{"id":37476,"date":"1994-07-22T00:00:00","date_gmt":"1994-07-21T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/organon-india-ltd-vs-collector-of-excise-on-22-july-1994"},"modified":"2018-10-03T04:44:44","modified_gmt":"2018-10-02T23:14:44","slug":"organon-india-ltd-vs-collector-of-excise-on-22-july-1994","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/organon-india-ltd-vs-collector-of-excise-on-22-july-1994","title":{"rendered":"Organon (India) Ltd vs Collector Of Excise on 22 July, 1994"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Organon (India) Ltd vs Collector Of Excise on 22 July, 1994<\/div>\n
Equivalent citations: 1994 AIR 2489, \t\t 1995 SCC Supl. (1)\t53<\/div>\n
Author: B Jeevan Reddy<\/div>\n
Bench: Jeevan Reddy, B.P. (J)<\/div>\n
           PETITIONER:\nORGANON (INDIA) LTD.\n\n\tVs.\n\nRESPONDENT:\nCOLLECTOR OF EXCISE\n\nDATE OF JUDGMENT22\/07\/1994\n\nBENCH:\nJEEVAN REDDY, B.P. (J)\nBENCH:\nJEEVAN REDDY, B.P. (J)\nPUNCHHI, M.M.\nAGRAWAL, S.C. (J)\n\nCITATION:\n 1994 AIR 2489\t\t  1995 SCC  Supl.  (1)\t53\n JT 1994 (4)   438\t  1994 SCALE  (3)421\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
The Judgment of the Court was delivered by
\nB.P. JEEVAN REDDY, J.- In these appeals, validity of Section
\n5  of  the  Opium  Act,\t 1878  and  of\tcertain\t rules\tmade
\nthereunder  by\tthe Madhya Pradesh Government is  called  in
\nquestion.   Though  the\t Opium\tAct,  1878  has\t since\tbeen
\nrepealed   by  Section\t82  of\tthe  Narcotics\t Drugs\t and
\nPsychotropic  Substances  Act, 1985, things done  under\t the
\nrepealed Act are saved and continued under the 1985 Act.  We
\nshall first state the relevant facts.\n<\/p>\n
2.   The  appellant-company obtained a wholesale licence  in
\nForm  No.  1  under Rule 5 read with Rule 6  of\t the  Madhya
\nPradesh Poppy Husks Rules, 1959 in February and March  1974.
\nIn the month of March 1974, it entered into a contract\twith
\nM\/s Veregngde Pharmacutische Fabricken B.V. Kloosterstreat 6
\noss  Holland (hereinafter referred to as the “Dutch  buyer”)
\nfor supplying to the Dutch buyer 1000 metric tonnes of poppy
\nhusks.\t This  contract\t was entered into  in  pursuance  of
\n“certificate of official approval of import” dated  5-4-1973
\ngranted by the Dutch authorities in favour of the said Dutch
\nbuyer to purchase\/import 10,00,000 kilograms of poppy  husks
\nfrom the appellant on or before 31-8-1974.  The appellant in
\nturn  obtained the “official authorisation of  export”\tfrom
\nthe  Office  of the Narcotics  Commissioner,  Government  of
\nIndia  permitting him to export 1000 metric tonnes of  poppy
\nshells\t(broken and crushed) to the aforesaid  Dutch  buyer.
