Full Judgment Text
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PETITIONER:
ADHYAKSHA MATHUR BABU’S SAKTI OUSHADHALAYA DACCA (P) LTD.AND
Vs.
RESPONDENT:
UNION OF INDIA
DATE OF JUDGMENT:
07/09/1962
BENCH:
WANCHOO, K.N.
BENCH:
WANCHOO, K.N.
SINHA, BHUVNESHWAR P.(CJ)
IMAM, SYED JAFFER
SUBBARAO, K.
SHAH, J.C.
AYYANGAR, N. RAJAGOPALA
CITATION:
1963 AIR 622 1962 SCR (3) 957
CITATOR INFO :
R 1989 SC1230 (6)
RF 1990 SC1927 (70)
ACT:
Excise Duty-Mritasanjibani, Mritasanjibani Sudha,
Mritasanjibani Sura, if medicinal preparations-If liable
under the State Acts-Medicinal and Toilet Preparations
(Excise Duties) Act, 1955 (16 of 1955), ss.2(g), 18(2), 21-
Constitution of India, Art. 277, Seventh Schedule, List I,
Item 84.
HEADNOTE:
The petitioners carried on business as manufacturers of
medicinal preparations according to Ayurvedic system and as
such manufactured Mritasanjibani, Mritasanjibani Sudha and
Mritasanjibani Sura by the process of distillation in
accordance with the Ayurvedic formula stated in such ancient
Ayurvedic treatises as Ayurvedic Sangraba, Bhaisajya Ratna-
bali and Arka Prakash, accepted as embodying the Ayurvedic
Pharmacopoeia all over India. When the Parliament passed
the Medicinal and Toilet Preparations (Excise Duties) Act,
1955, these three Ayurvedic preparations were taxed at the
rate of Rs. 17/8/- as prescribed by item I of the Schedule
to the Rules framed under s. 18(2) of the Act as being
medicinal preparations as defined by s. 2(g) of the Act.
Later on, the Rules were amended and the three preparations
omitted from the schedule to the rules and the various State
Governments began demanding duties of excise on these
preparations at much higher rates under the various State
Excise Acts. The case of the petitioners was that the levy
of Excise duties on these preparations fell within item 84
of List I of the Seventh Schedule to the Constitution and it
was not open to the State Governments to levy Excise duties
under the State Acts, that since these preparations were
medicinal preparations as defined by s.2(g) of the Act,
their omission from the Schedule was of no effect and could
not empower the State Governments to levy Excise duties and
that the Central Government had no power to exclude the said
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preparations on the advice of the Standing Committee
constituted under r. 68 of the Rules. The petitioners
relied on a large number of affidavits from qualified
Ayurvedic
958
practitioners to the effect that these preparations were
Ayurvedic medicines. This was denied by the respondents who
relied on the report of the Standing Committee that these
preparation were mere beverages and not medicinal
preparations. No affidavit of any Ayurvedic expert was,
however, filed by them.
Held, that there could be no doubt that these preparations
according to standard Ayurvedic texts were clearly
"medicinal preparations" within the meaning of s.2(g) of the
Medicinal and Toilet Preparations (Excise Duties) Act, 1955,
though they could also be used as ordinary alcoholic
beverages. They were, therefore, liable to duty under item
I of the Schedule to that Act and no Excise Duty could be
levied on them under the Excise Acts of the States.
The decision of the Standing Committee could not be
conclusive on the question whether these preparations were
medicinal preparations and their omission from the list
attached to the Rules on its report could be of no effect.
Held, further, that it could not be correct to say that even
if these preparations were "medicinal preparations" they
would be liable to Excise duty both under the Act and the
various Excise Acts of the States.
With the passing of the said Act, the saving made by ,Art.
277 of the Constitution in favour of the States came to an
end and the result was it at the State Governments were no
longer entitled lo levy any duty on medicinal and toilet
preparations and, further, s.21 of the Act effected a repeal
of such provisions of the State Excise Acts as related to
medicinal and toilet preparations.
JUDGMENT:
ORIGINAL JURISDICTION0N: Petitions Nos. 344 and 350 to 354
of 1961.
Petitions under Art.32 of the Constitution of India for
enforcement of fundamental rights.
