19112 n. r ...... i.x Ofiur, JIHros

. ' S. Ir. Huihll.V., Jlw.,

SWJ.

726 SUPREME COU!t'f REPOI~T~ [ l ·• 2j SU Pf.

reaseessment of tho firm disclosing an error made before April I, 19.5~.

The appeals therefore fail and a.re dismissed with costs. One hearing fee.

Appeals dismissed.

KANBI KARSAN JADAV v.

STATE OF GUJARAT

(J. L. KAPUR and R.to.GIIUBAR DAYAL, , JJ.) Criminal Trial-Et-idenct of anrot'-r-Corroioration on mat.rial partiou/ara-Other circum•tanct• to be con•Utrtd- CMniical !Czaminer'• evidenct, if can bt taken into Conoi<kration tn duidt idtntily of haira-lndian Penal Code, 1860 (45 of 1860), 302, 201-IAdia EWknct Act, 1872 (1of1872), a. 45.

The appellant and two othcn were convicted for murder undtr "· 302 and 201 of the Indian Penal Code.

The High Court acc, pted the testimony of the appro'''r as being a reliable piece of evidence. It relieJ upon the <liscovery of the dtad body of the deceased at the instance uf t lte appellant and of hlord sralned buttons also at his instance and attached importanc(':.to tile scarf recovered from the pit \\here the dead body was alkgcJ to have been first buried and "hid1 had hair> both of the appellant as well as the deceased.

The apprll.mt contended that the evidence of the approver, even 1h.Jugh it had been accepted as true, was not corrohorated in 1naterial particulan connecting the appellant with the ofJCncc.

None of the recoveries arc corroborative of the statement of the approver to the extent of connecting the appcllanl with the offence committed ; on the other hand they are somewhat contradictory of the statement. fhc evidence of the CheJnical Examiner was not sufficient to prove that hairs on the scraf were of the appellant or of the deceased because the Chemical Examiner was no expert on this matter and his evidence WM not admissible under s. 45 of the Evidence ,\ct and, at the most, according to the Chemical Examiner the hairs resembled those of the appellant.

Held, that where the evidence of the approver is held not to be very helpful to the prosecution other circumstance>

besides the evidence of tbe approver has to be considered.

The mere fact that the dead body was pointed out by the appellant or was discovered as a result of a statement made by him would not necessarily lead to the conclusion of the offence of m"Jrder.

In the present case beside the evidence of the approver, the appellant's pointing out of the dead body, his pointing out the silver buttons of the deceased which were stained with human blood and the presence of his hairs on a pania (scraf) on which there were the hairs of the deceased also, are important facts which are sufficient evidence to connect the a.ppellant with the commission of the offence.

Held, further, that writers of medical jurisprudence have stated that from microscopic cxa1nination of the hairs it is possible to say whether they are of the same or of different colours or sizes and from the examination it lnay help in deciding where the hairs come from.

Vemireddy Satyanarayan Reddy v. State of Hyderabad, [1956] S.C.R. 247 and Wasim Khan v. State of Uttar Pradesh, [I ~56] S.C.R. 19 l, relied on.

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 223 of 1959.

Appeal by special leave from the judgment and ordered dated April 14, 1959, of the former Bombay High Court (Rajkot Bench) at Rajkot in Criminal Appeal No. 84 of 1958.

Nur-ud-din Ahmed and K. L. Hatki for appel lant.

H. R. Khanna and R.H. Dkebar, for respondent.

1962. January 24. The Judgment of the Court was delivered by

KAPUR, J.-The appellant and two others were convicted by the Additional Sessions Judge, Gohihvad, under ss. 302 and 21)1 of the Indian Penal Codu for the murdPr of Kanji aud they were sentenced to imprisonment for life under the former section and to seven years' rigorous imprisonment under the latter. The sentenc" were eoncur-r"nt.

On appeal the High Court set aside the conviction

Konbi liarsan

Jadao

v. litale of Gujar•I

Kap"' J.

'962

KwiKu- Jq .. v.

SW. of GujOT•I

K-J.

728 SUPREME COCltT REPORTS [1962] SUPP.

of Nanji Ravji but upheld the convictions and l!t'n tenccs of the appollant and Karamshi Bhawan. The appellant has come in appeal to this Court by Special leave.

The deceased Kanji was rather an unsavoury character in villag<i Chirodo. and it is alleged that he had a illicit connection with Shrimati ::, bantu

the sistor of Karamshi and also used to follow about Smt. Baghu the sister of the appellant for a. similar object.

It is stated that five days before the occurrence the appellant Karsan, Karamshi, Nanji and Gumansinh approver met and decided to murder tile appellant. With that ohjcct in view Gumansinh approver wns to decoy the deceased to the Vadi of the appellant and there the murder was to be committed. At about sunset on March 19, 1958, the deceased was decoyed to the place as previously arranged and therl' he was murdered by the appellant who gave him a few blows, with a sharp cutting instrument called Dharia.

According to the statement of the approver the dead body was. wrapped in the scarf of tho deceased and was carried by the appellant from the place of the murder to the dry bed of the river and there it was hurried in a pit. Nothing was heard of the murder or of the deceased till on March 26, 1958, a brother of the deoeased ma.do a report to the police about his disappearance and that he suspected the three uncles of the appellant, subsequently the appellant and the other accused persons were taken into custody by the police. One of them while in the custody t-f the police, was allowed to go to the village and he asked the help of Shamji and Manila! P.Ws. He also made a confeBSion to them and they reported the matter to the police. On March 31, 1958, Gumansinh and Karamshi ma.de confcasions

2 s.c.R. SUPREJ-IE COURT REPOR'£ci 72ll

which were recorded by a Magistrate.

Between March 26 and March 31, recoveries of variotts articles. were m1td~. At the instance of the appellant, it is stated, the dead body and then the head of the deceased was recovered from a lfoitant well.

At tho instance of Nanji en :Vlarch 28, 195S a scDrf was, discovered in the pit in which the dearl body was according to the approver, buried. On the scarf, !here were some hairs which on analysis by the Chemical Examiner were fonnd to be similar to the hairs of the appellant and of the deceased.

A day previous, i. e. March :!7, 1958, at the instance of the appellant silver buttons which were stained with human blood were discovered from the fieH of the appellant at small stick like a button belonging to the deceased was also found at his instanue.

The High Court rejected the confession of Karamshi on the ground that it was not voluntary.

It acquitted Nanji on the ground that there were no corroboration in regnrd to him of the apprl•Ver's statement, the place where the dead body was buried

was not dis<'overed at his instance, his production of stick and shirt and trousers from his house was of no consequence, and the oral evidence was contrary to the medical evidence and Karamshi's confessional statement could not be used agamst Nanji.

In regard to the appellant the High Court accepted the testimony of the approver as being a reliable piece of evidence. It attached no importance to the recovery of the cutting instrument, Dharia, nor to the discovery of the stick ( Dhoka) at his instance. But the High Court did rely upon the discovery of the dead body of the deceased, i.e. the trunk and the head, at. the instance of the appellant and of the blood-stamed buttons also at his instance and attached importance to scarf renovered from the pit where the dead body was alleged to have been first buried and which had hairs both of the appellant as well as of the deceased.

1 62

Kanbi Karsan

J11dav

State (Jf Giarat

Kapur J.

Ktnthi Ktrrsan

Jadao v.

StaU of Gu; arat

Kapur J.

730 SUPREME COlRT REPORTS ll962) SUPP.

It was argued for the appellant that the <'Vidence of the approver, even though it had been accepted as true, was not corroborated in material particulars connecting the appellant with the offence.

On the other hand it was contradicted.

The appr1Jver had btated that the dead body was buried in a pit in the dry bed of the river but wht•n thl\t pit was dug up the dead body was not found there and unly a piece of ulna bone and a heel of a human foot were found and all these recoveries had be(n made earlier and so could not be ca.lied corroborative in material particulars. It was further submitted that there was no evidence to show as to when ; ind how the body of the deceased was removed from tho pit, dismembered and thrown into the well. 1 he recovery of the scarf, it was pointed out, was all innocuous circumstance because on tht> evidence produced it had not been shown to belong to the appellant but to hiR father and th(' evidencc of the Chemic'.\! Examiner was not sufiicieut, to prove that the hairs on the scarf were of the appellant or of the deceased because the Chemical Examiner was certainly no expert on this matter ancl his evidence was not admiBBible under s. 4i) of the Evidence Act, and at the most, according to tho Chemical Examiuer's report the hairs resembled those of the appeilant. And secondly according to the approver the dead body of the deceased was wrapped in his own pania (scarf). lt was further submitteci that the statement in regard to tho recovery of the trunk and the head will only show that tho appellant knew where tho trunk and the head were, which at the most would lead to an inference of an offence under s. :10 l and not of s. 302.

What the law requires in the case of an accomplice's evidence is that there should be such corroboration of the material Parts of the story connecting the accused with the crime as will satisfy reasonable minds that the approver can be regarded

as a truthful witness. The corroboration need not be direct evidence of the commission of the offence by the accused.

If it is merely circumstantial evidence of his connection with the crime it will be sufficient and the nature of the corroboration wiil depend on and vary with the circumstances of each case.

Vemireddy Satyanarayan Reddy v. The State of Hyderabad(').

The confessional statement mad(• by the approver on March 31, 1958 gave the following facts connecting the appellant with the murder. ( l) The appdlant gave dharia blow to the decl'Jased.

The dharia bad li!ready been discovered and it has been disregarded from the evidence by the High Court as being of no importance. The next thing stated by the approver was that the deceased's body was tied in a pania (scarf).

He did not state that the scad in which it was bound belonged to the appellant. The next fact stated by him was that the appellant carried the body of the deceased and then it was buried in a pit and lastly he stated that the appellant h11d told him that the head of the deceased had been thrown into a well.

None of these recoveries in the circumstances of this case are corroborative of the statement of the approver to the extent of connecting the appellant with the offence commited. On the other hand, they are somewhat contradictory of the statement because the pania (scarf) which was found in the pit has now been stated to belong to the appellant.

The dead body was not found in tile pit, the head had already been discovered and the trnuk had also been taken out of the well. In these circ•umstances it was submitted that the approver's statement cannot be said to have been corroborated in material particulars.

But there are other circumstances which have to be considered even if the evidence of the approver is held uot to be very helpful to the prosecution. Firstly, thern is the pointing out of

(I) [1956] S. C.R. 247. 252.

Karibi Karsan

Jridov

State ,, JG1ljara(

Kap•1r J.

1\anbi K <d1tU1

Jadori

Stolt of Gijrutll

Kap"' J.