\nThis certificate dated 14-3-1974 refers specifically to\t the
\naforementioned\tImport Certificate dated 5-4-1973 issued  by
\nthe  Dutch authorities.\t It further specifies that the\tsaid
\ngoods  shall be exported through the Customs House,  Bombay,
\nby  sea,  to Holland within three months from  the  date  of
\nissue\tof  the\t said  authorisation.\tOn  30-3-1974,\t the
\nappellant  applied  to\tthe Collector  of  Excise,  District
\nMandsaur,   Madhya  Pradesh  for  grant\t of  permission\t  to
\ntransport  the\tsaid  quantity of poppy\t husks\tfrom  Madhya
\nPradesh.   In  this  application the  appellant\t stated\t the
\nfollowing  facts:  The appellant holds a  wholesale  licence
\ngranted\t under Rules 5 and 6 of Madhya Pradesh\tPoppy  Husks
\nRules, 1959.  It has received an order from the aforesaid
\n58<\/span>
\nDutch  buyer  for supply of 1000 tonnes of  poppy  husks  in
\nHolland.  In pursuance of the said order, the appellant\t has
\nto despatch from Mandsaur, poppy husks of the said  quantity
\nfor   transportation  across  Indian  customs  frontier\t  to
\nHolland.    The\t  appellant   has   obtained   the    export
\nauthorisation\t dated\t 14-3-1974   from   the\t   Narcotics
\nCommissioner  of India for despatch of the said poppy  husks
\nto  Holland  a copy of which is enclosed.  The\tDutch  buyer
\nhas also obtained the permit from the Dutch Government on 5-
\n4-1973\tfor the import of the said goods.  The\tDutch  buyer
\nhas  also arranged for a ship to call at the Bombay Port  on
\n5-6-1974  for  taking delivery of the  said  consignment  of
\npoppy  husks.  Accordingly, the appellant is  applying\t“for
\npermission  to\ttransport and for the despatch of  the\tsaid
\nconsignment  of\t poppy\thusks of  1000\ttonnes\tfrom  Madhya
\nPradesh\t for the purpose of executing the  said\t order……
\nInasmuch  as  the said consignment of poppy  husks  will  be
\ndespatched  from  Madhya Pradesh for export  across  customs
\nfrontier  of  India, no excise duty is leviable\t or  payable
\nunder  the  Madhya Pradesh Poppy Husks Rules and  hence,  no
\namount\t is  remitted  along  with  the\t application.\t The
\nappellant  requested for grant of permit urgently so  as  to
\nfulfil the contract within the specified date.\n<\/p>\n
3.On 15-4-1974, the Collector of Excise, Mandsaur  intimated
\nthe appellant that permission to transport poppy husks\tfrom
\nMandsaur  District  to the Port of Bombay would\t be  granted
\nonly  on payment of the export duty under and in  accordance
\nwith  the Madhya Pradesh Poppy Husks Rules.  He declined  to
\ngrant any such permit without payment of duty.\n<\/p>\n
4.On 16-4-1974, the appellant approached the Madhya  Pradesh
\nHigh  Court  for issuance of a writ of\tmandamus  and  other
\nappropriate   writs  directing\tthe  Collector\tof   Excise,
\nMandsaur  to grant the permit applied for without  insisting
\non  the payment of the export duty as demanded by  him.\t  In
\nfact  more  than  one  writ  petitions\twere  filed  by\t the
\nappellant  before different Benches of the said High  Court.
\nIn  one of the writ petitions, an interim order was  granted
\ndirecting  the Collector of Excise, Mandsaur to\t permit\t the
\nexport without collecting the export duty but subject to the
\ncondition  of the appellant furnishing a bank guarantee\t for
\nthe  said  amount  in favour of the Registrar  of  the\tHigh
\nCourt.\t No  such interim order was granted  in\t other\twrit
\npetitions.  The writ petitions were heard and dismissed by a
\nDivision  Bench on 21-10-1976, against which  the  appellant
\napproached  this  Court.  Leave was  granted  on  28-1-1977.
