of the
Act and the Schedule with the Explanation. in view of the
submission that the Explanation could not have rendered item
3(i) of the Schedule redundant. Was there any change of
intention of the Legislature in this regard?
A Schedule in an Act of Parliament is a mere question of
drafting. It is the legislative intent that is material. An
Explanation to the Schedule amounts to an Explanation in the
Act itself. As we read in Halsbury’s Laws of England, Third
Edition, Vol. 36, para 551: "To simplify the presentation of
statutes, it is the practice for their subject matter to be
divided, where appropriate, between sections and schedules,
the former setting out matters of principle, and introducing
the latter, and the latter containing all matters of detail.
This is purely a matter of arrangement, and a schedule is as
much a part of the statute, and as much an enactment, as is
the section by which it is introduced." The schedule may be
used in construing provisions in the
148
body of the Act. It is as much an act of Legislature as the
Act itself and it must be read together with the Act for all
purposes of construction. Expressions in the Schedule cannot
control or prevail against the express enactment and in case
of any inconsistency between the schedule and the enactment
the enactment is to prevail and if any part of the schedule
cannot be made to correspond it must yield to the Act. Lord
Sterndale, in Inland Revenue Commissioners v. Gittus, [1920]
1 K.B. 563 said:
"It seems to me there are two principles of
rules of interpretation which ought to be
applied to the combination of Act and Sched-
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ule. If the Act says that the Schedule is to
be used for a certain purpose and the heading
of the part of the Schedule in question shows
that it is prima facie at any rate devoted to
that purpose, then you must read the Act and
the Schedule as though the Schedule were
operating for the purpose, and if you can
satisfy the language of the section without
extending it beyond that purpose you ought to
do it. But if in spite of that you find in the
language of the Schedule words and terms that
go clearly outside that purpose, then you must
give effect to them and you must not consider
them as limited by the heading of that part of
the Schedule or by the purpose mentioned in
the Act for which the Schedule is prima facie
to be used. You cannot refuse to give effect
to clear words simply because prima facie they
seem to be limited by the heading of the
Schedule and the definition of the purpose of
the Schedule contained in the Act."
The above observation was not disapproved in appeal
(1921) 2 A.C. 81. However, the basic principle is that in
case of a conflict between the body of the Act and the
Schedule, the former prevails. In the instant case we do not
find any such conflict.
An Explanation, as was found in Bihta Marketing Union
v. Bank of Bihar, AIR 1967 SC 389: (1967) 1 SCR 848, may
only explain and may not expand or add to the scope of the
original section. In State of Bombay v. United Motors, AIR
1953 SC 252: (1953) SCR 1069,it was found that an Explana-
tion could introduce, a finction or settle a matter of
controversy. Explanation may not be made to operate as
"exception" or "proviso". The construction of an Explana-
tion, as was held in Collector of Customs v. G. Dass & Co.,
AIR 1966 SC 1577, must depend upon its terms and no theory
of its purpose can be entertained
149
unless it is to be inferred from the language used. It was
said in Burmah Shell Oil Ltd. v. Commercial Tax Officer, AIR
1961 SC 3 15: (1961) 1 SCR 902, that the explanation was
meant to explain the Article and must be interpreted accord-
ing to its own tenor and it was an error to explain the
Explanation with the aid of the Article to which it was
annexed. We have to remember what was held in Dattatraya
Govind Mahajan v. State of Maharashtra, AIR 1977 SC 915
(928): (1977) 2 SCR 790, that mere description of a certain
provision, such as "Explanation" is not decisive of its true
meaning. It is true that the orthodox function of an expla-
nation is to explain the meaning and effect of the main
provision to which it is an explanation and to clear up any
doubt or ambiguity in it, but ultimately it is the intention
of the legislature which is paramount and mere use of a
label cannot control or deflect such intention. State of
Bombay v. United Motors, (supra) laid down that the inter-
pretation must obviously depend upon the words used therein,
but this must be borne in mind that when the provision is
capable of two interpretations, that should be adopted which
fits the description. An explanation is different in nature
from a proviso for a proviso excepts, excludes or restricts
while an explanation explains or clarifies. Such explanation
or clarification may be in respect of matters whose meaning
is implicit and not explicit in the main section itself. In
Hiralal Ratanlal v. State of U.P., [1973] 1 SCC 216 (225),
it was ruled that if on a true reading of an Explanation it
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appears that it has widened the scope of the main section,
effect be given to legislative intent notwithstanding the
fact that the Legislature named that provision as an Expla-
nation. In all these matters courts have to find out the
true intention of the Legislature. In D.G. Mahajan v. State
of Maharashtra, (supra) xx this Court said that legislature
has different ways of expressing itself and in the last
analysis the words used alone are repository of legislative
intent and that if necessary an Explanation must be con-
strued according to its plain language and ’not on any a
priori consideration’.