732 SUPHEME COl:RT REPORTS [1962] SUPP.

tho dead body by the appellant from the well ; secondly, the di8covery of the blood-stained (stained with human blood) buttons nt the instance of tho appellant ; thirdly the srarf which has been held t'' belong to the appelhnt and which was found from the pit pointed out by the co-accused Nanji and fourthly by tho presenct of the hairs of the appellant and of the deceased on that scarf.

The men fa.ct that the dead bodv was pointed out by the appella11t or was tliocovered as

a result of a statement made by him would not nece88arily lead to the conclusion of the dfonce of murder. But there are other circumstances which have to be considered. The discovery of the buttons with bloodstains at the instance of tho appellant is a circumstance which may iaise the presumption of tho partir:ipation of the appellant in the murder, In Wa8in Khan v. The State of Uttar Pradesh (1), it was held that the recent and unexplained possession of stolen property would be presumptive evidence against a prisonn on a charge of roblicry as also of a charge of murder. But it must depend upon the circumstancl's of each case.

The third piece of ev idenoo to be considered is the recovery of the p<mia i.e. scarf. No doul t lhl'le is no state!Il('llt by the approver that the scarf in which the dead bndy was taken was thJ.t of the appellant.

But a sr, arf bas been found which tht Hig!i Court has held as beJ.mging to the appelll\nt and hairs both of the dec•at>ed a8 well as of the t•ppellant were found on tl:.at scarf.

It was argm•d that the finding of the hairs was of no conHequence and at least the Chemical Examinrr "'as wit the proper 1xpert who could depose a& to the similnrity or

otherwise of thl' hair~. Tho writers on mt>dical jurisprudence, however, ha, e stated that from the microscopic examination of th•· hairs it i:; posible to.say whether thoy 11r0 (If th0 same or of 1lifferi; nt colours or Ri1,.-~ and from 1.hA <•Xnmination it ma:v help in deciding where the hairs come from.

\I) [19:.0J S. C.R. 191.

Taylor's Medical Jurisprudence (1956 Edn.) Voi. 1, at page 122, some cases ar~ given showing that hairs were identified as belonging to particular persons.

Thus, we have besi<les the evidence of the approver three important facts which connect the appellant with the commission of the offence.

His pointing out the dead body, his pointing out the silver buttons of the deceased which were stained with huma.n blood and the presence of his hairs on a pania (scarf) on whicli there were the hairs of the deceased .also. In our opinion this would be sufficient evidence in thA circumstances of the present case to connect the avpellant with the commission of the offence.

We, therefore, dismiss the appeal.

Appeal disn. iss(d. ---

BASANTRAM .,,

UNION OF INDIA (P. B. GAJENDRAGADKAR andK. N. WANC1HOO, JJ.)

Evacuee Property--Inclu<ion in compensation. poolr-Effect -Power of Central Government-AdminiBtration of Evac"ee Property (Central) R"lea, r. 14 (6)-AdminiBtration of li'vacue< Property .1ct, 1950-Tlte displced persons (Comp, nBation and Rekahilitation) 4.ct, (XUV qf 1954), ss. 12, 14, 16 and 19.

The appellants migrated to India in 1947 from West Pakistan. To begin with, they were given temporary allotment of land in two villages.

In 1949, land was allotted to them on quai-pern1anent basis, and they have remained in possession of the same eversince.

Originally, land was classi .. fied into two kinds : urban and agricultural land. Later on; a third classification was introduced, known as sub-urban land. fhe two villages in which land was allotted to the appellants were not included in. the notification with respect to sub-urban land.

In February, 1952, the Director of Rehabilitation passed an order declaring those villages as

L9af -- K11nb; liarsan

Jadav

State ofGujaud - Kapur J.

1"62

January21.

KANBI KARSAN JADAV

STATE OF GUJARAT

L. KAPUR

R.to.GIIUBAR DAYAL, , JJ.

Penal Code, 1860

IAdia EWknct Act, 1872

Indian Penal Code

s. 45

ss. 302 and 21

s. 4

s. 302

ss. 12, 14, 16 and 19


2 s.c.R. SUPREME COURT .REPORTS 733

Taylor's Medical Jurisprudence (1956 Edn.) Voi. 1, at page 122, some cases ar~ given showing that hairs were identified as belonging to particular persons.

Thus, we have besi<les the evidence of the approver three important facts which connect the appellant with the commission of the offence.

His pointing out the dead body, his pointing out the silver buttons of the deceased which were stained with huma.n blood and the presence of his hairs on a pania (scarf) on whicli there were the hairs of the deceased .also. In our opinion this would be sufficient evidence in thA circumstances of the present case to connect the avpellant with the commission of the offence.

We, therefore, dismiss the appeal.

Appeal disn. iss(d. ---

BASANTRAM .,,

UNION OF INDIA (P. B. GAJENDRAGADKAR andK. N. WANC1HOO, JJ.)

Evacuee Property--Inclu<ion in compensation. poolr-Effect -Power of Central Government-AdminiBtration of Evac"ee Property (Central) R"lea, r. 14 (6)-AdminiBtration of li'vacue< Property .1ct, 1950-Tlte displced persons (Comp, nBation and Rekahilitation) 4.ct, (XUV qf 1954), ss. 12, 14, 16 and 19.

The appellants migrated to India in 1947 from West Pakistan. To begin with, they were given temporary allotment of land in two villages.

In 1949, land was allotted to them on quai-pern1anent basis, and they have remained in possession of the same eversince.

Originally, land was classi .. fied into two kinds : urban and agricultural land. Later on; a third classification was introduced, known as sub-urban land. fhe two villages in which land was allotted to the appellants were not included in. the notification with respect to sub-urban land.

In February, 1952, the Director of Rehabilitation passed an order declaring those villages as

L9af -- K11nb; liarsan

Jadav

State ofGujaud - Kapur J.

1"62

January21.

196f

I Ba.rant R.o.m '

Union of India

IV rmchGO .T •

sub-urban. The result of the order was that the allotment made to the appellants was to be reduced.

The appellants went'in revision to the Custodian General, and their revision peti1ions were di!lmissed on the ground that in view of Rule 14(6)(iii)(d) of the Rules it was open to the Central Govern- Il]ent by a special order to direct cancellation or variation of the. aJ.lotmeht made in favo_ur of the appellants, and the Central Government had On the rrpresen'tation of the Punjab Governm("n t agreed to declare the two villages in question as sub'urban by its or_der. dated October 11, 1955.

The appe!lapts filed a writ petition in the High Court but that W?.~ dimissed summarily.

They have come in appeal to this ourt by special 'eave.

Held, that when the notification of March 24, 1955, was rr ade under s. 12 of the Displaced Persons (Compensation and Rehbi!itation) Act, 1954, the evacuee property in those villagf's Ceasrd to be evacuee property and became a part of

the compensation pool. That property could only be dealt with under the Act flf 1954.

Tf any variation or cancella_tion of ::iliotment Vias to he madr. 'that C<1uld be dbne only under the,

provi•i.ons of s. 19 of Act of 1954. There was no power left in the Central Government to act under Rule 14(6)(iii)(d) of the R11Jes framed under the Administration of Evacuee Property Ar.t, 1950 with respect to that land after the notificaTion of March 24, 1955.

Ba./mukand v. Th• "State of Pun, iali, I.L.R. 1957 Punjab 712 and Ma_i<lr Gnpal s; nflh v. Custodian of Eracuee Property, A.I.R. 1961 S.C. 1320, foJlowed.

Crvrr, APPELLATE JuRISDTC'TION : Civil Appeal No.'76G of 1957.

AppMI by special leave from the judgmnt 11nd o'rdcr dR.ted Jarynary 31, 1956, of the Pun1ab Hi<>b 'Court in Civil Writ Petition No. 30 of 1956. ,.. .

R. 8. Nnru.la, for tho appellants.

B. J(. Khanna and I'. D. 11! enon, for the res pondents .

.'::. 1,. Prmdhi, for the intcrvenNs. l962. .J 11nuarv 24.

Tho .Tudgrnf\nt of the Conrt was dn\jvC'rod hy

\VAis<'HOO, J.-This is !tn app<'al by special knve against fhe nrdnr <'f .1]1P P11nj11h High Conrt

summarily rejecting a petition filed by the appellants under Art. 226 of the Constitution. The bfr:f facts neceEsary for present purposes are these, The appellants migrated in 1947 from what is now West Pakistan and settled in two villages, viz., Sheikhapintl anr'I Kot.la. They were given temporary allotment of agricultural land in the two villages under the East Punjab Evacuees' (Administration of Property) Act, (No.XIV of 1947) then in force.

Thereafter a scheme was formulated in 1948 for q11asi-perm&nent allotment of agricultural land to ownerR of land in West Pakistan after the East Punjab Refugees (Registration of Claims) Act, (No. VIII of 1948) was enacted.

In July 1949, a notification was issued stating the condition under which allotment of awicultural land would be made to displaced persons from West Pakistan. This allotment was quasi permanent in the smse that it was to remain in force so long as the land was t.o remain vested in the Custodian of Evacuee Property. In pursuance of this notification, land was allotted in the two villages to the appellants on quasi-permanent basis in I \.149 and the appellants have remained in posseRsion thereof eversince. Originally Jann was classified into two kindR, namely, (i) urban m; d

(ii) agricultural land. Later in 1949, how<"ver, a third classification, namely sub-urhan was also introd11ceCl in practice with respPC't tv agricultural land in the neighbourhood of Cl3rtain towns and a notification seems to have been issued with reRpect to that specifying the villages land in which was considered to be a sub-urban (vide Chap. V of Land Settlement Manual by Tarlok

Singh). But the two village~ in which land was allotted to the appellants were not included in the notification with respect to sub-urban land.

In August 1950 after tho quasi-permanent allotmPnt in favour of the appellants had hnen

Basont ll<lln

Union of India

Wanehoo J.

Illtl

B111W Rortt

U11ion of lltdia

Wor1clioo J.

736 Sl"'PREME OO"CJRT REPORTS [1962) SUPP.

made, the Revenue Assistant (Rehabilitation) Jullundur proposed that t.hese two villages should also be ela.ssified as sub-urban, tho consequence of which would have been to reduce the area of land givi>n to the allottl'.es therein. The . appellants objected before the Director General of Rehabilitation to the villages being graded ns suburb&n.

The Director General called for a report from the Revenue Assistant (Rehabilitation) and eventually passed an order on January 12, 1951 that it was not desirable at that stage to cause any disturbance to the allotments made in theae two villages by declaring them .sub.urban and that the atatm quo should continue. This however did not end the matter and in February, 1952 the Director of Rehabilitation passed en order in effect declaring these vilhges 11.8 sub-urran with the result that the allotment ma.do to the appe1Iants would havo to be reduced. It also appears thi.t some order was p&11scd in April, 1952 on paper alloting the extra land which would be rele&llt'd from the allotment of the appellants to other persons who have a11pearl'd as intervcners in this appeals. But thi~ ordi>r rPmained merely on pa.per and has not been carried mlt so far.