A. V. Viswanatha Sastri, A. N. Sinha, N. H. Hingorani and B.
P. Jha, for the petitioners.
B. Sen and B. H. Dhebar, for the respondents Nos. 15 2and
7 to 8 (in all the Petitions).
B. Sen, S. C. Bose and P. K. Bose, for the respondent No.
3.
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Lal Narayan Sinha, D. P. Singh, M. K. Ramamurthi, R. K. Garg
and S. C. Agarwala, for respondent No. 4.
K.S. Hajela and C. B. Lal, for respondent No. 5.
Ranadeb Chaudhuri, L. R. Das Gupta, S. N. Andley and
Rameshwer Nath, for the intervener.
1962. September 7. The Judgment of the Court was delivered
by
WANCHOO, J.-These six petitions under Art. 32 of the
constitution raise a common point and will be dealt with
together. The main question raised in all these petitions
is whether the State-Governments are entitled to tax the’
three Ayurvedic preparations, namely Mirtasanjibani,
Mritasanjibani Sudha and Mritasanjibani Sura, which are
manufactured by these petitioners, under the various Excise
Act in force in the respective States. Further points were
raised in the petitions as regards the validity of the
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restrictions imposed in the matter of the import, export,
Possession and sale of these three Ayurvedic preparations.
But the learned counsel for the petitioners stated before us
that he was not pressing any other point except one viz.,
whether the various State-Governments could tax these three
Ayurvedic preparations under the various Excise Acts in
force in the States concerned. We propose therefore to deal
with this point only in the present cases.
The case of the petitioners is briefly this. They carry on
business as manufacturers of medicinal preparations
according to the Ayurvedic system of medicines and among the
Ayurvedic medicines manufactured by them are these three
preparations. These Ayurvedic preparations are manufactured
by the process of fermentation and distillation in
accordance with the Ayurvedic system of medicine
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following the formula in standard books known as Ayurved
Sangraha, Bhaisajya Ratnabali and Arka Prakash. These
books, according to the petitioners, contain extracts from
all authoritative ancient Ayurvedic treatises accepted
throughout India and are in vogue as Ayurvedic
pharmacopoeias in the various States. Though the three
preparations have three different names they are in reality
only one medicine and are prepared according to a single
formula in these books. The petitioners aver that these
three preparations are manufactured in accordance with the
standard Ayurvedic pharmacopoeias in vogue, in various
States and are efficacious amongst others in the following
diseases: -
(a) in typhoid fever (Sannipatik Jwara)
during collapsed condition;
(b) in cholera;
(c) in case of loss of appetite to increase
power of digestion;
(d) In rheumatism, sciatica etc., and
(e) to remove weakness, impart strength and
vigour and also as a general tonic and
restorative for convalescent patients.
Before the Constitution came into force, all these three
preparations were liable to Provincial excise duty under
item 40 of List II of the Seventh Schedule to the Government
of India Act, 1935. The Constitution however made a change
in the three legislative Lists with respect to excise and
under item 51 of List II of the Seventh Schedule the States
have the power to levy excise duty on alcoholic liquor for
human consumption and on opium, Indian hemp, and other
narcotic drugs and narcotics but not including medicinal and
toilet preparations containing alcohol or any substance like
opium etc. Further, under item 84 of List I of the
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Seventh schedule the Union has the power to impose duties of
’excise on tobacco and other goods manufactured or produced
in India except (i) alcoholic liquors for human consumption
and (ii) opium, Indian hemp and other narcotic drugs and
narcotics, but including medicinal and toilet preparations
containing alcohol or any substance like opium etc. Thus
the Constitution took away the power of the States to impose
duties of excise on medicinal and toilet preparations
containing alcohol or any substance like opium etc and give
that power to the Union. However, Art. 277 of the
Constitution provided that "any taxes, duties, cesses or
fees which, immediately before the commencement of this
Constitution were being lawfully levied by the Government of
any State or by any municipality or other local authority or
body for the purposes of the State, municipality, district
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or other local area may, notwithstanding that those taxes,
duties, cesses or fees are mentioned in the Union List,
continue to be levied and to be applied to the same purposes
until provision to the contrary is made by Parliament by
law". In view’ of this Article, the State Governments
continued to levy excise duties on medicinal and toilet
preparations containing alcohol, opium, etc., till 1957 as
Parliament bad made no law to the contrary till then. In
1955, however Parliament passed the Medicinal and Toilet
Preparations (Excise Duties) Act, No. 16 of 1955,
hereinafter referred to as the Act) which was brought into
force from April 1, 1957. We are in the present case
concerned only with medicinal preparations and a "medicinal
preparation" is defined in s. 2(g) of the Act as including
"all drugs which are a remedy or prescription prepared for
internal or external use of human beings or animals and all
substances intended to be used for or in the treatment
mitigation or prevention of disease in human being or
animals.’ Section 3 provides for levy of duties of excise at
the rates specified in the Schedule, on all dutiable goods
962
manufactured in India. Section 19 gives power to the
Central. Government to make rules to carry out the purpose
of the Act and in particular s. 19(2) (xx) gives power to
notify in the official gazette lists of the names and
descriptions of preparations which would fall for assessment
under any particular item of the Schedule or for regulating
their manufacture, transport and distribution". The
Schedule (omitting the Explanations which are immaterial for
present purposes) prescribing the duty is in these terms :-
"Item Description of dutiable goods No.
