1994 JTR(SC) 1003
1995 AIR(SC) 356 ; 1994 AIR(SCW) 4547 ; 1994 6 JT 629 ; 1995 9 JT 356 ; 1995 1 RLW(Raj) 11 ; 1994 4 Scale 602 ; 1995 7 Scale 336 ; 1995 1 SCC 257 ; 1994 Supp4 SCR 278 ; 1995 1 UJ 142 ; 1995 KHC 744 ; 1996 1 Supreme 232
SUPREME COURT OF INDIA
K. RAMASWAMY AND N. VENKATACHALA, JJ.
M/s. Sitaram and Bros., Appellant
Versus
State of Rajasthan and others, Respondents.
Civil Appeal No. 925 of 1990 with Civil Appeals Nos. 3601-3602 of 1889
Decided on 5-10-1994.
Act
Referred
:CONSTITUTION OF INDIA : Art.254, Sch.7 List.i Entry.52, List.ii Entry.24, List.ii Entry.8, List.iiI Entry.33(a), Art.246
INDUSTRIES DEVELOPMENT AND REGULATIONS ACT : S.18(g)
RAJASTHAN EXCISE ACT : S.41(2)(d), S.3, S.2, S.3(1)(7)(a)
(A) The Rajasthan Excise Act, 1950, as amended by the Rajasthan Excise Amendment Act, 1985, was challenged primarily on the grounds of repugnancy with the Industries Development and Regulation Act, 1951, and the Molasses Control Order, 1961. The amendment inserted the term 'Molasses' into clause (d) of sub-section (2) of section 41, bringing molasses within the scope of excise regulation under the Rajasthan Excise Act. The amendment was enacted by the State Legislature under Entry 33(a) of List III (Concurrent List) read with Entry 24 (Intoxicating Liquors) of the State List of the Seventh Schedule to the Constitution of India. The Molasses Control Order, 1961, made by the Central Government under section 18G of the Industries (Development and Regulation) Act, 1951, regulates aspects such as sale, storage, grading, and pricing of molasses. The court observed that the state legislation and the central order operate in different fields without inconsistency, allowing them to coexist harmoniously. Entry 52 of the Union List, which empowers Parliament to regulate industries when declared expedient in the public interest, encompasses the Industries Development and Regulation Act, 1951, and its Molasses Control Order, but this does not preclude the State Legislature from acting under Entry 24 and Entry 33(a) where the subject mattermolasses as a by-product of sugarfalls within the state's domain over intoxicating liquors and concurrent trade and commerce regulation. The court held that the amendment Act falls within the legislative competence of the State Legislature under Article 246(3) of the Constitution.
(B) Key legal principles include: Legislative competence under Entry 24 (intoxicating liquors) and Entry 33(a) (concurrent list) permits state regulation of molasses as a by-product of sugar; the Molasses Control Order, made under Entry 52 of the Union List and section 18G of the Industries Act, addresses operational industry-specific controls without overlapping state punitive measures; harmonious interpretation of state amendment and central order avoids repugnancy; and the constitutional allocation of powers under the Seventh Schedule permits concurrent regulation in the absence of direct conflict.
Facts of the case:
The State of Rajasthan amended the Rajasthan Excise Act, 1950, via the 1985 Amendment Act to include molasses as an excisable article, regulating its import, export, transport, and possession. This amendment was challenged in the Rajasthan High Court as ultra vires the state legislature's powers and repugnant to the Molasses Control Order, 1961, and the Industries Development and Regulation Act, 1951.
Findings of Court:
The Division Bench of the Rajasthan High Court held that the amendment Act, excluding certain conditions deemed repugnant, was validly enacted under Entry 33(a) of the Concurrent List and Entry 24 of the State List. It further found no repugnancy with the Molasses Control Order, as the central order and state amendment operated in distinct spheres.
Issues:
Whether the State Legislature had competence to amend the Rajasthan Excise Act to include molasses; whether the amendment was repugnant to the Molasses Control Order; and whether the Central Act and Rules occupied the field of molasses regulation to the exclusion of state legislation.
Ratio Decidendi:
The court determined that entries in the Seventh Schedule are not mutually exclusive where the subject matter involves a by-product falling under multiple entries; the state can legislate on molasses under Entry 24 and Entry 33(a), and such legislation does not conflict with central regulations under Entry 52 when the fields of operation are distinct, leading to the dismissal of the appeals.
Result:
The appeals were dismissed, upholding the constitutional validity of the Rajasthan Excise Amendment Act, 1985, and allowing the state to regulate molasses without interference from central provisions, provided no direct inconsistency exists.