When the appellants came to know of the order of February ~!). 11152, they filed a revision before the Custodian Guneral for setting aside that order. The revision , rame up before the Dl'put y Custodian General for hearing in January l 9fi6. By then however certain changes in the law and the Rules had been made.

Firstly, there was an amendment in r. 14 (6) of die Ari ministration of Evarme prope1 ty (Central)Ruks

fr'lmed under the Administration of Evacuue prop<'rty Act, (Centrn.l Act XXXI of 1950).

Further, the Displacrd persons (Compensation and Rrhabilitation) Act, Centrnl Act XLIV of 1954, (hereinaftt'r nferrd to as the Act) had b!'en pnssed.

Undl'r tho amenrlmrnt tn r. 14(n) power

mt~ gil't'll for canc<'llatinn or variatio11 of any

allotment of rural evauee property on a quasipermanent basis, where the allotment was to be cancelled or varied in accordance with the general or special order of the Central Government. It appears that in the meantime correspondence passed between the Punjab Government and the Central Government and an order under the amended r. 14 (6) (iii) (d) was obtained on October 11,1955.

Therefore, when the revision came up before the Deput1 Custodian General he held that in view of r. 14 (6) (iii) (d) of the Rules it was open to the Central Government by special order to direct cancellation or variation of the allotment made in thjs case in favour of the appellants and that the Central Government had on the representation of the Punjab Government agreed to declare thes.e two villages as suburban by its order dated October ll, 1955; therefore he held that whatever was being done after October 11, 1955 was in pursuance of the order of the Central Government.

He therefore held that the impugned order of February 29, 1952, even if it was revisable, no longer held the field and action was to be taken in future under the order of the Central Government passed on October 11, 1955. Therefore, the revisions had become infructuous and he dismissed them.

Then followed the writ petition by the appellants in the Punjab High Court, which was dismissed summarily. As leave was refused by the High Court, the appellants applied for special leave to this Court, which was granted; and that is how the matter has come up before us.

The main contention on behal£ of the appellants before us is that after the coming into force of the Act and the notification made thereunder on March 24, 1955 under s. 12, the land allotted to the appellants in the two villages. ceased to be evacu'le property and became part of the compensation pool created thereunder a.nd therefore the Central

Basani Rom

y, Union •/Jr.di•

WancMo J.

1115!

B.-&...

v. u,.;.,, of btdi•

WacAooJ.

Government had no. power left to act under the Central Act XXXI of 1950 and tho Rules framed thereunder.

In consequence the order pa.sscd, by the Central Government on October II, 1955 on the basis of which the Deputy Custodian General rejected the revision petitions filed on behalf of the appellants was not within the competence of the Central Government and no action could bo taken by virtue of that order declaring the two villages as sub-urban. Therefore it was not open to the authorities under the Central ActXXXI of 1950 to take any action under that order with the object of varying the allotment made in favour of the appellants by reducing the area allotted to thorn. It is further urged that whatever further action has to be taken after the notification dated March 24, 1955 can only be taken under the Act and that no such action has in fact boon taken.

We are of opinion that there is force in this contention of the appellants and it must prevail.

Section 12( I) of the Act provides that "if the Central Government is of opinion that it is necessary to acquire any evacuoo property for a pubJic pur

pose, being a purpose oonneoted with the rei'ief and rehabilitation of displaced persons, including payment of compensation to euch persons, the Central Government may at any time acquire such evacuee property by publishing in the Official Gazette a notification to the effect that the Central Govern

ment bas decided to acquire such evacuee property in pursuance of this section". Sub-section (2) then provides that "'on the publication of a notification under sub-section (l), the right, title and interest of any evacuee in the evacuee property specified in the notification shall ......... be extinguished and the evaonee property shall vest absolutely in the Central Government free from all encumbrances." Sub section ( 4) provides that all evacuee property acquired under this section shall form part of the

compensation pool.

Section 14 provides for the constitution of a compensation pool.

Section 16 gives powers to the Central Government for the management of the compensation pool, including the appointment of such officers as it may deem fit (referred to as managing officers) or constitution of such authority or corporation, as it may deem fit (re, ferred to as managing corporations). Section 17 provides for functions of managing officers and managing corporations. Section 19, which is important, provides that "notwithstanding anything contained in any contract or any other law for the time being in force but subject to any rules that may be made under this Act, the managing offlcer or managing corporation may cancel any allotment or termina1e any lease or amend the terms of any lease or allotment under which any evacuee property acquired under this Act is held of occupied by a person, whether such allotment or lease was granted before or after the commencement of this Act." Rules have been framed under the Act specifying the circumstances under which a managing officer or a managing corporation may cancel an allotment or terminate a lease or vary the terms of any such lease or allotment (see r. 102). It is not in dispute that the evacuee property in these two villages was notified under s.12(1) of the Act on March 24, 1955. The cone!lquence of that notification is that all rights, title and intE•rest of the evacuee in the property

cease~ with the result that the property no longer remamed evacuee property. Once therefore the property ceased to be evacuee property it can not be dealt with under the Central Act No. XXXI of 1950 or the Rules frame<! thereunder. The property in these two villages became part of the compensation pool after the notification of March 24, 1955 and could be dealt with under the provisions of the Act and any variation or cancellation of any lease or allotment thereafter could only be made under s.19

B•sflnt Rm

•• Uni,. of [,,, U,

Wanchoo J.

19"

.i-1a..

•• U"'-•flldia

w--.J.

740 SUPREME OOURT REPORTS [1962] SOPP.

of the Act. This is the position which emerges on a. consideration of sections 12, 14, 16 a.nd 19 of the Act after the notification undPr s. 12( I) was made with rospect to the eva.ouee property in these two

villages on March 24, 1955. This view has been taken by the Punjab High Court in Balmukand v.

T7i£ Punjab St.ate ('). The same view has also been expressed by this Court in Major Gopal, Singh v.

Custodian, EvaC!iR.e Property, (•), where it was held that from the date of the notifica.tion under s. 12, the Custodian by reason of the divesting of the property becomoafunctU1Jojficio with respect to it and oa.nnot rectify a.ny error ma.de by him in the past in the matter of cancellation of allotment. It follows therefore that when the notification of March 24, 1955 was ma.de a.nd the evacuee property in these two villages oeased to be evacuee property and

became part of the compensation pool it could only be dealt with under the Act a.nd if any variation or oanoellation of allotment was to be made it could only be done under the provisions of s. 19 of the Act and thore was no power left in the Central Government to act under r. 14(6)(iii)(d) of the Rules framed under the Central Act XXXI of 1950 with respect to this land after the notifica.tion of March 24, 1955. The order of the Deputy Custodian General of January 1956 shows that further proceedings with reepect to this land are contemplated under the order of October 11, 1950 pa8ll6d by the

Central Government under.r. 14(6)(iii)(d). As however that order was pa.ssed after Ma.rob 24, 1955, when the power of the Central Government to a.ot under the Central Act XXXI of 1950 had OO&led on the evacuee property in these two villages beooming part of the compensation pool, that order must be set aside and no further proceedings can be taken under that order. We order accordingly.

The appellant.II will get their coetll.

(I) I. L. ll. 1957 Punj. 712.

(2) (1962] l S. C. R, 328.

2 S.C.R.

SUPREME OOURT REPORTS 741

We should however like to make it clear that we express no opinion on the controversy bet; ween the appellants and the interveners who are left to such remedies as may be avriilable to them under the law. --

A.B. ABDULKADIR AND OTHERS

THE STATE OF KERALA AND ANOTHER

(AND CONNECTED APPEALS) (B. P; SINHA, c. J., P. B. GAJENDRAGADKAR, K. N.

WANOHoo, M. HU>AYATULLAH and J.C. SHAH, JJ.)

Central Exci.e-Control oj tobacco-System of auction8- Licence for storage-Repeal qf state law-Cochin and Travancore enactments, if lau• c.orrespond1"ng to Central E.xcises Act-'' Excise duty", meaning of-Cochin Tobacco Act, 1084 (Cochin 7 of 1084 M. E.)-1'ravancore Tobacco Regulation, 1087 (Travancore 1of1087 M.E.) -Finance Act, 1950 (25 of 1950), 88. 11(1), 13 (2).

In 1909 the Ruler of the erstwhile State of Cochin enacted the Cochin Tobacco Act of 1084 (M.E.) with the object of controHing the cultivation, production, manufacture, storage and sale of tobacco.

Rules were framed under the Act for regulating the cultivation, possession, transportation and sale of tobacco and a system of licensing was introduced for that purpose.

Licences for storage \Vere to be annual and to be issued on payment of licence fee. The authorities administering the provisions of the Act and the Rules framed thereunder were the Commissioner of Excise and his subordi" natcs, The system in force for the collection of tobacco revenue was to auction what were called A class and B class shops.

A law similar to that prevailing in Cochin was promulgated in 1911 by the Ruler ofTravancore as the Travancore Tobacco Regulation of 1087 (M.E.). The two States merged themselves in 1919 as the State ofTravancore Co<"Mn but the two Acts continued to remain in force in the respective territories. On April I, 1950, after the Constitution of India pad come into force and Travancore Cochin had become a

B .. antB.,.

•• U•U..of l•'i• --

d. ---

BASANTRAM

UNION OF INDIA (P. B. GAJENDRAGADKAR

ss. 12, 14, 16 and 19

s. 12

s. 19

Art. 226

Centrnl Act XLIV of 1954

s. 12

Central Act XXXI of 1950

Section 12( I)

Section 14

Section 16

Section 17

Section 19

sections 12, 14, 16

s. 12( I)

s. 12

s. 19

Central Act XXXI of 1950

Central Act XXXI of 1950

Cochin Tobacco Act, 1084

Tobacco Regulation, 1087

Finance Act, 1950

Constitution of India


2 S.C.R.

SUPREME OOURT REPORTS 741

We should however like to make it clear that we express no opinion on the controversy bet; ween the appellants and the interveners who are left to such remedies as may be avriilable to them under the law. --

A.B. ABDULKADIR AND OTHERS

THE STATE OF KERALA AND ANOTHER

(AND CONNECTED APPEALS) (B. P; SINHA, c. J., P. B. GAJENDRAGADKAR, K. N.

WANOHoo, M. HU>AYATULLAH and J.C. SHAH, JJ.)

Central Exci.e-Control oj tobacco-System of auction8- Licence for storage-Repeal qf state law-Cochin and Travancore enactments, if lau• c.orrespond1"ng to Central E.xcises Act-'' Excise duty", meaning of-Cochin Tobacco Act, 1084 (Cochin 7 of 1084 M. E.)-1'ravancore Tobacco Regulation, 1087 (Travancore 1of1087 M.E.) -Finance Act, 1950 (25 of 1950), 88. 11(1), 13 (2).

