# AND OTHERS v. UNION OF INDIA

- **Citation:** [1963] 3 S.C.R. 957
- **Court:** Supreme Court of India
- **Decided:** 1963
- **Bench:** B. P. Sinha, S. J. Imam, K. SuBBA RAo, K. N. W Anchoo~ J. C. Shah, N. Rajagqpal.A Ayyangar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/and-others-v-union-of-india-2696
- **Pages:** 22

## Headnote

Excise Duty-Mritasanjibani,
Mritasanjibani
Sudha, ·
Mritasanjibani Sura, if medicinal preparations-If liable under
the; . State Acts-Medicinal . and Toilet Preparations (Excise
Duties) Act, 1955 (16of1955), ss.2(g), 18(2), 21-0onstitution
of India, Art. 277, Seventh Schedule, List I, Item 84.
The·petitioners carried: on business as manufacturers .of
medicinal preparations according to Ayurvedic system and
as such manufactured Mritasanjibani, Mritasanjibani Sudha
and Mritasanjibani Sura by the process of distillation in
accordance with the Ayurvedic formula stated in such ancient
' Ayurvedic treatises as .Ayurvedic Sangraha, Bhaisajya Ratnabali and Arka Prakas,h, accepted as embodying the Ayurvcdic
pharmacopoeia all over India. When the Parliament passed
the ·Medicinal and Toilet Preparations (Excise Duties) Act,
1955, these three AyurvediC
preparations were taxed at
the rate of Rs. 17/8/- as
prescribed by
item I of the
Schedule to the Rules framed under s. 18(2) of the Act as
being medicinal preparations as defined by s. 2(g) of the Act.
Later on, the Rules were amended and the three preparations
omitted from the schedule to the rules and the various
State Governments began demanding duties of excise on these
preparations at much higher rates under the various· State
Excise Acts. The case of the petitioners was that the levy of
FJLcise auties on. these preparations fell within item 84 of
List I of the Seventh Schedule to the Constitution and it
was not open' to the State Governments to levy Excise duties
under the State Acts, that . since these preparations were
medicinal preparations as defined by s.2(g) of the Act, their
omission from the Schedule was of no effect and could not
empower the State Governments to levy Excise duties and
that the Central Government had no power to exclude the
said preparations on the advice of the Standing Committee
constituted under r. 68 of the
Rules.
The petitioners
relied on a large number of affidavits from qualified Ayurvedic
1982.
September '7,
'-·
I
--
' > .
' .
958 : SUPREME COUltT REPORTS
-[1963]
practitioners to the effect th=t these preparati~ns were Ayurvedic medicines. This was denied by the respondents who relied
.ddlr.yal:,ha Mafhur
on the rei}ort of the Sta.tiding Committee that these prepa·
Bahu's Sak.ti
·
d
d" • I
1962
Duahadhalaya
. · ration were mere beverages an
not _me 1crna preparations.
<>acca(P) Ltd.
No affidavit of. any Ayurvedlc expert was, however, filed-
• v.
by them.
Union of India~ -
_ _ Hdd, that there could be no doubt that these preparations according to standard Ayurvedic texts were clearly
-- "medicinal preparations" within the meaning of s.2(g) of
the Medicinal and Toilet Preparations (Excise Duties) Act,
1955, though they could also be used as ordinary
akoholic
_ beverages. They were, therefore, liable to duty under item I
of the Schedule to that Act and no Excise Duty could be levied
on them under the Excise Acts of the States.
-
-
The decision of the Standing Committee . could not be
conclusive on the question whether these preparations were
medicinal_ preparations and th Cir omission from the list
attached to the Rules on its report could be of no effect.
•
Held, further, that lt could not be correct to say that
~
even if, these preparations were ''medicinal preparations"
they would be liable to Excise duty both under the Act and
the various Excise Acts ()f the States.
-
·
With the passivg of-\hesaic! Act; the •avirg made by
Art.177 ofiht Cer.stitution in favtur of tlie States came to
- an <nd •nd the re:ult was ttat the State Governments were
no Longrr •ntitl<d to levy any duty on medicinal and toilet
preparaticns and, furthrr, s.21 of the Act tffected a repeal
of such provisions of the' State Excise Acts as related to
· medicinal and toilet_ preparations.
ORIGINAL JURISDICTION: .Petitions Nos. 344
and 350 to 354 of ID61. \. .
Petitions under Art. 32 of I he Constitution o!
India for enfrrconent of fundamental rights.
A. V. Viswanatha Sastri,· A.N. Sinh

## Text

_Characters 0–39,746 of 44,059. This is a partial read: ask again with offset=39746 for what follows._

..
3 s:c:R.
SUPREME -COURT REPORTS
ADHYAKSHA MATHUR BABU'S SAKTI
OUSHADHALAYA DACCA (P) ~TD.
AND OTHERS
v.
UNION OF INDIA
957
(B. P. SINHA, C. J., S. J. IMAM, K. SuBBA RAo,
. K. N. W ANCHOO~ J. C. SHAH and
N. RAJAGQPAL.A AYYANGAR, JJ',)
Excise Duty-Mritasanjibani,
Mritasanjibani
Sudha, ·
Mritasanjibani Sura, if medicinal preparations-If liable under
the; . State Acts-Medicinal . and Toilet Preparations (Excise
Duties) Act, 1955 (16of1955), ss.2(g), 18(2), 21-0onstitution
of India, Art. 277, Seventh Schedule, List I, Item 84.
