K.N.WANCHOO, J. - (1.) THESE six petitions under Article 32 of the Constitution raise a common point and will be dealt with together. The main question raised in all these petitions is whether the State Governments are entitled to tax the three Ayurvedic preparations namely 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 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 in various States and are efficacious amongst others in the following diseases : (a) in typhoid fever (Sannipatik Jwara) during collapsed condition; (b) in cholera; (c) in case of loss of appetite to increase power of digestion; (d) In rheumatism, sciatica etc., and (e) to remove weakness, impart strength and vigour and also as a general tonic and restorative for convalescent patients. 3. Before the Constitution came into force, all these three preparations were liable to Provincial Excise duty under Item 40 of List II of the Seventh Schedule to the Government of India Act, 1935. The Constitution however made a change in the three legislative Lists with respect to excise and under Item 51 of List II of the seventh Schedule the States have the power to levy excise duty on alcoholic liquor for human consumption and on opium, Indian hemp, and other narcotic drugs and narcotics but not including medicinal and toilet preparations containing alcohol or any substance like opium etc. Further, under Item 84 of List I of the Seventh Schedule the Union has the power to impose duties of excise on tobacco and other goods manufactured or produced in India except (i) alcoholic liquors for human consumption and (ii) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any substance like opium etc. Thus the Constitution took away the power of the States to impose duties of excise on medicinal and toilet preparations containing alcohol or any substance like opium etc. and give that power to the Union. However, Article 277 of the Constitution provided that "any taxes, duties, cesses or fees which, immediately before the commencement of this Constitution were being lawfully levied by the Government of any State or by any municipality or other local authority or body for the purposes of the State, municipality, 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. 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. Description of dutiable goods Rat of duty ---------- 1. Medicinal and toilet Rs. Seventeen and ansnas preparations, containing alcohol, eight per gallon of the which are prepared by strength of London proof distillation or to which alcohol spirit. has been added and which are capable of being consumed as ordinary alcoholic beverages.
(2.) MEDICINAL and toilet preparations not otherwise specified containing alcohol - (i) Ayurvedic preparations Nil containing self-generated alcohol, which are not capable of being consumed as ordinary alcoholic beverages. (ii) Ayurvedic preparations Rs. Three per gallon. containing self-generated alcohol, which are capable of being consumed as ordinary alcoholic beverages. (iii) All others Rupees five per gallon of the strength of London proof spirit. Medicinal and toilet Nil. preparations, not containing alcohol, but containing opium, Indian hemp, or other narcotic drugs or narcotic The Central Government framed Rules under the Act in 1956 and the administration of the Act and the Rules was entrusted to State Governments. A list of medicinal preparations, which were capable of being used as ordinary alcoholic beverages, was also published along with the Rules and Rule 65 provides that "until a standard Ayurvedic pharmacopoeia has been evolved by the Central Government, the pharmacopoeias that are in vogue in the various states shall be recognised as standard Ayurvedic pharmacopoeias". The contention of the petitioners is that these three Ayurvedic preparations conform to the definition of medicinal preparations given in Section 2(g) of the Act. Further, in the Schedule to the Rules, Mritasanjibani Sura was listed as a medicinal preparation in 1957. Further in 1958, Mritasanjibani and Mritasanjibani 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 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. It is further contended that if these preparations in fact come within the definition of "medicinal preparation" in Section 2(g) of the Act and are covered by the Schedule to the Act, the omission of these three preparations from the list attached to the Rules would make no difference and would not give power to the State Governments to tax them under the various Excise Acts in force in the States concerned.
(3.) THE petitioners further say that though Rule 68 of the Rules provides for a Standing Committee to advise the Central Govt. on all matters connected with the technical aspects of the administration of the Act and the Rules, and in particular, on the question whether (i) a particular preparation is entitled to be treated, or to continue to be treated, as a genuine medicinal or toilet preparation for the purposes of the Act, and (ii) if so, whether it should be treated, or continue to be treated, as a restricted or an unrestricted preparations, it was no open to the said Committee even if it was consulted in this matter to advise the Government that these three preparations were not medicinal preparations, if in fact they are medicinal preparations as defined in Section 2(g). It is therefore urged that even if the Central Government acted on the advice of the Standing Committee when it omitted these three preparations from the list appended to the Rules, it had no power to do so if these three preparations are in fact medicinal preparations within the meaning of Section 2(g) of the Act. The petitioners therefore pray for an appropriate writ, direction or order directing the Central Government not to give effect to the notifications of August and December 1960, removing these three preparations from the list appended to the Rules and also for a direction to the 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.;