1992 (3) TMI 363 - HC - Companies Law

Summary

Issues Involved:
1. Applicability of the Punjab Excise Act to Ayurvedic preparations.
2. Overlapping legislation and legislative competence.
3. Reasonableness of restrictions under Article 19(1)(g) of the Constitution.
4. Validity of the Notifications dated 3rd March 1987 and 5th March 1987.
5. Procedural compliance with rule-making provisions.
6. Alleged discriminatory treatment in the Notification dated 5th March 1987.

Issue-wise Detailed Analysis:

1. Applicability of the Punjab Excise Act to Ayurvedic preparations:
The petitioners argued that the Punjab Excise Act should not apply to Ayurvedic preparations, asserting that other legislation such as the Drugs Control and Cosmetic Act, 1940, and the Medicinal and Toilet Preparations (Excise Duty) Act, 1955, cover the entire field. The court held that the Excise Act and the ISP Rules are intended to regulate and control liquor, including Ayurvedic medicines containing more than 25% proof alcohol, to safeguard public health. The court found that the provisions of the Excise Act and ISP Rules operate in different spheres from other legislation and are intended for different purposes.

2. Overlapping legislation and legislative competence:
The court examined various Acts, including the Drugs and Cosmetics Act, 1940, and the Medicinal and Toilet Preparations (Excise Duty) Act, 1955, and concluded that these Acts do not cover the entire field of legislation related to Ayurvedic preparations. The court emphasized that overlapping legislation is permissible and that the provisions of the Excise Act and ISP Rules continue to apply in addition to other laws. The court also noted that the Excise Act, as extended to Delhi, is a Central Act, and thus, the question of legislative competence does not arise in the Union Territory of Delhi.

3. Reasonableness of restrictions under Article 19(1)(g) of the Constitution:
The petitioners contended that the ISP Rules impose unreasonable restrictions on their right to carry on business. The court referred to the Supreme Court's decision in Southern Pharmaceuticals & Chemicals v. State of Kerala, which upheld similar restrictions as reasonable. The court held that the ISP Rules constitute reasonable restrictions within the meaning of Article 19(6) of the Constitution, as they aim to prevent the misuse of Ayurvedic medicines containing high alcohol content as intoxicating beverages.

4. Validity of the Notifications dated 3rd March 1987 and 5th March 1987:
The court upheld the validity of the Notifications dated 3rd March 1987 and 5th March 1987. The first Notification deleted clause (ii) of Rule 24, making the ISP Rules applicable to Ayurvedic and Unani preparations. The second Notification exempted 19 intoxicating spirituous preparations from the ISP Rules. The court found that the Notifications were issued in accordance with the powers conferred by the Excise Act and the ISP Rules.

5. Procedural compliance with rule-making provisions:
The petitioners argued that the Notification dated 3rd March 1987 was not published in accordance with the provisions of Section 58 of the Punjab Excise Act, which requires previous publication. The court held that the Notification was issued before the date when the rules were to come into force, thereby complying with the requirement of prior publication. The court also noted that the Punjab General Clauses Act, which requires draft publication of rules, is not in force in Delhi.

6. Alleged discriminatory treatment in the Notification dated 5th March 1987:
The petitioners contended that the Notification dated 5th March 1987, which exempted 19 preparations from the ISP Rules, was discriminatory and violated Article 14 of the Constitution. The court found no merit in this contention, stating that the Excise Commissioner has the authority to exempt intoxicating spirituous preparations that are incapable of being misused for potable purposes. The court held that the selection of the 19 preparations was valid and not discriminatory.

Conclusion:
The court dismissed the writ petitions, upholding the applicability of the Punjab Excise Act and the ISP Rules to Ayurvedic preparations containing more than 25% proof alcohol. The court found that the restrictions imposed by the ISP Rules are reasonable and necessary to prevent the misuse of such preparations as intoxicating beverages. The court also upheld the validity of the Notifications dated 3rd March 1987 and 5th March 1987, and found no procedural irregularities or discriminatory treatment in their issuance.