K.N.SAIKIA - (1.) THIS plaintiffs appeal by special leave is from the Appellate Judgment and Decree of the High Court of Judicature at Bombay reversing those of the trial court and dismissing plaintiffs special suit.
(2.) THE appellant is a Limited Company registered under the Companies Act having its registered office situate at Ahmednagar within the State of Maharashtra. THE appellant carries on business, inter alia, as manufacturers of Ayurvedic preparations including "Asavas", "Aristhas". At all times material to this appeal, the appellant was manufacturing and selling an Ayurvedic product called "Ashvagandhaarist" which is a medicinal preparation containing selfgenerated alcohol but not capable of being consumed as ordinary alcoholic beverage. Under the provisions of the Medicinal and Toilet Preparations (Excise Duties) Act. 1955, hereinafter referred to as "the Act". which came into force on 1/04/1957. excise duties were levied on medicinal and toilet preparations specified in the Schedule to the Act, hereinafter referred to as "the Schedule." The Act, as originally stood in 1955, inter alia, contained two items in the Schedule respectively specifying "medicinal and toilet preparations containing alcohol" which are prepared by distillation or to which alcohol has been added and which are capable of being consumed as ordinary "alcoholic beverage" and "medicinal and toilet preparations not otherwise specified containing alcohol", being the commodities excisable under the provisions of the Act. The said "Ashvagandhaarist" was treated and accepted by the Excise Authorities as being exempt from the payment of any excise duty upon the basis and the footing that the same was an Ayurvedic preparation containing self generated alcohol which was not capable of being consumed as ordinary alcoholic beverage, and which fell under item 2(i) of the Schedule in respect of which the rate of excise duty postulated in the Schedule was "Nil". The Act was amended by the Amendment Act 19 of 1961. The amendment, inter alia, introduced the concept of "patent and proprietary medicine" in the Schedule. The amendment Act, however, by an Explanation, introduced in the Schedule the definition of the "patent and proprietary medicine" contained in the Drugs Act, 1940. Even after the introduction of the said amendment, the appellant's aforesaid product continued to be treated as exempt from the liability to pay any excise duty on the selfsame ground, namely, that it was covered under item 2(i) of the Schedule which item 2(i) was re-numbered as item 3(i) of the Schedule as amended by the Amendment Act of 1961.
(3.) BY Section 18 of the Finance Act, 1962, the Act was further amended by substitution of an Explanation No. 1 to the Schedule of the Act. BY virtue of and under the said Explanation a patent and proprietary medicine was defined as a medicinal preparation of the description and the type specified in the Explanation. The Explanation which was brought in by the Finance Act was given retrospective effect from 23/04/1962. In purported pursuance of the said Explanation and/or upon the basis thereof, a circular dated 31/05/1962 was issued by the then Director of Prohibition and Central Excise, Government of Maharashtra, Bombay which, inter alia, directed that the medicinal preparations containing self- generated alcohol but not capable of being consumed as alcoholic beverage were to be treated as products falling under item 1 and not item 3 of the Schedule. Consequent thereupon, the respondents levied and recovered from the appellant diverse sums aggregating to Rs. 2,18,282.16 being the alleged amount of the excise duty payable in respect of the product "Ashvagandhaarist". The amounts were paid by the appellant "under protest".;