R.S. Narula, J. - (1.) THE petitioner who is a bottle merchant of Chowk Arya Samaj, Bhatinda, has in the following circumstances prayed for the Punjab Excise Bottles Rules, 1963 (hereinafter called the Rules) being declared unconstitutional, illegal, null and void, and inoperative, and for quashing the Punjab Government notification, dated April 16, 1963 (Annexure 'A'), in which the said rules were published.
(2.) SECTION 3(6 -a) of the Punjab Excise Act (1 of 1914) (hereinafter referred to as the Act) defines an "excise bottle" to mean a bottle of such type or description as may be or may have been at any time permitted for the bottling or liquor or beer by the rules made under the Act. Rule 38(11)(f) of the Punjab Liquor License Rules, 1956, gives in its clause (1) specifications of bottles in which Indian made foreign spirits are permitted to be bottled. The rule mentions the three sizes of the excise bottles according to their capacity in millilitres (750, 500 and 250 millilitres) and states in clauses (ii) and (iii) as below: - (ii) The bottles mentioned above shall be of standard pattern and shall either bear the following specifications moulded on the glass: (a) The words 'Punjab Excise' and the figures and words '750 millilitres' 375 millilitres or 180 millilitres' as the case may be or shall have a monogram moulded or sand blasted on them consisting of the letters 'PE' and the figures and letters '750 millilitres' 375 millilitres and 180 millilitres in a triangle e.g.; (b) the name or mark of the manufacturer of the bottles. (iii) No licensee shall permitted to use for bottling Indian made foreign spirit any bottles bearing the name or trade mark of any other bottles. Section 58(1) of the Act authorises the State Governments make rules for the purpose of carrying out the provisions of the Act or any other law for the time being in force relating to excise revenue. Sub -section (2)(d) of that section states that in particular and without prejudice to the generality of the provisions of sub -section (1), the State Government may any make rules regulating the import, export transport or possession of any intoxicant or excise bottle and the transfer, price or use of any type of description of such bottle. In exercise of the powers conferred on the State Government by section 58(2)(d) of the Act, Punjab Government framed the rules which were published in the Official Gazette, dated April 16, 1963, Rule 1 gives the short title of the rules as the Punjab Excise Bottles Rules, 1963. Rule 2 prohibits the use of any excise bottle for any purpose other than that of bottling spirit in accordance with the term of a license unless permitted to be used for any otter purpose by the Excise and Taxation Commissioner. Rule 3 prohibits the export of any excise bottle outside Punjab except under any general or special order of the Excise and Taxation Commissioner. Rule 4 prohibits the sale of excise botstles to anyone other than a licensed distillery or to the authorised agent of such distillery. Rule 5 prohibits, except with the written permission of the Excise and Taxation Commissioner, the possession or storage of more than twenty empty excise bottles by anyone except a licensed distillery or its authorised agent. Rule 6 defines an "authorise agent" as a person or a firm who has been authorised in writing by a licensed distillery in the State to buy and store excise bottles on its behalf. The same rule reserves to the Excise and Taxation Commissioner the right and authority to cancel any such letter of authorisation issued by a licensed distillery if the Commissioner considers that the authorised agent is an unsuitable person. Rule 7 merely states that the rules do not apply to the possession and use at any time of not more than twenty excise bottles for domestic purposes in any house. In order to be able to deal with the excise bottles, the petitioner became the authorised agent of Jagatjit Distilling and Allied Industries Limited, Jagatjit Nagar, district Kapurthala (which is a licensed distillery), on the basis of letter of authority, dated June 7, 1963 (Annexure 'B' to the writ petition) The petitioner also entered into some agreement with the said distillery in respect of the price to be charged for the supply of various kinds of excise bottles, the percentage which various sizes of bottles should bear, the incentives for larger supplies the penalties for failure to make the supplies, etc. but we are not concerned with those inter se stipulations between the petitioner and the licensed distillery. The above named distillery had appointed various other agents also. In letter, dated July 24 1970 (Annexure 'C') the distillery informed the petitioner about the names and addresses of three other parties appointed by them to purchase and supply empty battles branded with the name of the distillery, and directed the petitioner to deliver the stock of empty bottles collected by him either to the distillery at Hamira, or to any of the parties named in the letter against cash payment. By letter, dated August 4, 1971 (Annexure 'D') the