\nInterim orders were passed from time to time permitting\t the
\nappellant  to  export  poppy  husks  to\t Holland  either  on
\nfurnishing  bank  guarantee or on deposit of a part  of\t the
\nexport duty, as the case may be.\n<\/p>\n
5.The  main issue in these appeals is whether the  State  of
\nMadhya\tPradesh and its authorities are entitled in  law  to
\nlevy  and collect ‘duty’ as a condition for  permitting\t the
\nexport\tof  poppy husks from Madhya Pradesh  when  the\tsaid
\nexport\tis  not an export from one State  to  another  State
\nwithin\tIndia but an export across the customs\tfrontier  of
\nIndia, i.e., export to Holland?\n<\/p>\n
6.Opium is a noxious drug.  It is dangerous to the health of
\nhuman  beings.\tThe cultivation and trade in opium leads  to
\nproblems  of law and order.  Over the last few decades,\t the
\ntrade  in  such\t drugs has  become  intertwined\t with  crime
\ntranscending  national\tborders.   With a  view\t to  control
\ncultivation, possession, transport and sale of opium and its
\nderivatives, the Opium Act, 1857 was
\n59<\/span>
\nenacted.  A few years later Opium Act, 1878 was enacted. (In
\nthese  appeals\twe are not concerned with the 1857  Act\t but
\nonly with the later Act.  All references hereafter to  Opium
\nAct  mean references only to the 1878 Act).  The  provisions
\nof   the  Opium\t Act  have  undergone  several\t amendments,
\nalterations  and adaptations over the years.  We  need\tnot,
\nhowever,  notice all of them except those effected  in\t1930
\nand thereafter.\n<\/p>\n
7.India was a State signatory to the convention relating  to
\ndangerous drugs held at Geneva in the year 1925,  whereunder
\nthe  contracting parties resolved to take further  steps  to
\nsuppress  the contraband traffic in and abuse  of  dangerous
\ndrugs, especially those derived from opium, Indian hemp\t and
\ncoca leaf, as set out in the said convention.\tAccordingly,
\nthe  Dangerous Drugs Act, 1930 was enacted.  Since  by\tthat
\ntime  the  Opium  Act  was  already  in\t operation,  it\t was
\nsimultaneously\tamended so as to make both  the\t enactments,
\nviz.,\tOpium  Act  and\t the  Dangerous\t Drugs\t Act,\t1930
\ncomplimentary to each other, occupying different fields.  Of
\ncourse the Dangerous Drugs Act deals not only with opium but
\nalso   certain\tother  dangerous  drugs.   [The\t  expression
\n“dangerous  drug” is defined to include coca leaf, hemp\t and
\nopium and all manufactured drugs Section 2(h).] It would  be
\nappropriate  at this stage to notice the provisions of\tboth
\nthe enactments insofar as they pertain to opium.\n<\/p>\n
8.The expression ‘opium’ has been defined in identical terms
\nin both the enactments, viz., Section 3 of the Opium Act and
\nclause\t(e) of Section 2 of the Dangerous Drugs Act  with  a
\nslight\tdifference.   We shall set out the  said  definition
\nfrom  the  Opium Act, underlining the portion which  is\t not
\nfound in the definition in the Dangerous Drugs Act, 1930:\n<\/p>\n
\t      “3.  In  this Act, unless there  be  something
\n\t      repugnant in the subject or context,-
\n\t      ‘opium’ means-\n<\/p><\/blockquote>\n
\t      (i)   the\t capsules  of  the  poppy   (Papaver
\n\t      somniferum L.), whether in their original form
\n\t      or  cut, crushed or powdered, and\t whether  or
\n\t      not juice has been extracted therefrom;\n<\/p><\/blockquote>\n
\t      (ii)  the\t spontaneously coagulated  juice  of
\n\t      such capsules which has not been submitted  to
\n\t      any  manipulations other than those  necessary
\n\t      for packing and transport; and\n<\/p><\/blockquote>\n
\t      (iii) any\t mixture,  with or  without  neutral
\n\t      materials, of any of the above forms of opium;
\n\t      but   does   not\t include   any\t preparation