Applying the above principles we do not find any differ-
ence between the Schedule and the Explanation I; the latter
has not amended the Schedule by either deleting item 3(i) or
by adding or including Ayurvedic preparations in item 1. No
change of legislative intent is indicated.
In the Medicinal and Toilet Preparations (Excise Duties)
Rules, 1956 Section C Medicinal and Toilet preparations,
Allopathic preparations, Homoeopathic preparations and
Ayurvedic preparations are dealt with separately. So far as
Ayurvedic preparations are concerned,
150
Rule 64 dealing with types of preparations said: "Asavas and
Aristhas are the principal types of Ayurvedic preparations
in which alcoholic content is self-generated and not added
as such." Rule 65 on Pharmacopoeia for Ayurvedic prepara-
tions said: "Until a standard Ayurvedic pharmacopoeia has
been evolved by the Central Government, the pharmacopoeias
that are in vogue in the various States shall be recognised
as standard Ayurvedic pharmacopoeias." Rule 66 classified
the preparations containing self-generated alcohol for
purposes of levy of duty. It said: "No duty shall be levied
on Ayurvedic preparations containing self-generated alcohol
in which the alcohol content does not exceed 2 per cent.
Where the percentage of proof spirit is in excess of 2 per
cent, duty will be leviable under item 2(ii) or 2(i) of the
Schedule to Act the according as the preparations are capa-
ble of being consumed as ordinary alcoholic beverage or
not." Thus Ayurvedic preparations containing self-generated
alcohol which are not capable of being used as alcoholic
beverages fall under original 2(i) and now 3(i).
The above Rules, which have not been shown to have been
amended clearly say that where the percentage of proof
spirit is in excess of 2% the preparation would be dutiable
under item 2 which became item No. 3 in the amended Sched-
ule. This Rule is consistent with the Schedule but is wholly
inconsistent with the Director’s circular.
Mr. Ganguli relies on (1971) 2 SCR 590: (1971) 1 SCC 4
Baidyanath Ayurved Bhawan Pvt. Ltd. v. The Excise Commis-
sioner of U.P., The question there was whether medicinal
preparation containing tincture, spirit etc. was dutiable.
The tincture and spirit in their turn contained alcohol. It
was contended that alcohol was not directly added but was
component of the tincture or spirit. It was, however conced-
ed that the preparations were medicinal preparations and
that tincture was a component of that preparation and alco-
hol was a component of tincture. Therefore, this Court held
that it was difficult to see how it could be urged that the
preparation did not contain alcohol. All that the plain
language of the provision required was that the preparation
should contain alcohol. The question whether Ayurvedic
preparation was a drug to be included in the definition of
medicinal preparation was not involved. Whether self-gener-
ated alcohol was to be treated differently was also not
there.
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In Mohanlal Maganlal Bhavsar v. Union of India. [1986] 1
SCC 122 it was held that before a medicinal preparation can
fall under Item
151
1 of the Schedule three conditions are required to be satis-
fied: (A) the preparation must be a patent or proprietary
medicine; (2) it must contain alcohol; and (3) it must not
be capable of being consumed as an ordinary alcoholic bever-
age. The fact that ointments and liniments were medicinal
preparations containing alcohol in semi-liquid form did not
make any difference. However it was not in dispute that the
articles were medicinal preparations for the purposes of the
Act and that they were patent and proprietary medicines. In
the instant case the question is whether Ayurvedic prepara-
tions, in view of the definition of medicinal preparations
in the Act, could be regarded as drugs and could be dutiable
under Item 3 and not Item 1. In Commissioner of Sales Tax v.