Medicinal and toilet preparations, containing alcohol, which
are prepared by distillation or to which alcohol has been
added and which are capable of being consumed as ordinary
alcoholic beverages.
2. Medicinal and toilet preparations not otherwise
specified containing alcohol-
(i)Ayurvedic preparations containing self generated alcohol,
which are not capable of being consumed as ordinary alco-
holic beverages.
(ii)Ayurvedic preparations containing self generated
alcohol, which are capable of being consumed as ordinary
alcoholic beverages.
Rate of duty
(1) Rs. Seventeen and ansin as eight per gallon of the
strength of London proof spirit.
(2)(i) Nil
(2)(ii) Rs. Three per gallon.
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(iii) All others Rupees five
per gallon
of the stren-
gth of London
proof spirit.
3. Medicinal and toilet prepara- Nil.
tions, not containing alcohol, but
containing opium, Indian hemp, or
other narcotic drugs or narcotic.
The Central Government framed Rules under the Act in
1956 and the administration of the Act and the Rules was
entrusted to State-Governments. A list of medicinal
preparations, which were capable of being used as ordinary
alcoholic beverages, was also published along with the Rules
and r. 65 provides that "until a standard Ayurvedic
Pharmacopoeia has been evolved by the Central Government,
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the pharmacopoeias that are in vogue in the various states
shall be recognised as standard Ayurvedic pharmacopoeias".
The contention of the petitioners is that these three
Ayurvedic preparations conform to the definition of
medicinal preparations given in s. 2 (g) of the Act.
Further, in the Schedule to the Rules, Mritasanjibani Sura
was listed as a medicinal preparation in 1957. Further in
1958, Mritasanjibani and Mritansanjibani Sudha were also
added under the head "medicinal preparations in the Schedule
to the Rules as the three are really one and the same
medicine. The Act and the Rules came into force from April
1, 1957 in accordance with the provision of a. 1 (3) of the
Act, which gives power to the Central Government to enforce
the Act on such date as it may, by notification in the
official gazette, appoint. The petitioners case is that
thereafter they began to pay duties of excise on these three
medicines under item I in
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the Schedule to the Act at the rate of Rs.17. 50 nP per
gallon of the strength of London proof spirit, as these
preparations were considered medicinal preparations
containing alocohol which were prepared by distillation or
to which alcohol was added and which capable of being used
as
ordinary alcoholicbeverages. This continued till August
1960when the Central Government purporting to act under s.
19 of the Act amended the Rules and omitted from the
Schedule to the Rules two of the three preparations, namely,
Mritasanjibani and Mritasanjibani Sudha. Further in
December, 1960, the Central Government again amended the
Rules and omitted from the Schedule to the Rules the third
preparation (namely, Mritasanjibani Sura). Consequently,
various State Governments began demanding duties of excise
on these there preparations at rates which are much higher
than the rate of Rs. 17. 50 nP prescribed in the Schedule to
the Act. The contention of the petitioners is that on the
coming into force of the Act, the levy of excise duties on
these medicinal preparations fell within item 84 of List I,
with the result that thereafter it is not open to State-
Governments to levy duties of excise on these preparation in
accordance with the various Excise Acts in force in the
States. It is further contended that if these preparations
in fact come within the definition of "medicinal
preparation" in s. 2 (g) of the Act and are covered by the
Schedule to the Act, the omission of these three
preparations from the list attached to the Rules would make
no difference and would not give power to the State-
Governments to tax them under the various Excise Acts in
force in the States concerned.