The·petitioners carried: on business as manufacturers .of
medicinal preparations according to Ayurvedic system and
as such manufactured Mritasanjibani, Mritasanjibani Sudha
and Mritasanjibani Sura by the process of distillation in
accordance with the Ayurvedic formula stated in such ancient
' Ayurvedic treatises as .Ayurvedic Sangraha, Bhaisajya Ratnabali and Arka Prakas,h, accepted as embodying the Ayurvcdic
pharmacopoeia all over India. When the Parliament passed
the ·Medicinal and Toilet Preparations (Excise Duties) Act,
1955, these three AyurvediC
preparations were taxed at
the rate of Rs. 17/8/- as
prescribed by
item I of the
Schedule to the Rules framed under s. 18(2) of the Act as
being medicinal preparations as defined by s. 2(g) of the Act.
Later on, the Rules were amended and the three preparations
omitted from the schedule to the rules and the various
State Governments began demanding duties of excise on these
preparations at much higher rates under the various· State
Excise Acts. The case of the petitioners was that the levy of
FJLcise auties on. these preparations fell within item 84 of
List I of the Seventh Schedule to the Constitution and it
was not open' to the State Governments to levy Excise duties
under the State Acts, that . since these preparations were
medicinal preparations as defined by s.2(g) of the Act, their
omission from the Schedule was of no effect and could not
empower the State Governments to levy Excise duties and
that the Central Government had no power to exclude the
said preparations on the advice of the Standing Committee
constituted under r. 68 of the
Rules.
The petitioners
relied on a large number of affidavits from qualified Ayurvedic
1982.
September '7,
'-·
I
--
' > .
' .
958 : SUPREME COUltT REPORTS
-[1963]
practitioners to the effect th=t these preparati~ns were Ayurvedic medicines. This was denied by the respondents who relied
.ddlr.yal:,ha Mafhur
on the rei}ort of the Sta.tiding Committee that these prepa·
Bahu's Sak.ti
·
d
d" • I
1962
Duahadhalaya
. · ration were mere beverages an
not _me 1crna preparations.
<>acca(P) Ltd.
No affidavit of. any Ayurvedlc expert was, however, filed-
• v.
by them.
Union of India~ -
_ _ Hdd, that there could be no doubt that these preparations according to standard Ayurvedic texts were clearly
-- "medicinal preparations" within the meaning of s.2(g) of
the Medicinal and Toilet Preparations (Excise Duties) Act,
1955, though they could also be used as ordinary
akoholic
_ beverages. They were, therefore, liable to duty under item I
of the Schedule to that Act and no Excise Duty could be levied
on them under the Excise Acts of the States.
-
-
The decision of the Standing Committee . could not be
conclusive on the question whether these preparations were
medicinal_ preparations and th Cir omission from the list
attached to the Rules on its report could be of no effect.
•
Held, further, that lt could not be correct to say that
~
even if, these preparations were ''medicinal preparations"
they would be liable to Excise duty both under the Act and
the various Excise Acts ()f the States.
-
·
With the passivg of-\hesaic! Act; the •avirg made by
Art.177 ofiht Cer.stitution in favtur of tlie States came to
- an <nd •nd the re:ult was ttat the State Governments were
no Longrr •ntitl<d to levy any duty on medicinal and toilet
preparaticns and, furthrr, s.21 of the Act tffected a repeal
of such provisions of the' State Excise Acts as related to
· medicinal and toilet_ preparations.
ORIGINAL JURISDICTION: .Petitions Nos. 344
and 350 to 354 of ID61. \. .
Petitions under Art. 32 of I he Constitution o!
India for enfrrconent of fundamental rights.
A. V. Viswanatha Sastri,· A.N. Sinha, N. H.
Hingorani and B. P. Jha, for the
0
petition~r1.
B. Sen and R. H. Dhebar, for the respondents
·Nos. I, 2 and 7 to 8 (in all the petitions).
-B: Sen, 8. 0. Bose and P. K. Bose, for the
respondent No. 3. _,
•
..
3 S.C.R.
SUPREME COURT REPORTS
Lal Narayan Sinha,
D. P. Singh,
M. K.
Ramamurthi, R. K. Garg
and S. O. Agarwala, for
respondent No. 4.
K. S. Hajela and 0. B. Lal, for respondent
No. 5.
Ranadtb Chaudhuri, L. R. Das Gupta, S. N.
Andley and Rameshwer Nath, for the intervener.
1962. September 7. The Judgment of the Court
was delivered by
W .ANCHOO, J.-These six peti,tions under Art. 32
of the constitution raise a common point and will be
dealt with together. ']he ma,in question raised in all
these petitions is whether the State-Governments are
entitled to tax the three Ayurvedic preparations,
n&mely Mirtasanjibani, Mritasanjibani Sudha and
Mritasanjibani Sura, which are manufactured by
these petitioners, under the various Excise Aot in
forne in the respective· StatEs.
Further points
were raised in the petit,ions as regards the validity
of the restrictions imposed in the matter of the
. import, export, possession and sale of these three
Ayurvedic preparations. But the learned -counsel
. for the petitioners sta.ted before us that he was not
pressing any other point except one viz., whether
the various State-Governments could tax these
three· Ayurvedic preparations under the various
E:x:cise Acts in force in the States concerned. We
propose therefore to deal with this point only in
the present cases.
