HYDERABAD CHEMICAL AND PHARMACEUTICAL WORKS LIMITED Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) The validity of Rule 36 of the Spirituous and Medicine Preparations Rules 1345 F. framed under the Hyderabad Abkari Act No. 1 of 1316 F. is impugned in these petitions.

(2.) The petitioners manufactured medicines containing, inter alia, alcohol, opium and other narcotic drugs. Tney have been carrying on this business for some years. In ihe year 1955, the Parliament passed the Medicinal and Toilet Preparation (Excise Duties) Act (Act XVI of 1955) (hereinafter refered to as the Act) to provide for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol, opium, Indian hemp and ether narcotic drugs. This Act came into force in the State of Andhra Pradesh an 1/04/1957. Before this date, the petitioners ware given a pharmaceutical laboratory licence under the provisions of the Hyderabad Abkari Act. Subsequent to the Act, the petitioners were granted licence under the provisions thereof for manufacturing marines with contents of alcohol, opium etc. on condition that they should pay duty at the rates specified in the schedule annexed to the Act. For the preparation of these medicines, the State Government supplies alcohol at certain rates. In order to prevent and check the mis-use of the spirits and to facilitate the levy and collection of excise duty, the State Government posted to the bonded manufactory of the petitioner-companies supervisory staff and sought to reimburse them-selves the expenses incurred by them in this behalf.

(3.) The petitioners denied the authority of the State Government to recover the cost of the establishment cnarges. The Government over-ruled this objection and insistsd on the petitioners paying the amount. Herice, the petitioners nave invoked the jurisdiction of this Court under Article 226 of the Constitution for the issue oi a writ of mandamus to restrain the Government from collecting those charges.