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TMI Blog1979 (4) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... upon this measure both as a fiscal measure and the one safeguarding public health and even public morals because it is well recognised that liquor trade is instinct with injury to individual and community and has serious side-effects recognised everywhere in every age. Therefore, there is no substance in the contention that the retrospectivity of the Ordinance is illegal and invalid. Appeal dismissed. - Special Leave Petitions (Civil) Nos. 2585-2594/79 - - - Dated:- 12-4-1979 - DESAI, D.A. AND SEN, A.P., JJ. V. S. Desai, L. N. Sinha, L. M. Singhvi, P.P. Rao, R. C. Verma, Y. K. Sabharwal, D. P. Mukherjee, and A. K. Ganguli for the Petitioner Soli J. Sorabjee, Addl. Sol. Genl. R. K. Bhatt and R. N. Sachthey for the Respondent JUDGMENT DESAI, J. Law touching manufacture, import, use or consumption of liquor (as understood in common parlance) is recently vigorously assailed with almost afflicted sentimentalism that even though we have dismissed this batch of Special Leave Petitions on 23rd March, 1979, in fairness to petitioners on whose behalf all possible contentions that can be formulated by research and dialectics were advanced with eloquence and devoid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Civil Writ No. 116/79. A Division Bench of the Delhi High Court heard the Letters Patent Appeals against the judgment of the learned single Judge of the Delhi High Court as well as the aforementioned writ petition and by a common judgment held the Ordinance as well as the impost thereunder valid and dismissed the writ petition and allowed the Letters Patent Appeals setting aside the judgment of the learned single Judge. This bunch of petitions is filed against the judgment of the Delhi High Court in Civil Writ No. 116/79 and allied writ petitions and the Letters Patent Appeals. The cardinal question around which the various facts of controversy rotates turns upon the competence of Parliament to enact legislation under challenge which would directly impinge upon the competence of the President to issue the impugned Ordinance. Article 123 of the Constitution enables the President to issue an Ordinance in the circumstances thereunder mentioned and the power to issue Ordinance is co- extensive with the legislative power of Parliament vide Article 123(3). The question, therefore, is whether Parliament had the power to impose special duty on the import of country liquor in Delhi. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocal area for consumption, use or sale therein . The relevant provisions of the impugned Ordinance may also be extracted for convenience of reference. The Ordinance in its Preamble states that by reason of certain excisable articles not being manufactured or produced in Delhi, one such being country liquor, countervailing duty is not leviable on such articles which are imported into Delhi, and proceeds to define duty in clause 5(a) of s. 3 as under: (5a). duty means the excise duty or countervailing duty or, as the case may be, special duty; Clause (c) was added to clause (6) of s. 3 specifying the words any spirit . Clause (18a) was added specifying thereunder the definition of 'special duty' which reads as under: (18A). Special duty means a tax on the import of any excisable article being an article on which countervailing duty as in mentioned in entry 51 of List II in the Seventh Schedule to the Constitution is not imposable on the ground merely that such article is not being manufactured or produced in the territory to which this Act extends . Section 31 was amended enabling the Government to levy over and above excise duty a countervaili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standing that such matter is a matter enumerated in the State List. Power of Parliament thus to legislate with respect to any matter for Delhi, territory not included in a State, is unabridged or unfettered by the entries in the State List. Further, residuary power of legislation including the power to levy tax is conferred on Parliament by the combined operation of Articles 246(4), 248(1) (2) and Entry 97 in the Union List. That power is untramelled by the limitations prescribed by Articles 246(2) and (3) and Entry 51 of State List and is plenary and absolute subject only to such restrictions as are imposed by the Constitution and we find none such which is material to the present question (vide Mithan Lal v. State of Delhi) (1). Accordingly, if excise or countervailing duty could be levied on country liquor manufactured or imported into Delhi, albeit other conditions for the levy of such duty being fulfilled, Parliament would not lack competence to levy the same only because levy of such duty on alcoholic liquors for human consumption is within the competence of a State. But it must be confessed that as country liquor is not manufactured in Delhi, the Parliament could not un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alth, the controversy was whether the impugned Act was a law with respect to entry, including Entry 49 in the List II or was it one under Entry 86 read with Entry 97 or Entry 97 itself of the List I. Repelling the contention of legislative incompetence this Court held that there is nothing in the Constitution to prevent Parliament from combining its powers under one or other Entry with its power under Entry 97. The terse observation is that this Court knows no principle which debars Parliament from relying on the powers under the specified entries 1 to 96, List I and supplement them with the powers under Entry 97, List I and Article 248 or even the powers under entries in the Concurrent List. This authoritative pronouncement would answer the contention that while legislating for the Union Territories the Parliament unhampered by Articles 246(2) and (3) but enriched by Article 248(1) and (2) could legislate on any of the topics either in the List I or in List II or in exercise of the residuary power under Entry 97. There is thus no dearth of legislative competence of Parliament to enact legislation for a territory not included in a State because the power to legislate takes within i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and within the foreseeable future could have been within the contemplation of the founding fathers and was, therefore, specifically enumerated in one or the other of three Lists, meaning thereby that three Lists were exhaustive of Governmental action and activity. Demands of welfare State, hopes and aspirations and expectations in a developing society and the complex world situation with inter- dependence and hostility amongst nations may necessitate legislation on some such topics that even for visionary they could not have within the contemplation of the founding fathers. Complex