The case of the petitioners is briAfly this. They
carry on business as ·manufacturers of medicinal
preparationa, according to the Ayurvedie system
of medicines and among the Ayurvedio medicines
manufactured by them are these three preparations.
These Ayurvedic preparations are manufactured by
the . process of fermentation and distillation. in
accordance with the AymTedic system of 11',ledicine
·19§t
h.>aksha JL at/ntr
B' h's II•kli .
Ou1halilt•/&'o
Diec~ (P) .Lti.
v.
C..~ni n u t
1962
Aih:t•kaho Mathur
&hu's Sakii
Ou1hdft(P'fCJ
Dam ( P) ·Ltd,
v«
Unien of India
w ... i..oJ,
'.
/
960
SUPREME COURT REPORTS
(1963]
following the formula in standard book!i known as
Ayurved Sangraha, Bhaisa,jya RatnabaHand Arka
Prakash. These books, according to the petitioners,
contain extracts from all authoritative ancient
· Ayurvedic treatisea accepted throughout India &nd
are in vogue as Ayurvedic pharmacopoeias in the
various States.
Though the three preparations
have three different names they are in reality only
one medicine and are prepared according to a
single formula in these books.
The petitioners
aver that these three preparations are manufactured in accordanoe with the standard Ayurvedic
pharmacopoeias in vogue in various States and are
efficacious amongst otherM in the following diseases:·
(a) in typhoid fever (Sannipatik Jwara) during
collapsed condition;
(b) in cholera;·
(c) in ca.se of loss of appetite to increase
power of digestion;
·
(d) In rheumatism, sciatica etc., and
(e) to remove weakness,
impart strength
and vigour and also as a general tonic
-and restorative for convaleseent patients.
Before the Constitution came into force, all
these three preparations were Jia hie to Provincial
excise duty under item 4() of List II of the Seventh
Schedule to the Government of India Act, 1935.
The Constitution however made a change in the
three legislative Lists with respect to excise and
under item 51 of List Il of the Seventh Schedule
the States have the power to levy excise duty on
alcoholic liquor for human consumption and on
opium, Indian hemp, and other narcotic drugs and
narcotics but not including medicinal and toilet pre-·
partions containing alcohol or any substance like
.opium etc. Further, under item. 84 of List I of the
3 S.C.R.
SUPREME COURT REFORTS
961
Seventh Schedule the Union has the power to impose
duties ot' excise on tobacco and other goods manufactured or· produced in India except (i) alcoholic
liquors for human consumption and (ii) opium,
Indian hemp and other narcotic drugs and narcotics,
but including medicinal and toilet preparations containing alcohol or any substance like opium etc. Thus
the Constitution took away the power of the States
. to impose duties of excise on medicinal and toilet
preparations containing alcohol or any substance like
opium etc. and give that. power to the Union. However, Art. 277 of the Constitution provided that "any
taxes, duties, ceases or fees which, immediately before
the commencement of this Constitution were being
lawf'Qlly levied by the Government of any State or
by any municipality or other local authority or
body for the purposes of the State, municipality,
district or other loc(tl area may, notwithstanding
tha.t those taxes, duties, ceases or fees are mentioned
in the UQ.ion List, continue to be levied and . to be
applied to the same purposes until provision to the
contrary is made by Parliament by law". In view
of this Article, the State Governments continued to
levy excise duties on medicinal and toilet preparations containing alcohol, opium,, etc., till 1957 as
Parliament bad made no law to the contrary till
then. In 1955, however Parli.ament passed the Medi-.
cinal aμd Toilet Preparations (Excise Duties) Act,
No.
16 of 1955, hereinafter referred to as the Act)
which was brought into force from April 1, f957.
We are in the present case concerned only with
medicinal preparations anP, a -"medicinal preparation" is defined in s. 2(g) of the Act as. including
"all drugs which are a remedy OJ'.
prescription
prepared for internal or external use of human
beings or animals and all substances intended to be
used for or in the treatment, mitigation or prevention of· disease in
human being or animals."
Section 3 provides for levy of duties of excise at the
rates specified in the Schedule, on all dutiable goods
1~63
Mhyoksha Mathur
liabu's Sakti
·Oushodha/o_ya
Dacea (P) Lit/.
v.
Union of lttdio
Wancho• J.
-.
1962 --
Ad~y"lksha Mcthur
lfab t's Sokti
-
Dacca ( P) Ltd.
Yo
Union of India
.Wancho1t J.
962
SU PREM~ COURT REPORTS
[1963]
manufactured in India. Section 19 gives power to
the Central Government to m11.ke rules to carry out
the purpose of the Act and in particular s. 19 (2)
(xi:) gives powet• to notify in the official gazette
liste of the nttmes and descriptions of preparations
which would fall for assesement under any particular
item of the Sehedule or for regulating their manufacture, transport and distribution". The Schedule
(omitting the Explanations which are immaterial
for present purposes) prescribing the duty is in
these terms :-
.. Item Description of dutiable goods
Rate of duty
No.
1.
Medicinal and toilet preparations,
containing
alcohol,
which are prepared by distillation or to which alcohol
has been added and which are
capable of being cons~med as
ordinary alcoholic beverages.
2.
