B.N.AGRAWAL, J. - (1.) THE question involved in this batch of appeals, arising out of an order of reference made by a three judge bench of this Court, is as to whether Article 301 of the Constitution of India (hereinafter referred to as "the Constitution") will have any application in relation to potable liquor the business whereof is said to be res extra commercium; in view of the decisions of this Court in Cooverjee B. Bharucha v. THE Excise Commissioner and THE Chief Commissioner, Ajmer, and Ors.; THE State of Bombay v. R.M.D. Chambarbaugwala; Har Shankar and Ors. v. THE Deputy Excise and Taxation Commissioner and Ors. and Khoday Distilleries Ltd. and Ors., v. State of Karnataka and Ors..
(2.) THESE appeals arise out of judgements and orders passed by Punjab and Haryana High Court and Kerala High Court. The State of Punjab imposed tax on import of potable liquor manufactured in other States. The State of Kerala also imposed a similar levy. The Punjab and Haryana High Court by its judgment dated 17.01.1997 passed in writ petition (civil) no. 5358 of 1996 quashed the notification dated 27.03.1996 imposing levy of import duty by the State of Punjab in exercise of its powers conferred upon it under sections 31, 32 and 58 of the Punjab Excise Act, 1914 (hereinafter referred to as "the Punjab Act') on two grounds viz.; (i) the State has no power to levy such tax under the Punjab Act and (ii) in view of the constitution bench decision of this Court in Kalyani Stores v. The State of Orissa and Others, the imposition of duty is ultra vires Article 301 of the Constitution. So far as challenge to imposition of import duty on potable liquor by the State of Kerala under Abkari Act, 1077 (hereinafter referred to as "the Abkari Act") is concerned, the Kerala High Court has dismissed the writ application on grounds, inter alia, that such duty, being regulatory in nature, is not ultra vires the Abkari Act. The High Court did not enter into the question of applicability of Article 301 of the Constitution vis-a-vis effect of imposition of such import duty on potable liquor. Mr. P.M. Misra, learned senior counsel appearing on behalf of the appellant - State of Punjab in the Punjab matter having regard to several provisions of the Punjab Act submitted that the High Court committed a manifest error in holding that the State has no power to impose such a tax. As regards applicability of Article 301 of the Constitution, the learned counsel contended that as the State has the exclusive privilege to deal in potable liquor in any manner it likes, it has the concomitant requisite power to impose such tax by way of restriction on import. The learned counsel further contended that as no trader can claim any fundamental right in carrying on trade or business in potable liquor, question of applicability of Article 301 of the Constitution would not arise. It may not be out of place to mention that at the stage of reply Dr. A.M. Singhvi, learned senior counsel filed written submissions on behalf of the State of Punjab more or less reiterating the contentions raised by Mr. P.N. Misra.
(3.) MR. T.L.V. Iyer, the learned senior counsel appearing on behalf of State of Kerala submitted that it is within the province of the State to impose restrictions on import of potable liquor by imposing import duty. According to learned counsel such a duty has not been imposed by the State in exercise of its statutory power conferred upon it in terms of Entry 51, List II of the Seventh Schedule to the Constitution but regulatory powers as envisaged in Entry 8 thereof. In other words, MR. Iyer contended that the import duty has been levied not as a measure of tax but as a part of regulation on the trade. The learned counsel further contended, although such a stand has not been taken by the State before the High Court, but having regard to the well-settled principle of law as laid down by this Court and referred to hereinafter, the State can impose such duty as a price for parting with its exclusive privilege. In support of the contentions the learned senior counsel appearing for the State of Punjab and that of Kerala relied upon the decisions of this Court in the cases of Har Shankar (supra), Nashirwar and Others v. State of Madhya Pradesh and Others, State of Orissa and Others v. Harinarayan Jaiswal and Others, State Bank of Haryana and Others v. Jage Ram and Others, State of Andhra Pradesh v. Y. Prabhakara Reddy, State of U.P. and Others v. Sheopat Rai and Others, State of Haryana and Others v. Lal Chand and Others, State of Punjab v. Mis. Dial Chand Gian Chand and Company, Solomon Antony and Others v. State of Kerala and Others, Khoday Distilleries Ltd. and Others (supra) and Government of Maharashtra and Ors. v. Mis. Deokar's Distillery .;