In 1909 the Ruler of the erstwhile State of Cochin enacted the Cochin Tobacco Act of 1084 (M.E.) with the object of controHing the cultivation, production, manufacture, storage and sale of tobacco.

Rules were framed under the Act for regulating the cultivation, possession, transportation and sale of tobacco and a system of licensing was introduced for that purpose.

Licences for storage \Vere to be annual and to be issued on payment of licence fee. The authorities administering the provisions of the Act and the Rules framed thereunder were the Commissioner of Excise and his subordi" natcs, The system in force for the collection of tobacco revenue was to auction what were called A class and B class shops.

A law similar to that prevailing in Cochin was promulgated in 1911 by the Ruler ofTravancore as the Travancore Tobacco Regulation of 1087 (M.E.). The two States merged themselves in 1919 as the State ofTravancore Co<"Mn but the two Acts continued to remain in force in the respective territories. On April I, 1950, after the Constitution of India pad come into force and Travancore Cochin had become a

B .. antB.,.

•• U•U..of l•'i• --

A. B. Al>iulkoiir

y, n. ,..,. oJ lf".i.

SUPREME COURT REPORTS [1962) SUPP.

Part B State thereunder bys. 11 of the Finance Act, 1950, the 0:ntral, Excises and Salt.Act, 19#, was extended to that State.

Section 13(2) of the Finance Act, 1950, provided that "if immediately before the !st day of April, !9j0, there is in force in any State other than Jammu and Kashmir a law corresponding {o, but other than, 8'n Act referred to in subs. (I) or (2) of r. 11, such Jaw is repealed with effect from the said date., .. . . " After thi• provision in the Finance Act, 1950, the Rules which we1c in force on April I, 1950, were changed in the Cochin area by a notification dated August 3, l9j0, and the system of auction sales of A Class and B Cla!S shops was done away with and instearl graded licence fees were introduced for various classes of licensees. Similar change was made for the Travancore area by notification dated January 25, 1951.

The appellants who were carrying on busines.s in tobacco within the territoriCJ of Travancore and Cochin challenged the legality of the notifications of August 3, 1950, and January 25, 1951, on the ground that the Cochin Tobacco Act and the Travancore Tobacco Regulation under which the notifications were purported to be issued, were law corresponding to the Central Excises and Salt Act, 1944, and so they stood repealed from April I, 1950, by virtue of the operation of ss. 11 and 13(2) of the Finance Act.

It was contended for the State of Kcrala that the main feature of the Central Excises and Salt Act, 1944, was the impo>ition of a duty of excise on goods produced or manufactured in India and that there was no provision for charging duty in the Cochin Act or the similar Travancore Act and therefore all these provisions in the Rules for the control of tobacco from the time of cultivation to the time of the final stage of sale to the consumer, evm though they were similar to the Rules und<r the Central Act, would not make the Cochin Act or the similar Travancore Act a law corresponding to the Central Act.

Held, that the rults framed under the Cochin Tobacco Act of 1084(M.E.) and the Travancore Tobacco Regulation of

1087 (M.E.) requiring licences to be taken out for storage and sale of tobacco and for payment of licence fee in respect th<reof were law corresponding to the provisions of the Central Excises and Salt Act, 1944, and, hence, were superseded on April I, 1950, by virtue of s.

I 3(2) of the Finance Act, 1950. Consequently, the new Rules t'ramed in August 1950 and January 1951 for the respective areas of Cochin and the respective areas of Cochin and Travancorc for the iSBue of licences and payment of fee therefore for storage of tobacco, were invalid ab i11itio.

Per Sinha, C. J., Gajendragadkar, Wanchoo and flidayatullah, JJ.-(1) The Cochin Tobacco Act, 1084

(M.E.), as well as the Travancore Tobacco Regulation, 1087 (M.E.), were in substance law corresponding to the Central Excises and Salt Act, 1944, and therefore, stood repealed on April I, 1950.

(2) The auction system which was in force under the Cochin and Travancore Acts was only a method of realising duty through the grant of licences to those who made the highest bid at the auctions. The fact that this system was used-instead of the system of charging of duty as provided in s. 3 of the Central Exciss and Salt Act, 1944, would not make any difference to the nature of the impost; the income from auctions was in the nature of excise duty.

Per Shah, J.-An Excise duty is, according to the Indian statute, a duty on the manufacture or production of goods and the duty which was levied in the States of Travancore and Cochin on the storage of tobacco cannot be regarded as a duty of excise.

In re The Oentral ProvinceB and Berar Sales of Mowr Spirit and Lubricants Taxaiion Act, 1938, [1939]

F.C.R. 18, The Province of Madras v. Messrs Boddu Paidanna and Sons,

[1942] F.C.R. 90, Governor-Generalin-Oouncil v. Province of Madras, (1945) L.R. 72 I.A. 91 and Ohaturbhai M. Petal v.

The Union of India, [1960] 2 S.C.R. 362, considered.

CrvIL APPELLATE JURISDICTION: Civil Appe.-ils Nos. 89, ~O and 126 to 128/61.

Appeals from the judgment and order dated November 8, 1957, of the Kerala High Court in

0. Ps. Nos. 70 and 71 of 1956(K) and 2, 6 and 7 of

1955 E.

M. 0. Set, alvad, Attorney-General of India and R. Gopalakrishnan, for the appellants in C. As. Nos. 89 and 90 of 61.

G. S. Pathak and V. A. SeiJid MUhammad, for the respondent in C. As. Nos. 89 and 90 of 61.

4 J'.· Vi .. wa11athn Sastri, .A. Goorge TitWJ, R.

Mahal1n171er and M. R.

J( rishnn P.illa.i, for the appellants in C. As. Nos. 126 to 128 of 61.

0. 8. Pritltnk and Sardnr Bnhndur, for the respondents in C. As. Nos. 126 to )28 of 1961,

A. B. Abdulkattfr

T/w Stal• of KwV.•

196!

........... Ii ..

v. n, 81oh ef lrnola

WM<Ao.J.

744 SUPREME OOURT REPORTS [1962] SUP!>.

1962. January 24. The Judp:ment of B. P.

Sinha., C. J., P. B.

Gajendragadkar,

K. N .

Wanohoo and M. Hidayatullah, JJ., was delivered by Wanchoo, J., J. C.

Shah, , J., delivered a separate judgment.

WANCHOO, J.-These five appeals on certificates granted by the High Court of Kerala raise a common question of law and will be dealt with together. Two of them (appeals 89 and 90) are from what was formerly the Cochin area and the other three are from what was the Travancore area.

They relate to a tax on tobacco in these areas. As

the facts, laws and rules in the two areas are similar we propoiie to deal in detail with the

appeals from the Cochin area.

In 1909, Act VII of 1084 was pa811ed by the Maharaja of Cochin to consolidate and amend the law relating to tobacco and was called the Cochin Tobacco Act, VII of I 084 (hereinafter called the Cochin Act). Section 4 of the Cochin Aot prohibited tho p081!ession for sale, transport, import or export, sale and cultivation of tobacco exoept as permitted under the Act or the Rules framed thereunder. l'ection 5 of the Act gave power to the Diwan to make niles from time to time consistent with the Act to permit absolutely or subject to any conditions, and also to regulate the possession for ea.le, transport, import or export, ea.le and cultivation of tobacco as well as the form of duty leviable on the sale of tobacco by retail. The remaining provisions of the Aot deal with offences, prosecutions, punishment, confiscation and other ancillary matters

uch as arrest and eiezure, with which we are not concerned in the present appeals. Rcferenoe may however be made toe. 18 which provided that "no

action shall lie against the Sirkar or against any officer of tho Excise department for damages in any civil court for any act booa fid, e, done or ordered to be done in pursuance of this Act, or of any law for

2 S.C.:i.:t.

SUPREME COURT REPORTS 745

the time being in force relating to tobacco revenue.

Rules were framed under the Cochin Act called the Tobacco Cultivation Rules, which, by the first rule pMvided that "the cultivation of tobacco plant is prohibited except under a licence and shall be restricted to such parts or localities of

the State, as may, from time to time, be fixed by the.Diwan ........................ " Rule 3 provided for drying, curing, manufacturing and storing of the tobacco, cultivated in the State, to be done under the supervision of an officer of the Excise Depar~ ment in licened manufacturing yards and storehouses. Rule 4 provided for licences for manufacturing yards and store-houses. Rule 5 laid down that the licences would be in force for one official year and were to be issued on payment of a fee of H.s. 50/- for each liccnce, Under r. 6, the tobacco crop could only be harvested after permission obtained from the Inspector of Exdse and nder r. 7 the harvesting was to be done by the licensed cultivator under the general superintendence of the Sub-Inspector of the locality in which the area cultivated lay and the harvested crop was to be transported only under permits granted by him from such area to the manufacturing yard where alone manuf ... cture was to be undertaken. Rule 8 provided for the maintenance of a stock book by a licensee of a storehouse or a manufacturing yard.

Rule 13 provided that the licensed manufacturer and the storehouse keeper would sell or otherwise dispose of his stock only to licensed dealers and there was pr0hibition against the disposal or sale of tobacco to any person who had not the required license to possess the same. Rule 15 made it an off, nce for any one to cultivate, dry, cure, manufacture, store, transport, S<' II or otherwise dispose of tobacco in contravention of the Rules.

In addition to these Rules, there were further Rules also framed under the Cochin Act with

A. B. Ab&lkadir ,,

The Siok of K<rol.•·

Wa..-lloo J.

A. a. "bdolllodir

•• n, a,.,, •f E .. .i.

W..Ao.J.

746 SUPREME OOURT REPORTS [1962] SUPP.

respect to import of tobacco into the State, 1md all import was prohibited except under the provisions of the Diwan's notifir.ation prescribing the sale of tobacco shops and licences.

PoBBeBBion of tobacco for the purpose of sale was also prohibited except under the provisions for the sale of tobacco shops and licences.

Export of tobaeco was also prohibited except with tho special sanction of the Commidsioner of Excise.

It further appears that the system in force for the collection of tobacco revenue up to August

1950 was to auction what were called A riaBB and B class shops and the last of such auction was held under the notification dated May 30, l 9t9. In addition there were C class shops, the licence for which wa.~ granted either on the recommendation or in consultation with B class licensees at the discre tion of the Excise Commissioner or any other officer authoridad by him on payment of the prescribed fee.

This system along with the 11.ules already referred

to was in force on April I, 1950.

On April l, 1950, after the Constitution had come into force and Travo.ncore-Cochin had becme a Part B State thereunder, the Finance Act, No.