Medicinal and toilet preparations not otherwise specified
containing acohol-
( i)
(ii)
Ayurvedic preparations
containing self-generated alcohol, which are not
capable of being con·
sumed as ordinary alcoholic beverages.
Ayurvedio preparations
containing self.generat
ed alcohol, which are
capable of being con·-
sumed as ordinary alcoholic bexerages.
Rs.
Seven·
teen and ansnas eight per
gallon of the
strength · cif
London proof
spirit.
Nil
Rs. Three per
gallon.
. -
-
3:s.c.R.
SUPREME COURT REPORTS
963
3.
(iii) All others
Medioina.l and toilet preparations, not containing aloohol,
but containing opium, Indian
hemp, or other narcotic drugs
or narcotio.
Rupees five
per
gallon
of the strength of London
proof spirit.
Nil.
The Central Government framed Rules under
the Aot in 1956 and the administration of the
_Aot and the Rules wa1 entrusted to State-Governments. A list of medioinal
prepa.rations, whioh
were capable of being used as ordinary alcoholic
beverages, was also published along with the Rules
and r. 65 provides that "until a standard Aynrvedic pharmacopoeia . has been evolV'ed by the
Central Government, the pharmacopoeias that
a.re in vogue in the various .States shall be reoognised
as standard Ayurvedio
pharmaoopoeias".
The
contention of the petitioners is that these
three Ayurvedio preparations conform to the definition
of medicin11.l preparations given in s. 2 (g) of the
Act.
Further, in the Sohedule to the Rules, Mritasanjibani Sura w.as listed as .a medioinal preparation in 1957. Further in 1958, Mritasanjibani and
.Mritansanjibani Sudha were also added under the
head "medicinal preparations'' in the Sohedule to
the Rules as the . three are really one and the
same medicine. The Aot and the Rules oame into
force from April 1, 1957 in -aooordanoe with the
provision of s. 1 (3) of the Aot, whioh gives po:
wer to the Central Government to enforoe the
Act on such date as it may, . by notifioation in the
official. gazette, . appoint.
The petitioner's case
is that thereafter they began to pay duties of
excise on these three medioines under item 1 in
196!
..l.tlA,1abloo M_
Bab1l1 SCJTI
Oushadhala
· Dacca (PJ L
v.
Uaioa of ltttlla
-1
1962
; A.dliyak1ha Mathtfr
I
Babu'• Sakti
OushadhalaJO
l'occa (P) Ltd,
v •.
·Union of India
Wancht10 J.
964
SUPREME COURT REPORTS
. [1963)
. .
.
.the Sch~dule to the Act at the rate of Rs.17. 50 nP
per gallon of the strength of Loudon prO•)f
spirit, as these preparations were consi.dered medicinal preparations containing alocohol which were
.prepared by distillation or to which alcohol was
added and which w"re capable of being used as
ordinary
afooholic
beverages. This oontinued
till August 1961) when the Central Government
purporting to act under s. 19 of the Act amended the Rules and omitted from the Schedule to
the Rules two of the three preparations, nll.mel:Y,
l\fritasunjibani and Mritasanjibani Sudha. Further
in December, 1960, the Centr~I <Jovernment again .
amended the Rules and omitted from the Schedule
to the Rules the third preparation (namely, Mrita·
sanjibani Sura).
Consequently,
various State·
Governrμents began demanding duties of excise on
these there preparations
at rittes which
are
much higher than the rate of Rs. 17. 50 nP
pres~ribed in the Schedule to the Act .. 'Ihe conten·
.tion of the petitioners is that on the coming into
forca of the Act-, the levy. of excise duties on these
medicinal preparations fell within item 84 of List I,
with the result that thereafter it is not open to
State-Governments to levy duties of iixoise on these
preparation in accordance with the various Excise
Acts in force in the Statas. It is further contended
that if these preparations in fact come within the
definition of "medicinal preparation" in s. 2 (g) of
the Act and are covered by the Schedule to the
Act, the omission of these three preparatio~s from
the list attach0d to the Rules would make no
difforonce and would not give power to the State-·
Governments to tax them under the various Excise
Acts in force in the States co11cerned.
The petitioners further say that though r. 68
of the l~ules. provides· for a Standing Committee
to advise the Central Govt. on all matters connected
with the technical aspects of the administration·of.the
.\
L.
-
)
\.
, I
3 S.C.R.
SUPREME COURT ::RiEPO~TS
965
Act and the Rules, and in particular, on the
qutietion whether (i) a particular preparation is
entitled to be treated, or to continue to be treated,
as a genuine medicinal or toilet preparation for
the purposes of the Act, and (ii) if so, whether it
should be treated, or continue to be treated, as a
restricted or an unrestricted preparations, it was not
open to the said Committee even if it was consulted
in this matter to advise the Go-.ernment that these
three preparations were not medicinal preparations,
if in fact they are medicinal preparations as defined
in s. 2 (g). It is therefore urged that even if the
Central Government acted on the advice of the
Standing Committee when it omitte<l' these three
prep&.rations from the list· appended to the Rules,
it had no power to do so if these three preparations are in fact medicinal preparations within the
meaning of s. 2 (g) of the Act. The petit.ioners
therefore pray for an appropriate writ, direction or
order directing t,he Central Government not to give
effect to the notifications of August and December
J i:l60, removing these three. preparations from the
list appended to the Rules and also for a direction to
the >State-Governments not to levy duty on these
preparations under the respective Excise . Acts in
force in the various States and prohibiting the
State·Governments from collecting duties of excise
on the said medicinal preparations in excess of the
ratui fixed by the Act and to refund the amounts
of duty already collected. in excess of that r~te.