The petitioners further say that though r. 68 of the Rules
provides for a Standing Committee to advise the Central
Govt. on all matters connected with the technical aspects of
the administration of the
965
Act and the Rules, and in particular, on the question
whether (i) a particular preparation is entitled to be
treated, or to continue to be treated, as a genuine
medicinal or toilet preparation for the purposes of the Act,
and (ii) if so, whether it should be treated, or continue to
be treated, as a restricted or an unrestricted preparations,
it was not open to the said Committee even if it was
consulted in this matter to advise the Government that these
three preparations were not medicinal preparations, if in
fact they are medicinal preparations as defined in s. 2 (g).
It is therefore urged that even if the Central Government
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acted on the advice of the Standing Committee when it
omitted these three preparations from the list appended to
the Rules, it had no power to do so if these three prepara-
tions are in fact medicinal preparations within the meaning
of s. 2 (g) of the Act. The petitioners therefore pray for
an appropriate writ, direction or order directing the
Central Government not to give effect to the notifications
of August and December 1960, removing these three
preparations from the list appended to the Rules and also
for a direction to the State-Governments not to levy duty on
these preparations under the respective Excise Acts in force
in the various States and prohibiting the State-Governments
from collecting duties of excise on the said medicinal
preparations in excess of the rates fixed by the Act and to
refund the amounts of duty already collected in excess of
that rate.
The petitions have been opposed by the Central Government
and by the various State-Governments concerned. The main
counter-affidavit has been filed on behalf of the Central
Government and the various State Governments have adopted
that counter-affidavit with some additions. The main
contention on behalf of the respondents is that these three
preparations are not admitted to be "medicinal preparations
containing alcohol" within
966
entry 84 of List I, by reason of these preparations not
being mentioned in any recognised Ayurvedic Pharmacopoeia.
It is also not admitted that they are prepared according to
the prescribed specifications referred to by the petitioners
by utilising the proper ingredients and manufactured
according to the recipes or directions given in the three
Ayurvedic text books relied upon by the petitioners.
Farther, it is denied that these three preparations conform
to the definition of s. 2 (g) of the Act. It is also not
admitted that they are remedies, muchness efficacious
remedies for any human ailment. It is further urged that
the Central Government has been empowered to decide on the
advice of the Standing Committee whether any preparation
should be treated or continue to be treated as a genuine
medicinal and toilet preparation for the purpose of the Act
or whether it should be treated or continue to be treated as
a restricted or unrestricted preparation. Further, the
Central Government can according to the advice of the
Standing Committee, amend the Schedule of the medicinal and
toilet preparations of restricted category from time to time
by notifications and if a particular preparation is found to
fall out-side the scope of the Act the State-Governments
would be competent to levy duties of excise on it under the
Excise Acts in force in the various States. It is contended
that the action of the Central Government in omitting these
there preparations from the list to the Rules framed under
the Act was based on the advice of the Standing Committee
which was of the opinion that these were not genuine
medicinal preparations. Consequently, they were omitted
from the list appended to the Rules under the Act and the
Act did not apply to them with the result that the State
Governments were free to subject them to duties of excise
under the various Excise Acts in force in the various
States.
967
The main question therefore falls for consideration in these
cases is whether the three preparations are in fact
medicinal preparations containing alcohol falling within
item 84 List I of the Seventh Schedule to the Constitution,
on which item the Act is based and so whether they are
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medicinal preparations as defined in s. 2 (g) of the Act.
If they are medicinal preparations as defined therein, they
will be governed by the Act and the omission of these
preparations from the list appended to the Rules will not
make any difference to their being medicinal preparations
within the meaning of the Act. Before however we deal with
this main question, we may dispose of a contention raised on
behalf of the State of Bihar that even if the three
preparations are medicinal preparations they will be liable
to duty both under the Act as well as under the various
Excise Acts in force in the various States. We have already
pointed out that under the Government of India Act, 1935,
medicinal and toilet preparations were liable to duties of
excise under entry 40 of List II of the Seventh Schedule to
that Act. Correspondingly under item 45 of List I ibid
which provides for duties of excise on tobacco and other
goods manufactured or produced in India, medicinal and
toilet preparations were excepted from that entry.
