# [1979] 3 S.C.R. 651 - **Citation:** [1979] 3 S.C.R. 651 - **Court:** Supreme Court of India - **Decided:** 1979-04-12 - **Bench:** D. A. Desai, A P. Sen - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1979-3-s-c-r-651-7660 - **Pages:** 20 ## Headnote Punjab Excise (Delhi 'A1nei1dn1eizt) Ordinance, 1979 ctnpowering tile· Governnumt under the Punjab Excise Act, to levy "special duty" on the iniport of coun .. try liquor. into Delhi and the Delhi Fiscal Duty Order, 1979 levying "special duty'"-Validity of, Powers o'~ Parliament to /egislat~ exclusively for Union Territory of Delhi, B a part of the Territory of India not included in a State-Constitution of India C Articles 246 to 248 and Entry 97 of t/ie Union List. Right to trade in intoxicants-Whether a fundanientrd right-Constitution of India Article 14, 19(1)(g) and 301. Retrospective Legislation is valid in case of intoxicants-Constitution of India Art. 47. D While implementing the provisions of the Punjat, Excise Act, 1914 as in force in the Union Territory of Delhi, the concerned authority used to hold auction for grant of licence in Form L-10 for selling country liquor and at one such auction held on 29th March 1978, the petitioners' bids were accepted and they were granted licences in Form L-10 for the period 1st April 1978 to 31st Mairch 1979. The licence included a condition to sell a bottle of 750 ml. of country liquor at Rs. 15/- which was inter alia made up at excise duty E ( • ~-... SATPAL & co. v. LT. GOVERNOR (Desai, J.) 657 High Court heard the Letters Patent Appeals against the judgment of the learned single Judge of the Delhi High Court as wen as the aforementioned writ petition and by a common judgment held the Ordinance as wen as th~ impost thereunder valid mid dismissed the writ petition and allowed the Letters Patent Appeals setting aside the judgment of the learned single Judge. This bunch of petitions is filed against the judgment of the Delhi High Court in Civil Writ No. 116/79 and allied writ petitions and the Letters Patent Appeals. The cardinal question around which the various facts of controversy rotates turns upon the competence of Parliament to enact legislation under challenge which would directly impinge upon the competence of the President to issue the impugned Ordinance. Article 123 of thr Constitution enables the President to issue an Ordinance in the circumstances thereunder mentioned and the power to issn0 Ordinance is co-extensive with the legislative power of Parliament vide Article 123 (3). The question, therefore, is whether Parliament had the power to impose special duty on the import of country liquor in Delhi. Jn order to avoid the slightest confusion it must be reiterated that the power of Parliament to legislate for Delhi is in question . .l\rticle 246(1) confers exclusive power on Parliament to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule. Sub-article (3) confers similar powor on the Legislature of any State with respect to any of the matters enumerated in List II. Sub-article (2) confers power both on Parliament and the State Legislature to make laws with respect to any of the matters enumerated in List III (Concurrent List). Sub-article ( 4) reads as under :- "Parliament has power to make laws with respect to any matter for any part of the Territory of India not included m a State notwithstanding that such matter is a matter enumerated in the State List". Article 248(1) provides that Parfament has exclusive power to make a~y law with respect to any matter not enumerated in the Concurrent List or State List. In other words, residuary power of legislation is conferred on Parliament Sub-article (2) of Article 248 is material and may be extracted : "(2). Such power shall include the power of making any Jaw imposing a tax not mentioned in either of those Lists". A B c D E G a A B c D E 658 SUPREME COURT REPORTS [1979] 3 S.C.R. Entry 84 in the Union List reads as under : "84. Duties of excise on tobacco and other goods manufactured or produced in India except :- (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilen preparations containing alcohol or any substance included in sub-paragraph (b) nf this entry". Entry 97 of the Union List reads as under : "97. Any other matter not enumerated in List )( or List III including any tax not mentioned in either of those Lists". Entry 51 in the State Lis~ reads as under: "51. 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) F of this entry". G B Entry 52 is as under : "52. Taxes on the entry of goods into a local area for consumption, use or sale therein". The relevant provisions of the impugned Ordinance may also be extracted for convenience of reference. The Ordinance in its Preamble states that by reason of certain excisable articles not being manufactured or produced in Delhi, one snch being con'ntry liquor, countervailing duty is not leviable on such articles which are imported into Delhi, and proceeds to define duty in clause S(a) of s. 3 as under: "(Sa). "duty" means the excise duty or countervailing duty or, as the case may be, special duty;" • " • • ' ' SATPAL & co. v. LT. GOVERNOR (Desai, !.) 