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TMI Blog1980 (3) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... ing country liquor. Section 3(5) of the West Bengal Taxation Laws (Amendment) Act, 1972, omitted entry 25 from Schedule I. The effect of such omission was that sale of country liquor became chargeable to sales tax. The respondents felt aggrieved by the imposition of tax on the sale of country liquor by the impugned provision of section 3(5) of the West Bengal Taxation Laws (Amendment) Act, 1972. They filed writ petitions in this court and obtained rules nisi out of which these appeals arise. It was the common case of the respondents that gross profits earned by the licensees from the sale of the country liquor varied between 5.7 per cent and 7.8 per cent. The imposition of sales tax at 6 per cent would render their business so unprofitabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritory of India shall be free. Article 304(b) is as follows: "Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law- (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President." During the pendency of the appeals in this Court, the Governor of West Bengal promulgated the impugned Ordinance being the Bengal Finance (Sales Tax) (Amendment) Ordinance, 1980 (West Bengal Ordinance No. 4 of 1980), published in the Calcutta Gazette, Ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.7 per cent and 7.8 per cent, as found by the learned Judge, it is difficult to hold that the imposition of sales tax at the rate of 6 per cent is a reasonable restriction unless the dealers can pass on the tax to their customers. Our attention has been drawn by Mr. Chatterjee to the introduction of "explanation II" to section 86 of the Bengal Excise Act, 1909, by paragraph 7 of the Bengal Excise (Amendment) Ordinance, 1974 (West Bengal Ordinance No. 4 of 1974), which was published in the Calcutta Gazette, Extraordinary, dated 6th June, 1974. Explanation II, inter alia, provides that the price of an intoxicant shall be deemed to have always been exclusive of any tax, surcharge, additional surcharge or any other impost on sale or purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en held by the Supreme Court, after reviewing all the earlier decisions on the point, that there is no fundamental right to do trade or business in intoxicants, and that the State, under its regulatory powers, has the right to prohibit absolutely every form of activity in relation to intoxicants, its manufacture, storage, export, import, sale and possession. In this connection, we may refer to the following observation of Das, C.J., in State of Bombay v. R.M.D. ChamarbaugwalaA.I.R. 1957 S.C. 699., which has been relied on in the Har Shankar's case(1): "We find it difficult to persuade ourselves that gambling was ever intended to form any part of this ancient country's trade, commerce or intercourse to be declared as free under article 301. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to impose restriction as a regulatory measure. It is contended by him that there is a fundamental difference between imposition of restriction as a regulatory measure and where such imposition is made for fiscal purpose. As there is no fundamental right to carry on trade or business in liquor, one cannot complain against any regulatory measure that may be taken by the Government. But imposition of tax on the sale of country liquor for fiscal purpose, as has been made by the impugned Ordinance interfering with the freedom of trade or business of the respondents in country liquor, comes under the protection afforded by article 304(b) of the Constitution. He submits that in the aforesaid Supreme Court decisions import duty was imposed on intox ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he forms in which it is being dealt with by persons under licences from the Government may resemble trade or business. In our view, in order to avail of the protection of article 301 or article 304(b) of the Constitution, the commodity in which the right to trade, business or intercourse is claimed should be the subjectmatter of lawful trading activities. The view which we take finds support from a Full Bench decision of the Kerala High Court in Kochan Velayudhan v. State of KeralaA.I.R. 1961 Ker. 8 (F.B.). It has been held in that Full Bench case that the protection afforded by article 301 is confined to trading activities. "Liquor" is not a legitimate article of trade and freedom of trade in liquor is not protected by article 301. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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