The Modi Sugar Mills Ltd., [1961] 2 SCR 189 it was held that
a taxing statute must be interpreted in the light of what is
clearly expressed therein and nothing can be implied nor can
provisions be imported into them so as to supply an assumed
deficiency. In Baidyanath Ayurved Bhawan (supra) this Court
quoted the observation of Rowlatt, J. in Cape Brandy Syndi-
cate v. Commissioners of Inland Revenue, [1921] 1 K.B. 64
that "in a taxing Act one has to look at what is clearly
said. There is no room for any intendment. There is no
equity about a tax. There is no presumption as to tax.
Nothing is to be read in, nothing is to be implied. One can
only look fairly at the language used." The question in the
instant case, however, is whether the appellant’s product
being an Ayurvedic preparation could be a drug for being
included in the definition of medicinal preparation for the
purpose of the Act. This question was not raised in the
above cases.
As Mr. Dholakia points out, the Circular would render
item 3(i) of the Schedule wholly redundant. It has been the
consistent policy of legislature to exempt item 3(i) hither-
to 2(i), from duty. The legislature has not in any way
changed it. The Explanation has not in any way altered the
classification in the Schedule. The substituted Explanation
no doubt stressed on patents and trade marks. But it has not
expressly envisaged in item I, patented trade marked
Ayurvedic preparations contrary to the classification in the
Schedule. Ex praecedentibus et consequentibus optima fit
interpretatio. The best interpretation is made from the
context. Injustum est nisi tota lege inspecta, de una aliqua
ejus particula proposita judicare Vel respondere. It is
unjust to decide or respond as to any particular part of a
law without examining the whole of the law. Interpretare et
concordare leges legibus, est optimus interpretendi modus.
To interpret and in such a way as to harmonize laws with
laws, is the best mode of interpretation. In the instant
case the Director’s Circular is not in harmony with item
3(i) or with the classifi-
152
cation of Ayurvedic preparations in separate item 3. It
would not be in conformity with definition of medicinal
preparation’ in s. 2(g) of the Act. Jura eodern modo dislit-
uentur quo constitutuntur. Laws are abrogated by the same
means (authority) by which they are made. The Director’s
Circular is not shown to have been a piece of delegated
legislation. The Explanation on its tenor does not amend the
Schedule. No part of a Statute is to be taken as superfluous
or redundant. Every word in a Statute is to be given a
meaning. A construction which would leave without effect any
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part of the language of a statute will normally be rejected.
Every clause of a statute is to be construed with reference
to the context and other clauses of the Act so as to make,
as far as possible, a consistent enactment of the whole
Statute.
The High Court accepted the submission that it provided
a selfcontained definition of ’patent and proprietary medi-
cines’ for the purpose of the main Act and severed the
connection between the provisions of the Drugs Act as was
contemplated in earlier Explanation I, and consequently one
need not look to the Drugs Act at all for its interpretation
and the Schedule was thence to be interpreted as it existed
along with that self-containing definition in Explanation I.
In doing so, the position that "Patent and Proprietary
medicines" means "any medicinal preparation" which very
"Medicinal preparation" includes all drugs which are a
remedy or prescription etc. as defined in s. 2(g) of the
Act. So a reference to the Drugs Act was still necessary. No
doubt this is an inclusive definition. To enlarge its deno-
tation a specific provision to include Ayurvedic prepara-
tions containing selfgenerated alcohol which are not capable
of being consumed as ordinary alcoholic beverages was neces-
sary. That having not been done by the Explanation itself,
it was not permissible to include it by the Circular. The
Explanation I could not have been in conflict with the
provisions of the Act and the Circular could not have been
in conflict with the Explanation, the Schedule, the Rules
and the Act.
In the result, we set aside the judgment and decree of
the High Court and restore those of the Civil Judge decree-
ing the suit. We leave the parties to bear their own costs.
Y. Lal Appeal
allowed.
153