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PETITIONER: ADHYAKSHA MATHUR BABU’S SAKTI OUSHADHALAYA DACCA (P) LTD.AND

       Vs.

RESPONDENT: UNION OF INDIA

DATE OF JUDGMENT: 07/09/1962

BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. SINHA, BHUVNESHWAR P.(CJ) IMAM, SYED JAFFER SUBBARAO, K. SHAH, J.C. AYYANGAR, N. RAJAGOPALA

CITATION:  1963 AIR  622            1962 SCR  (3) 957  CITATOR INFO :  R          1989 SC1230  (6)  RF         1990 SC1927  (70)

ACT: Excise     Duty-Mritasanjibani,    Mritasanjibani     Sudha, Mritasanjibani  Sura,  if medicinal  preparations-If  liable under  the  State  Acts-Medicinal  and  Toilet  Preparations (Excise Duties) Act, 1955 (16 of 1955), ss.2(g), 18(2),  21- Constitution  of India, Art. 277, Seventh Schedule, List  I, Item 84.

HEADNOTE: 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 Sangraba, Bhaisajya  Ratna- bali  and Arka Prakash, accepted as embodying the  Ayurvedic 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  Excise duties 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

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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 958 practitioners  to  the effect that these  preparations  were Ayurvedic medicines.  This was denied by the respondents who relied  on the report of the Standing Committee  that  these preparation   were   mere  beverages   and   not   medicinal preparations.   No  affidavit of any Ayurvedic  expert  was, however, filed by them. Held,  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  alcoholic 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 their omission  from  the  list attached to the Rules on its report could be of no effect. Held, further, that it 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 of the States. With  the passing of the said Act, the saving made by  ,Art. 277  of the Constitution in favour of the States came to  an end  and the result was it at the State Governments were  no longer  entitled  lo levy any duty on medicinal  and  toilet preparations and, further, s.21 of the Act effected a repeal of  such provisions of the State Excise Acts as  related  to medicinal and toilet preparations.

JUDGMENT: ORIGINAL  JURISDICTION0N: Petitions Nos. 344 and 350 to  354 of 1961. Petitions  under  Art.32 of the Constitution  of  India  for enforcement of fundamental rights. A. V. Viswanatha Sastri, A. N. Sinha, N. H. Hingorani and B. P. Jha, for the petitioners. B.   Sen and B. H. Dhebar, for the respondents Nos. 15 2and 7 to 8 (in all the Petitions). B.   Sen, S. C. Bose and P. K. Bose, for the respondent  No. 3. 959 Lal Narayan Sinha, D. P. Singh, M. K. Ramamurthi, R. K. Garg and S. C. Agarwala, for respondent No. 4. K.S. Hajela and C.  B. Lal, for respondent No. 5. Ranadeb  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 WANCHOO,  J.-These  six  petitions  under  Art.  32  of  the constitution  raise  a common point and will be  dealt  with together.   The main question raised in all these  petitions is  whether the State-Governments are entitled to  tax  the’ three   Ayurvedic   preparations,   namely   Mirtasanjibani, Mritasanjibani  Sudha  and Mritasanjibani  Sura,  which  are manufactured by these petitioners, under the various  Excise Act in force in the respective States.  Further points  were raised  in  the  petitions as regards the  validity  of  the

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restrictions  imposed in the matter of the  import,  export, Possession  and sale of these three Ayurvedic  preparations. But the learned counsel for the petitioners stated 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  Excise  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 briefly this.  They carry  on business   as   manufacturers  of   medicinal   preparations according to the Ayurvedic system of medicines and among the Ayurvedic  medicines  manufactured by them are  these  three preparations.  These Ayurvedic preparations are manufactured by   the  process  of  fermentation  and   distillation   in accordance with the Ayurvedic system of medicine 960 following  the  formula in standard books known  as  Ayurved Sangraha,  Bhaisajya  Ratnabali  and  Arka  Prakash.   These books,  according to the petitioners, contain extracts  from all  authoritative  ancient  Ayurvedic  treatises   accepted throughout   India   and   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 accordance with  the standard  Ayurvedic  pharmacopoeias  in  vogue,  in  various States  and are efficacious amongst others in the  following diseases: -               (a)   in  typhoid  fever  (Sannipatik   Jwara)               during collapsed condition;               (b)   in cholera;               (c)   in case 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 convalescent patients. Before  the  Constitution came into force, all  these  three preparations  were  liable to Provincial excise  duty  under item 40 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 II 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 preparations containing alcohol or any substance like opium etc.  Further, under item 84 of List I of the                             961 Seventh schedule the Union has the power to impose duties of ’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,  cesses  or fees  which,  immediately before the  commencement  of  this Constitution were being lawfully 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