(A) The Rajasthan Excise Act, 1950, as amended by the Rajasthan Excise Amendment Act, 1985, was challenged primarily on the grounds of repugnancy with the Industries Development and Regulation Act, 1951, and the Molasses Control Order, 1961. The amendment inserted the term 'Molasses' into clause (d) of sub-section (2) of section 41, bringing molasses within the scope of excise regulation under the Rajasthan Excise Act. The amendment was enacted by the State Legislature under Entry 33(a) of List III (Concurrent List) read with Entry 24 (Intoxicating Liquors) of the State List of the Seventh Schedule to the Constitution of India. The Molasses Control Order, 1961, made by the Central Government under section 18G of the Industries (Development and Regulation) Act, 1951, regulates aspects such as sale, storage, grading, and pricing of molasses. The court observed that the state legislation and the central order operate in different fields without inconsistency, allowing them to coexist harmoniously. Entry 52 of the Union List, which empowers Parliament to regulate industries when declared expedient in the public interest, encompasses the Industries Development and Regulation Act, 1951, and its Molasses Control Order, but this does not preclude the State Legislature from acting under Entry 24 and Entry 33(a) where the subject mattermolasses as a by-product of sugarfalls within the state's domain over intoxicating liquors and concurrent trade and commerce regulation. The court held that the amendment Act falls within the legislative competence of the State Legislature under Article 246(3) of the Constitution.
(B) Key legal principles include: Legislative competence under Entry 24 (intoxicating liquors) and Entry 33(a) (concurrent list) permits state regulation of molasses as a by-product of sugar; the Molasses Control Order, made under Entry 52 of the Union List and section 18G of the Industries Act, addresses operational industry-specific controls without overlapping state punitive measures; harmonious interpretation of state amendment and central order avoids repugnancy; and the constitutional allocation of powers under the Seventh Schedule permits concurrent regulation in the absence of direct conflict.
Facts of the case:
The State of Rajasthan amended the Rajasthan Excise Act, 1950, via the 1985 Amendment Act to include molasses as an excisable article, regulating its import, export, transport, and possession. This amendment was challenged in the Rajasthan High Court as ultra vires the state legislature's powers and repugnant to the Molasses Control Order, 1961, and the Industries Development and Regulation Act, 1951.
Findings of Court:
The Division Bench of the Rajasthan High Court held that the amendment Act, excluding certain conditions deemed repugnant, was validly enacted under Entry 33(a) of the Concurrent List and Entry 24 of the State List. It further found no repugnancy with the Molasses Control Order, as the central order and state amendment operated in distinct spheres.
Issues:
Whether the State Legislature had competence to amend the Rajasthan Excise Act to include molasses; whether the amendment was repugnant to the Molasses Control Order; and whether the Central Act and Rules occupied the field of molasses regulation to the exclusion of state legislation.
Ratio Decidendi:
The court determined that entries in the Seventh Schedule are not mutually exclusive where the subject matter involves a by-product falling under multiple entries; the state can legislate on molasses under Entry 24 and Entry 33(a), and such legislation does not conflict with central regulations under Entry 52 when the fields of operation are distinct, leading to the dismissal of the appeals.
Result:
The appeals were dismissed, upholding the constitutional validity of the Rajasthan Excise Amendment Act, 1985, and allowing the state to regulate molasses without interference from central provisions, provided no direct inconsistency exists.
ARUNESHVAR GUPTA, I.MAKVANA, RACHNA JOSHI ISSAR
JUDGMENT
The appeals arise from Writ Petition No. 1808 of 1988 and batch dated 18-8-89 of the Division Bench of the Rajasthan High Court following its earlier judgment dated May 17, 1989 in Writ Petition No. 1340 of 1986 and batch. In the High Court, S. 17A and class Molasses added to S.41 (2) (d) of the Rajasthan Excise. Act, 1950 as amended by the Rajasthan Excise Amendment Act 8, 1985 were impugned. The Division Bench after exhaustive consideration of all the controversies declared that the Amendment Act 8 of 1985 was enacted by the State Legislature under Entry 33 (a) of List III (concurrent list) of the 7th Schedule of the Constitution of India. Therefore, the State Legislature was competent to enact the said Amendment Act except the Condition No. 3(1) (II) and 3(2) of the licenses in Form M-1 as repugnant to the provisions of clauses (3), (4) and (7) of the Molasses Control Order. The State did nor prefer any appeal as regards the declaration of the said aforesaid provision to be ultra vires of the State Legislature. But being dissatisfied with the judgment of the Division Bench the appellants had sought leave and this court granted leave under S. 136 of the Constitution.
