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Issues Involved:
1. Whether the two provisos to Rule 2 of the Mysore Forest Act exceed the rule-making authority conferred by Section 37 of the Act. 2. Whether the provisos impose unauthorized restrictions on the freedom of trade, commerce, and intercourse under Article 301 of the Constitution. 3. Whether the provisos are saved by Article 305 of the Constitution as "existing law." Detailed Analysis: 1. Rule-Making Authority Under Section 37 of the Mysore Forest Act: The State Government of Mysore framed rules under Section 37 of the Mysore Forest Act, 1900, to regulate the transit of forest produce. Rule 2, framed on October 13, 1952, required a permit for the import, export, or movement of forest produce within specified areas. Two provisos were added to Rule 2 in 1959 and 1960, respectively. The first proviso prohibited transportation of forest produce between sunset and sunrise, while the second proviso allowed transportation until 10 P.M. with a Rs. 1,000 cash deposit as security. The respondent, a timber dealer, challenged these provisos, arguing they exceeded the rule-making authority under Section 37, which only allowed regulation, not prohibition. The High Court of Mysore agreed, stating that the provisos effectively "stopped transport altogether," thus exceeding the regulatory power conferred by Section 37. The Supreme Court upheld this view, emphasizing that the power to regulate transit under Section 37 did not include the power to prohibit or restrict it. The Court noted that a rule which totally prohibits movement during specific hours is prohibitory or restrictive, not regulatory. Regulations should facilitate and promote transport, not obstruct it. 2. Unauthorized Restrictions on Trade, Commerce, and Intercourse: Article 301 of the Constitution guarantees freedom of trade, commerce, and intercourse throughout India. The High Court held that the provisos were not regulatory but prohibitory, thus violating Article 301. The Supreme Court agreed, stating that the provisos were restrictive of trade and commerce and, therefore, prima facie void under Article 301. The Court reiterated that regulatory measures facilitating trade are not hit by Article 301, but the provisos in question could not be considered regulatory. The State's argument that the restrictions were reasonable and in the public interest (to prevent unauthorized felling and smuggling of forest produce) was not sufficient to transform the restrictive nature of the provisos into regulatory measures. 3. Applicability of Article 305 as "Existing Law": Article 305 exempts "existing law" from the operation of Articles 301 and 303. The term "existing law" refers to laws, ordinances, orders, bye-laws, rules, or regulations passed or made before the commencement of the Constitution. The State argued that Section 37 of the Mysore Forest Act, being pre-Constitution, allowed for such rules. The Supreme Court rejected this argument, clarifying that while Section 37 was "existing law," the rules made under it after the Constitution could not be deemed "existing law." The Court cited its decision in Kalvani Stores v. State of Orissa, which held that post-Constitution notifications under pre-Constitution acts do not qualify as "existing law" under Article 305. Additionally, Article 304, which allows for reasonable restrictions on trade by state legislatures, was deemed inapplicable as the provisos were made by the executive government, not the legislature. There was no evidence that the restrictions were reasonable or imposed in the public interest, as required by Article 304(b). Conclusion: The Supreme Court concluded that the two provisos to Rule 2 were restrictive and not regulatory, thus exceeding the authority under Section 37 of the Mysore Forest Act. They also violated Article 301 of the Constitution and were not saved by Article 305 as "existing law." Consequently, the appeal by the State of Mysore was dismissed, and the High Court's decision to strike down the provisos was upheld. Appeal dismissed.
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