Therefore, till the Constitution came into force the State-
Governments had power to levy duties of excise on medicinal
and toilet preparations. We have further pointed out that
the Constitution has made a change, and medicinal and toilet
preparations were excepted from entry 51 of List II of the
Seventh Schedule to the Constitution relating to duties of
excise leviable by States and were put in entry 84 of List
I‘ ibid which provides for duties of excise leviable by the
Union. However Art. 277 provides that any taxes or duties
etc. which, immediately before the commencement
968
of the Constitution, were being lawfully levied by the
Government of any State etc. may, notwithstanding that those
taxes, duties etc. are mentioned in the Union List, continue
to be levied and to be applied to the same purpose until
provision to the contrary is made by Parliament by law.
Therefore, so long as Parliament did not make any law
relating to medicinal and toilet preparations, the position
under the Government of India Act would continue and the
States would, have the power to continue levying duties of
excise on medicinal and toilet preparations to the same
extent to which they were levying them immediately before
the commencement of the Constitution. In 1955, Parliament
passed the Act for levy of duties of excise on medicinal and
toilet preparations. This Act was brought into force from
April 1, 1957, and the consequence of this enactment was
that the power of the States to heavy duties any further on
medicinal and toilet preparations came to an end in view of
Art. 277 of the Constitution. There can in our opinion be
no doubt that Art. 277 which saved the power of the States
to levy duties of excise etc. which came in the Union List
on the passing of the Constitution is no longer applicable
as soon as Parliament makes a provision to the contrary.
Once therefore a provision to the contrary is made, the
saving provided in Art. 277 comes to an end and thereafter
the State-Governments cannot continue to levy any duty which
they might have been levying by virtue of Art. 277 till
provision to the contrary was made. Further, this
conclusion which follows from Art. 277 is made perfectly
clear by s. 21 of the Act, which provides that "if
immediately before the commencement of the Act there is in
force in any State any law corresponding to this Act, that
law is hereby repealed". The effect of this repeal is that
the Excise Acts of the various States under which duty was
being levied on medicinal and toilet
969
preparations containing alcohol must be deemed to have been
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repealed, in so far as they apply to such medicinal and
toilet preparations. It is not necessary that the State
should have had a separate law, for levy of duties of excise
on medicinal and toilet preparations, for the repeal in s.
21 of the Act to come into effect. The Excise Acts of the
various States were undoubtedly law under which duty was
being levied on medicinal and toilet preparations containing
alcohol and those Excise Acts must be deemed to correspond
to the Act for the purposes of levy of duty on medicinal and
toilet preparations and must be held to have been repealed
by s. 21 so .far as medicinal and toilet preparations were
concerned. It is urged on behalf of the State of Bihar that
the purpose of the Excise Acts in States was not merely to
raise revenue which was a secondary consideration but to
regulate the consumption of liquor and for that purpose the
various Excise Act of the States imposed a heavy duty to
reduce Consumption. Further, it is urged that the purpose
of the Act is only to impose duties for revenue purposes and
it has nothing to do with the regulation of consumption of
liquor and reducing such consumption. Therefore, the excise
Acts of the various States when they impose duty of excise
on medicinal and toilet preparations had two purposes,
namely, (i) to raise revenue and (ii) to reduce consumption
of liquor, and therefore the Excise Acts of the various
States cannot be said to be corresponding law which has
been. repealed by the Act which has only one purpose namely
raising of revenue. We have not however been able to under.
stand how any purpose behind a fiscal measure can have any
relevance on the question of correspondence. Various Excise
Acts of the States in so far as they impose duties on
medicinal and toilet preparations containing alcohol are
fiscal statutes far taxing these preparations. Now, the Act
970
is a fiscal statute for taxing these preparations enacted by
Parliament under entry 84 of List I of the Seventh Schedule
to the Constitution, and therefore the Excise Acts which
were the corresponding taxing Statutes for these
preparations must be held to be repealed so far as taxation
on these preparations is concerned. There can therefore be
no doubt that there is correspondence between the Act and
the various Excise Acts of the various States in so far as
levy of duty on medicinal and toilet preparations is
concerned and s. 21 of the Act repeals all the Excise Acts
of the States so far as such levy is concerned. There can
thus be no question of medicinal and toilet preparations
being liable to duty under the Act as well as the various
Excise Acts in force in the States. This contention is
hereby rejected.