distillery informed the petitioner that it had cancelled the license issued by it in favour of seven parties named therein and desired the petitioner to immediately stop supply of empty excise bottles to any of those parties. The authority of the petitioner to supply empty excise bottles was restricted in that letter to one named party of Ludhiana only. On August 24, 1971, the distillery by their letter of that date (Annexure 'E') cancelled the license issued by it to the petitioner for the collection, storage, purchase and sale of Punjab excise bottles belonging to that distillery with immediate effect. In that letter, the petitioner was further warned that if he dealt in the purchase, collection, storage or sale of Punjab excise bottles belonging to the Jagatjit Industries Limited suitable action under the relevant Punjab Excise Rules would be taken against him for unauthorised dealing with such bottles under the Rules. Since permission to deal with the bottles could be granted by the Excise and Taxation Commissioner alone to a person who did not hold an authority from a licensed distillery, the petitioner as well as eight other persons similarly situated (all of whom claimed to be empty bottles suppliers) submitted a written representation to the Excise and Taxation Commissioner, Punjab, on August 26, 1971 (Annexure 'H'), complaining against the changed policy (of appointing one empty bottles supplier instead of three suppliers) on various grounds mentioned in that communication. A prayer was made to the Excise and Taxation Commissioner to cancel the newly adopted policy of single suppler and to keep an authority to issue licenses for dealing in empty bottles with the department. According to the petitioner some assurance was given to them on August 26, 1971 when they met the Excise and Taxation Commissioner personally, but the said assurance did not fructify. After having sent another representation by way of a reminder on September 6, 1971 (Annexure 'I' to the petition), and having failed to obtain any relief from the department, the petitioner filed the present writ petition on September 18, 1971, impugning the validity of the rules on the various grounds to which reference will hereinafter be made. In the affidavit of the Excise and Taxation Officer, Bhatinda which has been filed as written statement on behalf of all the respondents the State of Punjab, the Excise and Taxation Commissioner, the Deputy Excise and Taxation Commissioner, and the Excise and Taxation Officer) all the relevant facts have been admitted, but the contentions relating to the invalidity or unconstitutionality of the rules have been denied.
(3.) THE first ground on which the petition has been pressed before me by Mr. Tirath Singh Munjral, the Learned Counsel for the petitioner is that section 58(2)(d) of the Act, under which the impugned rules have been framed is beyond the legislative competence of the State Legislature "Excise Bottle" was added to the article mentioned in section 58(2)(d) in the course of the amendment of the principal Act by the Punjab Excise (Amendment) Act (1 of 1940) (hereinafter called the amending Act). The definition of "excise bottle" was also added by the same amending Act. The only other amendment made by that Act into the principal Act was of section 78 which deals with confiscation of articles in respect of which any offence might have been committed. "Excise bottle" was added to the articles which can be confiscated under that provision. The amending Act was enacted in exercise of the legislative powers vested in the Provincial Legislature by entry 31 in List II of the seventh schedule to the 1935 Act, relevant portion of which corresponds to entry 8 in the State List under the Constitution which reads: - Intoxicating liquors, that is to say the production, manufacture, possession, transport, purchase and sale of intoxicating liquors. It has been held in Cooverjee B. Bharucha v. Excise Commissioner and the Chief Commissioner Ajmer : A.I.R. 1954 S.C. 220, in which case the Supreme Court was concerned with (Ajmer) Excise Regulation that the said excise laws had been in exercise of the powers conferred by entries 31 and 40 of List II of the seventh schedule to the Government of India Act, 1935 (corresponding to entries 8 and 51 of the State List in the seventh schedule to the Constitution). Entry 51 in the Constitutional State List (as also entry 40 of the 1935 Act List II) relates to levy and imposition etc. of duties of excise and is not relevant for our purposes. Mr. Munjral wanted to argue that the amending Act could not have been passed in exercise of the powers of the State under entries 26 and 27 of the State List, but did not dilate on that point in view of the categorical statement made by Mr. G.S. Chawla, Learned Counsel for the State, who claimed the validity of the amending provision under entry 8 only and conceded that entries 26 and 27 are not relevant. Mr. Munjral submitted that howsoever liberally entry 8 may be construed, nothing which is not an intoxicating liquor can be brought within its