1986 (3) TMI 338 - SC - Central Excise

Summary

Issues:
Challenge to restrictions on import of toilet preparations into Gujarat under statutory measures; Validity of notification declaring Eau-de-cologne as a "spirituous preparation"; Refusal of import licence for Eau-de-cologne; Allegation of monopoly by local manufacturers; Violation of Fundamental Rights under Article 19(1)(g) and Article 19(1)(f) of the Constitution; Infringement of Article 301 of the Constitution; Challenge to Gujarat Articles Unfit for Use as Intoxicating Liquor (Manufacture and Import) Regulation Rules, 1966.

Analysis:

1. The petitioners, a firm in Gujarat, challenged the legality of restrictions on importing toilet preparations, including Eau-de-cologne, into the state. The issue revolved around the statutory measures in Gujarat aimed at prohibiting the consumption of intoxicating liquors. Reference was made to the Bombay Prohibition Act, 1949, and subsequent amendments exempting certain preparations containing alcohol from the prohibitions. The controversy stemmed from the interpretation and application of these provisions in the context of importing toilet preparations.

2. The Central Government's notification declaring Eau-de-cologne as a "spirituous preparation" under the Spirituous Preparations (Inter-State Trade and Commerce) Control Act, 1955, was challenged in the High Court and subsequently quashed due to procedural irregularities. However, the petitioners faced difficulties in obtaining an import licence for Eau-de-cologne despite the legal developments. The refusal was based on concerns of potential misuse for purposes other than cosmetics, leading to the rejection of the import licence application.

3. Allegations of discriminatory practices favoring local manufacturers in Gujarat were raised by the petitioners, claiming a monopoly situation since 1965. They contended that the authorities' actions violated their Fundamental Rights under the Constitution, specifically Article 19(1)(g) and Article 19(1)(f), related to trade and property rights. Additionally, an infringement of Article 301, which deals with freedom of trade, was asserted. The petitioners challenged the validity of the Gujarat Articles Unfit for Use as Intoxicating Liquor (Manufacture and Import) Regulation Rules, 1966.

4. The petitioners' challenge evolved during the proceedings, shifting focus from the constitutional validity of the rules to the refusal of the import permit. Arguments were made regarding the lack of evidence linking the imports to unauthorized sales and the exemption of Eau-de-cologne from specific licensing requirements. The petitioners emphasized procedural aspects and the absence of determinations regarding the nature of the imported Eau-de-cologne.

5. Ultimately, the Court dismissed the writ petitions, suggesting that the petitioners pursue statutory remedies under the Bombay Prohibition Act to address factual issues raised during the case. The decision highlighted the need for factual inquiries related to the import permit, exemption status of Eau-de-cologne, expert determinations, and potential mala fide exercise of authority. The petitioners were advised to utilize the available statutory appeal or revision mechanisms for redressal.