ORGAN (INDIA) LTD, CALCUTTA Vs. COLLECTOR OF EXCISE, DISTRICT MANDSAUR

JUDGEMENT

(1.) THIS petition under Article 226 of the Constitution challenges the imposition of duty on export of poppy husk under Rule 3 -A of the M.P. Poppy Husk Rules. 1959, framed under section 5, read with section 13 of the Opium Act, 1878, (hereinafter called the "Act"), as ultla vires Article 246 of the Constitution. By amending the petition, the petitioners have further con tended that section 5 of the Opium Act is itself void under Article 13(1) of the Constitution, as the power delegated to the State Government is unbriddled uncanalised, uncontrolled and arbitrary. It is ultra vires on the ground of excessive delegation. Initially, the challenge was also rested on Articles 14 and 19 of the Constitution [ground (d)]. but during the course of the hearing, an application was made by the petitioners to delete that ground.

(2.) THE petitioners' case is that petitioner No. 1 (hereinafter ca1led the 'petitioner') is a public company incorporated under the Companies Act. On February 25, 1974. a wholesale licence in poppy Husk in Form No.1 under Rule 5, read with Rule 6 of the M P. Poppy Husk Rules. 1959 was granted to the petitioner in the name of its Secretary (petitioner No.2). On March 20,1974, the said licence was renewed. In or about March 1974, the petitioner entered into a contract with M/s Verengde Pharmacutische Fabricken B. V. Kloosterstra at 6 Oss Holland (hereinafter referred as the "Dutch Buyer") for supply to them of 1000 metric tonnes of poppy husk. The Dutch buyer obtained from the Dutch Government necessary import authorisation allowing them to import poppy husk into Holland. On the strength of the aforesaid authority the petitioner obtained permission from the Narcotics Commissioner, Government of India, duly authorising the petitioner to export "for' sale" 1000 metric tonnes of poppy husk. The petitioner obtained 100 tonnes of poppy husk which was lying in various places in the district of Mandsaur, sealed in bags of 40 kgs. each. They were to be despatched to the Port of Bombay by road transport. On or about March 30, 1974, the petitioner applied to the Collector of Excise, District Mandsaur, for necessary permission to enable it to transport the said poppy husk from the district of Mandsaur to the Port of Bombay, to perform its obligation under the said contract with the said Dutch buyer. No excise duty was leviable or payable under Rule 3 -A(a) of the M. P. Poppy Husk Rules. 1959. for export across the custom frontiers and, therefore, the petitioner claimed exemption from depositing any amount by way of excise duty or otherwise under the said Rules. On April, 15. 1974, the Collector of Excise, District Mandsaur. ordered that permission to transport poppy husk from the District of Mandsaur to the Port of Bombay could only be granted on payment of excise (export ?) duty under Rule 3 -A(a) of the said rules and refused to grant permission without Payment of that duty.

(3.) THE respondents opposed the petition. They rely on Rule 8, sub -rule (1) of the M. P. Poppy Husk Rules, 1959, under which a wholesale licensee is authorised to export poppy husk under certain conditions. They have pleaded want of knowledge as regards the alleged agreement between the petitioner and the Dutch buyer, or the autborisation by the Dutch Government for importation or the grant of authorisation by the Narcotics Commissioner of India. According to their submission, the authorization issued by the Nareotics Commissioner of India was under the International Opium Commissions and the rules framed under the Dangerous Drugs Act, 1930; it has nothing to do with the Opium Act or the Poppy Husk Rules. The respondents case in short is that the petitioner applied under Rule 8 of the M. P. Poppy Husk Rules, 1959 for an export pass in respect of poppy husk, from the State of Madhya Pradesh to the State of Maharashtra. The respondents wert concerned only with the export of poppy husk from the State of M. P. to the State of Maharashtra. The respondents were neither concerned with any alleged sale of poppy husk in Holland, nor with the export of poppy husk from Bombay port to Holland. Duty on export of poppy husk from the State of Madhya Pradesh to any other State in India is levied under Rule 3 -A(a) of' the M. P Poppy Husk Rules, 1959, and is chargeable in advance under Rule 8(4) of the said Rules. The respondents denied that either section 5 of the Opium Act or the rules are ultra vires. It is further contended in the return that since the petitioner's application was not accompanied by a valid import pass or "no objection certification" issued by the excise authorities of the importing State the respondent's order was legal, valid and within his powers.