The next question is whether these three preparations are
medicinal preparations as defined in the Act in s. 2 (g).
The definition is an inclusive one and includes "all drugs
which are a remedy or prescription prepared for internal or
external use of human beings or animals and all substances
intended to be used for or in the treatment, mitigation or
prevention of disease in human beings or animals".
According to the West Bengal Excise Rules, which deal with
the manufacture of these three preparations it appears that
the preparations are to be made according to the recipe and
direction laid down in Arka Prakash, Ayurved Sangraha, and
Bhaisajya Ratnabali, and have to be manufactured only in
bond by a qualified Kabiraj or by a Kabiraji firm having a
qualified Kabiraj for supervision of the manufacturing
operations. Further, the alcoholic content of the
preparations must be below 42 per centum. According to the
recipe found in these Ayurvedic books, the basic
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971
ingredient out of which these preparations are manufactured
is gur; besides gur there are 42 other ingredients which
have to be mixed. These ingredients are medicinal drugs
according to Ayurveda. In addition to these ingredients,
water is also mixed and the whole mixture is kept sealed for
20 days, presumably for the purpose of fermentation and
thereafter the preparation is obtained by distillation and
as already stated contains about 42 per centum of alcohol.
Further, according to these books, the preparation is used
as a tonic to build body and physique, to increase strength
and appetite and to make appearance healthy and bright. It
is also used in SanniPat Jwara (typhoid fever) in critical
stages. It is also prescribed for cholera in frequent doses
and finally is used in all conditions of collapse. The
counter-affidavits filed on behalf of the Union and the
States which are opposing these petitions do not definitely
state that these preparations are not medicinal
preparations. For example, in the affidavit of the State of
West Bengal, it is stated that it is not admitted that these
preparations are exclusively for medicinal purposes. It is
also stated that these alcoholic preparations are capable of
being used as ordinary alcoholic beverages. Similarly, in
the affidavit of the Union, it is stated that it is not
admitted that the preparations are efficacious remedies for
any human ailment. On the other band, a number of
affidavits have been filed on behalf of the petitioners from
registered Kabirajas to show that these preparations are
manufactured according to the three Ayurvedic books already
mentioned and are used for certain diseases including
cholera. The respondents, however, rely on the advice of
the Standing Committee consisting of the Drugs Controller of
the Government of India and the Chief Chemist, Central
Revenues Control Laboratory, which was of opinion after
examining the formulae and the
972
analytical data and the claims given on the label of the
preparations and also after carrying out tasting test, that
these three preparations should be considered straight
forward beverages and not as medicinal preparations. It was
in consequence of this decision that these three
preparations were taken out of the list attached to the
Rules framed under the Act. The two members of the Standing
Committee do not appear to be experts in Ayurvedic medicines
and no affidavit has been filed of any ayurvedic expert on
behalf of the respondents. There seems no reason therefore
not to accept the affidavits filed on behalf of the
petitioners from qualified Ayurvedic practitioners: series F
to F 16. These Ayurvedic practitioners are not connected
with the petitioners and what they say in their affidavits
is in accordance with the use to which these preparations
can be put as medicines according to the three Ayurvedic
text books already referred to. In these circumstances it
would in our opinion be impossible to say that these
preparations are not remedies prepared for internal use of
human beings and are not intended to be used for or in the
treatment, mitigation or prevention of disease in human
beings. If therefore they are a remedy prepared for
internal use of human beings and are intended to be used for
or in the treatment, mitigation and prevention of disease in
human beings, they would clearly be medicinal preparations
within the meaning of a. 2 (g) of the Act; and if so, they
would be liable to be taxed under the Schedule to the Act
and not under the various Excise Acts of the different
States concerned. It is only necessary to add that the
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definition of "medicinal preparation" contained in a. 2(g)
of the Act, does not depart from the meaning of that
expression when it occurs in item 84 of List I, and hence on
the Act coming into force, the States lost the power to levy
excise duty on these preparations.