\n\t      containing  not  more  than 0.2  per  cent  of
\n\t      morphine, or a manufactured drug as defined in
\n\t      Section 2 of the Dangerous Drugs Act, 1930.”\n<\/p><\/blockquote>\n
9.   The expressions ‘import’ and ‘export’ have been defined
\nin the Opium Act to “mean  respectively\t to bring  into,  or
\ntake out of, a State otherwise than across   any     customs
\nfrontiers”.  “Customs frontiers” is defined to mean “any  of
\nthe  customs  frontiers of India as defined by\tthe  Central
\nGovernment under Section 3-A of the Sea Customs Act, 1878”.\n<\/p>\n
10.  Two  other\t expressions defined in the  Opium  Act\t are
\n‘transport’ and ,sale’.\t They read as follows:\n<\/p>\n
\t      ”\t ‘Transport’ means to remove from one  place
\n\t      to another within the same State.\n<\/p><\/blockquote>\n
\t      60<\/span><\/p>\n
\t      ‘Sale’ does not include sale for export across
\n\t      customs\tfrontiers,  and\t ,sell’\t  shall\t  be
\n\t      construed accordingly.”\n<\/p><\/blockquote>\n
11.  The expression “opium derivative” is defined in  clause\n<\/p>\n
(f) and the expression ‘manufactured drug’ in clause (g)  of
\nSection\t 2 of the Dangerious Drugs Act.\t (These\t expressions
\nare  not  defined in the Opium Act.) 1.\t  not  necessary  to
\nnotice the said definitions inasmuch as it is stated  before
\nus  by\tcounsel for both the parties that poppy\t husks\tfall
\nwithin\tthe  expression ‘opium’ and do not  represent  opium
\nderivative or manufactured drug as defined in the  Dangerous
\nDrugs  Act.  Clause (i) of Section 2 of the Dangerous  Drugs
\nAct  defines “to import into India” to mean “to\t bring\tinto
\nIndia  by  land,  sea  or air  across  any  of\tthe  customs
\nfrontiers   defined  by\t the  Central  Government”  and\t  as
\nincluding “the bringing into any port or place in India of a
\ndangerous  drug\t intended to be taken out of  India  without
\nbeing  removed\tfrom the ship or conveyance in which  it  is
\nbeing  carried”.   Clause  (k) defines\tthe  expression\t “to
\nexport\tfrom India” to mean “to take out of India  by  land,
\nsea  or\t air  across any of  the  said\tcustoms\t frontiers”.
\nClauses (j) and (1) define the expressions “to import inter-
\nprovincially” and “to export inter-provincially” to mean  to
\nbring  into or to take out of a State, as the case  may\t be,
\notherwise  than\t across any of the said\t customs  frontiers.
\nClause (m) defines the expression “to transport” as  meaning
\ntaking out from one place to another in the same State.\n<\/p>\n
12.  Now,  coming to the substantive provisions\t central  to
\nboth   enactments,  insofar  as\t opium\tis  concerned,\t the
\nfollowing  is  the  position.  Section 4 of  the  Opium\t Act
\n(notwithstanding  the heading of the section which does\t not
\nappear\tto have been amended correspondingly while  amending
\nthe  body  of  the  section)  deals  only  with\t possession,
\ntransport,  import, export and sale of opium.  It  would  be
\nappropriate to set out Section 4 of Opium Act.\tIt reads:\n<\/p>\n
\t      “4. Except as permitted by this Act, or by any
\n\t      other enactment relating to opium for the time
\n\t      being in force, or by rules framed under\tthis
\n\t      Act,  or\tunder  any such\t enactment,  no\t one
\n\t      shall-\n<\/p><\/blockquote>\n
\t      (a)   possess opium;\n<\/p><\/blockquote>\n
\t      (b)   transport opium;\n<\/p><\/blockquote>\n
\t      (c)   import or export opium; or\n<\/p><\/blockquote>\n
\t      (d)   sell opium.”\n<\/p><\/blockquote>\n
13.  Correspondingly,\tDangerous  Drugs  Act\tdeals\twith
\ncultivation  of poppy and manufacture of opium\t(Section  5)
\nimport into India and export from India and transhipment  of
\nany dangerous drug (Section 7)\tmatters which are not  dealt
\nwith  by the Opium Act.\t It would be appropriate to set\t out
