MODI J - (1.) THIS is a writ petition under Art. 226 of the Constitution of India.
(2.) THE petitioner is a public limited company and carries on the business of manufacture of synthetic staple fibres, namely, nylon staple fibre and polyester staple fibre. In the process of manufacture of synthetic staple fibre, a by product, namely, methyl alcohol is obtained in a crude form. THEy pure form of methyl alcohol is known as methanol. Sub-sec. (4) of sec. 3 of the Rajasthan Excise Act, 1950, defines "excisable article" as under, - " (i) spirit, fermented liquor or any alcoholic liquor for human consumption or denatured spirit or denatured spirituous preparation, or (ii) any intoxicating drug, or (iii) stills or other appliances for distillation, or (iv) fermented wash or other material for distillation, or (v) any other article which the State Government may. from time to time, declare to be an excisable article for the purposes of this Act. " The State Government, in exercise of its powers under clause (v) of sub-sec. (4) of sec. 3 of the Rajasthan Excise Act, issued a notification dated February 15, 1957 whereby the State Government ordered that methyl alcohol shall be deemed to be an excisable article. Sec. 28 of the Rajasthan Excise Act provides for levy of duty on excisable articles. The State Government, by notification dated April 26, 1972, imposed excise duty on the manufacture of methanol at the rate of paise 50 per litre and further imposed countervailing duty at the same rate on methanol manufactured in India and imported into the State. The text of the said notification is reproduced below, - "government of Rajasthan, Finance (Revenue & Accounts-I) Department. NOTIFICATION. Jaipur, April 26, 1972. S. O. In exercise of the powers conferred by sec. 28 of the Rajasthan Excise Act, 1950 (Act II of 1950), the State Government hereby imposes excise duty on the manufacture of methanol, whether consumed in or exported outside the State, at the rate of fifty paisa per litre and further imposes countervailing duty at the same rate on methanol manufactured in India and im- ported into the State. No. F. 4 (14) FD/ex/72. By Order of the Governor, Sd/- A. V. Sontake, Dy. Secretary to Government. " The main contention of the petitioner in this writ petition is that the State Legislature has no authority to impose excise duty on methanol and as such the above notification dated April 26, 1972, is liable to be quashed. In order to determine the constitutional validity of the notification, it is necessary to find out whether the levy of excise duty on the manufacture of methanol falls within the purview of one or the other Entries in Lists II and III to the Seventh Schedule of the Constitution of India. The argument on behalf of the petitioner is that this levy of excise duty on methanol is not covered by any of the Entries in the said two Lists. The learned counsel for the respondents, however, places reliance on the following Entries, - " (1) Entry 19 in List III - -Drugs and poisons, subject to the provisions of Entry 59 of List I with respect to opium; (2) Entry 8 in List II - Intoxicating liquors, that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors; (3) Entry 51 in List II - Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India; (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics; but not including medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of this entry. " Regarding the first 2 Entries, namely, Entry No. 19 of List III and entry No. 8 of List II of the Seventh Schedule of the Constitution, suffice it to say that they have no appli-cation in the matter of taxation or levy of excise duty. Art. 265 of the Constitution embodies an important constitutional principle, namely, that no tax shall be levied or collected except under the authority of law. The term "law" in this Article means statutory law, that is, an Act of the legislature, in other words, the law should be one within the legislative competence of the Legislature being covered by the Legislative list assigned to it by the Constitution. Under Entry 19 of List III, the Legislature has been empowered to enact a regulatory legislation in respect of drugs and poisons. Similarly, under Entry 8 of List II, the Legislature has been empowered to enact a regulatory legislation in respect of intoxicants. But the power of passing a regulatory legislation given under these Entries does not carry with it the power of taxation. A Taxation law cannot be sustained by a reference to a general Entry in the Legislative list. It has been observed by their Lordships of the Supreme Court in N. P. V. Sundararamier Co. vs. State of Andhra Pradesh (1) that in List I Entries 1 to 81 several matters have been mentioned over which Parliament has authority to legislate and Entries 82 to 92 enumerate the taxes which could be imposed by a law of Parliament. Their Lordships added that "an examination of these two groups