XXV of l 950, extended the Central Excises and Salt Act, No. I of 19H (hereinafter called tho Central Act), to the Part B State of Travancorc- Coehin br s. 11 thereof. Section 13 (2) of the Finance Act, further provided that "if imincdialely before the 1st day of April. 1950, there is in forco in any State other than Jammu and Kashmir a law corresponding to, but other than, an Act referred to in subs. ( l) or (2) of s. 11, such law is hereby repealed with effect from the said date ............... "

It seems that in consequence of this provision in the !!'inane" Act, l!l50, the HuleP which were in force on April I, 1950, were clanged in the Cochin area by a notification dated August 3, I 95U, and the system of auction sales of A cl&11s and B class shops was done away with and instead

graded licence fees were introduced for various classes of licensees, including C class licensees.

Similar change was made for the Travancore area by notification dated January 25, 1951.

These Rules introduced by these two notifications also did away with the control of cultivation, drying, curing, manufacturing and ware-housing which were in force under the earlier Rules, so that these new Rules were only conc<Jrned with licensing of A, B and C class shops. A class licensees under the new Rules were called stockists, B class licensees were wholesale sellers and C class licensees were retailers. The system for A class licensees was that they were to pay a minimum annual fee for a maximum quantity of tobacoo or tobacco goods possessed by them and additional fee for further additional quantity. Thus,

for example, in the case of Jaffra tobacco it was

provided that maximum aLnual fee would be Rs. 1,500/- for a minimum of 100 candies and further fee of Rs. 1,000/- for additional quantity of 100 candies or part thereof.

The appellants of Cochin area were tobacco dealers and holders at the time they filed their petitions in 1956 of A class licences. The main contention raised on their behalf in their petitions was that the Cochin Act stood repealed by the Finance Act, 1950, on the introduction of the Central Act in the Part B State of Travancore-Cochin from April 1, 1950; in consequence, the notification which was issued on August 3, 1950, or on January 25, 1951, framing new Rules for the issue of licences and prescribing rules therefor under the powers conferred under the Cochin Act C\l' the similar Travancore Act were ab initio void, because the Acts under which the notifications were purpo1ted to be issued stood repealed from April 1, 1950. In addition various other grounds were raised challenging the validity of the new Rules which, however, we do not think it necessary for the purposes of theiie appeals to set out 4ere.

lllfB

A. B . .u.lulhlir

T!r, SIM of X .....

w .. c1t .. J.

19$

A. B. Jlbd"lkdir

TAI 614r. of 1' mua

Want1- J.

748 SUPREME OOURT REPORTS [1962] SUPP.

Tho petitions were opposed on behalf of the State and it was contended that tho Cuchin Act or the similar Travancoro Act did not stand repealed from April l., 1950, In consequence it was urged that the State wa.s competent to frame new Rules which it did wider the Cochin Act or the similar "Travancore Act. Further the ca.so of the State was

that the graded licence fee introduced after April l, 1951, was a tax which was sUBtainable under item 60 or 62 of List II of the Seventh Schedule to the Constitution.

The High Court dismissed the petitions holding that th" laws under which the new Rules were framed were in force and were justifiable under item 62 of List II of tho Seventh Schedule. Unfor. tunatoly, though tbo judgment of the High Court mon tions the contention of the appellants that on the extension of the Central Act with effect from April l, 1950, by ; he Finance Act, 1950, tho Cochin

Act as well as the similar Travancore Act ceased to be operative from that date, there is no discussion in the judgment with regard to this contention, and the High Court did not consider whether in view of s.13(2) of the Finanoe Act, I !!50, the Cochin Act as well as the similar Travancore Act stood repcale1l

from April l, 1-950. If the effect of R. 13(2) of the Finance Act, 1950, was to repeal the Cochin Act as well as the similar Travancore Act, from April I.

19!">0, there will be no law in operation which wou Id justify the framing of the new Ru !es either in August 1950 or in January l!l; H and it would then be unneePssary to consider whether a law contain ing provisions similar to those contaii!cd in the notification would be within the oompetence of the State lgislature under item 62 of List IC of the Seventh Schedule. That question would only arise if the Cochin Act or tho similar Tra.vancorc Act survived the repeal effected by s. 13(2) of the Finance Act.

We have therefore to see what the provisions of the Finance Act are in this connection. As already indicated, s. 11( 1) of the Finance Act extends the Central Act and the Rules and Orders made thereunder which were in force immediately after the commencement of the Finance Act to all Part B States, except the State of Jammu and Kashmir. Consequently, the Central Act as well as the Rules and Orders made thereunder bcamo applicable to the Part B State of Travancore-Cuehin from April 1, 1950. Further s. 13(2) of the Finance Act specifically provides that from April 1, 1050, any law corresponding to the Central Act, will be repealed from that date. The contention on behalf

of the appellants is that the Coehin Aet as well as thto similar Travancore Act was a law correponding to the Central Act and therefore stood repealed. as from April l, 1950, under s. 13(2) of the Act and it

is this contention that we have to examine.

It was pointed out b) this Court in The CUBtodia, n of Evacuee Property v. Khan Saheb Abdul Shakoor, etc. (' ). that whete the Act repealed provides substantially for all matters contained in the Act effecting the repeal there is correspondence between the two Acts and the earlier Act would thus stand repealed; it is not necessary that there should be complete identity between the repealing Act and the Act repealed in every respect, Therefore, when s. 13 (2) of the Finance Act provides that on the extension of the Central Act from April I, 1950, to the Pa.rt B State of Travancore- Cochin, any law corresponding to the Central Act is repealed with effect from that date, all that we have to see is whether the law repealed substantially provided for the same matters as the Central Act, even though it may not be identical in all respects.

Let us therefore turn to the Cochin Act and the rules framed thereunder to see if it substantially

(I) A.J.R. 1961S.C.1087.

1!Jt.i2

A. B. Abdulkadir

TM Slalt of KeY.tila

Wanchoo J.

Illa

.4. II. AWolioiir

Tit Bi.i, •I K11.I.

w ...... .r.

750 SUPRmf:E OOURT REPOR'rS [1962] SUPP.

provides for the same matters with which the Cen t.ral Act and the Rules and Orders ma.de thereunder deal. The main contention on behalf of the respondent in this connection is that the Central Act is an Act imposing u duty of excise on tobacco under item 4f> of List I of the Seventh Schedule to the Governmont of India Act, 1935 (now corresponding to ik•m 84 of List I of the Seventh Schedule to the Constitution), and l!IJ{)h duty of excise is a duty on goods manufactured or produced in India. Thus according to tho respondent, the main feature of the Central Act is the impORition of a tax on goods produced or manufactured in India and unless the Cochin Act or the similar Travanooro .Act also

imposes a tax on goods produced or manufactured in what was formerly Cochin or Travanoore State there would be no question of correspondence between the Cenh'al Act and the Cochin Act or the similar Travancore Act. Reference was alao made to In Re the Central Province.8 and Berar Sale.s of Motm Spirit and Lubricants Taxation Act. 1938 (Central Promnces and Berar Act XIV of 1938)('), Tht,

Promnce of Madras v. Meaar~. Boddu Paidanna and Bon('), and Governor-General in Oauncil v. Promnce of MadraB(•). where the nature of a duty of excise was oonsidered. In the first case it was held that the primary meaning l1f' "e:tcise duty" was of a tax on articles produced or manufactured in the taxing

count7 (see p. 40). It was also observed in that case that it could not be denied that laws were to be found which impose a duty of excise at eta.gee subsequent to the manufacture or production.

In the second caee it was held that duties of exoille were duties levied on the manufacture or producer of the commodity taxed. In the the third ce.ee, the Privy Counoil approved pf the view of the Federal Court as to the nature of the duty of excise. It may therefore be acoopted that a duty of exciee is a

(I l [1939) F.C.R. IS

(2) [ 1!142) F.C.R. 90.

(3) [1945) L.R. 72 I.A. 91.

tax on goods produced or manufactured in the taxing country.

It may also be accepted that generally speaking the tax is on the manufacturer or the producer, though it cannot be denied that laws are to be found whioh impoHe a duty of excise at stages subsequent to the manufacture or production. We cannot however forget that the Cochin Act or the similar Travaucore Act was passed by States in which there were no such constitutional provisions as are to be found in the Government of India Act and its legislative Lists and this aspect will have to be borne in mind when judging the question of correspondence between the Central Act and the Cochin Act or the similar Travancore Act.

Now the Central Act provides by s. 3 for the levy and: collection of duties of .excise on all excisable goods other than salt which are produced or manufactured in India and also a duty on salt manufactured in or imported by land into any part of India. Further s. 6 of the Central Act gives power to the Central Government to issue licences and prohibits any person from engaging in the wholesale purchase or sale whether on his own account or as a broker or commission agent or the storage of any excisable goods except under the authority and in accordance wi*, h the terms and conditions of a licence granted under the Central Act. In Chaturbhai M. Patd v. The Union of India (1) where the various provisions of the Central Act (including s. 6) and the Rules framed thereunder were attacked on the ground that they had nothing to do with the levy and collection of duties of excise, this Court held that the various provisions of the Central Act and the Rules made thereunder were essentially connected with levying and collection of excise duty and in its true nature and character the Central Act remained one under item 45 of List r and that the incidental trenching upon the provincial field would not affect its constitutionality. The nature of the Rules there

(I) [ 1960) 2 S. C.R. 362.

A. B. AU .. ll; air

v. 7'lu Stall ef ,.,,..,.

Wonc,,._J,

A. B. d6dal.l:a<itr

v. n, SMh of K'rr•/4

WM<>\ooJ.

752 SUPREME OOURT REPORTS [1962] SUPP.

considorcd will appear from the following observations at p. 371 :-

"It (the Central Act) is a fiscal measure to levy and realise duty on tobacco. The method of reali.sirig duty must be left to the wisdom of the legilature taking each individual tradA and its peculiarities and difficulties which ariEe in that matter. Various provisions

of th11 .Act and the Rules show that the authorities are on the track of the movement of tobacco from the time it is grown to the time it is manufactured and sold in the market and the various provisions of the Act and the Rules made thereunder have been considered necessary for effectuating the

purp08e of the Act." It is true that the Central Act provides for the levy of excise duty under s. 3 but in order to carry out that purpose it has provided for licences under s. 6.

The Rules also provide in Chap. III for levy and refund of duty, in Chap. V for manufactured goods other than satt, in Chap. VII for warehousing, in Chap. VIII for licensing. Thus in order to levy excise duty under the Central Act, there are provisions in the Rules which start in the case of tobacco from the stage of cultivation and continue right up to the time the finished product reaches the hand of the retailer and thus becomes a part of the common stock for purp080B

of sale to the consumers. We have also seen that the Cochin Act similarly providas for control on tobacco from the stage at which it is grown to the stage till it reaches C class lioen8008 who sell it in retail to the oonsumers. The Cochin Rules may not be so detailed as the Rules under the Central Act but their main object and purpose is the same, namely, to koep a check on tobacco from the time it is grown to the time it reaches the C class licensee who eventually sells it to the coil8Uiller.