ambit. "Liquor" has been defined in section 3(14) of the Act to mean intoxcating liquor, and includes all liquids consisting of or containing alcohol; also any substance which the State Government may by notification declare to be liquor for the purposes of the Act. Whether an empty bottle is or is not such substance which could be declared to be liquor for the purposes of the Act under section 3(14) need not be considered by me in this case as it is the common case of both sides that the State Government has not issued any such notification whereunder an excise bottle might have been declared to be liquor. There is no doubt that what has been defined to be an excise bottle cannot by itself be called "intoxicating liquor" in any sense of that word. A bottle may contain liquor, but is not liquor itself. Nor can an empty bottle normally intoxicate any one. The argument of Mr. G.S. Chawla is that entries in the legislative lists must be as liberally construed as possible. He has referred in this connection to the observations of their Lordships of the Supreme Court in Sri Ram Ram Narain Medhi v. The State of Bombay : AIR 1959 SC 459, wherein it has been stated that the heads of legislation in the Lists should not be construed in a narrow and pedantic sense, but should be given a large and liberal interpretation. The observations of the Judicial committee of the Privy Council in British Coal Corporation v. The King, LR 1935 AC 500, at page 518 to the effect that "indeed, in interpreting a constituent or organic statute such as the Act, that construction most beneficial to the widest possible amplitude of its powers must be adopted," were approved by the Supreme Court. In the United Provinces v. Atiqa Bagum : 1940 FCR 110, it was held that none of the items in the Lists is to be read in a narrow or restricted sense and each general word should be held to extend "to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it." Construing entry 18 in List If in the light of the principles settled in the aforesaid cases, the Supreme Court held in Sri Ram Ram Narain Medhi's case (supra) that the Bombay Tenancy and Agricultural Lands (Amendment) Act (13 of 1956) which provided for the transfer and alienation of agricultural land, aimed at land improvement and was, broadly stated, a legislation in regard to the rights in or over land or categories specifically referred to in entry 18 which reads: - Land, that is to say, rights in or over land, land tenures including toe relation of landlord and tenant, and the collection of reuts; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization. In Rai Ramkrishna and others etc. v. State of Bihar, AIR 1953 S.C. 1667, it was held that in exercise of powers vested in a State Legislature under entry 56 of the State List to levy taxes on goods and passengers, it was competent for the State Legislature to devise machinery for recovery of the said taxes on the ground that the entry in the seventh schedule conferring legislative power on the Legislature must receive the widest denotation. Mr. Chawla contended that liquor cannot go without bottling and what has been defined as "excise bottle" is intended to be exclusively used for bottling liquor, and, therefore, there is such an intimate and direct connection between liquor and an excise bottle that an entry in the legislative list authorising legislation on the subject of intoxicating liquor must be held to include an authority to legislate in respect of exclusive marked containers in which liquor may be kept and also authorises legislation in respect of possession, transport, purchase and sale of such bottles. After carefully considering the matter, I am of the opinion that there is great force in the submission of Mr. Chawla. In the statement of objects and reasons printed at page 330, Part I of the Punjab Gazette, dated February 23, 1940, for enacting the amending Act, it was stated as below: - In the Punjab, unlike some other Provinces of India, country liquor can be retailed only in sealed bottles. This reform was made some 20 years age and to it is attributed a marked decrease in the consumption of such liquor. Simultaneously with this reform the old -fashioned drinking booths and the practice of peg selling were abolished. In recent years some 200,000 dozen bottles have been imported annually; but the source of supply was in German territory; and is no longer available. English supply is uncertain; English prices are nearly 200 per cent higher; and the cost of freight may be expected to increase further. Accurately -sized Indian made bottles are not yet on the market. On the other hand if the sealed bottle system were abandoned, illicit consumption would increase. New bottles not being readily available, the problem will be solved in part if the existing stocks of used bottles are returned to the distilleries and this Bill is intended to secure their return. Excise bottles are all marked, usually by moulding or sand -blasting, and can be readily identified. The above statement of objects and reasons contains the historical back -ground of