Calcutta High Court
Bengal Homeopathic Manufacturers' ... vs State Of West Bengal & Ors on 16 February, 2017
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
Original Side
W.P. No. 1798 of 2006
Bengal Homeopathic Manufacturers' Association & Anr.
Vs.
State of West Bengal & Ors.
With
W.P. No. 1544 of 2008
Bengal Homeopathic Manufacturers' Association & Anr.
Vs.
State of West Bengal & Ors.
For the Petitioners : Mr. Saktinath Mukherjee, Sr. Advocate
Mr. Joydip Kar, Sr. Advocate
Mr. Siddharth Ghosh, Advocate
For the Respondents : Mr. Abhratosh Majumder, Ld. G.P.
Mr. Kishore Datta, Sr. Advocate Mr. Soumitra Mukherjee, Advocate Mr. Prithu Dudhuria, Advocate Mr. Amitava Mitra, Advocate Hearing concluded on : November 24, 2016 Judgment on : February 16, 2017 DEBANGSU BASAK, J.:-
Two writ petitions have been taken up for hearing analogously as they are between the same parties. The first petitioner is an Association of Homeopathic Manufacturers. The petitioners have contended that they are not liable to obtain licence in Form 28-B of the Bengal Excise Rules. According to the petitioners, the manufacturing activity and sale of homeopathic medicines are governed by two Central Acts and that, the Bengal Excise Act does not have any role to play once one of the essential ingredients of manufacture of homeopathic medicines, i.e., Alcohol Forties enters the premises of the members of the first petitioner designated under the two Central Acts.
Learned Senior Advocate for the writ petitioners has submitted that, the members of the first petitioner are manufactures of the Homeopathic medicines. In the manufacturing process of Homeopathic medicines, Alcohol Fortis is required. The same is prepared out of rectified spirit. The members of the first petitioner procures rectified spirit under a licence , namely, L-1 issued under the Medicinal and Toilet Preparations (Excise Duty) Rules, 1956. He has referred to the various Rules under the Medicinal and Toilet Preparations (Excise Duty) Rules, 1956 and has submitted that, the members of the first petitioner are required to apply for licence. The licence is granted for manufacture under a bond. It is also granted for manufacture when the members of the first petitioner have paid duty on the Alcohol. He has submitted that, therefore, the authorities under the Central Act look after the user of the Alcohol. A second authority under the State Act has no place to look into the same process given the area of operation of the two Central Acts. He has submitted that Form 28-B of the Bengal Excise Act was initially not produced before Court. He has referred to the first writ petition. He also referred to the affidavit in the writ petitions and an interim order passed by the Court.
Learned Senior Advocate for the petitioners has submitted that, the right to carry on business guaranteed under Article 19(1) (g) of the Constitution of India can be restricted by a law. The restriction has to be reasonable. The restriction must conform to Article 14 of the Constitution. He has referred to the 7th Schedule List I and Entry 84 therein. He has drawn the attention of the Court to the definition of "manufacturing" used in the Central Acts. He has relied upon 2006 Volume 12 Supreme Court Cases page 568(Orient paper & Industries Ltd. v. State of M.P. & Ors.) and 2000 Volume 9 Supreme Court Cases page 68 (Britannia Industries Ltd. v. T. N. Pollution Control Board & Anr.).
Learned Government Pleader appearing on behalf of the State has submitted that, Form 28-B is in vogue and that at least one Homeopathic manufacturer has applied thereunder. He has submitted that, Form 28-B is issued under Rule 5(b) of the Bengal Excise Rules. He has submitted that, Form 28-B is not in derogation of either L-1 or L-2 licences issued under Central Acts and that, they are in additions thereto. He has referred to the Bengal Excise Act. He has submitted that, the Excise Commissioner of the State is required to discharge functions under two Central Acts. He has submitted that, the Bengal Excise Act permits the Excise Commissioner to issue instructions for storage of the alcohol concerned. He has submitted that, the Central Act and the Bengal Excise Act complement each other and that, they operate in independent field. In support of such contention he has relied upon 2005 Volume 2 Supreme Court Cases page 762 (State of Bihar & Ors. v. Shree Baidyanath Ayurved Bhawan (P) Ltd & Ors.).
The following issues fall for consideration in the two writ petitions are as follows:-
1. Whether Form 28-B is in derogation with L-1 and L-2 licences issued under the Medicinal and Toilet Preparations (Excise Duty) Act, 1955 and the Rules framed thereunder?
2. Would the provisions of Bengal Excise Act have no manner of application to Homeopathic medicine manufacturers having licence under the Drugs and Cosmetics Act, 1940 and Medicinal and Toilet Preparations (Excise Duty) Act, 1955?
Form 28-B is issued under Bengal Excise Rules. The relevant Rule under the Bengal Excise Rules is Rule 5(b).
