# JAGANNATH AND OTHERS v. UNION OF INDIA

- **Citation:** [1962] 2 S.C.R. 118
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Case number:** Writ Petition No. 84 of 1958
- **Bench:** P. n. GAJENDRAGADKAR, A. K. Sarkar, K. N. Wanojioo, ICC. DAS GUP'l'A, snd N. RAJAOOPALA AYYANGAR
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jagannath-and-others-v-union-of-india-2128
- **Pages:** 8

## Headnote

Excise Duty-Tobacco-Diffrrenl rates for 111llole leaf and
broken leaf-If discriminatory-Central Excises and Salt Act,
1944 (/ of z944), First Schedule Entry 4(I) Items 5 and 6-COll·
stitution of India, Art. 14.
Item 5 of entry 4(1) of the First Schedule to the Central Excise and Salt Act, 1944, itnposes an excise duty of I{s. I-Io nP. per
kilogram on tobacco other than flue cured and not actually used
for the manufacture of cigarettes, smoking mixtures for pipes
and cigarettrs or biris in the whole leaf form. Item 6 imposes
a duty of Rs. 2-20 nP. per kilogram on tobacco in the broken
leaf form. The petitioners who dealt in tobacco in the broken
leaf form contended that their tobacco could not be distinguished on any rational basis from the whole leaf form in Item 5 and
the imposition of a double tariff on their !obacco was invalid
as it was based on unconstitutional discrimination, the tariff
being on the basis of use to which the tobacco was put.
r •
2 S.C.R. SUPREME COURT REPORTS
119
Held, that there was no.unconstitutional discrimination in
!96<
the imposition of the excise duty on tobacco in the broken leaf
form.
Tobacco in the broken leaf form was capable of being
]agannath
used in the manufacture of biris while tobacco in the whole
v.
leaf form could not be so used economically. The two forms of Union of India
tobacco were different by the test of capability of user. The
tariff was not based either wholly or even primarily by reference
to the use of tobacco. There was a clear and unambiguous distinction between tobacco in the whole leaf form covered by
item 5 and tobacco in the broken leaf form covered by item 6
which had a reasonable relation to the object intended by the
imposition of the tariff.
Kunmathat Thathunni Moopil Nair v. The State of Kerala,
[1961] 3 S.C.R. 77, referred to.
ORIGINAL JURISDICTION:
Writ Petition No. 84 of
1958.
Petition under Art. 32 of the Constitution of India
for enforcement of Fundamental Rights.
G. G. Mathur, for the petitioners.
G. K. Daphtary, Solicitor-General of India, B. Sen,
R. H. Dhebar and T. M. Sen, for the respondent~
1961. April 20.
The Judgment of the Court was
delivered by
GAJENDRAGADKAR, J.-This is a petition filed underGajend1agadka1 J.
Art. 32 of the Constitution challenging the validity of
the excise tariff imposed by cl. (6) in entry 4(1) in the
First Schedule to the Central Excises and Salt Act,
1944 (I of 1944). Petitioners Nos. 1 to 17 are tobacco
cultivators and they carry on the trade and business
of growing tobacco and of selling it in Kaimganj
Tahsil in the District of Farrukhabad in Uttar Pradesh. Petitioners 18 to 30 are partners or proprietors
or agents of firms which are private bonded werehouse
licencees and they carry on trade and business of pur-
' chasing tobacco from the cultivators and of selling the
same to dealers or to other private warehouse licencees.
By their petition the petitioners have asked for a writ,
direction or order in the nature of mandamus to be
issued to the respondent, the Union of India, restraining it from levyir.g excise duty on hooka and chewing
tobacco under the impugned item and any other writ,
direction or order which may be found suitable to
120
SUPREME COURT REPORTS
[1962]
protect the fundamental rights of the petitioners .to
carry on their trade and business of dealing in hooka
jugt1nnatli
and chewing tobacco. The atlack against _the validity
v.
union uf_I,,di.i of the impugned tariff item is based substantially on
two grounds. It is urged that the rates imposed by
Gaj,ndrngadka' J. the impugned item are excessive and they virtually
destroy the petitioners' trade and it is argued that the
impugned item is based on unconstitutional discrimination. Mr. Mathur, for the petitioners, fairly conceded that he would noL be able to substantiate the first
ground of challenge, and indeed it is obvious that a
challenge to tax law qn t1'e mere' ground that the
tariff imposed by the tax law is heavy cannot be entertained. That leaves the q

## Text

L. N. Muklt1rjr•
••
St till of M odrtis
Raghuba"
Doyol j.