973
We may in this connection refer to the counter-affidavit
filed on behalf of the State of Uttar Pradesh, where it has
been stated that on the basis of the formulae alleged by the
petitioners in the Schedules, no standard medicinal
preparation can be prepared as the mode of preparation con-
travenes all settled laws of biochemistry. This has been
sworn by an Excise Inspector of the Excise and Intelligence
Bureau of the State of Uttar Pradesh. It is not clear
however from the counter affidavit what qualifications the
deponent, has to make such a statement, nor are we able to
understand which laws of biochemistry are contravened by the
mode of preparation prescribed in the three Ayurvedic text
books already referred to. As against this, we may refer.
to the report of the Chopra Committee on Indigenous Drugs of
India. In para. 265, the Committee says that in different
parts of India, as many as 900 indigenous drugs (vegetable,
mineral and metallic) and over 1000 preparations made from
these drugs are used by the Ayurvedic physicians, and "there
seems to be little doubt that out of the large number of
drugs used by the Hindu physicians for centuries past and
still in use, there are some that deserve the reputation
they have earned as cures". In para. 266, the Committee
points out the difficulties in the way of assessment of the
proper value of indigenous drugs. These difficulties are of
two kinds; firstly, the modern scientists are not acquainted
with the exact connotation of terms of Indian pharmacology,
and secondly, whereas western medicine tries to explain the
action of a drug in terms of its chemical components, such
as alkaloids, glucosides, essential oils, antibiotics,
hormones etc., Indian medicine takes into account the action
of the drug in its entirety, as they hold that the action of
the whole drug is often different from that of any one of
its constituents considered separately. The Committee
further says that there is a good deal of truth in this
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assertion. In Para. 268, dealing with compound preparations,
the Committee mentions another difficulty that usually
confronts pharmacologists in the problem of investigating
the value of compound medicines which are more frequently
used than single drugs. It further points out that "the
investigation of the pharmacological properties and
therapeutic value is considered to be more in the,
particular combination than that of any one of the drugs
taken separately. They therefore urge on the need for an
investigation into he combination as a whole. But, for this,
no modern methods are as yet available.
These observations of the Chopra Committee will show
that the claim made in the counter-affidavit filed on behalf
of the State of Uttar Pradesh based on the so-called settled
laws of biochemistry cannot be accepted--at any rate with
respect to compound preparations like the three under
consideration, for the research on Ayurvedic medicines has
been so far very little. Reference may also be made to the
report of a Committee known as Udupa Committee with respect
to the Ayurvedic system of medicines. At p. 132, the
Committee observes, on the question of the enactment of a
Drugs Act for Indian medicines that the Central Government
do not have any technical person who has detailed knowledge
Ayurvedic drugs, though there are a large number of
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Ayurvedic scholars on the pharmacy side whose help can be
taken in drafting the necessary bill. In this connection,
the Committee suggested that ail adviser on Ayurvedic drugs
should be appointed for this purpose immediately, who should
have under him an Ayurvedic Drugs Advisory Committee, and
this will facilitate the drafting of the legislation the
Committee had in mind and also help the Government to decide
disputed points about Ayurvedic drugs and medicines which
were now cropping up frequently. This Committee was
975
constituted in July, 1958, and it does not appear that any
action on the lines suggested by the Committee was taken by
the Government of India. In these circumstances we have on
the one side the three standard Ayurvedic text books
according to which these preparations are prepared; we have
also the affidavits of a large number of Ayurvedic
practitioners of obvious repute to the effect that these
preparations are medicinal preparations which are used to
alleviate human suffering in certain conditions. On the
other hand, there is no affidavit from an Ayurvedic expert
on behalf of the respondents. We may however in this
connection refer to an affidavit of the Assistant Chemical
Examiner to the Government of West Bengal who is experienced
in examining and analyzing alcoholic liquors. According to
him, the chief basis of these three preparations is molasses
and gur, which is a fact as we have already pointed out from
the recipe in the Ayurvedic text books. He further says
that in these three preparations there are several steam
volatile products, namely, furfural, aldohydes, ketones and
acids but the presence of the same does not destroy or
minimise the effect of alcoholic intoxication of these
preparations. He further says that the taste or smell of
these preparations does not make them unfit for drinking in
a large dose and they can be used as an alcoholic beverage.