The petitions have been opposed. by the
Central Government and by
the various StateGoverriments ooncerned. The main counter-affidavit
has been filed on behalf of the Central Government
and the various State Governments have adopted
.that counter-affidavit with some additions. The main
contention on behalf of the respondents is that
these three preparations are not a.dmitted to be
"m_edicinal preparations containing alcohol" within
Adh!laksha· Mathur
Babuls Sakti
Oushadhalay•
Dai;ca (P) Ltd.
v.
Union of India
WanchooJ.
•
Aihy•lrsh• Uathur
1Jabu~1 Satti
Ousl•' ola1a
Doec• (P) Lti.
••
Uni•n·of India
lr anch•o J.
966
SUPREME COURT REPOR'l'S
[1963]
entry 84 of List I, by reason of theee preparatione
not being mentioned in any recognised Ayurvedic
pha.rmaoopoeia. It is also not admitted that they
are prepared according to the prescribed specifications referred to by the petitioners by utilising the
proper ingredients and. manufactured aceording to
the recipes or directions given. in the three Ayurvedic text books relied upon by the petitioners.
Further, it is denied that these three preparation•
conform to the definition of s. 2 (g) of . the Act.
It is also not admitted that they are remedies,
muchless efficacious
remedies
for any human
ailment. It is further urged that the Central Government has been empowered to decide on the 11.dvice
of the Standing Committee whether any preparation should be treated or continue to be treated
as a genuine medicinal and toilet preparation for the
purpose of the Act or whether it should be trei.ted
or
continue to be treated as . a restricted
or
unrestricted preparation.
Further,
t_he Central
Government can according to the advice of the
Standing Committee, amend the Scl:edule of the
medicinal &nd toilet preparations of restricted category from time to time by notifications and if &
particular preparation is found to fall out-side the
scope of the Act the State-Governments would
be competent to levy duties of excise on it under
the Excise Acts· in force in the various States. It
i_s contended that the action of th'J Central
Government in omitting these there preparations
. from the list to the> Rules framed under the
Act WtlS based on the advice of the Standing
Committee · which was of the opinion that these
were not genuine medicinal preparations. Conse•
quently, they were omitted from the ·Jist appended
to the Rules under the Act and the Act did not
apply to them with the result that the State
Governments were free to subject the·m to duties
of excise under the various Excise Acts in force
in the various · States.
3~S.C;R.
·SUPREME COURT REPORTS
967
'Ihe main question therefore falls for consideration in these cases is whether the three preparation11 are in fact medicinal preparations conta-
. ining alcohol falling within item 84 List I of the
Seventh Schedule to the Constitution, on which
item the Act is based and so whether they are
medicinal preparations as defined in s. 2 (g) of the
Act. If they are medicinal prepartions as defined
therein, they will be governed by tho Act and ·the
omission of these preparations from the list
a.ppended to the Rules will not make any difference to their being medicinal preparations within
the meaning of the Act. . Before . howaver we
deal with this main question, we may dispose of
a contention raised on behalf of the State of
Bihar that even if the three preparations are
medicinal preparations they will be liable to
duty poth under the Act
as well as under the
various Excise Acts in force in the various States.
We have already pointed out that under the
Government of India Act, 1935, medicinal and
toilet preparations were liable to duties of excise
under entry 40 of List II of the Seventh Schedule
to that Act. Correspondingly under item 45 of
List I ibid which provides for duties of exoise
on tobacco and other goods· manufactured or
produced in India, medicinal and toilet preparations were excepted from that entry. Therefore, till
the Constitution came into force the State-Govern~
ments had power to levy duties of excise on
medicinal and toilet preparations. We ha.ve further
pointed out that the .Constitution has ma.de a
change, and medicinal and toilet
preparations
were
excepted from en.try 51 · of List II of
the . Seventh
Schedule
to
the
.Constitution
relating to duties of excise leviable by States and
were put in entry 84 of List 1 ibid which' provides
for duties of excise leviabl~ by the Union. How-
. ever, Art. 277 provides that a.ny taxes or duties
etc. which, immediately before the commencement
1962
J.iihy1klha 'J/.a lh ur
Babu's Salt.ti
Oushoiial •Y"
O•<ea ( P) Lli.
y
Unin •f lnii•
19Ji
Adhyakaha Mathur
Babu's SaA·ti
Oushadhal 1-iya
Dacca ( P) Ltd.
v.
Union of India
Waneltoo J.
I
968
SUPREME COUR'l REPORTS
[1963]
of the Constitution, were being lawfully levied by
the Government of a,ny State etc. may, notwithstanding that those taxes, duties etc. are mentioned
in the Unfon List, continue to be levied and to be
applied tci the same purpose until provision to the
contrary is made ':>y Parliament by law. Therefore,
, so long as Parliament did not make any law relating
tci medicinal and toilet preparations, the position
under the
Government of India Act would
continue and the States ,would have the power to
continue levying duties of excise on medicinal
and toilet preparations to the sam" extent to which
they were levying them immediately before the
commencement of the Constitution.