April ao.
118
f
f
SUPREME COURT REPORTS
[1962]
jurisdiction to try the offence of criminal conspiracy
can also try offences committed in pursuance of that
conspiracy even if those offences were committed out •
side the jurisdiction of th st Court, ss the provisions of
s. 239, Criminal Procedure Code, sre not controlled by
the provisions of s. 177, Criminal Procedure Code, which
do not crestP a.n absolute prohibition against the trial
of offences by s Court other than the one within whose
jurisdiction the offence is committed. On s parity of
reasoning, the Court having jurisdiction to try the
offences committ~d in pursuance of the conspiracy,
ca.n try the offence of conspiracy even if it we.a committed outside its jurisdiction. We therefore hold
that the ordn under appeal is correct snd, accordingly, dismiss this sppesl.
Appeal dismissed.
JAGANNATH AND OTHERS
v.
UNION OF INDIA
(P. n. GAJENDRAGADKAR, A. K. SARKAR,
K. N. WANOJIOO, ICC. DAS GUP'l'A, snd
N. RAJAOOPALA AYYANGAR JJ.)
Excise Duty-Tobacco-Diffrrenl rates for 111llole leaf and
broken leaf-If discriminatory-Central Excises and Salt Act,
1944 (/ of z944), First Schedule Entry 4(I) Items 5 and 6-COll·
stitution of India, Art. 14.
Item 5 of entry 4(1) of the First Schedule to the Central Excise and Salt Act, 1944, itnposes an excise duty of I{s. I-Io nP. per
kilogram on tobacco other than flue cured and not actually used
for the manufacture of cigarettes, smoking mixtures for pipes
and cigarettrs or biris in the whole leaf form. Item 6 imposes
a duty of Rs. 2-20 nP. per kilogram on tobacco in the broken
leaf form. The petitioners who dealt in tobacco in the broken
leaf form contended that their tobacco could not be distinguished on any rational basis from the whole leaf form in Item 5 and
the imposition of a double tariff on their !obacco was invalid
as it was based on unconstitutional discrimination, the tariff
being on the basis of use to which the tobacco was put.
r •
2 S.C.R. SUPREME COURT REPORTS
119
Held, that there was no.unconstitutional discrimination in
!96<
the imposition of the excise duty on tobacco in the broken leaf
form.
Tobacco in the broken leaf form was capable of being
]agannath
used in the manufacture of biris while tobacco in the whole
v.
leaf form could not be so used economically. The two forms of Union of India
tobacco were different by the test of capability of user. The
tariff was not based either wholly or even primarily by reference
to the use of tobacco. There was a clear and unambiguous distinction between tobacco in the whole leaf form covered by
item 5 and tobacco in the broken leaf form covered by item 6
which had a reasonable relation to the object intended by the
imposition of the tariff.
Kunmathat Thathunni Moopil Nair v. The State of Kerala,
[1961] 3 S.C.R. 77, referred to.
ORIGINAL JURISDICTION:
Writ Petition No. 84 of
1958.
Petition under Art. 32 of the Constitution of India
for enforcement of Fundamental Rights.
G. G. Mathur, for the petitioners.
G. K. Daphtary, Solicitor-General of India, B. Sen,
R. H. Dhebar and T. M. Sen, for the respondent~
1961. April 20.
The Judgment of the Court was
delivered by
GAJENDRAGADKAR, J.-This is a petition filed underGajend1agadka1 J.
Art. 32 of the Constitution challenging the validity of
the excise tariff imposed by cl. (6) in entry 4(1) in the
First Schedule to the Central Excises and Salt Act,
1944 (I of 1944). Petitioners Nos. 1 to 17 are tobacco
cultivators and they carry on the trade and business
of growing tobacco and of selling it in Kaimganj
Tahsil in the District of Farrukhabad in Uttar Pradesh. Petitioners 18 to 30 are partners or proprietors
or agents of firms which are private bonded werehouse
licencees and they carry on trade and business of pur-
' chasing tobacco from the cultivators and of selling the
same to dealers or to other private warehouse licencees.