Further if one looka at the Rules

under the similar Travancore Act in vol. II of the 1962 Travancore Excise Manual which were in force on A. B. Alxfulhiir April 1, 1950, in relation to tobacco it will be fonnd •· that there are elaborate rules in Part III from TlieBtat .. JKer<l• pp. 257 to 325 dealing with all aspects of control Wanc.V. .J. • relating to tobacco. Chap. IV deal8 with bonding and issue; Chap. V with licences for sales, Chap. VI with transport and possession. Further there are rules at p. 296 for cultivation, curing and warehousing. Then at p. :114 are rules for the manufacture of cigars, cheroots and snuff in bond. It will thus be clear that the Cochin as well as the Travancore Rules provided for similar control of tobacco as under the Central Act and show that the authorities in Travancore and Cochin were also on the track of the movement of tobacco from the time it was grown and manufactured to the time it was sold in the market. It would therefore follow that the Cochin Act as well as the similar Travancore Act along with the Rules corresponded to the Central Act substantially and would thus be repealed bys. 13(2) of the l!'inance Act, 1950.

But it is urged on behalf of the State that there is no provision for charging duty in the Cochin Act or the similar Travancore Act and therefore all these provisions in the Rules for control from the time of cultivation to the time of the final stage of sale to the consumer, even though they are similar to the Rules under the Central Act, would not make the Cochin Act or the similar Tra.vancore Act a corresponding Act to the Central

Act.

There is no doubt that there is no provision corresponding to s. 3 of the Central Act in the Cochin Act or in the similar Travanuore Act.

Under the Cochin Act the tax was levied by virtue of the power conferred on the Diwan under s. 5 to make rules for the purpose.

Under the similar Travancore Act, the provision is contained in s. 31 which provides that the Diwan may with the sanction of the Ruler make rules permitting

A. B. Abdulhdir

TN Stut1 of Kt<alo

w..,1tooJ.

754 SUPRElIE OOURT REPORTS [1962) SUPP.

absolutely or subject to the payment of any duty or fee or to any other conditions, and regulating within the whole or any specified part of Trav&ncore, the cultivation, manufacture, possession, transport, import and sale of tobacco. So in both the former States, the Act did not contain a charging section and the duty was levied by the Rules framed by the Diwan under the powers conferred on him by the Act. In essence, therefore, the provision for charging the tax was made in the Rules. Further it is true that the method by which the tobacco revenue was realised was through auction sales of the right to possess and sell tobacco.

Bnt we must not forget that the Cochin Act as w; ell as the similar Travanoore Act was passed by a Ruler who was not trammelled by a Constitution like the Government of India Act, 1935, and its Legislative Lists.

The method evolved for realising tobacco revenue was to auction the right to pOl.'sess and sell tobacco and the amounts received at such auctions would cover what would be duty under s. 3 of the Central Act and licence fee under s. 6 thereof.

It is urged however that this does not amount to duty on goods produced, nor is the duty in such a case

. aid by the manufacturer or producer of the goods.

Ne have alrt'a.dy indica.ted that the essence of the duty of excise as held by the Federal Court and the Privy Council is that it is a duty on the goods manufactured or produced in the taxing country. l'urther .as generally the duty is on the goods produocd or manufactured it is paid by the producer or manufacturer, though as in the case of all indirect taxes it is passed on eventually to the consumer in the shape of being included in the price and is thus really borne by the consumer.

Further the ca.ires on which reliance has been placed on behalf of the State also show that Jws are to be found which impose duty of excise at stages subsequent to manufacture or

...

production. As a matter of fact, even in British India before 1935 there used to be_ public auctions of the right to poaaess and sell excisable goods like country liquor, ganja and bhang and the amount realised was excise revenue. It is also obvious that this system of auction is not a system of levying sales tax because it has nothing to do with the levy on each sale, which is the essence of a sales tax. It seems that in the former States of Travancore and Cochin; auction system continued right up to the time the Constitution came into force and even for sometime thereafter. It seems under the circumstances that the auction system whio.h was in force was only a method of realising duty through the grant of licences to those who made the highest bid at the auctions. The fact therefore that this system was used instead of the system of charging of duty as provided in s. 3 of the Central Act would not in our opinion make any difference to the nature of the impost which was in force on the relevant date, namely, April 1, 1950.

It was however urged that under this system even tobacco which was not produced or manufactured in the State but was imported from outside was included for the purpose of licences granted under it. That is undoubtedly so. But from the Rules which were in force regarding cultivation, curing, manufacturing and so on of tobacco within the State itwould not be unreasonable to infer that the substantial part of the income from auctions was still in the nature of excise duty. Even fa the case of imported tobacco, only with respect to that part of it which was eventually sold to the consumer as it was imported without any processing or treatment in the State, it can be said that the impost which fell on it was not in the nature of excise duty.

However, there is no way of differentiating this part of the revenue from the r<•st and considering the elaborate provisions as to the control of tobacco trade from the grower right up to the time that the

A. B. Abdulkadi<

•• Th, S tah of K,,.la

Wan<hoo J.

l9n

~. B. '46dulkuir

II, - ef ,.,..i.

756 SUPREME COURT REPORTS (1962) SUPP.

goods wero sold to tho public in retail sale it would in our opinion be not unreasonable to hold that the Cochln Act as well as the Travancore Act was in subs tan co an Act corresponding to the Central A ct.

Therefore when the Central Act was extended to the

Part B State of Travancore Cochin by s. 11 ( 1) of the Finance Aot aud the Finance Act specifically provided bys. 13 (2) for the repeal of corresponding law, the result was that the Cochin Act as well as the similar Trava.ncore Act stood repealed. There would be no power in the State Government thereafter to frame new Rules either in August 1950 or in January 19!)1 for there would be no law to support the new Hules and without such law the new Rules could not impose a tax as that would clearly offend Art. 265 of the Constitution. Further as soon as the Cochin Act as well as the similar Tra.vancore Act stood repealed on April 1, 1950, by virtue ofs.13(2) of thi; Fina.nee Act there could be no question of their being sustained under item 62 of List II of the Seventh Schedule for that would only a.rise if these were not repealed as corresponding law by s.13(2 ).

Turning now to thl' three Travancore appeals it is enough to say that they stand on tho same footing as the two Cochin appeals. If anything the Travancore Act as well as the Travancore Rules whicli wue in force on April 1, 1950 a.re more elaborate than theCochinAct and thfl Cochin Rules.

Further the Travancore Act bys. 31 actually refers tc.. manufacture also. The Coohin Act did not refer to manufacture in the Act itself though there was provision for manufacture in the Rules framed under the Act. What applies therefore to tho Cochin Act and the Rules framed thereunder applies in force to the Trava.ncorc Act and the Rules framed thereunder and there is no doubt that the Travan core Act and tho Rule11 framed thereunder were also a. law corrsponding to the Central Act and the Rule.a framed thereunder. The TravancoroAct there fore a)Ho stuu<l repealed from April 1, 1950. There

would thus be no law to support the Rules framed by tbo State Government in January 1951 and therefore the Rules must fall.

It appears that these new Rules have been abrogated as from January 1958. So it was urged on behalf of the State that this Court should not grant a mere declaration as to the invalidity of the Rules, when they are no longer in existance. This argument in our opinion ha~ no force because we must look to the situation as it was when the petitions wer<i presented. The Cochin petitions were presented in 1956 and the Travancore petitions were presented in 1955 and at that time the Rules were in force and they continued in force till December

1957. Therefore the petitioners would be entitled to a declaration that the Rules were invalid because at any rate that would give them relief so far as the period after their petitions is concerned while the Rules remained in force.

We therefore allow the appeals and set aside the order of the High Court. The petitions are allowed and it is hereby declared that the new RuleH purporting to be framed either under the Cochin Act or under the Travancore Act in August 1950 and thereafter in .January 1951 were invalid .ab initio

ancl have no force and effect. The appellants will get their costs from the State-one set of hearing costs.

SrrAH, J.-In this group of five appeals the principal q1iestion which falls to be determined is whether within the meaning of s. 13(2) of the Finn.nee Act, HViO (which by s. 11 thereof extended the Central Excises & Salt Act, I of, I 9-l4; to tho Part B States), there was, immediately before the 1st of April l!J,:; o, in force in Part B State of TravancoreCochin, a law corresponding to the Central Excise & Salt Act, 19H, It is common ground that if there was such a law in force, by virtue of ".13(2) of the Finance Act of 1950, that law stood repealed.

A. R Abdulkal ir v.

Tie State of Kerala

Warichoo J.

SMh J.

llMl

A.B.AW•1dtr

v. 111 Bi.•/ K•lh

SWJ.

758 SUPREME OOURT REPORTS [1962] SUPP.

The appellants in Civil Appoals Nos. 89 and 90 of 1961 were carrying on business in tobaooo within the territory of the former State of Coohin.

Appellants in Civil Appeals 126 to 128 of 1961 were

residents of and carried on business in tobacoo within territory of the former State of Travancore. On July 1, 1949, the States of Travanoore and Cochin

formed themselves into a Union under a common administration, but by the virtue of the Travanoore- Cochin Administration Law, 6 of l l 26(M.E.), the Acts which were in operation in the two Stat.ea continued to remnin in foroe in the territories in which they were previously in force.

In the territory of the former State of Travancore, there was in force the Travancore Tobaooo Regulation, I of

1087 (M.E.) which wBB ena<>ted by the Ruler of Travancore in 1911. Bys. 3 of the Act, "Tobacco" was defined as including "snuff, cigars, cigarettes, beedies, toba.coo powder and other prepru-ations or admi::::tures of tobacco".

Section 4 of the Act imposed, except as permitted by the Act or by any other enactment relating to tobaooo, for the time being in force by the Rules published under the Act or any other such emctment prohibitions against

cultivation, manufacture, possessions, transport, importation, exportation or sale of tobacoo. By Chapter III of the Act power was conferred upon the officers of the Excise Depactment to search houses suspected to contain tobacco and to seize tobacco and provision was made for incidrntal matters.

Chapter IV dealt with offences and

punihmeut and by s. 31 the Diwan of the State was authorised, with the sanctirln of the Ruler, from time to time, by Notification in the Gazette, to make rules consist.mt with the Act amongst other subjects permitting ablolutely or subject to the payment of any duty or fee or to any other conditions, and regulating within the whole or any speoified part of the State of Travancore, oultiva. tion, manufacture, posseesion, tramportation,

import and sale of tobacco; authorising the establishment of warehouses or bank8haUs for storing tobacco legally cultivated or imported into the territory fixing the mode, time and place of levy of duty, regulating the apecial custody of tobacco warehoused and the levy of fees for warehousing and transport, and generally to carry out the

p10visions of the Act. Rules 'were framed in 1913 in exercise of the powers under s. 31 of the Tobacco Act whereby restrictions were imposed upon the import and export of tobacco and provision was made for bonding tobacco in warehouses and for the issue of licences for bonding tobacco. Provision was also made for licensing retail sitle for tobacco and for transport and possession thereof.