In 1955,
Parliament ·passed . the Act for levy of duties of
excise on medicinal and toilet preparations. This
Act was brought into force from April I, 1957,
and the oonsequence of this enactment waR that
the power of the States to leavy duties any further
<in medicinal and toilet preparations came to an
end in view of· Art. -277
of the Constitution.
There can in our opinion be no doubt that Art.
277 which saved the power of .the States to levy
duties of excin etc. which came in the Union List
on the passing of the Constitution is no longer
applicable' as soon as l'arliament makes a provision to the contrary. Once therefore a provisi·on
to the contrary is made, the saving provided in
Art. 277 comes to an end and thereafter the
State-Governments cannot continue to levy any
duty which they might have been levying
by
virtue of Art. 277 till provisioJ? to the contrary was
made. Further, this conclusion which follows from
Art. 277 is made perfectly clear by s. 21 of the Act,
which provides that "if immediately before the
commencement of the Act there is in force in any
State any law corresponding to this Act, that law
is hereby repealed". The effect of ·this repeal is
that the JJ:xcise Acts of the various States under
which duty was being levied on medici.nal and toilet
3 S.C.R.
. SUPREME COUR'l' REPORTS
969
preparations containing alcohol must be deemed to
have been repealed, in so far as they apply to such
medicinal and toilet preparations. It is not neces1sary that the State should have had a separata law
for levy of duties of excise on medicinal and toilet
preparations, for the repeal in s. 21 of the Act to
comB into effect.
The Excise Acta 0f the various
States were undoubtedly law under which duty was
being levied on medicinal and toilet preparp,tions
containing alcohol and those Excise Acts must be
deemed to correspond to the Act for the purposes
of levy of duty on medicinal and toi1et preparations
and must be held to have been ret;ealed by !L 21 so
.far a.s medicinal and toilet preparations were concerued. It is urged on behalf of the State of Bihar
that the purpose of the Excise Acts in States was not
meno,Jy to raise revenue which was a secol'dary consideration but to regulate the .consumption of liquor
and for that purpose the various Excise Act of the
States
imposed
a
heavy
duty
to
reduce
consumption. Further, it is urged that the purpose of
the Act is only to impose duties for revenue purposes
and it has nothing to do with the regulation of consumption of liquor and reduci.ng such consumption.
Therefore, the excise Acts of the various States
when they impose duty. of excise on mec!icinal
and toilet .preparations had two purposes,. namely,
,idhyahlla Mathur
Babu's Sokti
OushadhalayiJ,
Dace• (P) Ltd.
(i) to raise revenue and (ii) to reduce consumption of liquor, and therefore the Excise Acts of
the various States cannot be said to be corresponding law which has been repealed by the Act
which has only one purpose namely raising of
revenue. We have not however been able to under·
11tand how any purpose behind a fiscal measure
can have any relevance .on the question of cor-res-
-
pondonce. Various Excise Acts of the States in
so far
as they impose duties on medfoinal and
toilet preparations containing alcohol are fiscal
statutes far taxing these preparations. Now, the Act
v.
Union of India
Wonchoo J.
Aih,alt.JhfJ JI. •thur
B.J~u'1 ~·al.ti
Oushadhalay•
ltcaa (P) Ltd.
Y.
lini•n •/ lnii"
rra:ncho1 J.
970
SOPREME COURT REPORTS
[1961]
is a fiscal statute for
taxing these preparations
enaotAd by Parliament under entry 84 of List I
of the Seventh Schedule to the Constitution, and
therefore the Excise Acts which were the corresponding taxing statutes for these preparations
must be held to be repealed so far as taxation on
these preparations is concerned. 'There can therefore be . no doubt that there is correspondence
bstween . the Act and the various Excise Acts of
the various States in so far as levy of duty on
medicinal and toilet preparations is
concerned
and s. 21 of the Act repe<tls all the Excise Acts of
the States so far as such levv is concerned.
There
can thus be no question of medicinal and toilet
preparations being liable to duty under the Act
as well as the various Excise
Acts iu force io
the States.· This contention is hereby rejected.
The next question is whether these three
preparations are medicinal preparations as defined
in the Act in e. 2 (g).
'l'he definition is an inclusive
one and includes "all drugs which are a remedy or
prescription prepared for internal or external use of
human beings or animals and all substances in-
: tended to be used for or in the treatment, mitigation
' or prevention of disease in human beings or
animals". According lo the West Bengal Excise
Rules, which deal with the manufacture of these
three preparations; it appears that the preparations
are to be made
accordin~ · to the recipe and
direction laid down in Arka Prakash, Ayurved
Sangraha, and Bhaisajya Ratnabali, and have to be
manufactured only in bond by a qualified Kabiraj
or by a Kabiraji fir.m having a qu:tlified Kabiraj for
supervision of
the
manufaoutring
operations.
Further, the alcoholic content of the preparations
must be below 42 per centum. According to the
recipe found in these Ayurvedic books, the basic
!
3 S.C.R.
SUPREl\iE COURT REPORTS
971·
ingredient out of which these preparations are manufactured is gur; besides gur th.ere are 42 other iagre·
dieats which have to be mixed. These ingredients
are medicinal drugs according to Ayurveda.. In
addition to these ingredients, water is also mixed
and the whole mixture 'is kept sealed for 20 days,
presumably for the purpose of fermentation and
thenafter the preparation is obt,ained by distillation and a.l!l already stated contains about 42 per
centum of alcohol.