the amending Act under the provisions of which the impugned rules have been promulgated. The subject on which the legislation consisting of the amending Act was undertaken was country liquor. The expressed object of continuing sealed bottle system was to avoid increase of illicit consumption of liquor. The amending Act was enacted to create the machinery for procuring the return of existing stocks of excise bottles to the distilleries. The law was made only in respect of bottles which are marked either by moulding or sand -blasting and which are readily identifiable as coming within the prescribed standard pattern. The authority permitted to legislate in respect of intoxicating liquor for the purpose of controlling and regulating it's production, possession, transport, purchase and sale must necessarily be deemed to have been authorised by implication to legislate in respect of all matters necessary for such control and regulation. With the increase of price of licit liquor in the market, marked excise bottles are capable of being misused for passing off illicit liquor as licit. The impugned provisions aim at providing for bottling of liquor in "accurately sized" marked bottles to ensue proper control and regulation of liquor trade But for this legislation it would not be easily possible for the distilleries to get back their empties. Matters relating to the marking, use, collection and return to the distilleries of empty excise bottles are, in my opinion, ancillary and subsidiary to the use of intoxicating liquor. Mr. Munjral sought support from the judgment of the Supreme Court in the Check Post Officer and others v. K.P. Abdulla, (1970) 3 S.C.C. 55 for the proposition that the subject of empty excise bottles is not fairly and reasonably connected with the subject of intoxicating liquor The Supreme Court has held that the power conferred by sub -section (3) of section 42 of the Madras General Sales Tax Act, 1959, to seize and confiscate and to levy penalty in respect of all goods which are carried in a vehicle, whether the goods are sold or not is not incidental or ancillary to the power to levy sales tax, as a person carrying his own goods even as personal luggage from one State to another or for consumption, if unable to produce the documents specified in various clauses of sub -section (3) of section 42, stands in danger of having his goods forfeited. While dealing with that question, the Supreme Court held that a legislative entry does not merely enunciate powers, but it specifies a field of legislation and the widest import and significance should be attached to it. Their Lordships observed that the power to legislate on a specified topic includes power to legislate in respect of matters which may fairly and reasonably be said to be comprehended therein. I am inclined to think that the abovementioned observations of the Supreme Court go against the petitioner and support the case of the State. Entry 8 in the State list deals with the subject of intoxicating liquor. This is the specified topic covered by the entry. The entry has been specifically made to include the power to legislate in respect of possession and transport of intoxicating liquor. Liquor cannot travel on its own logs. It has to be transported either in bottles or drums. The only receptacle in which liquor is normally contained is the glass bottle. Similarly the combined effect of legislating in connection with the production and manufacture of liquor would include the control and regulation of bottling of liquor. In this view of the matter, it appears to me that the subject of excise bottles can fairly and reasonably be said to be comprehended in entry 8 under the head "intoxicating liquor". In the words of the Supreme Court the entry provides "a field of legislation" and not a topic of legislation. The field of legislation in respect of intoxicating liquors must necessarily include in it legislation relating to excise bottles. After all it has been authoritatively recognised by the Supreme Court that liquor is not an ordinary commodity. Mahajan, C.J. observed in Coovvrjee B. Bharucha's case (supra) that business of liquor is attended with such danger to the community and control of this trade is necessary for public morality and public expediency. Observations of Field, J. in Crowley v. Christensen, (1890) 33 Law Ed. 620 (A), about the capacity of liquor to undermine consumer's health and morals and to create self -abasement leading to neglect of business and waste of property and general demoralisation, were approved by the Supreme Court in that case, Field, J. had observed in Crowley's case that there is general concurrence of opinion in every civilized community that there are few sources of crime and misery to society equal to the dram shop, where liquor is indiscriminately sold. The only thing from which a lay illiterate consumer of liquor would make out whether it is of a particular distillery or not and whether it is illicit liquor manufactured under the Punjab excise laws is to see the marks on the bottles in which liquor may be contained.;