S.K.Kapur - (1.) By- this writ petition, the petitioner has asked for the following reliefs :- (1) quashing of the order dated 16-11-1965 signed by one P.S. Sharma for Excise Commissioner, Delhi; (2) a writ. order or direction restraining interference in the trade and profession of the petitioner in the Ayurvedic preparations inclusive of trade in the drug Maha Shakti Sudha ; and (3) an order on respondent No. 3, Inspector of Excise, directing him to release the stocks of the drug Maha Shakti Sudha seized by him on or about 10-11-1965. The alleged order dated 16-11-1965 is addressed to Messrs Janta Drug House, of which the petitioner claims to be the Managing Partner, and reads, "Necessary verification regarding the payment of duty on the goods and the genuineness of Maha Shakti Sudha, an Ayurvedic preparation, manufactured and supplied by Messrs Bharat Chemical and Pharmaceutical Works, Meerut, to Messrs Indian Medical Agency?, 106. Ram Nagar Market, are being made. You are hereby directed not to import and sell the above goods until it has been established that the goods are outside the purview of the Excise Act." It is averred in the writ petition that (a) Janta Drug' House (hereinafter referred to as the firm) is licensed to. stock, sell, exhibit for sale arid distribute drugs under the Drugs and Cosmetics-Act, 1940 ; (b) the petitioner obtained the drug Maha Shakti Sudha locally on or about 1-11-1965 for sale in the firm's shop; (c) the said drug is the manufacture of 'Messrs Bharat Chemical and Pharmaceutical Works, Meerut, who is licensed to manufacture the said drug under a licence issued in Form L 2 under the Medicinal and Toilet Preparations Excise Duties Act, 1955 (hereinafter called as Act 16 of 1955) and the rules framed thereunder, and the said medicine has been manufactured under the said licence ; (d) the medicine is a proprietary drug of Ayurvedic origin and the formula is displayed on the label pasted on the container ; (e) no doubt, one of the ingredients of the drug is rectified spirit (fifty two per cent); but the same is required to be used as a preservative. The various constituents of the drug, however, are of the Ayurvedic origin and are mentioned and recognised by an Ayurvedic Pharmacoepia (Bhav Prakash) approved by the Central Government under the Drugs and Cosmetics Act, 1940; (f) the rectified spirit used in the manufacture is obtained by the manufacturers (Messrs Bharat .Chemical and Phanuaceutical Works) under a licence in Form L. 2 . under Act 13 of 1955 on an indent in Form 1. D I to Act 16, of 1955, after pay'nent of full excise duty as leviable under the said Act (Act 16 of 1955), the procedure for obtaining rectified spirit, having been laid down in rule 49 of the rules framed under Act 16 of 1955; (g) the manufacture of such drug is carried on strictly according to the rule under Act Id of 1955 ; (h) the said drug is not covered by any Excise Act, as it has been specifically exempted from its operation by the rule issued by the Chief Commissioner, Delhi, entitled "The Delhi Intoxicating Spirituous Preparations, Import, Export, Transport, Possession and Sale Rules, 1952", as amended up to 13-12-1961. These rules prohibit the sale, import and export of intoxicating spirituous preparations a.s defined by the Chief Commissioner in his notification F. 10(27)/ 61-Fin (E) (i),but makes specific exemption from the operation of these rules medicines prepared under The Avurvedic or Unani Systems of medicines; and (i) on 10-11-1965, respondent No. 3, accompanied by the Delhi Police, raided the shop of the petitioner without any legal authority, searched the shop and seized the stock of Ayurvedic preparation Maha Shakti Sudha. The older dated 16-11-1965, mentioned above, was received by the petitioner on 17-11-1965.
(2.) It is, at this stage, pertinent to refer to the Delhi Intoxicating Sprituous Preparations, Import, Export, Transport, Possession and Sale Rules, 1952, as amended up to 13-12-1961, framed under the Punjab Excise Act, 1014, hereinafter referred to as the Excise Rules. Rule 1(g) defines "Intoxicating Spirituous Preparations" to mean "the spirituous preparations declared as liquor by the Chief Commissioner's notification No. F.1 (27) 61-Fin(E)(i) dated 7-12-1961, as subsequently amended vide this Administration Corrigendum No. F.10(27)/1, Fin(E) (i) dated 13-l2-1961, and shall include all such preparations as the Chief Commissioner may declare as such from time to time". Rule 2 requires that "no intoxicating spirituous preparations shall be manufactured or prepared or possessed for sale except tinder the authority and subject to the terms and conditions of a licence in Form M. C. 12, granted in that be half by the competent excise officer; provided that a licence in Form M. C. 12 short not be necessary if the intoxicating spirituous preparations are manufactured or prepared or possessed under a licence granted under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, and the rules framed thereunder". Rule 24 reads, "These rules shall not apply to the intoxicating spirituous preparations imported from overseas to and those medicinal preparations which contain self-generated alcohol or or are made under Ayurvedic or Unani system of medicine". By notification No. F. 10(27)/61--Fin (E) (i), made in exercise of power under clause (14) of section 3 of the Punjab Excise Act, 1914, dated 7-12-1961 the Chief Commissioner declared all spirituous preparations containing more than twenty per cent proof alc3hol to be liquor for the purposes of the Punjab Excise Act. The principal question to be decided, therefore, is whether or not the drug in question is exempt from the operation of the said notification by virtue of rule 24 of the Excise Rules being a drug made under "Ayurvedic ..... system of medicine". It is not disputed on behalf of the petitioner that if the medicine is not one falling under rule 24. its possession for sale would be violative of the said Excise Rules.