659 Clause (c) was add,cd to clause (6) of s. 3 specifying the words "any spirit". Clause (18a) was added specifying thereunder the definition of 'special duty' which reads as under : "(18A). "Special duty" means a tax on the imporr of any excisable article being an article on which countervailihg duty as is mentioned in entry 51 of List II in the Seventh Schedule to the Constitution is not imposable on the ground merely that such article is not being manufactured or produced in the territory to which this Act extends". Section 31 was amended enabling the Government to levy over and above excise duty a countervailing duty or special duty at such rate or rates not exceeding the rates set forth in Schedule IA which was al~o added by the Ordinance. The contention is that Entry 51 in the State List enables the State Legislature to levy duty of excise or countervailing duty on alcoholic liquors for human consumption and that the almost corresponding Entry 84 of the Union List denies power to Parliament to levy duty of excise on alcoholic liquors for human consumption. Proceeding further it was said that initially countervailing duty was levied on the country liquor imported in Delhi and when it was found that as country liquor was not manufactured in Delhi countervailing duty. could not be levied upon it, an attempt was made to levy the same duty by a camouflage of changing the name and that in pith and substance the Ordinance levies countervailing duty which Parliament had no power to levy particularly because country liquor on which duty is levied is not manufactured in Delhi. It is an admitted position that country liquor, the subject-matter A B c D E of impost, is not manufactured in Delhi. It is again an admitted posiF lion that as country liquor is not manufactured in Delhi, countervailing duty as is commonly understood could not be levied upon its import in Delhi. The question is : does that exhaust the power of Parliament to levy a duty on the import of country liquor into Delhi ? Scheme underlying distribution of legislative powers in t'art XI, ~ Chapter I ailci especially Articles 246 and 248 is that except the matters specifically enumerated in List II (State List) in the Seventh . Schedule, Parliament's plenary power to legislate extends to all conceivable matters which can be topic of legislation, and even this limitation on its power vanishes when Parliament legislates for part of the territory of India not included in a State. The three dimensional picture D becomes complete, viz., (i) to select topic for legislation; (ii) enactment of legislation on the topic; and (iii) to impose tax in respect 660 SUPRE11E COURT REPORTS (1979] 3 S.C.R. A of such subject-matter. of legislation, by reference to Art. 248 which confers powtr to make any law with respect to any matter not enume-, -· rated in Lists II and III including the power to impose tax not men- X · tioned in either of those Lists. Under Article 246 ( 4) Parliament has power to make laws with respect to ·any matter for any part of the B territory. of India not included in a State notwithstanding that such matter is a matter enumerated in the State List. Power of Parfoment thus to legislate with respect to any matter for Delhi, territory not - - - included in a State, is unabridged or unfettered by the entries in the State List. Further, residuary power of legislation including. the power to levy tax is conferred on Parliament by the combined operation of • • c Articles 246(4), 248(1) & (2) and Entry 97 in the Union List. That power is nntramelled by the limitations prescribed by.Articles 2~6(2) k and (3) and Entry 51 of State List and is plenary and absolute subject only to such restrictions as are imposed by the Constitu!i:Jn and ·! we find none such which is material to the present question (vide Mithan Lal v. State of Delhi)('). I D F G R . Accordingly, if excise or countervailing duty could be levi·od on country liquor manufactured or imported into Delhi, albeit other conditions for the levy of such duty being fulfilled, Parliament would not lack competence to levy the same only because levy of such duty on alcoholic liquors for human consumption is within the competence of a Sta!e. But it must be confessed that as country liquor is not manufactured in Delhi, the Parliament could 1101 under Entry 51 of the State List levy either excise or countervailing duty on it. Merely because· Parliament could not levy countervailing duty on country liquor imported into Delhi because country liquor is not manufactured in Delhi, it does not exhaust the power of Parliament to levy some other duty on the import of Uquor if it is otherwise constitutiPnally permissible . It was, however, said that Entry 51 in State List being a specific entry providing for levy of duty either on manufacture or import of country liquor and there being. no other specific entry enabling to levy • special ·duty it is inconceivable that the framers of the Constitution ~ should have ldt some such levy on the import of country liquor in respect of Delhi under residuary entry. In other words, it was said that ,. J 1 where there is a specific entry the kgislation must squarely ftill within _,.,..- .the entry and correspondingly is must be assum'd that it would not b~ covered by the residuary entry. In fact the argument went so far that before resort could be had to the residuary Entry 97 the Court in C1)[t95ll S.C.R. 445 to 451 • .. SATPAL & co. v. LT. GOVERNOR (Desai, !.) 661 its exploration to ascertain under which Entry the legislation falls, must proceed from the beginning and in its journey till Entry 97 if it falls somewhere, removing the camouflage under which the legislation is sought to be taken out from the specific entry, it would not be proper to say that the legislation is covered by the residuary entry. Whenever legislative competence is in question attempt of the Courts is to find out whether the legislation squarely falls in one or the other entry. If a particular legislation is covered by any specific entry well and good. If it does not, the second question would be : is it beyond the legislative competence of Parliament? In undertaking this exercise it is quite often known that a legislation may be covered by more than one entry because an analysis bas shown that the entries are overlapping. 