2. It was contended by Mr. Makwana, learned counsel for the appellant that exercising the power under Entry 52 of List I (Union List), the Industrial Development Regulation Act, 1951 was enacted by the Parliament, Item 25 of the Schedule relates to the sugar industry. Molasses is a by product of the mother liquor of sugar. It is also controlled by the Molasses Control Order, 1961 made by the Central Government exercising the power under S. 18G of the Industries (Development and Regulation) Act, 1951 and that therefore the State Legislature is devoid of competency to enact the Amendment Act. We find no force in the contention. Entry 52 of list I (Union List) of the 7th Schedule to the Constitution envisages to enact law relating to industries the control of which by the Union is declared by Parliament by law to be expedient in the public interest. Undoubtedly, Act 65 of 1951 was enacted in exercise of this power and S. 18G gives power to the Central Government to regulate the items of industries enumerated in the Act 65 of 1951. However, Entry 24 and Entry 8 of the State List of the 7th Schedule gives power to the State Legislature to make law relating to intoxicating liquors, that is to say, the production, the manufacture, possession, transport, purchase and sale of intoxicating liquors. Entry 24 is the reserve power of the State Legislature subject to Entry 7 and Entry 52 of List I to enact the law relating to the industries. Entry 33 of the concurrent list gives power to the Parliament as well as the State Legislature to enact law regulating trade and commerce in and the production, supply and distribution. of (a) the production of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest and imported goods of the same kind as such products. Therefore, the Parliament as well as the State Legislature have been given the power to enact a law regulating trade and commerce in and the production, supply and distribution of "the products of any industry" obviously dealt with under Entry 52 of Union List. Section 17 A of the Amendment Act defines Molasses, thus:
"Molasses means the mother liquor produced in the final stage of the manufacture of sugar or khandsari sugar by the vacuum pan process or open pan process from sugar cane or gur."
3. Section 4 of the Amendment Act provides that in clause (d) of sub-sec. (2) of S. 41 of the Principal Act after the expression "excisable article" the expression "or Molass es" shall be added. Section 17 of the Rajasthan Excise Act deals with establishment and licensing of distilleries and warehouses subject to certain restrictions contained therein. As seen S. 17A merely defines the Molasses without any further consequences. Section 41 gives power to the State Government to make rules for the purpose of carrying out the provisions of the Rajasthan Excise Act or other law for the time being in force relating to excise revenue (b) liquidating the import, export, transport or possession of any excisable article. By virtue of S.4 of the Amendment Act " or Molasses" has also been added to clause (d) of sub-sec. (2) of S.41.
4. Thereby , it would appear that the Legislature intended to regulate the import, export, transport or possession of Molasses. The question whether the Amendment Act is repugnant to the provisions of the Industries Development Regulation Act or the Molasses Control Order 1961 made by the Central Government exercising the power under S. 18G of the Industries (Development and Regulation) Act 65 of 1951. Section 17 of. the Amendment Act is in pari materia is with the definition given in S. 2(a) of the Molasses Control Order 1961 which came into effect for the State of Rajasthan with effect from 1-11-75. The question, therefore, is whether S. 4 of the Amendment Act introducing molasses in clause (d) of sub-sec. (2) of S.41 of the Rajasthan Excise Act, 1950, is repugnant to the provisions of the Molasses Control Order or any other relevant order occupied under Act 65 of 1951. The Molasses Control Order, 1961 regulates restriction on sale, clause(3), restriction or removal, clause (4), storage of Molases, clause(5), grading of Molasses, clause (6) and pricing maximum for the sale regulated by clause (7). As seen the operation of the Molasses Control Order and the operation of the Amendment Act have not occupied the same field nor run into collision course. It is seen that the Amendment Act was made by the State Legislature exercising the power under Entry 33(a) of the concurrent list read with Entry 24 of State List as Molasses is a by product of a sugar industry covered by the Industries Development Regulation Act. The Amendment Act does not enter into the occupied field of the Molasses Control Order. There is no inconsistency in their operation and that therefore both the Amendment Act and the Molasses Control Order would harmoniously co-exist and operate in their respective fields. The State Legislature had thereby made the Amendment Act regulating the import, export, transport or possession of Molasses within the State of Rajasthan. Thus, we find that the Amendment Act is within the Legislative competence under Article 246(3) of the Constitution. The appeals are dismissed accordingly but without costs.
Appeals dismissed.
For Citation: AIR 1995 SC 356 = 1994(6) JT 629 = (1995) 1 SCC 257 = 1995(1) UJ (SC) 142 = 1994(4) Scale 602.