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or  other local area may, notwithstanding that those  taxes, duties,  cesses  or fees are mentioned in  the  Union  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  Parliament passed the Medicinal  and  Toilet Preparations   (Excise   Duties)  Act,  No.  16   of   1955, hereinafter  referred to as the Act) which was brought  into force  from  April  1, 1957.  We are  in  the  present  case concerned only with medicinal preparations and a  "medicinal preparation"  is defined in s. 2(g) of the Act as  including "all  drugs which are a remedy or 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 962 manufactured  in  India.   Section 19  gives  power  to  the Central.  Government to make rules to carry out the  purpose of  the Act and in particular s. 19(2) (xx) gives  power  to notify  in  the  official gazette lists  of  the  names  and descriptions of preparations which would fall for assessment under any particular item of the Schedule 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 No. Medicinal and toilet preparations, containing alcohol, which are  prepared by distillation or to which alcohol  has  been added  and which are capable of being consumed  as  ordinary alcoholic beverages. 2.   Medicinal   and  toilet  preparations   not   otherwise specified containing alcohol- (i)Ayurvedic preparations containing self generated alcohol, which  are not capable of being consumed as  ordinary  alco- holic beverages. (ii)Ayurvedic   preparations   containing   self   generated alcohol,  which  are capable of being consumed  as  ordinary alcoholic beverages. Rate of duty (1)  Rs.  Seventeen  and ansin as eight per  gallon  of  the strength of London proof spirit. (2)(i) Nil (2)(ii) Rs. Three per gallon.                             963 (iii) All others                       Rupees five                                      per gallon                                      of the stren-                                       gth of London                                       proof spirit. 3.   Medicinal and toilet prepara-         Nil. tions, not containing alcohol, but containing opium, Indian hemp, or other narcotic drugs or narcotic. The  Central Government framed Rules under the    Act     in 1956  and  the administration of the Act and the  Rules  was entrusted   to  State-Governments.   A  list  of   medicinal preparations,  which were capable of being used as  ordinary alcoholic beverages, was also published along with the Rules and  r.  65  provides  that  "until  a  standard   Ayurvedic Pharmacopoeia  has been evolved by the  Central  Government,

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the  pharmacopoeias that are in vogue in the various  states shall be recognised as  standard Ayurvedic  pharmacopoeias". The  contention  of  the  petitioners is  that  these  three Ayurvedic   preparations  conform  to  the   definition   of medicinal  preparations  given  in  s. 2  (g)  of  the  Act. Further,  in the Schedule to the Rules, Mritasanjibani  Sura was  listed as a medicinal preparation in 1957.  Further  in 1958,  Mritasanjibani  and Mritansanjibani Sudha  were  also added under the head "medicinal preparations in the Schedule to  the  Rules  as the three are really  one  and  the  same medicine.  The Act and the Rules came into force from  April 1, 1957 in accordance with the provision of a. 1 (3) of  the Act, which gives power to the Central Government to  enforce the  Act  on  such date as it may, by  notification  in  the official  gazette,  appoint.  The petitioners case  is  that thereafter they began to pay duties of excise on these three medicines under item I in 964 the  Schedule  to the Act at the rate of Rs.17.  50  nP  per gallon  of  the strength of London proof  spirit,  as  these preparations   were   considered   medicinal    preparations containing  alocohol which were prepared by distillation  or to  which alcohol was added and which capable of being  used as ordinary alcoholicbeverages.  This continued  till  August 1960when 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, namely, Mritasanjibani   and  Mritasanjibani  Sudha.    Further   in December,  1960,  the Central Government again  amended  the Rules  and omitted from the Schedule to the Rules the  third preparation  (namely, Mritasanjibani  Sura).   Consequently, various  State Governments began demanding duties of  excise on  these there preparations at rates which are much  higher than the rate of Rs. 17. 50 nP prescribed in the Schedule to the  Act.  The contention of the petitioners is that on  the coming  into force 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 excise on these preparation in accordance  with  the various Excise Acts in  force  in  the States.  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 preparations from the list attached to the Rules would  make no  difference  and  would  not give  power  to  the  State- Governments  to  tax them under the various Excise  Acts  in force in the States concerned. The  petitioners further say that though r. 68 of the  Rules provides  for  a Standing Committee to  advise  the  Central Govt. on all matters connected with the technical aspects of the administration of the                             965 Act  and  the  Rules, and in  particular,  on  the  question 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 Government 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