1f the legislation may fall in one entry partly and part of it may be covered by the residuary entry, the legislation would none-the-less be immune from the attack on the ground of legislative competence. This was the approach adopted by a 7 Judges Bench of this Ciurt in Unior. of India v. H. S. Dhillon(') wherein while examining the constitutio11al validity of the amended Wealth Tax Act which included the capital value of agricultural land for the purpose of computing net wealth, the controversy was whether the impugned Act was a Jaw with respect to entry, including Entry 49 in the List II or was it one under Entry 86 read with Entry 97 or Entry 97 itself of the List I. Repelling the contention of legislative incompetence this Com t held that there is nothing in the Constitution to prevent Parliament from combining its powers under one or other Entry with its power under Entry 97. The terse observation is that this Court knows no principle which debars Parliament from relying on the powers uuder the specified entries 1 to 96, List I and supplement them with the powers under Entry 97, List I and Article 248 or even the powers under entries in the Concurrent List. This authoritative pronouncement would answer the conten~10n that while legislating for the Union Territories the Parliament unhampered by Articles 246(2) and (3) but enriched by Article 248(1) and (2) could legislate on any of the topics either in the List I or in List II or in exercise of the residuary power under Entry 97. There is thus no dearth of legislative competence of Parliament to enact legislation for a territory not included in a State because the power to legislate takes within its sweep matters included in all the three Lists and added to it is the residuary power on matters not specifically included in any entry in any of the three Lists. It was, however, said that the observations in Dhillon's case (supra) are no more good law in view of the opinion of Judges constituting (I) [19721 2 S.C.R. 33. A B c D E F G H A B c D E F G H 662 SUPREME COURT REPORTS [1979] 3 S.C.R. majority in His Holiness Kesavananda Bharati Sripadagalavaru v. State of Kera/a('). The controversy in Kesavananda Bharat i's case was about the power of the Parliament to amend the Constitution and a contention being the spill over from J.C. Golaknath v. State of Punjab(") was that apart from Article 368, Entry 97 of List I would confrr power on Parliament to amend the Constitution. After pointing out that when all the three Lists were exhaustively drawn up it is difficult to believe that an important power would be kept hidden in Entry 97 of the Union List leaving to the off chance of the courts locating that power in that entry, it was said that if a subject of legislation was present to the minds of the framers of the Constitution, it could not Lave been left to be found by the Courts in the residuary powers. Mr. Scervai's commentary at p. 1264 on Constitutional Law of India, 2nd Edn., was pressed into service wherein it is ob>erved that a forteori if a subject of legislative power was promill'~ntly present to the minds of the framers of our Constitution, they would not have left it to be found by Courts in the residuary power. Proceeding ahead it was submitted that while enacting Entry 51 in List II the subicct of levying duty on import of alcoholic liquor was present to the minds of the framers of the Constitution and, therefore, it is futile to search that power in the residuary Entry. The observations in Kesavancmda's case (supra) have to be kept in focus in the context of the controversy whether Article 368 confers specific power of amendment of the Constitution and it was sought to be brushed aside by saying that it merely provided procedure for amendment of the Constitution and, therefore, the power for amendment must be located in the residuary Entry 97 01 the Union List. The position here is materially different. With the advancement of society, expanding horizons of sci~nti fi.c and technical knowledge, probe into the mystery of creation, it is impossible to conceive that every imaginable head of legislation within human comprehension and within the foreseeable future could have been within the contemplation of the founding fathers and was, therefore, specifically enumerated in one or the other of three Lists, meaning the;cby that thre;, Lists were exhaustive of Governmental action and activity. Demands of welfare State, hopes and aspirations and expectations in a developing society and the complex '."orld situation with intEI-dependence and hostility amongst nations may necessitate legislation on some such topics that even for visionary they could not have lxcn within the contemplation of the founding fathers. Complex modern governmental administration in a federal set up pro- (ll [1973] Suppl. S.C.R. I. (2) [1967] 2 S.C.R. 672. • >' I • T SATPAL & co. v. LT. GOVERNOR (Desai, !.) 663 viding distribution of legislative powers coupled with power of judicial review may raise such situations that a subject of legislation may not squarely fall in any specific entry in List I or III. Simultaneously on correct appraisal it may not be covered by any entry in List II though apparently or on a superficial view it may be covered by an entry in List II. In such a situation Parliament would have power to legislate on the subject in exercise of residuary power under Entry 97, List I and it would not be proper to unduly circumscribe, corrode or whittle down this power by saying that subject of legislation was present to the mind of the framers of the Constitution because apparently it falls in one of the entries in List II and thereby deny power to legislate under Entry 97. The history of freedom struggle demonstrates in unequivocal terms the importance of residuary power of legislation being co'nferred on Parliament. Therefore, the scope and .ambit of Entry 97 need not be whittled down or circumscribed by a proce£S of interpretation. In any case majority decision in Dhillon's case (supra) is neither overruled not cicpartcd from in Kesavananda's case (supra). Accordingly, once the power of Parliament to legislate on a topic is not expressly taken away by any constitutional provision, it remains intact under Entry 97 of List I. A Undoubtedly, excise and countervailing duties on alcoholic liquors for human consumption were within the contemplation of the framers of the Constitution. That is a specific topic of legislation in List IL It