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TMI Blog1981 (3) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956. Other preparations are unrestricted preparations. The holder of a licence in form L. 1 under the Medicinal and Toilet Preparations (Excise Duty) Rules, 1956, shall be deemed to be a registered dealer for the purpose of the notification. The second appellant herein by an order dated 13-11-1975 has directed that L-1 licences like the respondent should not manufacture any restricted preparations by using more than 10% of the annual quota of alcohol allotted to them. Immediately, after the communication of the said order, representations were made to the Government of Tamil Nadu by the manufacturers, but it fell in deaf ears. Since nothing concrete was done and as the business was seriously affected, the respondent was obliged to file W.P. 100 of 1977, on the file of this Hon'ble court for a writ of certiorified mandamus for quashing the order of the second appellant dated 13-ll -1975, and directing the appellants not to interfere with the lawful manufacture of restricted preparations by the respondent in accordance with the terms of the licence granted under the Medicinal and Toilet Preparations (Excise Duty) Rules, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that in the manufacture the respondent can consume alcohol not more than 25000 proof litres for the year 1980-81. According to the licence, the respondent can manufacture 35 preparations containing alcohol and they are shown in the annexure to the said licence. In the circular dated 13-11-1975, the second appellant herein has stated that L.l. licensee should not manufacture any single restricted preparation out of the list annexed to the L-1 licence by using more than 10 per cent of the annual quota allotted to them. It has been further averted by the respondent herein that even though the licences have been permitted to manufacture 35 preparations as per the L-1 licence, they have been restricted by the circular dated 13-11-1975 in making the restricted preparations. The said circular was challenged in W.P. 100 of 1977, and in spite of the judgment in the said writ petition dated 21-2-1977, the appellants did not implement the direction in the said judgment. Hence the respondent was constrained to file W.P. 558 of 1980. After the order in the said writ petition, the appellants made an endorsement in the respondent's licence dated 27-3-1980 stating that 10 per cent ceiling of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the restrictions in the licence itself, the appellants have stated that the order in W.P. 558 of 1980 is not correct. With the above said allegations, the appellants have prayed that the writ appeal may be allowed holding that the restrictions imposed by the appellant are in accordance with the Act and the Rules framed thereunder. 7. Mr. Venkataswami, the learned Government Pleader, after taking us through the relevant provisions of the Medicinal and Toilet Preparations (Excise Duties) Act, 1956 and the Rules made thereunder, submitted that the restrictions imposed by the appellants are in public interest and are within the powers of the authority acting under the said Act and the Rules made thereunder. The decision in W.P. 100 of 1977 cannot be extended to the licences issued subsequent to the said decision when especially the licences contained restrictions for the manufacture of the restricted goods. 8. Mr. Ramasubramanian, the learned Counsel appearing for the respondent, read out the decision in M/s. Enoch pharm v. State of Kerala, A.I.R. 1965 Ker. 280 and submitted that the said decision applies on all fours to the facts of the present case. According to the learned Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section. 6 read with Rule 84 and the provisions in the form A. L-1 show that the statute provides for control not merely of a regulating nature for the purpose of ensuring the collection of duty imposed by the Act but also control of the quantum and the number of articles that could be allowed to be manufactured. According to the Advocate General, the section, the rule and the form clearly provide the power to impose the restrictions of the nature that have been imposed by Exs. P.4 and P.5. But the learned Judge, after examining the provisions of the Act and the Rules made thereunder observed that he is unable to see in those provisions any power conferred on the licensing authority. The learned Judge observed "No person engaged in manufacturing medical preparations shall do so without a proper licence. This is an ordinary provision which is intended for regulating of various types of activities for different purposes. Such regulation may be for the purpose of health or for the purpose of imposition of a fee for services rendered by local authorities or as in this case to ensure the collection of the duty imposed by the Statute. I find no provision in the statute even suggesting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any manufacturer, the licensing authority shall satisfy itself about the requirements of alcohol of that manufacturer and if that authority is of the opinion, that the quantity of alcohol asked for is not in conformity with the bona fide needs of the manufacturer, it shall either reduce or refix the quantity of alcohol as it may deem fit." Rule 86 deals with alteration or substitution of licence. It reads— "The licensing authority may, at any time, call for any licence and may amend or alter it or may tender to the licence a new licence in accordance with any further conditions which may be prescribed……." Even in this Rule 86 it is made clear that there must be some rule prescribing the conditions contemplated under Rule 86. Rule 91 deals with additional rules specially applicable for applying for a licence for working a bonded/non-bonded manufactory. Sub-rule (ix) states— "a list of all preparations which the licencee proposes to manufacture in his manufactory showing the percentage or proportion of alcohol in terms of London Proof gallons contained in each such preparation quoting the authority (pharmacopoeia) under which such preparation is proposed to be manufactured." ..... X X X X Extracts X X X X X X X X Extracts X X X X
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