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acted  on  the  advice of the  Standing  Committee  when  it omitted  these three preparations from the list appended  to the Rules, it had no power to do so if these three  prepara- tions are in fact medicinal preparations within the  meaning of s. 2 (g) of the Act.  The petitioners therefore pray  for an  appropriate  writ,  direction  or  order  directing  the Central  Government not to give effect to the  notifications of   August   and  December  1960,  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 rates fixed by the Act and  to refund  the amounts of duty already collected in  excess  of that rate. The  petitions have been opposed by the  Central  Government and  by the various State-Governments concerned.   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 admitted to be "medicinal  preparations containing alcohol" within 966 entry  84  of List I, by reason of  these  preparations  not being  mentioned in any recognised Ayurvedic  Pharmacopoeia. 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 according  to the recipes or directions given in  the  three Ayurvedic  text  books  relied  upon  by  the   petitioners. Farther, it is denied that these three preparations  conform to  the definition of s. 2 (g) of the Act.  It is  also  not admitted  that  they  are  remedies,  muchness   efficacious remedies  for any human ailment.  It is further  urged  that the  Central Government has been empowered to decide on  the advice  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 treated or continue to be treated as a  restricted  or unrestricted  preparation.   Further,  the Central  Government  can  according to  the  advice  of  the Standing Committee, amend the Schedule of the medicinal  and toilet preparations of restricted category from time to time by notifications and if a 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 is contended that the action of the Central Government in omitting  these there  preparations from the list to the Rules framed  under the  Act was based on the advice of the  Standing  Committee which  was  of  the  opinion that  these  were  not  genuine medicinal  preparations.   Consequently, they  were  omitted from  the list 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 them to duties  of  excise under  the  various  Excise Acts in  force  in  the  various States.  967 The main question therefore falls for consideration in these cases  is  whether  the  three  preparations  are  in   fact medicinal  preparations  containing 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

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medicinal  preparations as defined in s. 2 (g) of  the  Act. If they are medicinal preparations as defined therein,  they will  be  governed  by the Act and  the  omission  of  these preparations  from the list appended to the Rules  will  not make  any difference to their being  medicinal  preparations within the meaning of the Act.  Before however 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  both 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 excise 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- Governments had power to levy duties of excise on  medicinal and  toilet preparations.  We have further pointed out  that the Constitution has made a change, and medicinal and toilet preparations  were excepted from entry 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 I‘ ibid which provides for duties of excise leviable by  the Union.   However Art. 277 provides that any taxes or  duties etc. which, immediately before the commencement 968 of  the  Constitution,  were being lawfully  levied  by  the Government of any State etc. may, notwithstanding that those taxes, duties etc. are mentioned in the Union List, continue to  be  levied and to be applied to the same  purpose  until provision  to  the contrary is made by  Parliament  by  law. Therefore,  so  long  as Parliament did  not  make  any  law relating to 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  same 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  1,  1957, and the consequence of this  enactment  was that the power of the States to heavy duties any further  on 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 excise etc. which came in the Union  List on  the passing of the Constitution is no longer  applicable as  soon  as Parliament makes a provision to  the  contrary. Once  therefore  a provision 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 provision   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  Excise Acts of the various States under which duty  was being levied on medicinal and toilet 969 preparations containing alcohol must be deemed to have  been

