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TMI Blog1962 (9) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... State Governments could tax these three Ayurvedic preparations under the various Excise Acts in force in the States concerned. We propose therefore to deal with this point only in the present cases. 2.The case of the petitioners is briefly this. They carry on business as manufacturers of medicinal preparations according to the Ayurvedic system of medicines and among the Ayurvedic medicines manufactured by them are these three preparations. These Ayurvedic preparations are manufactured by the process of fermentation and distillation in accordance with the Ayurvedic system of medicine following the formula in standard books known as Ayurved Sangraha, Bhaisajya Ratnabali and Arka Prakash. These books, according to the petitioners, contain extracts from all authoritative ancient Ayurvedic treatises accepted throughout India and are in vogue as Ayurvedic pharmacopoeias in the various States. Though the three preparations have three different names they are in reality only one medicine and are prepared according to a single formula in these books. The petitioners aver that these three preparations are manufactured in accordance with the standard Ayurvedic pharmacopoeias in vogue i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed the Medicinal and Toilet Preparations (Excise Duties) Act, No. 16 of 1955, (hereinafter referred to as the Act) which was brought into force from April 1, 1957. We are in the present case concerned only with medicinal preparations and a "medicinal preparation" is defined in Section 2(g) of the Act as including "all drugs which are a remedy or prescription prepared for internal or external use of human beings or animals and all substances intended to be used for or in the treatment, mitigation or prevention of disease in human being or animals." Section 3 provides for levy of duties of excise at the rates specified in the Schedule, on all dutiable goods manufactured in India. Section 19 gives power to the Central Government to make rules to carry out the purpose of the Act and in particular Section 19(2) (xx) gives power to notify in the Official Gazette lists of the names and descriptions of preparations which would fall for assessment under any particular item of the Schedule or for regulating their manufacture, transport and distribution". The Schedule (omitting the Explanations which are immaterial for present purposes) prescribing the duty is in these items :- "Item No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndon proof spirit, as these preparations were considered medicinal preparations containing alcohol which were prepared by distillation or to which alcohol was added and which were capable of being used as ordinary alcoholic beverages. This continued till August 1960 when the Central Government purporting to act under Section 19 of the Act amended the Rules and omitted from the Schedule to the Rules two of the three preparations, namely, Mritasanjibani and Mritasanjibani Sudha. Further in December, 1960, the Central Government again amended the Rules and omitted from the Schedule to the Rules the third preparation (namely, Mritasanjibani Sura). Consequently, various State-Governments began demanding duties of excise on these three preparations at rates which are much higher than the rate of Rs. 17.50 np prescribed in the Schedule to the Act. The contention of the petitioners is that on the coming into force of the Act, the levy of excise duties on these medicinal preparations fell within Item 84 of List I, with the result that thereafter it is not open to State Governments to levy duties of excise on these preparation in accordance with the various Excise Acts in force in the States ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith some additions. The main contention on behalf of the respondents is that these three preparations are not admitted to be "medicinal preparations containing alcohol" within Entry 84 of List I, by reason of these preparations not being mentioned in any recognised Ayurvedic pharmacopoeia. It is also not admitted that they are prepared according to the prescribed specifications referred to by the petitioners by utilising the proper ingredients and manufactured according to the recipes or directions given in the three Ayurvedic text books relied upon by the petitioners. Further, it is denied that these three preparations conform to the definition of Section 2(g) of the Act. It is also not admitted that they are remedies, much less efficacious remedies for any human ailment. It is further urged that the Central Government has been empowered to decide on the advice of the Standing Committee whether any preparation should be treated or continue to be treated as a genuine medicinal and toilet preparation for the purpose of the Act or whether it should be treated or continue to be treated as a restricted or unrestricted preparation. Further, the Central Government can according to the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitution has made a change, and medicinal and toilet preparations were excepted from Entry 51 of List II of the Seventh Schedule to the Constitution relating to duties of excise leviable by States and were put in Entry 84 of List I ibid which provides for duties of excise leviable by the Union. However, Article 277 provides that any taxes or duties etc. which, immediately before the commencement of the Constitution, were being lawfully levied by the Government of any State etc. may, notwithstanding that those taxes, duties etc. are mentioned in the Union List, continue to be levied and to be applied to the same purpose until provision to the contrary is made by Parliament by law. Therefore, so long as Parliament did not make any law relating to medicinal and toilet preparations, the position under the Government of India Act would continue and the States would have the power to continue levying duties of excise on medicinal and toilet preparations to the same extent to which they were levying them immediately before the commencement of the Constitution. In 1955, Parliament passed the Act for levy of duties of excise on medicinal and toilet preparations. This Act was brought into