Certain other rules regulating cultivation, curing and warehousing tobacco and for the issue of licences for those purposes were promulgated in 1937.

Rules were also framed regulating the manufacture of cigars, cigarettes and cheroots in bonds under licences. It is unnecessary to set out these rules in detail, it may suffice to observe that cultivation, curing, manufacture, possession, transport, importation and exportation and sale of tobacco was controlled by a system of lie{lnsing.

Certain licences were issued free of charge and in respect of certain other licences, especially storage and sale, fee had to bf' paid to the State.

Similarly, in the State of Cochin there was enacted by the Ruler of Cochin the Cochin Tobacco Act of 1084 (M.E.) on May 3, 1909. By s. 3(dJ of that Act, tobacco was defined as inclusive of "snuff, cigars and preparations of which tobacco forms a part." By s. 4, except as permitted by the Act or by the Rules made thereunder, possession for the purposes of sale, transport, import, export, sale and cultivation of tobacco were prohibited.

By s. 5, the Diwan of the State was authorised from time to time after previous publication, to make rules consistent with the Act to permit abso-

A. B. Abdulkadff

v, Till SIGll qf Ke alo

Shah J,

lHt

A. B • ~U, Jbj;,

TAt 8i.11 •f X'tt•l•

ShM J,

760 SUPREME OOURT REPORTS (1962] SUPP.

lutely or su bjcct to any conditions regulating the pOBSession, transportation, importation or exporta. tion and sale and cultivation of tobacco. Contravention ,, f the Ar.t and the Rules or orders made under thP Act wert pl'nalised bys. 6.

Rules were framed in 1923 under the Cochin Tobacco Act providing for a system of licensing for cultivation, manufacture and storage of tobacco and for in cidental matters. Control was maintained over harvesting, weighment, storage, stock taking and transport of tobacco, and also on the export and import of tobacco. The authorities administering the provisions of the Tobacco Act and the Rules framed thereunder were the Commissioner of Excise and officers Rnbordinate to him in the Excise Dc•parlm1nt.

Licences for storage were to be annual licencfS and to be issued on payment of liccnC'c fer.

Under the Cochin Act and the Rules framed thereunder control was maintained on toha<"co at all the Rtages of its production, manufacture and difipoeal.

From a resume', of the provisions of these two Acts and rules and notifications issued thereunder, it is m; mifest that on the production, manufacture storage an<i sale of tobacco control was im pofled and the administration of this control was left in the hand8 of tho Excise Departments of the two States. AH stated hereinbefore, by virtue of Act VI of 1125 (M.E.), the two Acts in operation within he territories of the two States were conti nurd even aftrr the Union c>fTrav'\ncore and 0ochin was formed, and bv Art. :n2 of tho Constitution the provisions of the two Acts remained in opera tion in the repective area of the former States even after the Part Il State of TravancoreCochin ea.me

into being on January 26, 1950.

By s. ll of Finance Act 25 of 1950 certain Acts including the Central Excises & Salt Act, I of 1944, and all Rules and orderu made thereunder in force from time to time before the commencement of the

28.C.R.

SuPREME COURT REPORTS 761

Finance Act were extended with effect from April I,

l!J50, to the part B States (except the State of Jammu & Kashmir), It was provided by s. 13(2)

"that if immediately before the lst of April, 1950, there was in force in any State other than J ammu & Kashmir a law corresponding to but other than the Act referred to in subs. (I) s. 11 such law" shall stand repealed with effect from the said date. Presumably, on account of thi> application of the Central Excises & Salt Act, I of

11144, by s. 11 of the Finance Act, 1950, the Part B State of Travancore-Cochin published fresh sets of Tobacco Rules.

These Rules were issued on January 25, 1951, in purported exercise of the powers conferred by the Travancore Regulation I of 1087 (M.E.l and the Cochin Tobacco Act of 1084 (l\LE.). Rule 14 (which is common to both the sets of Hules) provides that "the vend of tobacco of all kinds is prohibited throughout the state, except undi; r a licence".

Rule 15 prcivides that the "licence for the vend of tobacco shall be of the following descriptions :-

(i) Stockist or 'A' Class licence;

(ii) Wholesale or 'B' Class lit>enoe ; and

(iii) Retail or 'C' Class licence." Rule 16(i) and (ii) provides:

"(i) Holders of Stockist or 'A' Class licences shall be entitled to purchase tobacco from any dealer within or without the

State without any qnantitative restriction.

This class of licensees 3hall sell only to other 'A' Class licensees or to 'B' Class licensees,

(ii) The annual fees for these licences shall be as follow~ : -

(Then follows a table which sets out minimum fee prescribed for varieties of tobacco stocked upto the maximum

IfltlZ

A. B. dbdlllialit'

v. n.. 81"11 of Irerai.

Sholl J.

JIU ..... """""*'b

"· 7lt St• •/ Xdel.•

BWJ,

762 SUPitEME OOURT REPORTS [19tl:.!] SUPP.

prescribed quantity and the <Mlditional

fee payable for stocking additional quantities.)" The appellants in all those appeals were 'A' Cla.88 stockists e.nd were called upon to pay licence fee prescribed by these Rules.

Th1>y claimed that they were not liable to pay licenco fee under the Rules framed in 1951 bece.uso there Willi absolute delegation of legislative power by the Rules, that the levy infringed their fundamental rights under Arts. 14 and 19(l)(g) of the Constitution, that the duty levied was in any event an excise duty, and becaube the fee represented a tax on trade, calling or employment and on that account was subject to the constitutional restriction imposed by Art. 2";1l(2l of the Constitution. They also contended that the Tobacco Acts of the Travancore State and the Cochin State, which had been kept alive by Act 6 of ll25 (M.E.) and by Art. 372 of the Constitution were superseded by the application of the Central Excises and Salt Act, 1944, bys. 11 of the Finance Act, 1950.

The High Cont of TravancoreCoohin in the petitions for writs of mandam'll8 and other writs negatived the contentions raised by the appellants that the Acts and tho Rules amounted absoluto delegation of legislative power or that the fundamental rights under Arts. 14 and l9(ll(g) and the rel!trictions imposed by Art. 276(2) of the Constitution were infringed thereby. The High Court also held that tho duty levied was not an excise duty and presumably on that account declined to consider the question whether the Tobacco Acts of the States of Travancore and Cochin had been aupel'l!('ded either wholly or partially by the application of the Central Excises and Salt Act of 1944.

The Travancore and the Cochin Acts do not directly levy any duty on production or manufacture of tobacco, Restrictions, it is true, are imposed on

the growing, curing, manufacture, storage, import and export by . requiring that licences shall be obtained for those purposes and prescribing penl ties for violating the provisions of the Acts anrl the Rules. It also appears that the trade in tobacco was regulated before the formation of the B State of Travancore-Cochin, by holding auctions for the rights to sell tobacoo. These auctions were held by Excise Commissioners and the highest bidder in the auction got the right to deal in toLacco, and the two Acts were enacted for ngulating and controlling the sale of tobacco, but the State did not levy any duty on 1 he mannfacturr, 01 production of tobacco. '.!'he licenc:e foe for the i8sue of a licence for g1owing, curing, manufacturing, ('Xporting, importing or storing is not in itself an excise duty on the manufacture or production.

The Federal Court Tn the matter o.f the Central Provinces and Berar Sale.s o.f Motor Spirit and Uubricants 'l'axat-ion Act, 1938 (1) observed :

" ...... at the date of the Constitution Act (Government of In•lia Act 1!)35) though it seems that the word excise' was uot infrequently for tho administrat.ion of a particular indirect tax (as salt excise or opium excise), \he only kin<l of excise duties which were known in India bv that name were duties collectnd from mami. facturers or pr ; flucers, and usually payahl<' on th"l issue of the cxcisahlc articles from the place of manufacture or production. '.!'his also may not be eonclnsivo in itself, but. it seems a not n11rP1tH•llla.blo infore11ce th:it P11rliam,,11t int!'nrkd the' !'Xjll'l'S8ion 'clut.i1•s of excis1i' in the Constit.ufrm Act to be understood in tlw Sf'll'fJ in whic:h upto tlrn.t. t.iirn; it had nlwJys in foci linen usecl in Inclia, wh<>rf'

{I) [1939] F.C.R. 18, 51-55

d. B. Aba.lk•"1

•• The Stale of'""""

Shah J,

lHI

A.B.Au.u.tir

v. 7l. SW. •f Km/•

BWJ.

764 SUPREME OOURT REPORTS (1962] SUPP.

indoed excise duties of any other kind were unknown.

Nor indeed are excie dutios properly so-called often to be found at the present day which a.re not collected at the stage oi production or manufacture, whatever

may have been the case in Blackstone's time a.ncl whatever may havl' been tho reasons for Johnson's definition of 'Excise' in the first edition of his Dictionary ( 1755)., .... " (Per Gwyr C.J.) This view was approved by the Judicial Committee in The Governor-Ge:neral in Oourwil v.

TM, Prom'.nce, of Madra.9 (1).

An excise duty is according to the Indian Statute, a duty on tho manufacture or production of goods and the duty which was levied in the States of Travaucore and Cochin on the storage of tobacco cannot be regarded as a duty of excise.

But that conclusion is not decisive of the problem under consideration. The question has 8till to be consi dered whether tho Travancoro and Cochin Acta and the Rules framed thereunder were law "corresponding" to tho Central Excises and Sa.It Act, 1944, extended under tho Finance Act, I 950. The expree sion "corresponding" does not postulate identity of the Rtate Law and the statute extended by s. I I of the Fina.nee Act : if there was in foree at the material time law in the Pa.rt B State dealing with a particular subject mattl'r and tho law extended by s. I I of tho Finance Act, 1950, dealt with the same subject matter and the two laws though not identical still were such that if they stood together there would have been legislative duplication or overlapping, the law in force in Pnrt B State would be rogarded as corresponding to the law extended by the Indian Fina.nee Act and hence repealed by the operation of s. 13(2).

Let us examine the eoheme of the Central Excises and Salt Act of 1944 for the purpose of

(I) [19H J L.R. 72 I.A. 91.

2 S.C.R.

SUPREME" OOURT REPORTS 765

ascertaining whether the Travancore and the Cochin Tobacco Acta and Rules frame thereunder are law corresponding to the Central Excises and Salt Act, 1944, wholly or partially. The Central Excises and Salt Act,, 1944, was enacted to consolidate and amend the law r€lating to Central duties of excise on goods manufactured or produced in certain parts of India and to salt.