of Entries shows that while the main subject of Legislation figures in the first group, a tax in relation thereto is separately mentioned in the second. " Turning to list II, their Lordships stated that Entries 1 to 44 form one group mentioning the subjects on which the states can legislate and Entries 45 to 63 in that List form another group and they deal with taxes. Their Lordships then added, - "entry 18, for example, is 'land' and Entry 45 is 'land revenue'. Entry 23 is 'regulation of mints' and Entry 50 is 'taxes on mineral rights'. The above analysis and it is not exhaustive of the Entries in the Lists - leads to the inference that taxation is not intended to be com prised in the main subject in which it might on an extended construction be regarded as included, but is treated as a distinct matter for purposes of legislative competence. And this distinction is also manifest in the language of Art. 248, Cls. (1) and (2) and of Entry 97 in List I of the Constitution. " While summing up the conclusions, their Lordships observed, - "under the scheme of the Entries in the List, taxation is regarded as a distinct matter and is separately set out. " It State of Mysore vs. M/s D. Cawasji & Co. (2), it was argued before the Supreme Court that under the List II Entry 8, the State Legislature is competent to legislate for levy of cess in respect of "intoxicating liquors" that is to say "the production, manufacture, possession, transport, purchase and sale of 'intoxicating liquors'. " Relying upon Sundararamier's case (1), their Lordships rejected the argument in these words, - "legislative power normally includes all incidental and subsidiary powers but the power to tax is neither incidental nor subsidiary to the power to legislate on a matter or topic. " Their Lordships added, - "entries in the Lists I and II in Schedule VII dealing with certain specific topics do not grant power to levy tax on transactions relating to those topics. Power to tax must be derived from a specific taxing entry. Tax could therefore not be levied on intoxicating liquors relying upon Entry 8, List II. " Thus it is clear that levy of excise duty on methonal can neither be justified under Entry 19 of List-III nor under Entry 8 of List-II. None of these Entries empowers the State Legislature to levy excise duty on intoxicating liquors. The only other Entry, under which this levy of excise duty can be sustained and on which the learned counsel for the respondents has placed reliance is Entry 51 or List II of Seventh Schedule of the Constitution. Entry 51 empowers the State Legis-lature to levy excise duty on the manufacture and production of "alcoholic liquors for human consumption" and that too if they are not medicinal preparations. The question that arises for determination is whether methanol or methyl alcohol can be described as "alcoholic liquor for human consumption" ? Chamber's Twentieth Century Dictionary defines "liquor" to mean "a beve-rage specially alcoholic". The Shorter Oxford English Dictionary defines it as "liquid for drinking and now generally means "a drink produced by fermentation or distilation". In Black's Law Dictionary, "alcoholic liquor" is defined to mean "intoxicating liquor which can be used as a beverage and which when drunk in excess, will produce intoxication". Again in "words and Phrases" Permanent Edition, Volume III, at page 134, the term "alcoholic Liquors" is described as under, - "the term 'alcoholic liquors' does not embrace medicinal, toilet, and culinary preparations recognized as such by standard authority (such as the United States Dispensatory) not intended to be used as intoxicating beverages, and not reasonably capable of being so used, such as paregoric, essence of lemon, essence of ginger, bay rum, cologne, wood alcohol, and the like, although such articles are liquid, contain alcohol, and may produce intoxication. " It is thus clear that alcoholic liquor is a beverage containing alcohol. It is further clear that liquids containing alcohol, which are not intended to be used as intoxicating beverage are not alcoholic liquors. It will have therefore to be seen whether methyl alcohol or methanol can be used by human beings as a beverage. There is no doubt that methyl alcohol or methanol contains alcohol. Specification Indian Standard Methanol (Methyl Alcohol) at page 7 under heading "marking" prescribes following cautionary notice on the container containing Methanol: - "flamable : INGESTION OR ABSORPTION DANGEROUS : CAUSES BLINDNESS, CUMULATIVE POISON. " In the Bock "industrial Chemicals" by W. L. Faith (Third Edition) at page 504, mentions the properties of Methanol as under : - "clear, colourless, flammable, volative, very mobile liquid, poisonous when taken internally. " In Volume I of "organic Chemistry" by I L. Finar (1970 Edition) "methanol" has been described as colourless, inflammable liquid and poisonous. "organic Chemistry", by P. B. Sakkar and P. C. Rakshit, (13th edition of 1968), at page 90 describes Methanol as under : - "methanol is a liquid (b. p. 64. 