f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Acts of the various States when they impose duty of excise on medicinal and toilet preparations had two purposes, namely, (i) to raise revenue and (ii) to reduce consumption of liquor, and therefore the Excise Acts of the various States cannot be said to be corresponding law which has been repealed by the Act which has only one purpose namely raising of revenue. We have not however been able to understand how any purpose behind a fiscal measure can have any relevance on the question of correspondence. Various Excise Acts of the States in so far as they impose duties on medicinal and toilet preparations containing alcohol are fiscal statutes for taxing these preparations. Now, the Act is a fiscal statute for taxing these preparations enacted by Parliament under Entry 84 of List I of the Seventh Schedule to the Constitution, and therefore the Excise Acts which were the corresponding taxing statutes for these preparations must be held to be repealed so far as taxation on these preparations is concerned. There can therefore be no doubt that there is correspondence between the Act and the various Excise Acts of the various States in so far as levy of duty on medicinal and toilet p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese preparations are exclusively for medicinal purposes. It is also stated that these alcoholic preparations are capable of being used as ordinary alcoholic beverages. Similarly, in the affidavit of the Union, it is stated that it is not admitted that the preparations are efficacious remedies for any human ailment. On the other hand, a number of affidavits have been filed on behalf of the petitioners from registered Kabirajas to show that these preparations are manufactured according to the three Ayurvedic books already mentioned and are used for certain diseases including cholera. The respondents, however, rely on the advice of the Standing Committee consisting of the Drugs Controller of the Government of India and the Chief Chemist, Central Revenues Control Laboratory, which was of opinion after examining the formulae and the analytical data and the claims given on the label of the preparations and also after carrying out tasting test, that these three preparations should be considered straight forward beverages and not as medicinal preparations. It was in consequence of this decision that these three preparations were taken out of the list attached to the Rules framed under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India. In para 265, the Committee says that in different parts of India, as many as 900 indigenous drugs (vegetable, mineral and metallic) and over 1000 preparations made from these drugs are used by the Ayurvedic physicians, and "there seems to be little doubt that out of the large number of drugs used by the Hindu physicians for centuries past and still in use, there are some that deserve the reputation they have earned as cures". In para 266, the Committee points out the difficulties in the way of assessment of the proper value of indigenous drugs. These difficulties are of two kinds; firstly, the modern scientists are not acquainted with the exact connotation of terms of Indian pharmacology, and secondly, whereas western medicine tries to explain the action of a drug in terms of its chemical components, such as alkaloids, glucosides, essential oils, antibiotics, hormones etc., Indian medicine takes into account the action of the drug in its entirety, as they hold that the action of the whole drug is often different from that of any one of its constituents considered separately. The Committee further says that there is a good deal of truth in this assertion. In Para 268, deali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m an Ayurvedic expert on behalf of the respondents. We may however in this connection refer to an affidavit of the Assistant Chemical Examiner to the Government of West Bengal who is experienced in examining and analysing alcoholic liquors. According to him, the chief basis of these three preparations is molasses and gur, which is a fact as we have already pointed out from the recipe in the Ayurvedic text books. He further says that in these three preparations there are several steam volatile products, namely, furfural, aldohydes, ketones and acids but the presence of the same does not destroy or minimise the effect of alcoholic intoxication of these preparations. He further says that the taste or smell of these preparations does not make them unfit for drinking in a large dose and they can be used as an alcoholic beverage. Even this affidavit does not say that these are not medicinal preparations. All that it says is that these preparations contain about 42 per centum of alcohol and can be used as ordinary alcoholic beverages. So if these preparations are medicinal preparations but are also capable of being used as ordinary alcoholic beverages, they will fall under the Act and wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Bengal Rules (ref. West Bengal Excise Compilation, Pt. 2) which we have quoted above, these preparations are prepared in bond and there are various restrictions before the issue of the preparations by the manufacturer. Nothing has been said to show that these preparations are not in fact made in accordance with the direction contained in the Ayurvedic text books. If this was not so, the excise staff would be there to check their preparation. As a matter of fact the first rule with respect to the manufacture of these preparations in the West Bengal Excise Compilation lays down that they will be prepared according to the recipe and direction in Arka Prakash, Ayurved Sangraha and Bhaisajya-Ratnabali; and if that rule is being disobeyed we should have expected some one to swear that though the rule says that the preparations should be made according to the directions in these text books, they are in fact not so made. Further if the rule is being contravened, there must be power in the State Government to take action against those who contravene the rule. But nothing has been brought to our notice to show that any action has been taken. In these circumstances we are not prepared to ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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