\nSections 5 and 7 of the Dangerous Drugs Act:\n<\/p>\n
\t      “5.    Control  of  Central  Government\tover
\n\t      production  and  supply ofopium.- (1)  No\t one
\n\t      shall-\n<\/p><\/blockquote>\n
\t      (a)   cultivate the poppy (Papaver  somniferum
\n\t      L.) or\n<\/p><\/blockquote>\n
\t      (b)   manufacture opium,
\n\t      save in accordance with rules made under\tsub-
\n\t      section  (2)  and with the conditions  of\t any
\n\t      licence  for  that  purpose which\t he  may  be
\n\t      required to obtain under those rules.<\/p><\/blockquote>\n
\t      61<\/span><\/p>\n
\t      (2)   The\t (Central  Government)\t*  may\tmake
\n\t      rules    permitting   and\t   regulating\t the
\n\t      cultivation  of the poppy (Papaver  somniferum
\n\t      L.)  and\tthe manufacture of opium,  and\tsuch
\n\t      rules may prescribe the form and conditions of
\n\t      licences for such cultivation and manufacture,
\n\t      the authorities by which such licences may  be
\n\t      granted,\t the  fees  that  may\tbe   charged
\n\t      therefor,\t and any other matter  requisite  to
\n\t      render  effective the control of the  (Central
\n\t      Government)   over   such\t  cultivation\t and
\n\t      manufacture.\n<\/p><\/blockquote>\n
\t      (3)   The\t (Central Government) may also\tmake
\n\t      rules  permitting and regulating the  sale  of
\n\t      opium from Government factories for export  or
\n\t      to  (State  Governments) or  to  manufacturing
\n\t      chemists.\n<\/p><\/blockquote>\n
\t      7.    Control   of  Central  Government\tover
\n\t      operations at land and sea frontiers.- (1)  No
\n\t      one shall-\n<\/p><\/blockquote>\n
\t      (a)   import into India,\n<\/p><\/blockquote>\n
\t      (b)   export from India, or\n<\/p><\/blockquote>\n
\t      (c) tranship
\n\t      any dangerous drug, other than prepared opium,
\n\t      save in accordance with rules made under\tsub-
\n\t      section  (2)  and with the conditions  of\t any
\n\t      licence  for  that  purpose which\t he  may  be
\n\t      required to obtain under those rules.
\n\t      (2)   The\t Central Government may\t make  rules
\n\t      permitting and regulating the import into\t and
\n\t      export  from  India and  the  transhipment  of
\n\t      dangerous\t drugs, other than  prepared  opium,
\n\t      and  such\t rules may prescribe  the  ports  or
\n\t      places at which any kind of dangerous drug may
\n\t      be imported, exported or transhipped, the form
\n\t      and  conditions of licences for  such  import,
\n\t      export  or  transhipment, the  authorities  by
\n\t      which  such licences may be granted, the\tfees
\n\t      that  may be charged therefor, and  any  other
\n\t      matter  requisite\t to  render  effective\t the
\n\t      control  of the Central Government  over\tsuch
\n\t      import, export and transhipment.”\n<\/p><\/blockquote>\n
Each   Act  contains  machinery\t provisions  providing\t for
\nregulation, control and other allied and incidental  matters
\nrelevant to the field covered by each of them.\n<\/p>\n
14.It  is  thus\t clear\tthat while  the\t Opium\tAct  defines
\n‘import’ and ‘export’ as meaning bringing into or taking out
\nof  State otherwise than across any customs  frontiers,\t the
\nDangerous Drugs Act deals with import into India and  export
\nfrom India across customs frontiers.  Evidently, with a view
\nto  avoid  any\tconfusion,  while the  Opium  Act  uses\t the
\nexpression  ‘import’ and ‘export’, the Dangerous  Drugs\t Act
\nspeaks of “to import into India” and “to export from India”.
\nThe  expression\t ‘transport’ has been defined  in  identical
\nterms  under both the enactments; it means removal of  opium
\nfrom   one   place  to\tanother\t within\t the   same   State.