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repealed,  in  so far as they apply to  such  medicinal  and toilet  preparations.   It is not necessary that  the  State should have had a separate law, for levy of duties of excise on  medicinal and toilet preparations, for the repeal in  s. 21  of the Act to come into effect.  The Excise Acts of  the various  States  were undoubtedly law under which  duty  was being levied on medicinal and toilet preparations containing alcohol  and those Excise Acts must be deemed to  correspond to the Act for the purposes of levy of duty on medicinal and toilet  preparations and must be held to have been  repealed by  s. 21 so .far as medicinal and toilet preparations  were concerned.  It is urged on behalf of the State of Bihar that the  purpose of the Excise Acts in States was not merely  to raise  revenue  which was a secondary 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 reducing such consumption.  Therefore, the excise Acts  of the various States when they impose duty of  excise on  medicinal  and  toilet preparations  had  two  purposes, namely, (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. stand  how any purpose behind a fiscal measure can have  any relevance on the question of correspondence.  Various Excise Acts  of  the  States in so far as  they  impose  duties  on medicinal  and  toilet preparations containing  alcohol  are fiscal statutes far taxing these preparations.  Now, the Act 970 is a fiscal statute for taxing these preparations enacted 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 between 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 repeals all the Excise  Acts of  the States so far as such levy 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  in force in the States.   This  contention  is hereby rejected. The  next question is whether these three  preparations  are medicinal  preparations as defined in the Act in s.  2  (g). The  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 intended  to be used for or in the treatment, mitigation  or prevention   of  disease  in  human  beings   or   animals". According  to the West Bengal Excise Rules, which deal  with the manufacture of these three preparations it appears  that the preparations are to be made according 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 firm having  a qualified  Kabiraj  for  supervision  of  the  manufacturing 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

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971 ingredient out of which these preparations are  manufactured is  gur;  besides gur there are 42 other  ingredients  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 thereafter  the preparation is obtained by distillation  and as  already stated contains about 42 per centum of  alcohol. Further,  according to these books, the preparation is  used as a tonic to build body and physique, to increase  strength and appetite and to make appearance healthy and bright.   It is  also used in SanniPat Jwara (typhoid fever) in  critical stages.  It is also prescribed for cholera in frequent doses and  finally  is used in all conditions  of  collapse.   The counter-affidavits  filed  on behalf of the  Union  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 preparations are exclusively for medicinal purposes.  It  is also stated that these alcoholic preparations are capable of being  used as ordinary alcoholic beverages.  Similarly,  in the  affidavit  of the Union, it is stated that  it  is  not admitted that the preparations are efficacious remedies  for any  human  ailment.   On  the  other  band,  a  number   of affidavits 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  used  for  certain  diseases  including cholera.   The respondents, however, rely on the  advice  of the Standing Committee consisting of the Drugs Controller of the  Government  of  India and the  Chief  Chemist,  Central Revenues  Control  Laboratory, which was  of  opinion  after examining the formulae and the 972 analytical  data  and the claims given on the label  of  the preparations and also after carrying out tasting test,  that these  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 Ayurvedic medicines and  no affidavit has been filed of any ayurvedic expert  on behalf of the respondents.  There seems no reason  therefore not  to  accept  the  affidavits  filed  on  behalf  of  the petitioners from qualified Ayurvedic practitioners: series F to  F 16.  These Ayurvedic practitioners are  not  connected with  the petitioners and what they say in their  affidavits is  in 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  are not remedies prepared for internal use  of human  beings 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 meaning of a. 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

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definition of "medicinal preparation" contained in a.  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 these preparations. 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 Inspector of the Excise and  Intelligence Bureau  of  the  State of Uttar Pradesh.  It  is  not  clear however  from the counter affidavit what qualifications  the deponent,  has to make such a statement, nor are we able  to understand 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 Chopra 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 1000 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  have  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 components,  such as  alkaloids,  glucosides,  essential  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 truth in this      974 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   the  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 he 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-affidavit 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  compound  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 enactment  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