A manufacturer of Homeopathic medicine is required to apply under the Medicinal and Toilet Preparations Rules, 1956 for licences to deal with alcohol. The relevant Rules are Rules 82, 83 and 84. Two types of licences are issued under Rules of 1956. One type is a licence to manufacture medicinal and toilet preparations containing alcohol under a bond. Under such type of licence, the manufacturer undertakes to pay duty later. L-1 licence is issued for such purpose. The other type is L-2 licence which is issued for manufacture of medicine with Alcohol where duty is paid in respect of the Alcohol. These two types of licences operate on the Alcohol when the Alcohol is within the premises of the manufacturer recognised as premises for manufacture of Homeopathic medicine.
Bengal Excise Act, 1909 and the Rules framed thereunder deal with transport procurement and storage of Alcohol and designated premises licence under such Act and Rules. The Circular dated February 23, 2007 issued by the Excise Directorate of the State, seeks to make purchaser of Alcohol from the licensed premises under the Bengal Excise Act, 1909 accountable. It had come to the notice of the Excise Directorate of the State that, Homeopathy medicine manufacturers were not keeping proper register or evidence of user of Alcohol purchased from licence holder under the Bengal Excise Act, 1909. In order to streamline the movement of the Alcohol from a person licensed under the Bengal Excise Act, 1909 and its ultimate use by Homeopathy manufacturer under the Central Acts to do so, the Circular dated February 23, 2007 has been brought into existence. Bengal Excise Act, 1909 allows the State authorities to regulate the user of Alcohol in the State of West Bengal. It permits the State authorities to grant licences to persons who store such material. Homeopathy medicine manufacturers are the purchaser which in turn requires Alcohol as one of it ingredients. A Homeopathy purchaser is required to purchase Alcohol under the Act of 1909 subsequent to its purchase by a Homeopathy manufacturer till the same is put into use by such Homeopathy manufacturer either Under L-1 or L-2 is sought to be regulated by the State authorities by insisting that a Homeopathy manufacturer obtains a licence under form 28-B. Form 28-B is issued under provisions of Bengal Excise Rules. Rule 5(b) of the Bengal Excise Rules is as follows:-
"5(b). The licence "to establish private warehouse for the deposit and storage of Rectified Spirit without payment of duty for supply of such spirit for manufacture of medicinal and toilet preparations whether containing alcohol in the finished state or not and for the purpose of further rectification of such a spirit and sale of a spirit so rectified", under the special section, must be renewed annually. Such renewal will be granted by the Deputy Commissioner of Excise, Special subject to the approval of the Commissioner on an application being made along with the receipted challan showing the deposit of amount calculated at the rate of Rs.0.20 (Twenty Paise) only per B.L. on Rectified Spirit used/sold during the preceding licensing period of Rs.10,000 (Ten thousand) whichever is higher."
L-1 and L-2 do not deal with the movement of Alcohol from a bonded warehouse under the Act of 1909 to the premise recognized under the L-1 and L-2. Therefore, the State authorities cannot be faulted for introduce a mechanism to keep a check on such movement of Alcohol from a bonded warehouse under the Act of 1909 till it enters to the L-1 and L-2 premises. The two Central Acts, therefore, do not operate in the field of Form 28-B. Therefore, there is no conflict between the Central Acts and The State Act as sought to be contended on behalf of the petitioners. The circular dated February 23, 2007 essentially requires a Form 28-B licence holder to maintain proper register in the prescribed form of user of the Alcohol. Since Form 28-B itself is found not to be in conflict with the two Central Acts, the question of the Circular dated February 23, 2007 being in conflict with the Central Acts do not arise.
The legislative competence of the State legislature in redefining the word 'intoxicate' in Section 2(12a) of the Bihar and Orissa Excise Act, 1915 has come up for consideration in Shree Baidyanath Ayurved Bhawan (p) Ltd & Ors. (Supra). It has held that, the State Excise Act seeks to licence and regulates use and possession of medicinal preparations containing Alcohol as Alcoholic beverage. The scheme of the Medicinal and Toilet Preparations (Excise Duty) Act, 1955 is to provide for the levy and calculation of the duty on medicinal and toilet preparation containing Alcohol. It has also held that, the State law does not come into conflict with the Central Act of 1955. It has held that, the state Excise Act and the Central Act are in difference spheres. The State can enact laws for regulating the possession, use and diversion of an Alcohol.
Britannia Industries Ltd. (Supra) has considered the question whether wheat flower, sugar and hydrogenated vegetable oil were vegetable products and milk powder was an animal product and that, whether a manufacturer of biscuit, bread and cake is liable to pay Entry Tax thereon. In such context it has been held that, wheat flower, milk powder and hydrogenated vegetable oil are used by the manufacturer of biscuit, bread and cakes which are altogether different product than the initial ingredients. On completion of the manufacture they should be acknowledged as a new article. A similar view has taken in Orient Paper & Industries Ltd. (supra).
In view of the discussion above made, the first and the second issues are answered in the negative and against the petitioners.
W.P. No. 1798 of 2006 and W.P. No. 1544 of 2008 are dismissed. No order as to costs.
[DEBANGSU BASAK, J.]