5°) with a pleasant odour and a burning taste. " It is poisonous causing blindness and death, depending upon the dose. In the body, it is slowly oxidised to toxic formic acid and not to innocuous Co2. It is, therefore, used to 'denature' (that is, render unfit for drinking) ethyl alcohol to methylated spirit. " The Book 'systematic Organic Chemistry" (Theory and Applications) by Hugh C. Muldoon and Martin I. Blake, describes the properties of methanol as under, - "methanol is a colourless, mobile, volatile liquid, almost odourless, if pure, but when made from wood, often possessing a distinctive empneumatic odour. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Uses of Methanol.- Methanol is not used medicinally either internally or externally. It is an intoxicant and a very active poison, even moderate quantities often proving fatal. Many deaths have resulted from the careless or ignorant substitution of methyl alcohol for ethyl alcohol that was intended for beverage use. Irremediable blindness is commonly caused when death does not follow its drinking. Serious results have followed the breathing of vaporized methanol by workers who used varnishes or stains containing it while working in poorly ventilated place. In Industry, the names methyl alcohol and wood alcohol are being replaced by methanol so that the name may not suggest the use of this highly toxic substance as a beverage. " B. Pavlov and A. Terentyev in their book 'organic Chemistry", 1969 edition, at page 141, describe methyl alcohol to be "a light (density 0 79 g/cu cm) liquid, which boils at 65° and freezes at-97°. It burns with blue flame. When ingested even in small amounts, it causes severe poisoning accompanied by loss of eye-sight. The ingestion of large amounts can be fatal". Encyclopedia Britannica, Volume 15, at page 361, describes Methanol as a voilent poison. In Modi's Medical Jurisprudence and Toxicology, 18th edition, at page 646, under the heading "methyl Alcohol (Wood Alcohol or Spirit, Pyroxylic Spirit, Methanol or Wood Naphtha) CH3oh it is stated as under : - ". . . . . . . . . . . . It is a colourless mobile liquid, having a peculiar, nauseating odour and a burning taste, and boiling at 64. 7° C It mixes with water in all proportions. It burns with a pale blue, non-luminous flame, and us vapour forms an explosive mixture with air or oxygen. It is largely U3ed as a solvent in shelliac and varnish manufacture and as an antifreeze. It is also mixed with rectified spirit to make industrial methylated spirit, and is used in arts and manufactured under the name of denatured alcohol or spirit. . . . . . . . . " The Book further mentions that methyl alcohol causes "dizziness weakness, headache, vertigo, nausea, vomiting, upper abdominal pain, fixed and dilated pupils, visual disturbances like photophobia and blurred vision, concentric diminution of visual fields for colour and form, followed by partial or total blindness due to optic neuritis, dyspnoea, cyanosis, slow pulse, delirium, convulsions, acidosia, coma, respiratory failure and death". According to the learned author, the fatal dose of methyl alcohol varies according to the susceptibility of individuals from 2 to 8 ounces. In some cases, 1 to 2 ounces have proved fatal. In some cases death has occurred from 3, 4 and 5 ounces and often from 6 to 8 ounces. There was also a case where half-an ounce caused blindness although a much larger quantity did not produce any injury to eyes. The learned author further says that death may occur by intake of methyl alcohol between 24 to 36 hours, or may be delayed for 3 or 4 days. In several cases, death occurred between 6 to 20 hours and in one case it occurred in one hour.
(3.) IN Taylor's Principles and Practice of Medical Jurisprudence, by Keith Simpson, Volume II, 12th edition, at page 412, it is mentioned about methyl alcohol as under, - "pure methyl alcohol, made synthetically or by refining wood alcohol, is a colourless mobile fluid with an odour similar to ethyl alcohol, and has a burning taste. It is used for denaturing ethyl alcohol, as a solvent for fats and varnishes, for cinematograph films, for the production of formalin and other chemicals, and in many other trade processes. It has been used considerably in the adulteration of alcoholic beverages. The drinking of pure methyl alcohol is not common, though cases occasionally occur among workers in chemical factories. On the other hand many deaths have resulted from the drinking of wood alcohol, drunk during prohibition and used as an antifreeze in automobiles, especially in the United States. IN Belgium, after the 1945 war, quantities of army antifreeze were sold to civilians as potable spirits and many died. The fatal dose is somewhere between 60 and 250 ml (2 to 8 oz.) and the m. a. c. in air about 200 p. p. m. " The learned author has then described the symptoms on intake of methyl alcohol in the following words.