The expression "excisable goods" is defined in s. 2(d) as meaning "goods specified in the First Schedule as being subject to a duty of excise and includes salt". By s. 2(f) the expression "manufacture" is defined as inclusive of "any process incidental or ancillary to the completion of a manufactured product, and (i) in relation to toba ; co includes the preparation of cigarettes, cigars, cheroots, biris, cigarette or pipe or hookah tobacco, chewing tobacco, or snuff x x x".

By s. 3 it is provided that there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India x x x and at the rates set forth in the First Schedule. By s. 6, certain incidental operations are made subject to licence and it is provided : The Central Government may, by notification in Official Gazette, provide that, from such date as may be specified in the notification, no pPrson shall, except under the authority and in accordanec with the tcrnis and conditions of a licence granted under this Act, engage in (a) the production or manufacture of any specified goods included iu the First Schedule or of saltpetre or of any specified component parts or ingredients of such gooJs or of specified containers of any spceificd excisable goods, or (b) the wholesale purchase or sal(' (whether on his own account or as a broker or eommission agent or the storage of auy ex('isable gootl" specified in this behalf in Part A of the Second Rd1c<lule".

By viltue of these provisions po,1cr is c'Pnft1Ted upon the Central GoTernment to impose re8tridions

196S

A. B. AUUlllllir

Tltt 811de of Keral•

SAolo J.

A.B.AWhdir

The Buw of s;,,.ai.

SW J.

766 SUPREME COURT REPORTS [1962] SUPP.

upon the rights to produce, manufacture and to engage in any process of production or mnnufa.cture of the <'Xcisable goods 01 in the wholesalo purchase or sale of excisable goorls ; this power is conferred indisputably U8 ancillary to enforcinir the law enacted for the levy an<l collection of l'Xoiso duty.

By s. !l <'Olltravcntions of the provisions of the Act and notifica.tions thereunder are penalised.

Power to forfoit goodR iB conferred bys, IO.

By Chnpter III, power to arrest and to summon persons to give eviden<"o oc pro•luce documents in inquiries under the Act, to search and the procedure to be followed by officers in-charge of police-sta.tions, inquiries to bo made by Central Excise Officers against arrested persons forwarded to them are made.

Chapter VI deals with adjudication of confiscations an<l penalties, and Chapter VII enacts certain supplementary provisions.

The Schf'<!ule to this Act sets out the descriptions of various goods and the rati:s of duty chargeable in respect thereof.

The primary purpose of the Act is to levy and colleet CX<'ise duty in respect of goods specified in the Firnt Schedule and with hat objec>t in view, diverse provisions an enacted. Tobacco is under the Act an exciHa.ble commodity, and duty at rates specifier! in the Schululo is leviable in respect df different forms of tvhacco. lly s. 6( h) wholesale purchase or sale, or storage of excisablr articles is prohibited.

By Rule 7 of tlw Central Exoiso Rules, I 944, duty is ma.de payable hy every person, who produces, cures, mantifactures or who stores in any warehouse any cxri,; able goo<ls.

Rule 174 which occurs in Chapter VII r deals with licensing. It provideH, in so far as it is material, that

"Every ma11ufacture, trader or person hereinafter mentioned, shall be required to take out a licence and shall not conduct his business in reg an I to such goods otherwise

2 S.C.It.

SUPREME COURT REPORTS 767

than by the authority, and subject to the terms and conditions of a licence granted by a dµl.}

authorised officer in the proper From :- (I) Matches x x x

\2) Unmanufactured proclucts.-Curers, brokers, Commission agents and wholesale dealers who purchase such pruclucts from curers, all brokers, commission agents and wholesale dealers doing business in unmanufactured tobacco ; all holders of private bonded store-rooms or warehouses;

(3) Other excisable goods except salt-

(a) Manufacturers; and (b) x x x" Rule 175 deals with the procedure for obtaining a licence. By the lst clause it provides that every person desiring to engage in operations requiring the possession of a licence aforesaid shall apply in writing every year for a licence or renewal thereof to the licensing authority who shall be such officer as the Central Board of Revenue may authorise in this behalf. Rule 176 prescribes Forms application for licences and cl. (2) provides that every such application for licence shall, where a fee is prescribed in the subjoined Table, be accompanied by a Central Excise Revenue Stamp showing payment of such fee under item No. 2 in the Table "a wholesale dealer in unmanufactured tobacco who purchases for the purpose of trade or manufacture" has to pay graded fee set out in the second and the third columns. Item 6 deals with the duty payable by the holder of a private bonded store-room or warehouse. Rule 178 provides for the Forms of licence. The appropriate forms of licence in respect of storage of tobacco for sale are Form L-2 (application for licence to carry on wholesale trade

A. B. A.bdu/kedir

•• The 8tQ1e of K., al•

Shd J.

11111 ...... .....,_.

'f.

TM Bt.U "&'ml•

SW J.

SUPREME OOURT REPORTS [1962] SUPP.

in unmanufaotured products liable to a central duty of excise), Form L3 (application for licence as broker or commission agent in respect of unmanufactured products liable to a central duty of excieo), and Form r,.5 (application for licence for a private bonded warehouse.storeroom for the storage of excisable goods). It is manifest that under the Rules so framed duty is imposed to obtain a licence on payment of fee for storage of tobacco for sale. It is not disputed that the appellants in all the appeals took out licences under rules 174 and 178 of the Central Exci808 and Salt Act and paid the licence fee in that behalf to the Central Government. The appellants were also required to pay licence fee for the storage of tobacco for sale under the provisions of the Travancore and tho Cochin Tob'l.C"X> Acts and the Rules framed thereunder on January 25, 1951.

It is true that under the Central Excises and Salt Act, 1944, the provision for obtaining licences for storage is a provision ancillary to tb e recovery of

excise duty, whereas under the Travancore and the Cochin Acts, the levy of licence fee was imposed in

pursuance of a schemo for maintaining control on the sale of tobacco without expressly levying any excise duty.

But on that account, it cannot be said that the provisions relating to tho requirement of licenoes and tho payment of licence fees for storage of tobacco for sale under the Travancore and the Cochin Acts wore not provision corroeponding to the provisions of s. 6(b) under the Central Excises and Salt Act, 1944 and the rules framed under the Act requiring that licences shall be taken

out for storage of tobacco for sale and fee shall be paid in respect thereof. In my judgment the relevant rules made 1111der the Travancore and the Cochin Tobacoo Acts requiring licenCf's to be taken for storage of tobacco and in force on April, I, 1950, were law corresponding to the provisions of the Central Excise and Sa.It Act, 1944, and the rules

framed thereunder which required licences to be taken out for storage of tobacco and for payment of licence fee in respect thereof and to that extent the provisions imposing an obligation to take out licences and to pay licence fees under the Tobacco Acts of Travancore and the Cochin States were superseded and the State of Travancore-Cochin had no authority to promulgate rules 14, 15 and 16 under the Notification issued in the Travancore-

Cochin Government Gazett.e dated January 25, 1951, and to levy licence fee for storage of tobacco.

It is unnecessary to consider whether the remaining provisions of the Travancore and the Cochin Tobacco Acts and th~ Rules framed thereunder were law correspondirrg with the Central Excises and Salt Act, 1944.

For these reasons I agree that the appeals be allowed, and the order passed by the High Court be set aside. In each petition a writ will issue declaring that the levy of licence fee undPr the Notification dated January 25, 1951, is without authority of law, and that the State of Travanc.1re-Cochin do forbear from levying and collecting the licence fee.

Appeals allowed.

KEDAR NATH SINGH

STATE OF BIHAR (B. P. SINHA, C, J., s. K. DAS, A. K. SARKAR, N. RAJAGOPALA AYYANGARand J.R. MunHOLKAR, JJ.)

Sedition-Content of-Siatute pa11aliai11g lfeditian and statement• e-0nduci11g to public mischief-Constitutio11alit11 of- Whetkerinfringesfreedom cf apeech--lndian l'e•al Code, 1860 (Act XLV of 1860), ss. 12!A, 50j-Constitution of India,

Art6. (19)(l}(a}, 19(2).

Secdon 124:\ of the Indian Penal Code which makes sedition an offence is constitutionally valid. Though the section imposes restrictions on the fundam, ntal freedom of

I96t

A. lie , j/)tfuJhdlr

Tiu 8tat1 of Kerola

Blah J.

B. ABDULKADIR AND OTHERS

SINHA

P. B. GAJENDRAGADKAR

C. SHAH, JJ.

Cochin Tobacco Act, 1084

Tobacco Regulation, 1087

Finance Act, 1950

Constitution of India

Finance Act, 1950

Section 13(2)

Finance Act, 1950

Finance Act, 1950

Central Excises and Salt Act, 1944

ss. 11 and 13(2)

Central Excises and Salt Act, 1944

Finance Act, 1950

Cochin Tobacco Act, 1084

Travancore Tobacco Regulation, 1087

Central Excises and Salt Act, 1944

s. 3

Central Exciss and Salt Act, 1944

[1939]

F.C.R. 18

[1942] F.C.R. 90

(1945) L.R. 72 I.A. 91

[1960] 2 S.C.R. 362

Section 4

s. 50

Rules also framed under the Cochin Act

s. 11

Section 13

s. 11

Rules which it did wider the Cochin Act

Seventh Schedule

Seventh Schedule

Finance Act, 1950

Finance Act, 1950

Seventh Schedule

s. 13(2)

s. 11( 1)

s. 13(2)

s. 13(2)

s. 13

Let us therefore turn to the Cochin Act

Seventh Schedule

Motm Spirit and Lubricants Taxation Act

Central Promnces and Berar Act

L.R. 72 I.A. 91

Now the Central Act

s. 3

s. 6

s. 6

1960) 2 S. C.R. 362

s. 3

s. 6

have also seen that the Cochin Act

Further if one looka at the Rules

Act a corresponding Act to the Central

s. 3

s. 5

s. 31

s. 3

s. 6

s. 3

Therefore when the Central Act

s. 11

Art. 265

Further as soon as the Cochin Act

Seventh Schedule

s.13(2 )

Further the Travancore Act

s. 13(2)

s. 11

Section 4

s. 31

s. 31

s. 13(2)

s. 11

s. 11

Finance Act, 1950

Arts. 14 and 19(l)(g)

Art. 2

Art. 372

Finance Act, 1950

Arts. 14

Art. 276(2)

[1939] F.C.R. 18

Act, 1944

Finance Act, 1950

s. 13(2)

L.R. 72 I.A. 91

s. 2(d)

First Schedule

s. 2(f)

s. 3

First Schedule

s. 6

First Schedule

s. 6( h)

Central Exoiso Rules

s. 6(b)

Central Excises and Salt Act, 1944

Act, 1944

ss. 12

Constitution of India

Indian Penal Code