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

JUDGEMENT

(1.) The validity of rule 36 of the Spirituous and Medicinal Preparations Rules, 1345 -F, framed under the Hyderabad Abkari Act (I of 1316-F.) is impugned in these petitions. The petitioners manufacture medicines containing inter aha alcohol, opium and other narcotic drugs. They have been carrying on this business for some years. In the year 1955, the Parliament passed the Medicinal and Toilet Preparations (Excise Duties) Act (XVI of 1955) (hereinafter referred 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 other narcotic drugs. This Act came into force in the State of Andhra Pradesh on 1st April, 1957. Before this date, the petitioners were 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 medicines 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 misuse 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 themselves the expenses incurred by them in this behalf.

(2.) The petitioners denied the authority of the State Government to recover the cost of the establishment charges. The Government overruled this objection and insisted on the petitioners paying the amount. Hence the petitioners have invoked the jurisdiction of this Court under Article 226 of the Constitution for the issue of a writ of mandamus to restrain the Government from collecting those charges. The contention pressed upon us in support of these petitions is that the Act has repealed the Hyderabad Abkari Act (I of 1316-F.) and'all the rules framed thereunder and consequently there was no authority inhering in the Government to recover the salaries of the supervisory staff from the bonded manufactories. This proposition is demurred to by the Government Pleader, who urges that the Act has not affected the rules which empower the State Government to collect the establishment charges. It is contended that the State Government has power to post supervisory staff to prevent the diversion of the spirit supplied by them for purposes other than those intended and to recover the cost from the manufactory in that regard.

(3.) The first question that arises for consideration therefore is whether the Hyderabad Abkari Act has been repealed in Mo by the Act and along with it the rules made thereunder including rule 36 which is brought into question. For this purpose, we have to bear in mind the scope and ambit of the Act. It is to be noted that the title of the Act is the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. The object of the Act is to provide for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol, opium, Indian hemp and other narcotic drugs. Thus, the preamble and the short title of the Act clearly indicate that it deals with the levy and collection of duties of excise. This legislation is ascribable to Entry 84 of List I of the Seventh Schedule to the Constitution. No State Legislature is competent to make any legislation on this topic and any State laws bearing on that subject are not valid. The Act has repealed all laws corresponding to that Act prevailing in any State. Section 21 of the Act reads :