Even this affidavit does not say that these are not
medicinal preparations. All that it says is that these
preparations contain about 42 per centum of alcohol and can
be used as ordinary alcoholic beverages. So if these
preparations are medicinal preparations but are also capable
of being used as ordinary alcoholic beverages, they will
fall tinder the Act and will be liable to duty under item
No. I of the Schedule at the rate of Rs. 17. 50 nP per
gallon of the strength of London proof spirit. On a
consideration of the material that has been placed before
us,
976
therefore, the only conclusion to which we can come is that
these preparations are medicinal preparations according to
the standard Ayurvedic text books referred to already,
though they are also capable of being used as ordinary
alcoholic beverages. They will therefore clearly fall
within the definition of "medicinal preparation" and would
be liable to duty under item I of the Schedule’ to the Act.
So far as the decision of the Standing Committee is
concerned which resulted in the omission of these three
preparations from the list attached to the Rules, that is
not conclusive on the question whether these are medicinal
preparations or not. Further the fact that these
preparations are omitted from the list attached to the Rules
would make no difference to their being medicinal
preparations within the meaning of the Act, liable to duty
under item I of the Schedule, if they are in fact medicinal
preparations as we hold them to be. They will therefore be
liable to duty under item 1 of the Schedule to the Act as
they undoubtedly fall under that item and are capable of
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being consumed as ordinary alcoholic beverages They cannot
however be taxed under the various Excise Acts in force in
the concerned States in view of their being medicinal
preparations which are governed by the Act.
Lastly, it was urged on behalf of the respondents, that
these preparations are Dot prepared according to the
formulae in the, Ayurvedic text books referred to above.
That is a question of fact which it is not possible for us
to decide on the materials placed before us. The averment
in this connection on behalf of the respondents is also not
categorical; for example, it has been stated on behalf of
the Union of India, that it is not admitted that these
preparations are prepared according to the, specifications
by utilising the proper ingredients and are manufactured
according to the recipe and direction given in the
Ayurvedic text
977
books referred to above. Nothing has been brought on the
record to show that these preparations were analysed and the
analysis showed that-the ingredients mentioned in the
Ayurvedic text books were not present in the preparations.
Besides, as it appears from the West Bengal Rules (ref West
Bengal Excise Compilation, Pt. 2) which we have quoted
above, these preparations are prepared in bond and there are
various restrictions before the issue of the preparations by
the manufacturer. Nothing has been said to show that these
preparations are not in fact made in accordance with the
direction contained in the Ayurvedic, textbooks. If this
was not so, the excise staff would be there to check their
preparation. As a matter of fact the first rule with
respect to the manufacture of these preparations in the West
Bengal Excise Compilation lays down that they will be
prepared according to the recipe and direction in Arka
Prakash, Ayurved Sangraha and Bhaisajya-Ratnabali; and if
that rule is being disobeyed we should have expected some
one to swear that though the rule says that the preparations
should be made according to the directions in these text
books, they are in fact not so made. Further if the rule is
being contravened there must be power in the State-
Government to take action against those who contravene tile
rule. But nothing has been brought to out, notice to show
that any action has been taken. In these circumstances we
are not prepared to hold that these preparations are not
prepared according to the Ayurvedic text books; and in any
case our decision holding these three preparations as
medicinal preparations is based on these preparations being
made in accordance with the directions contained in the
Ayurvedic text books and also in accordance with the Rules
in the West Bengal Excise Compilation. We presume that the
same must be the state of affairs in other States
978
There these preparations are manufactured, though appears
that the petitioners in the present case are mostly from
Calcutta and the manufacture in these cases must be going on
Calcutta.
We therefore allow the petitions and direct that these three
medicinal preparations should not be taxed under the various
Excise Acts in force in various States and can only be taxed
in accordance with the provisions of the Medicinal and
Toilet preparations (Excise Duties) Act. We pass no order
as to the claim for refund for that is a matter which the
petitioners can take up with the State Governments concerned
according to law. The petitioners will get their costs from
the respondents-one set of bearing fee.
Petitions allowed.
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