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Ayurvedic  scholars on the pharmacy side whose help  can  be taken  in drafting the necessary bill. In  this  connection, the Committee suggested that ail adviser on Ayurvedic  drugs should be appointed for this purpose immediately, who should have  under him an Ayurvedic Drugs Advisory  Committee,  and this  will  facilitate the drafting of the  legislation  the Committee had in mind and also help the Government to decide disputed  points about Ayurvedic drugs and  medicines  which were now cropping up frequently. This Committee was                             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  Ayurvedic  text  books according to which these preparations are prepared; we  have also   the  affidavits  of  a  large  number  of   Ayurvedic practitioners  of  obvious repute to the effect  that  these preparations  are medicinal preparations which are  used  to alleviate  human  suffering in certain conditions.   On  the other  hand, there is no affidavit from an Ayurvedic  expert on  behalf  of  the respondents.  We  may  however  in  this connection  refer to an affidavit of the Assistant  Chemical Examiner to the Government of West Bengal who is experienced in examining and analyzing alcoholic 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, furfural, 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 preparations 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 preparations contain about 42 per centum of alcohol and  can be  used  as  ordinary alcoholic  beverages.   So  if  these preparations are medicinal preparations but are also capable of  being  used as ordinary alcoholic beverages,  they  will fall  tinder the Act and will be liable to duty  under  item No.  I  of  the Schedule at the rate of Rs. 17.  50  nP  per gallon  of  the  strength  of London  proof  spirit.   On  a consideration  of the material that has been  placed  before us, 976 therefore, the only conclusion to which we can come 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  will  therefore  clearly  fall within  the definition of "medicinal preparation" and  would be liable to duty under item I 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 I of the 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 Schedule to the  Act  as they  undoubtedly  fall under that item and are  capable  of

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being  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 which are governed by the Act. Lastly,  it  was urged on behalf of  the  respondents,  that these  preparations  are  Dot  prepared  according  to   the formulae  in  the, Ayurvedic text books referred  to  above. That  is a question of fact which it is not possible for  us to  decide on the materials placed before us.  The  averment in this connection on behalf of the respondents is also  not categorical;  for example, it has been stated on  behalf  of the  Union  of  India, that it is not  admitted  that  these preparations  are prepared according to the,  specifications by  utilising  the proper ingredients and  are  manufactured according  to  the recipe and direction       given  in  the Ayurvedic   text                             977 books  referred to above.  Nothing has been brought  on  the record to show that these preparations were analysed and the analysis  showed  that-the  ingredients  mentioned  in   the Ayurvedic  text books were not present in the  preparations. Besides, as it appears from the West Bengal Rules (ref  West Bengal  Excise  Compilation,  Pt. 2) which  we  have  quoted above, these preparations are prepared in bond and there are various restrictions before the issue of the preparations by the manufacturer.  Nothing has been said to show that  these preparations  are  not in fact made in accordance  with  the direction  contained in the Ayurvedic, textbooks.   If  this was  not so, the excise staff would be there to check  their preparation.   As  a  matter of fact  the  first  rule  with respect to the manufacture of these preparations in the West Bengal  Excise  Compilation  lays down  that  they  will  be prepared  according  to  the recipe and  direction  in  Arka Prakash,  Ayurved Sangraha and Bhaisajya-Ratnabali;  and  if that  rule is being disobeyed we should have  expected  some one to swear that though the rule says that the preparations should  be  made according to the directions in  these  text books, they are in fact not so made.  Further if the rule is being  contravened  there  must  be  power  in  the   State- Government to take action against those who contravene  tile rule.   But nothing has been brought to out, notice to  show that  any action has been taken.  In these circumstances  we are  not  prepared to hold that these preparations  are  not prepared  according to the Ayurvedic text books; and in  any case  our  decision  holding  these  three  preparations  as medicinal preparations is based on these preparations  being made  in  accordance with the directions  contained  in  the Ayurvedic  text books and also in accordance with the  Rules in the West Bengal Excise Compilation.  We presume that  the same must be the state of affairs in other States 978 There  these preparations are manufactured, though   appears that  the  petitioners in the present case are  mostly  from Calcutta and the manufacture in these cases must be going on Calcutta. We therefore allow the petitions and direct that these three medicinal preparations should not be taxed under the various Excise Acts in force in various States and can only be taxed in  accordance  with  the provisions of  the  Medicinal  and Toilet  preparations (Excise Duties) Act.  We pass no  order as  to the claim for refund for that is a matter  which  the petitioners can take up with the State Governments concerned according to law.  The petitioners will get their costs from the respondents-one set of bearing fee. Petitions allowed.

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