Further, according to these
books, the preparation is used as a tonic to build
body ~nd physique, to increase strength and appetite
&nd to make ~ppearance healthy and bright. It is
~lso used in Sannipat Jwara
(typhoid fever) in
critical stages. It .is also prei.-cribed for cholera in
frequent doses and finally is used in all conditions
of co1Ja pse.
The coun ter-a:ffid~ vi ts filed on· behalf
of the Cnion and the States which are opposing
these petitions do not definitely state that these
preparations are not medicinal preparations. For
example, in the affidavit of the State of West
Bengal, it is stated that it is not admitted· that
these prepa:·ations are exclusively for medicinal
purposes.
It is alroo stated that these alcoholic
preparations are capable of being msed as ordinary
3lcoholic beverages. Similarly, in the ~ffidavit of
the Union, it is stated that it is not admitted that
the preparations ar9 efficacious remedies for any
human. ailment. On the other hand, a number of
affida vi'ts have been filed on behalf of the petitioners
from registered Kabirajas to show that these preparations are manufactured according to the three
.Ayurvedic books already· mentioned and are uaed
for certain diseasea incluaing choler&.
The respon·
dents, however, rely on the advice of the Standing
Committee consisting of the Drugs Controller of the
Government of, India and the Chief Chemist,
Central Hevenues Control Laboratory, which was
of opinion a.fter examining the formulae anq the
.AdhyakJha Mathur
Bal>.u' s Sakti
Oush•dhala>a
Dace• (P) LU.
v
Union of Iniia
Wanch•o J.
'
AcJ?!,olsha Mathur
'Babu.'s Sahli
OushadhaJpa
paaa (P) Ltd,
..
Un ion of lr.dia
1 Wanc%oo ,1.
I
I
972
SUPREME COURT REPORTS
[1963]
analytical data and the claims given on the label of
the preparations and also after carrying out tasting
test, that thesc;i three preparations should be considered straight forward
beverages and not as
medicinal preparations. It was in · consequence of
\this decision that these three preparations were
taken out of the list attached to the Rules framed
under the Act. The two members of the Standing
Committee do not ·appear to be experts in Ayurvedio medicines apd no affidavit has been filed of
any ayurvedic exper·t on behalf of the respondents.
There seems no ·reason therefore not to accept the
affidavits filed on behalf of the petitioners from
qualified Ayurvedio practitioners: series F to F 16.
These _ Ayurvedic practitioners are not connected
with the petitioners and what they say in their
affidavits is iu accordance with the use to which
these preparations can be put as medicines according
to the three Ayurvedic text books already referred
to. In these circumstances it would in our opinion
be impossible to say that these preparations a1 e
'not remedies prepared for internal use of human
bein1rn and are not intended to be used for or in
the treatment, mitigation or prevention of disease
in human beings. If therefore they are a remedy
prepared for internal use of human beings and are
intended to be used for or in the treatment, mitigation and prevention of disease in human beings,
they would clearly be medicinal preparations within
the ineaning of s. 2 (g) of the Act; and if so, they
would be liable to be taxed under the Schedule to
the Act and not under the various Excise Acts of
the different States concerned. It is only necessary to add,. that the definition of "medicinal
prepa.ration" contained ins. 2(g) of the Act, does
not depart from the meaning 'of that expression
when it occurs -in item .. 84 of List I, and hence on
the Act coming into force, the States lost the power
to levy excise duty ·on theae preparations.
·
J
)
:rs.Q.R.
SUPREME COURT·REPORTS
973
We may in this connection refer to the counter-affidavit filed on behalf of the State of Uttar
Pradesh, where it has been stated that on the
basis of the formulae alleged by' the petitioners in
the Schedules, no standard medicinal preparation
can be prepared as the mode of preparation con·
travenes all settled laws of biochemistry. This has
been sworn by an Excise InspPctor of the Excise
and Intelligence Bureau of the State of Uttar
Pradesh. It is not clear however from the counter·
affidavit what. qualifications the deponant has to
make such a statement, nor are we able to unde"rstand which laws of biochemistry are contravened
by the mode of preparation prescribed in the three
Ayurvedic text books already referred to.
As
against this, we may refer to the report of the
C~opra Committee on Indigenous Drugs of India.
In
para. 265, the Committee says that in different
parts of India, as many as 900 indigenous drugs
(vegetable, mineral and metallic) and over 100@
preparations made from these drugs are used by the
Ayurvedic physicians, and "there seems to be little
doubt that out of the large number of drugs used by
the Hindu physicians for centuries past and still in
use, there are. some that deserve the reputation
they hava earned as cures". In para. 266, the
Committee points out the difficulties in the way of
assessment of the proper value of indigenous drugs.
These difficulties are ·of two kinds; firstly, the
modern scientists are not acquainted with the exact
connotation of terms of Indian pharmacology, and
secondly, whereas western medicine tries to explain
the action of a drug in terms of its chemical com po·
nents, such as alkaloids, glucosides, esEential oils,
antibiotics, hormones etc., Indian medicine takes
into account the action of the drug in its entirety,
as they hold that the action of the whole drug is
often _different from that of any one of its constituents considered separately. The Committee further
says that there is a good deal of trnth in this
1962
·--
Adhyalsha.Mathur
Babu's Sa!li
Oushadhalaya
Dater• (P) Lid
v.