modern governmental administration in a federal set up providing distribution of legislative powers coupled with power of judicial review may raise such situations that a subject of legislation may not squarely fall in any specific entry in List I or III. Simultaneously on correct appraisal it may not be covered by any entry in List II though apparently or on a superficial view it may be covered by an entry in List II. In such a situation Parliament would have power to legislate on the subject in exercise of residuary power under Entry 97, List I and it would not be proper to unduly circumscribe, corrod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of this Court in Avinder Singh Ors. v. State of Punjab Ors.,(1) wherein it was observed that if on the same subject the legislature chooses to levy tax twice over there is no inherent invalidity in the fiscal adventure save wherever prohibitions exist. It was next contended that what is sought to be done by the impugned Ordinance is to circumvent the decision of the learned single Judge of the High Court which invalidated the levy of countervailing duty and that at best it is a colourable legislation and that in pith and substance it is re-introduction of countervailing duty under a different nomenclature and hence unsustainable. If by a legislation tax is sought to be imposed in exercise of certain legislative power which under judicial review is found to be wanting, it does not prohibit the legislature from exercising the same power if it can be traced to provisions of the Constitution. Merely because an incorrect exercise of legislative power under a misconception of power itself is once invalidated that very legislative power if it is traceable to provisions in the Constitution cannot be struck down on the ground that it is a colourable legislation or a mere ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax by Municipalities (Validation) Act, 1963, providing in s. 3 thereof assessment and collection of rate on lands and buildings on the basis of capital value or a percentage of the capital value and declaring the past levy to be valid by further providing that tax on lands and buildings may be imposed either on the basis of annual letting value or on the basis of capital value. When the amending and validating Act was questioned Prithvi Cotton Mills Ltd. Anr. v. Broach Borough Municipality Ors.,(2) this Court observed that the legislature exercised its undoubted powers of redefining 'rate' so as to equate it to a tax on capital value and convert the tax purported to be collected as a 'rate' into a tax on lands and buildings, and thus got rid of the judgment in Patel Gordhandas's case, (supra). It would thus follow that merely because a statute was found to be invalid on the ground of legislative competence that does not permanently inhibit the Legislature from re-enacting the statute if the power to enact the same is properly traced and established. In such a situation it would not be correct to say that the subsequent legislation would be merely a colourabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions on the freedom of inter- State trade, commerce and intercourse guaranteed by Article 301 or the freedom to carry on trade or business in liquor is a fundamental right under Article 19(1) being not in public interest, the enactment is constitutionally invalid. That raises the oft repeated vexed question whether right to carry on trade or business in liquor is a fundamental right under Article 19 (1) (g) and that same considerations would apply for acting under Article 301. This question has cropped up before the Court at regular intervals but it would be sufficient to take note of two decisions to dispose of the contention. In Har Shankar Ors. etc. v. Dy. Excise Taxation Commissioner Ors.(1) after referring to Crowley v. Christansen,(2) and several cases of this Court it was in terms stated that there is no fundamental right to do trade or business in intoxicants. The State under its regulatory powers, has right to prohibit absolutely every form of activity in relation to intoxicants-its manufacture, storage, export, import, sale and possession. In all their manifestations, these rights are vested in the State and indeed without such vesting there can be no effective reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d welfare of the people. Liquor traffic is a source of pauperism and crime. In this background it is now too late in the day to entertain an argument that imposition of tax on the import of liquor which serves the double purpose of restraining its use by making it costly and prohibiting its use on the ground that it trenches upon the manufacturers slowly and gradually to restrict its manufacture directly impinging upon its unrestricted consumption. Such an impost, therefore, can be said to be one in the public interest for preserving public health and public morals and cannot be said to be one as infringing the inter-State freedom of trade and commerce. Mr. Rao, who appeared for some of the petitioners specifically submitted that this question is no more res- integra in view of the decision of a Constitution Bench of this Court in Kalyani Stores v. The State of Orissa Ors.(1) In that case the validity of a Notification enhancing the duty on the import of foreign liquors from Rs. 40/- to Rs. 70/- per L.P. Gallon was questioned on the ground that it interferes with freedom of inter-State trade and commerce guaranteed by Article 301. This challenge was upheld by the majority decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be hardly relevant in examining the object and purpose behind enacting a certain legislation. Provision in Punjab Excise Act, 1914, conferring power on the State to direct closure of liquor shops on certain days in a week, month or year was challenged as one not of a regulatory character but introduced with the avowed object of enforcing prohibition and a contention was raised that way back in 1914 the then rulers could not have thought of enforcing prohibition through the provisions of the Punjab Act which was specifically enacted for the purpose of collecting revenue from liquor vendors and indirectly from liquor consumers. This Court in P. N. Kaushal's case (supra) while repelling this contention observed as under:- In short, while the imperial masters were concerned about the revenues they could make from the liquor trade they were not indifferent to the social control of this business which, if left unbridled, was fraught with danger to health, morals, public order and the flow of life without stress or distress. Indeed, even collection of revenue was intertwined with orderly milieu; and these twin objects are reflected in the scheme and provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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