By their petition the petitioners have asked for a writ,
direction or order in the nature of mandamus to be
issued to the respondent, the Union of India, restraining it from levyir.g excise duty on hooka and chewing
tobacco under the impugned item and any other writ,
direction or order which may be found suitable to
120
SUPREME COURT REPORTS
[1962]
protect the fundamental rights of the petitioners .to
carry on their trade and business of dealing in hooka
jugt1nnatli
and chewing tobacco. The atlack against _the validity
v.
union uf_I,,di.i of the impugned tariff item is based substantially on
two grounds. It is urged that the rates imposed by
Gaj,ndrngadka' J. the impugned item are excessive and they virtually
destroy the petitioners' trade and it is argued that the
impugned item is based on unconstitutional discrimination. Mr. Mathur, for the petitioners, fairly conceded that he would noL be able to substantiate the first
ground of challenge, and indeed it is obvious that a
challenge to tax law qn t1'e mere' ground that the
tariff imposed by the tax law is heavy cannot be entertained. That leaves the question of discrimination
alone to be considered iry. the present petition. For the
purpose of th!s petition'. we will assume that if discrimination in' respect of commodities taxed is proved it
ultimately amount,s to a discrimination against the
persons taxed and t!illrefore Art. 14 can be invoked in
such a case. Mr. Mathur contends that that is the
effect of tji.e decision of this Court in K unmathat
Thathunni Moopil Nair, etc., v. The.State of Kerala (1 )
and as we have just observed wo will assume that
such a challenge can be made against the validity of
a taxing statute with provisions such as we have
before us and deal with the petitioff on that basis.
The tariff entry in dispute as it now obtains under
the taxing statute is entry 4 in the First Sch~dule. lt
deals with tobacco. Under this entry "tobacco" means
any form of tobacco, whether cured or uncured a11d
whether manufactured or not, and includes the leaf,
stalks and stems of the tobacco plant, but does not
include any part of a tobacco p~ant while still attached
to the earth. Clause I in entry 4 deals with unmanufactured tobacco, and prescribes tariff per kilogram in
respect of the several items specified in it. Item
(1) under this clause deals with five categories of
tobacco which are flue cured and are used iu the
manufacture of cigarettes as indicated in the said five
sub.clauses. hem (2) deals with tubi;cco which .is fluo
cured and used for the nrnnufacturti of smoking
(1) [1961) 3 S.C.R. 77.
2 S.C.R. SUPREME COURT REPORTS
121
mixtures for pipes and cigarettes. Item (3) provides
'96'
for flue cured tobacco which is not otherwise specified;
Jagannath
and item (4) is concerned with tobacco other than flue
v.
cured am! used for the manufacture of (a) cigarettes Union of Endia
or (b) smoking mixtures for pipes and cigarettes. The , , --
tariff varies from Rs. 16•15 nP. per kilogram to 1'"J'ndragadkar J.
Rs. 1·65 nP. per kilogram. That takes us to item (5).
This item deals with tobacco other than flue cured
and not actually used for the manufacture of (a)
cigarettes or (b) smoking mixtures for pipes and cigarettes or ( c) biris.
The fourth clause under this item
is tobacco cur<'d in whole leaf form and packed or tied
in bundles, hanks or bunches or in the form of twists
or coils.
For tobacco falling under the four clauses
under item (5) the tariff is Rs. l·lOnP. per kilogram.
Clause (6) in this item with which we are concerned in
the present petition deals with tobacco other than flue
cured and not otherwise specified. :P'or this residuary
clause the tariff prescribed is Rs. 2·20 nP. per kilogram.
This tariff is double the tariff prescribed for the classes
in the preceding item. Mr. Mathur's grievance is that
the tobacco with which the petitioners deal cannot be
dist.inguished on any rational basis from the tobacco
covered by it<>m (5), cl. ( 4), and so the imposition 'of a
double tariff on the tobacco in which the petitioners
deal is invalid inasmuch as it is based on unconstitutional discrimination. The argument proceeds on the
assumption that the tariff is prescribed by reference
to the use to which tobacco is put and it is urged that
tho tobacco with which the petitioners are concerned
is not aetually used either for cigarettes or smoking
mixtures or biris and the fact that it is broken and
not whole leaf does not afford any rational basis for
classification.