(3.) It is said on behalf of the petitioner that the drug is being manufactured under a licence issued by the State of Uttar Pradesh in Form L. 2 of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956, framed in exercise of power conferred by sections 9, 10 and 19 of the said Act 16 of 1955, and that the licence being to manufacture Ayurvedic medicine it is not open to the respondents to contend to the contrary and are obliged to treat the drug as exempt under rule 24 of the Excise Rules. From L. 2 authorises a manufacturer to manufacture preparations specified therein. Clause (2) thereof reads: "The privilege conferred by this licence extends only to manufactu"e preparations of standard pharmacopoeias of Allopathic, Ayurvedic, Ho-noeopathic and (Jnini systems of medicine, proprietary types of medicine and all toilet prepantions". In the list of preparations the manufacture of which can be authorised, there are two categories of medicines, (1) standard preparations, and (2) proprietary preparations. "Standard preparations" are further classified into Allopathic, Ayurvedic, Homoeopathic and Unari preparations, while under the "proprietary preparations," the following particulars are required to be given- (1) Name of the preparation; (2) The true formula of the preparation ; and (3) Whether the preparations are toilet preparations. Schedule to the Finance Act, 1964 (Act 5 of 1964), levies duty on medicinal preparations in Ayurvedic, Unani or other indigeneous system of medicine, and the petitioner says that the respondents are not competent even to find out whether or not the duty has bee.n paid, as that' is a function assigned to different authorities, that the duty has to be paid in accordance with rules 6 to 11 of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956. and that elaborate provisions made in the said Rules for payment thereof will always ensure that the said duty has been paid. As a matter of fact, it is said that no rectified spirit can even be purchased unless the duty is paid. My attention has been invited to rules 49 to 51 of 1956 Rules prescribing the procedure for purchase of rectified spirit which, according to the petitioner, show that no purchase can be made without payment of requisite duty. My attention has then been invited to rules 65, 68, 83, 91, 85 and Form A. L-1 of the 1936 Rules. I think, a brief reference to these rules is necessary for completeness. In rule 65, pharmacopoeias in vogue in various States have been recognised as standard Ayurvedic Pharmacopoeias till a standard Ayruvedic Pharmacopoeia has been evolved by the Central Government. It is not disputed that Bhav Prakash is one of such standard pharmacopoeias. Rule 68 provides for the constitution of a standing committee to advise the Central Government on all matters connected with the technical aspects of the administration of Act 16 of 1955 and 1956 Rules. and particularly on the two matters expressed in the said rule. Rule 83 comes under Chapter VI of 1956 Rules, which lays down the procedure for obtaining a licence under the said rules. Rule 83 prescribes the from of application and it is on this that a lot of emphasis has been laid on behalf of the petitioner. Rule 91 requires that in addition to the particulars required in rule .83, a person desiring to obtain a licence to establish a bonded or non-bonded manufactory shall in his application furnish the particulars specified therein. Clause fix) of the said rule 91 reads, "a list of all preparations which the licensee proposes to manufacture in his manufactory showing the percentage or preparation of alcohol in terms of London Proof litres contained in each such preparation quoting the authority (pharmacopoeia) under which such preparation is proposed to be manufactured". It is said that by reason of this clause in rule 91 a manufacturer has even to disclose the pharmacopoia and the quantity of alcohol to be used in the preparation and the licence is issued only after such a disclosure has been made. Rule 95 prescribes the procedure for disposal of an application for licence to manufacture medicinal preparations and the enquiries that have to be made before issue of licence. On the basis of Form L. 2, it has been contended that the Excise Commissioner has to approve the medicines sought to be prepared and cumulative reading of the above provisions would show that the formula and the pharmacopoeia prescribed in the application for licence are also approved. The argument proceeds that in the face of these requirements for obtaining a licence it is not open to the respondents to challenge that the drug is not exempt under rule 24 and/or is not an Ayurvedic preparation.;