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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 ..... ly Mirtasanjibani, Mirtasanjibani Sudha and Mirtasanjibani Sura, which are manufactured by these petitioners, under the various Excise Act in force in the respective States. Further points were raised in the petitions as regards the validity of the restrictions imposed in the matter of the import, export, possession and sale of these three Ayurvedic preparations. But the learned counsel for the petitioners stated before us that he was not pressing any other point except one viz., whether the various 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 Prakas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icipality, district or other local area may, notwithstanding that those taxes, duties, cesses or fees are mentioned in the Union List, continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law". In view of this Article, the State Governments continued to levy excise duties on medicinal and toilet preparations containing alcohol, opium, etc., till 1957 as Parliament had made no law to the contrary till then. In 1955, however Parliament 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. Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bani Sudha were also added under the head "medicinal preparations" in the Schedule to the Rules as the three are really one and the same medicine. The Act and the Rules came into force from April 1, 1957 in accordance with the provision of Section 1(3) of the Act, which gives power to the Central Government to enforce the Act on such date as it may, by notification in the Official Gazette, appoint. The petitioner's case is that thereafter they began to pay duties of excise on these three medicines under Item 1 in the Schedule to the Act at the rate of Rs. 17.50 np per gallon of the strength of London 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 Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State Governments not to levy duty on these preparations under the respective Excise Acts in force in the various States and prohibiting the State Governments from collecting duties of excise on the said medicinal preparations in excess of the rates fixed by the Act and to refund the amounts of duty already collected in excess of that rate. 5. The petitions have been opposed by the Central Government and by the various State Governments concerned. The main counter-affidavit has been filed on behalf of the Central Government and the various State Governments have adopted that counter-affidavit with 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 deni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us States. We have already pointed out that under the Government of India Act, 1935, medicinal and toilet preparations were liable to duties of excise under Entry 40 of List II of the Seventh Schedule to that Act. Correspondingly under Item 45 of List I ibid which provides for duties of excise on tobacco and other goods manufactured or produced in India, medicinal and toilet preparations were excepted from that entry. Therefore, till the Constitution came into force the State Governments had power to levy duties of excise on medicinal and toilet preparations. We have further pointed out that the Constitution 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been repealed by Section 21 so far as medicinal and toilet preparations were concerned. It is urged on behalf of the State of Bihar that the purpose of the Excise Acts in States was not merely to raise revenue which was a secondary consideration but to regulate the consumption of liquor and for that purpose the various Excise Act of the States imposed a heavy duty to reduce consumption. Further, it is urged that the purpose of the Act is only to impose duties for revenue purposes and it has nothing to do with the regulation of consumption of liquor and reducing such consumption. Therefore, the Excise 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e books, the preparation is used as a tonic to build body and physique, to increase strength and appetite and to make appearance healthy and bright. It is also used in Sannipat Jwara (typhoid fever) in critical stages. It is also prescribed for cholera in frequent doses and finally is used in all conditions of collapse. The counter-affidavits filed on behalf of the Union and the States which are opposing these petitions do not definitely state that these preparations are not medicinal preparations. For example, in the affidavit of the State of West Bengal, it is stated that it is not admitted that these 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, no standard medicinal preparation can be prepared as the mode of preparation contravenes all settled laws of biochemistry. This has been sworn by an Excise Inspector of the Excise and Intelligence Bureau of the State of Uttar Pradesh. It is not clear however from the counter-affidavit what qualifications the deponent has to make such a statement, nor are we able to understand which laws of biochemistry are contravened by the mode of preparation prescribed in the three Ayurvedic text books already referred to. As against this, we may refer to the report of the Chopra Committee on Indigenous Drugs of 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 ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which were not cropping up frequently. This Committee was constituted in July, 1958, and it does not appear that any action on the lines suggested by the Committee was taken by the Government of India. In these circumstances we have on the one side the three standard Ayurvedic text books according to which these preparations are prepared; we have also the affidavits of a large number of Ayurvedic practitioners of obvious repute to the effect that these preparations are medicinal preparations which are used to alleviate human suffering in certain conditions. On the other hand, there is no affidavit from 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onnection on behalf of the respondents is also not categorical; for example, it has been stated on behalf of the Union of India that it is not admitted that these preparations are prepared according to the specifications by utilising the proper ingredients and are manufactured according to the recipe and direction given in the Ayurvedic text books referred to above. Nothing has been brought on the record to show that these preparations were analysed and the analysis showed that the ingredients mentioned in the Ayurvedic text books were not present in the preparations. Besides, as it appears from the West 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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