In dealing with this argument it would be relevant
very briefly to refer to the report of the Tobacco Expert Committee whose recommendations have furnished the main basis for the present revised tariff in
respect of tobacco.
In substance this rnport shows
that the present tariff cannot be said to have been
prescribed either wholly or even primarily by reference actually to the use of tobacco.
Tobacco, as the
16
'
122
80PREME COURT R~PORTS
[1962]
1 96 1
Committee's report points out, is a. rich man's solace
a.nd a poor man's comfort. Since it is used by all
)AganY1ath
I
v.
classes of peop e in various forms it is necessary to
u.;.,. of India frame th<:> ta.riff in such a way that tlw incidence of
tax shall fa.11 equitably on all classes of people using
Gojud••gadka. J. it. The report then points out that the Intention
Ta.riff based on the principle of intention was found to
he ineffecti\'e because the assessec's declaration of
intended 11-ie left large room for evasion of tax. That
is why th<' l ntention Tariff was substituted by a. fiat
ra.to of duty.
By experience it was found that even
this method was not very effective or equitable and
then was adopted the capability ta.riff. Cnder this test
the criterion of assessment was to be whether or not
a. particular specimen of tobacco was capable of use in
biri manufacturing. If so capable it was assessable on
a. higher rate, if not so capable then at a lower rate.
The report has examined the advantages of the capability tariff and has quoted the opinion of the Taxation Enquiry Committee which ma.de its rnport in
1953. Tlw report considered the volume of e\'idence
adduced before it and took into account a.II the suggestions ma.de. "In view of the practical difficulties
brought before us", says tho report, "we consider that,
within tlw present tariff, the only workable and satisfactory method of classifying tobacco will be to prt·scribe standard~ readily ident ilia.hie either visually or
by other 'imple tests and manipulations with a view
to d<:>termine empirically what is capable and what is
incapable of use in biris. The position is complicated
bp,cause tl1e same tobacco is used for different purposes
in different. parts of the country according to the prevalent consumption habits of different typea of tobacco"; and the Committee realised that any system of
classific11.tiou on a uniform basis for the whole of the
Indian I.Jn ion is bound to involve greater imposts on
consumer' of those areas w l.J.ore the prevalent custom
is to con,umc a variety for chewing, snuff, hooka.,
cigar purposes while the same varieties are used in
other a.re<>s for biris.
The conclus;on of the Committee, therefore, was that the only criterion which is
sa.fe to adopt is the one relating to the physical form
•I
..
•
2 S.C.R. SUPREME COURT REPORTS
123
of tobacco as affecting its suitability for biri making.
'96'
The Committee realised that it was very difficult to
Jagannath
classify specified varieties as solely chewing tobacco
v,
because many of these varieties are also used for makUnion of India
ing snuff and for hooka purposes. Normally, however,
. --
most chewing varieties are in whole leaf form and are Ga;endragadkar J.
cured by addition of moisture. Tobacco cured in
whole leaf form cannot be converted into flakes as
readily as tobac11.o cured by dry curing methods, and
in the opinion of'the Committee, although it is possible to prepare flakes out of tobacco cured in whole
leaf form the process of conversion into flakes causes
much higher proportions to crumble into dust, rawa
and other unsaleable forms. The Committee was conscious that the whole leaf varieties after suitable
manipulation can be utilised for biri manufacturing
purposes but it thought that this could be done only
after converting them into graded flakes, and even
thereafter only by admixture with other tobacco on a
small localised scale. In regard to the broken leaf
grades which the Committee recommended should be
liable to assessment at the higher rate relief was
recommended by permitting any owner to convert his
broken leaf tobacco into fine rawa or dust in which
form it will become physically unusable for biris.
According to the Committee, after such manipulation
of physical form, the resultant, if it fulfils the specifications for rawa and dust, may be allowed assessment
at the lower rate.
We have referred to these observations made by the
Committee in its report because they clearly and
emphatically bring out the distinction between "tobacco other than flue cured and not otherwise sp!lcified"
which is the subject-matter of the residuary clause and
"tobacco other than flue cured and not actually used
for the manufacture of cigarettes or smoking mixtures for pipefl. or cigarettes or biris" covered by cl. (5).