- "the symptoms, sometimes delayed several hours, consist of headache and nausea, vomiting and pais or severe cramps in the abdomen. There is a marked muscular weakness and depressed cardiac action. There may be dyspnoea and cyanosis. The effect on the central nervous sys tern is more intense and persistent than with ethyl alcohol. There may be delirium and coma, which may last for 2 or 3 days. There is a toxic effect on the liver and kidneys and on highly specialized nerve elements and fairly sudden failure of vision or complete blindness is a common sequel. " Lastly, it may be noticed that under the Rajasthan Poison Rules, 1972, methyl alcohol has been described as Poison in Schedule II at item 20. From what has been stated above, it is abundantly clear that Methyl Alcohol or Methanol is a poison and in no case it can be considered a beverage meant for human consumption. I may now turn to the allegations contained in the writ petition and their reply by the respondents. Both, the writ petition and its reply, are supported by affidavits. In paragraph 3 of the amended writ petition, the petitioner has specifically mentioned that methanol is a poisonous substance and is totally unfit for human consumption. In support of the above proposition, the petitioner has cited certain quotations from certain text-books. The respondents, in their reply to paragraph 3 of the writ petition, have stated as under, - "3. That para No. 3 of the amended writ petition is denied. The answering respondents crave leave of this Hon'ble Court to refer to relevant literatures on the subject at the time of arguments. However, it is submitted that Methyl Alcohol can easily be made potable by the use of potassium permanganate. In this connection, the following observations in the report of All India Study of Illicit Distillation and Smuggling of Liquor carried out by the All India Prohibition Council are reproduced to substantiate the answering respondents' contention in this respect : "methyl Alcohol which can easily be made potable by the use of potassium permaganate is a prolific source of illicit liquor and strict control over its issue and use is very necessary". It is further submitted that the Methyl Alcohol in any form either pure or impure is not totally unfit for human consumption. It is submitted that Methyl Alcohol can also be used as a substitute for alcoholic liquor to which is added a very small percentage of other ingredients to make it potable, but these ingredients are removable by chemical processes as has been submitted above or may become innocuous when diluted with other substances as has been submitted above is as to make it a substitute for intoxicating or alcoholic liquor. It is submitted that only a particular quantity of methyl alcohol prove detrimental to the health but all the same it cannot be denied that it is used as a substitute or liquor and is taken by the people who are addicted to intoxicants. Even the reference quoted by the petitioner here under this para go to show may that only a particular dose of the methyl alcohol may prove detrimental to the health. In these circumstances, it cannot be said that the Methyl Alcohol is wholly unfit for human consumption in any form or shape. " In para 8 of their reply, the respondents dealt with Entry 51 of List II of Schedule 7 of the Constitution and stated like this, - "though under item 51 of List II of Schedule VII, the words used in the entry are 'alcoholic liquors for human consumption, they cannot mean to say that any excisable article if it becomes consumable after going through some chemical process or may become innocuous when it is diluted with other substance, will not be subject to levy of any duty, under the said item even the said Article in its original form may not strictly fall within the term alcoholic liquors for human consumption. " The respondents have farther added in the same para, - "as explained above, a particular dose of methanol is detrimental to the health and if methanol is taken by a person in a quantity less than a particular dose, it cannot be said that it cannot be used for human consumption. Further, the ingredients of methanol are removable by chemical process or the said article may become innocuous when it is diluted with water or some other substance so as to make it suitable to use it as an intoxication The State Legislature in these circumstances was competent to impose excise duty under the Notification dated 26-4-72 on methanol or methyl Alcohol which is a form of alcoholic liquor. " Again, in paragraph 15 of the reply, the respondents in order to bring methanol within the ambit of Entry 51 List II of Schedule VII stated that methanol could be so purified as to be available for drinking purposes, and that being the case, it is covered by List II Entry 51 and is excluded by List I Entry 84. ;