Unisn of lmlia
Wanchoo J.
/
I
Adhya'luha Malhur
Babu~• Sakti
Oushadhala)a
/ 1acca (P) L,d.
y.
U "'on of lni'a
Wanchoo J.
974
St:YPREME COURT REPORTS
[1963]
assertion. In Para. 268, dealing
with compound
preparations,
the
Committee mentions another
difficulty that usually confronts pharmacologists
in the problem of investigating the value of
compound medicines which are more frequently
used than single drugs. It further points out
that "the investigation of tho pharmacological
properties and therapeutic value is considered to
be more in the particular combination than that
of any one of the ·drugs taken separately. They
therefore urge on the need for an investigation into
the combination as a whole.
But, for this, no
modern methods are as yet available.
These observations of the Chopra. Committee
will show that the claim made in the counter·a.ffidavit. filed on behalf of the State of Uttar Pradesh
based on the so-called settled laws of biochemistry
cannot be accepted-at any rate with respect to
oompound preparations like the three under consideration, for the research on Ayurvedic medicines
has been so far very little. Reference may also
be made to the report of a Committee known as
Udupa Committee with respect to the Ayurvedic
system of medicines. At p.
132, the Committee
observes, on the question of the enac~ment of
a Drugs Act for Indian medicines that the Central
Government do not have any technical person
who has detailed knowledge Ayurvedic drugs, though
there are a large number of Ayurvedic scholars
on the pharmacy side whose help can be taken in
drafting the necessary bill.
In this conuection, the
Committee suggested that an adviser ou Ayurvedio
drugs should be appointed for this purpose immediately, who should have under him an Ayurvedic Drugs
AdvisOI"y Committee, and this will facilitate the
drafting of the legislation the Committee had in mind
and also help the Government to decide disputed
points a.bout Ayurvedio drugs and medicines which
were now cropping up frequently. This Committee wae
'
>
3S.0.R.
SUPREME COURT REPORTS
975
constituted in July, 1958, and it does not appear
that any action on the lines suggested. by the
Committee was taken by the Government of India..
In these circumstances we have on the one side
the three standard Ayun: edic t~xt books according
to which these preparations are. prepared; we have
also the aff'idavits of a large number of Ayurvedic
practitioners of obvious repute to the effect that
these
preparations are medicinal
preparationll
which are· used to alleviate human suffering in·
certain conditions. On the other hand, there is
no affidavit from an Ayurvedio expert on behalf
of the respondents. We may however in this connection refer to
an affidavit of
the Assistant
. . Chemic:al Examiner to the Government of West
Bengal who is experienced in examining and analysing alooholic liquors. According to him, the chief
basis of ·these three preparations is molasses and
gur, which is a fact as we have already pointed
out from the recipe in the Ayurvedic text books.
He further says that in these three preparations
there are several steam volatile products, namely,
forfural, aldohydes, ketones and acids but the
presence of the same does not destroy or minimise
the effect of alcoholic intoxication
of these
preparations. He further says that the taste or
smell of these perparations does not make them
·unfit for drinking in a large dose and they can
be used as an alcoholic
beverage. Even this
affidavit does not say that these are not medicinal
preparations. All that it says is that these pr~pa.ra
tions contain about 42 per centum of alcohol and
can be used as ordinary alcoholic beverages. So if
these preparations are medicinal preparations but ·
are ~lso capable of being used as ordinary alcoholic
beverages, they will fall under the Act and wilJ
be liable. to duty under item No. l of the Schedule
at the rate of Rs. ~ 7. 50 nP ·per gallon of the
strength of London proof spirit. On a consideration
of the material that bas been placed· before ue,
1962
Mhyak•h• Ma1hur
Babu' s Saki I
Oushat•Ml<!J•
Daci;a ( P) Lid.
v.
Uni1n· •!!~Ilia
Wanoh111 J
'
.-..
·.
. .
I
Adh)l.aikaA11 Ma~lrur
Babu's 8tJlzti
Oushfldlroltsy&
DatctJ (P) Ltil.
v.
Union of India
Wo111hoo J.
976
SUPREME COURT REPORTS
[1963]
therefore, the only conclusion to which we can
oome is
that these preparations are medicinal
preparations according to the standard Ayurvedic
text books referred to already, though they are
also capable of being used as ordinary
alcoholic
' beverages. They wil.l therefore clearly fall . within
the definition of "medicinal preparation" and
would be liable to duty under item 1 of the Schedule
to the Act. So far as the decision of the Standing
Committee is concerned which resulted in the
omission of these three preparations from the list
attached to the Rules, that is not conclusive on the
question whether these are medicinal preparations
or not •. Further the fact that these preparations
are omitted from the list attached to the Rules
would make no difference to their being medicinal
preparations within the meaning of the Act, liable
to duty under item 1 of tbe Schedule, if they are in
fact medicinal preparations as we hold them to be.
They will therefore be liable to duty under item 1 of
the Sohedule to the Act as they undoubtedly fall
under that item and are capable of bein~ consumed
as ordinary
alcoholic
beverages. They cannot
however be taxed under the various Excise Acts
in force in the concerned States in view of their
being medicinal preparations whh~h are governed
by the Act.
Lastly, it was urged on behalf of the respondents that these preparations are not prepared
according to the formulae in the Ayurvedic text
books referred to above.