By the test of physical form the two articles are different. By the test of capability of user they are
different and in a sense according to the Committee's
recommendations they partake of the character of
different commodities. In this connection it may be
,,
124
SUPRE:\iE COURT REPORTS
[1962]
pointed out tha.t though the ta.riff impost on the
toha.cco falling under 1l1e impugned cl. (6) is much
}aga111talls
v.
higher, biris in the manufacture of which no process
Union 01 fnd•n ha8 been conducted with the aid of ma.chines operated
with or without the a.id of power a.re not subject t-0
G•J•"d••c"dk•• J. any ta.riff, whereas cigars, chewing, cigarettes and
biris in the manufacture of which any process ha.s
been conducted with the aid of machines operated
wit.h or without the aid of power arc subject to ta.riff.
The problem which the Committee ha'd to face was to
classify tobacco other than flue cured which would be
used for the manufacture of biris, and with that object
cl. (5) and cl. (6) have been devised. Therefore, in our
opinion, the distinction between tobacco falling under
cl. (5) a.nd cl. (6), according to the report of tho Committee, is so clear and unambiguous and its relation to
the object intended by the imposition of ta.riff is so
clearly reasonable that the attack against its validity
on the ground of unconstitutional discrimination
cannot be upheld.
There is one more point to which Mr. :\fathur referred and which may be incidentally considered. Mr.
Mathur contended that Nicotia.na. Rustica with which
tho petitioners deal is used exclusively for hooka and
chewing in Utta.r Pradesh. The petition avers that
the variety of Nicotiana Hustica which is used in biris
is not grown in l' ttar Pra.desh and that all the toba.oco which is grown in Kaimganj is Xicotiana. Rustica.
which is either pit cured or ground cured. It is used
exclusively for hooka and chewing and is unfit for use
in biris and cigarettes and is never so used. The
argument, therefore, is that this tobacco cannot be
legitimately taxed under tho impugned clause. Apa.rt
from the fact that the question as to w hcther the particular tobacco in which tho petitioners deal falls under
tho impugned clause or not cannot be legitimately
raised in a petition under Art. 32, the answer to tho
plea. is furnished by the count~r-a.ffidavit and the
report of the Committee. In the counter-affidavit the
allegations made in regard to the exclusive user of
:\ icotiana Rustics are generally denied, and what is
more the report of the Committee specifically point.a
•
-
2 S.C.R. SUPREME COURT REPORTS
125
out that though Rustica varieties of tobacco are gene-
'96'
rally not known to be used for biris, when they are
Jagan•ath
cured in broken leaf grades they cau be used with
v.
admixture with biri tobacco like Pandharpuri tobacco Union of llldia
for imparting strength to biri mixtures, and so accord-
. ---
ing to the Committee no generalisation in this matter Ga;endrngadkar J.
is possible and it cannot be asserted that. all forms of
this variety are incapable of use in biris.
Besides, it
would be quite possible for dealers in the said varieties of tobacco to send them to other parts of the
country where they are used for the purpose of manufacturing biris. Therefore, the grievance made by
the petitioners that the tobacco in which they deal
can never be used for biris i8 obviously nut well
founded.
In the result the petition fails and is di,,missed with
costs.
Petition dismissed.
JYOTI PERSHAD
v.
THE ADMINISTRATOR FOR THE UNION
TERH.ITORY OF DELHI
(AND CONNECTED PETITIONS)
(B. P. SINHA, 0 .• J., s. K. DAS, A. K. SARKAR,
N. H.AJAGOPALA AYYANGAR and
J. R. MUDHOLKAR, JJ.)
Slu1n Areas-J.mprovement and clearance of-Validity of enactment-Co,.stit,.tionality-Rent Control-Operation
of Rent Control Act in areas governed by Slmn Areas Act-Delhi 6- Ajmer Rent
Control Act, I952 (38 of I952)-Slum Areas (Improvement and
Clearance) Act, Ig56 (96 of Ig56), s. r9-Constitutian of lndid,
Arts. I4, r9(r)(j).
The petitioner after a prolonged litigation and having fu].
filled all the conditions of the Delhi Rent Control Act, obtained
decrees of ejectment against the tenants,
April 2I.