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TMI Blog1935 (12) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner's warehouse, were removed from the warehouse by the Inspector and stored in some other place. Against those orders the petitioner made certain representations to the Collector and some correspondence passed. On June 15, 1954, the Collector, Central Excise, issued a notice to the petitioner to show cause why a penalty should not be imposed on him for the contravention of Rules 151(c) and 226 of the Central Excise Rules,1944 and why the bags of kandi should not be confiscated. The petitioner showed cause, the Collector heard the petitioner who had also filed written arguments. Finding the charges against the petitioner proved, the Collector ordered confiscation of the bags of kandi, imposed a fine of Rs. 150 and the duty leviable thereon in lieu of confiscation. He further imposed a penalty of Rs. 2,000 under Rules 151(c) and 226 of the Central Excise Rules. The appeal taken to the Central Board of Revenue was dismissed as the petitioner refused to deposit the penalty of Rs. 2,000 and a revision to the Central Board of Revenue was also dismissed for the same reason. This is one of the orders which is challenged by the petitioner. 2. On July 29, 1954, the Collecto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) directing the respondents to return the goods confiscated by them. 4. For the petitioner three points were raised that : (1) Sections 6 and 8 of the Act and the Rules made thereunder were beyond the legislative competence of the Central legislature under the Constitution Act of 1935; (2) even if they were within the legislative competence they impose excessive and unreasonable restraint on the fundamental rights of the petitioner to trade in tobacco and they were not in the interest of the general public and, therefore, were not saved by Article 19(6); and (3) orders passed were ultra vires the Act and the Rules made thereunder. 5. Before we proceed to consider the arguments raised on behalf of the petitioner it is necessary to examine the scheme of the Act. Its scope as given in the preamble is : "to consolidate and amend the law relating to central duties of excise on goods manufactured or produced in British India and to salt." Section 2 of the Act gives the definitions. Chapter II provides for levy and collection of duty. The two main Sections i.e. 6 and 8 fall under this Chapter. Section 6 provides for certain operations to be subject to licences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se within Item 45 of List I and that was one of its objects, it also regulates trade or commerce and, therefore, falls within the abovementioned items of List II and would, to that extent, be ultra vires. It was contended that the pith and substance of a statute may cover two fields and in support relied upon the following observation of Mahajan, C.J., in Cooverji B. Bharucha v. Excise Commissioner and the Chief Commissioner, Ajmer, 1954 SCR 873 pp. 877, 882 : (AIR 1954 SC 220 at pp. 222, 224): "The pith and substance of the regulation is that it raises excise revenue by imposing duties on liquor and intoxicating drugs by different methods and it also regulates the import, export, transport, manufacture, sale and possession of intoxicating liquors." But that case did not raise the question of legislative competence; the point for decision was whether the statute there impugned, infringed the right to carry on trade in liquor and also whether the auction money was a fee or a tax. It was in that connection that the observation above quoted was made. 7. It was also argued that if the purpose and object of the Act is levying of duty of excise then it could not provide for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious lists it is necessary to examine the pith and substance of the Act and if the matter comes substantially within an item in the Central List it is not deemed to come within an entry in the Provincial list even though "the classes of subjects looked at singly overlap in many respects". It is within the competence of the Central legislature to provide for matters which may otherwise fall within the competence of the Provincial legislature if they are necessarily incidental to the effective legislation by the Central legislature on a subject of legislation expressly within its power. Attorney-General for Canada v. Attorney-General for British Columbia, 1930 A.C. III at p.118; Attorney-General for Canada v. Attorney-General for Quebec, 1947 A.C. 33 at p. 43. In Gallagher v. Lynn, 1937 A.C. 863, it was held that if the true nature and character of an Act is to protect the health of the inhabitants then even though it may incidentally affect trade, it is not enacted "in respect of" trade. Moreover it is a fundamental principle of constitutional law that everything necessary to the exercise of a power is included in the grant of the power. Edward Mills Co. Ltd. v. The State of Ajmer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 544 (supra) and at p. 540 : "It is equally well settled that the power to legislate on a topic of legislation carries with it the power to legislate on a ancillary matter which can be said to be reasonably included in the power given." We now proceed to determine the true nature and character or the pith and substance of the Act. It is a fiscal measure to levy and realise duty on tobacco. The method of realising duty must be left to the wisdom of the legislature taking each individual trade and its peculiarities and difficulties which arise in that matter. Various provisions of the Act and the Rules show that the authorities are on the track of the movement of tobacco from the time it is grown to the time it is manufactured and sold in the market and the various provisions of the Act and the Rules made thereunder have been considered necessary for effectuating the purpose of the Act. Rules made under the Act also are directed for achieving the same objective. Chapter IV in the Rules deals with unmanufactured products. Rule 15 therein requires the growers to make a declaration in respect of all land upon which tobacco is to be grown. Rule 17 which requires curing to be done on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not mean that the object and purpose of the Act is not imposition, collection and realisation of duty of excise. This rule is a means of making the realisation of duty effective and necessarily incidental to effectual legislation for collection of duties - 1930 AC III. Looking at the scheme of the Act, its object and purpose, its true nature and character and the pith and substance the conclusion is inevitable that the Act was within the legislative competence of the Central legislature and although there may be certain matters otherwise within the legislative competence of the provincial legislature they are necessarily incidental to effective legislation by the Central legislature. The various provisions of the Act and the Rules made thereunder were, in our opinion, essentially connected with the levying and collection of excise duty and its true nature and character the Act remains one that falls under Item 45 of List I and the incidental trenching upon the provincial field of Item 27 or 29 would not affect its constitutionality because the extent of invasion of the provincial field may be circumstance to determine the true pith and substance but once that question is determined ..... X X X X Extracts X X X X X X X X Extracts X X X X
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