\n‘Transhipment’\treferred  to in Section\t 7  evidently  means
\ntranshipment  in  the course of or as part  of\timport\tinto
\nIndia  or  export from India, as the case may be.   The\t two
\nenactments   thus   operate   in   two\t distinct,    though
\ncomplimentary, fields so far as opium is concerned.  In\t the
\ninterest  of  clarity, it may be stated that so far  as\t the
\nmanufactured opium and opium derivatives are concerned,\t all
\nits  aspects  including\t possession,  sale,  export,  import
\nwhether\t from  one State to another in India or\t across\t the
\ncustoms\t frontiers are governed by the Dangerous  Drugs\t Act
\nalone.\n<\/p>\n
* (a) Substituted for “Governor-General in Council” by A.O.,
\n1937<\/span>
\n62<\/span>\n<\/p>\n
15.Section 5 of the Opium Act empowers the State  Government
\nto make rules regulating the possession, transport,  import,
\nexport\tand  sale  of opium subject to payment\tof  duty  or
\nsubject to such other conditions, as it may impose.  In view
\nof  the contentions urged before us, it is necessary to\t set
\nout Section 5 in its full entity:\n<\/p>\n
\t      “5.  The\tState Government may, from  time  to
\n\t      time by notification in the Official  Gazette,
\n\t      make rules consistent with this Act, to permit
\n\t      absolutely, or subject to the payment of\tduty
\n\t      or  to any other conditions, and to  regulate,
\n\t      within the whole or any specified part of\t the
\n\t      territories  administered by such\t Government,
\n\t      all or any of the following matters-\n<\/p><\/blockquote>\n
\t      (a)   the possession of opium;\n<\/p><\/blockquote>\n
\t      (b)   the transport of opium;\n<\/p><\/blockquote>\n
\t      (c)   the importation or exportation of opium;
\n\t      and\n<\/p><\/blockquote>\n
\t      (d)   the sale of opium and the farm of duties
\n\t      leviable on the sale of opium by retail:
\n\t      Provided\tthat no duty shall be  levied  under
\n\t      any  such\t rule on any opium imported  and  on
\n\t      which  a duty is imposed by or under  the\t law
\n\t      relating to sea customs for the time being  in
\n\t      force or under the Dangerous Drugs Act, 1930.”\n<\/p><\/blockquote>\n
16.  Section 13 empowers the State Government to frame rules
\nregarding disposal of things confiscated and rewards.\n<\/p>\n
17.  In exercise of the powers conferred by Section 5  (read
\nwith  Section 13) of the Opium Act, 1878, the Government  of
\nMadhya\tPradesh framed the Rules called “Poppy Husks  Rules,
\n1959”.\t Rule  2(e)  defines “poppy  husks”  to\t mean  “such
\ncapsules  of  cleft, cut open, crushed\tand  powdered  poppy
\nseeds  as  have been drained of juice”.\t  Rule\t3  prohibits
\npossession  of poppy husks of more than specified  quantity.
\nRule  3-A prescribes the duty chargeable on export of  poppy
\nhusks.\t It is 25 paise per kilogram upon  export  (despatch
\nout) of poppy husks and 50 paise per kilogram upon sale by a
\nwholesale  licence holder.  Rule 4 prohibits sale  of  poppy
\nhusks otherwise than in accordance with a permit or  licence
\ngranted under the Rules.  Rule 5 prescribes the Collector as
\nthe  licensing authority.  Rule 8(1) says that\t“none  other
\nthan the wholesale licenceholder shall export (i.e. despatch
\nout) poppy husks”.  For such export, application for licence
\nhas to be made to the Collector and the duty paid in advance
\nat  the rates prescribed by Rule 3-A, i.e., along  with\t the
\napplication  for licence.  It is not necessary to  refer  to
\nother  rules  except to say that they seek to  regulate\t and
\nmonitor the movement, export and import of opium.\n<\/p>\n
18.  Rules  have also been framed by the Central  Government
\nunder Section 7 of the Dangerous Drugs Act called “Dangerous
\nDrugs (Import, Export and Transhipment) Rules, 1957”.\tRule
\n2(2)  defines  “Narcotics  Commissioner”  as  the  Narcotics
\nCommissioner appointed by the Government of India.  Part  IV
\nof the Rules deals with export by sea, land or air.  Rule 6,
\nwhich is the first rule occurring in this part, says that no
\ndangerous drug shall be exported from India by sea, land  or
\nair  without  obtaining\t an export  authorisation  from\t the
\ncompetent authority.  Rule 7 says that “save as provided  in
\nRule 10, dangerous drugs, other than those mentioned in sub-
\nrule (2) of Rule 6, shall not be exported by sea from  India
\nexcept\tunder  an authorisation granted in  accordance\twith
\nRule 8 and
\n63<\/span>
\nfrom  a port appointed for the purpose in Rule 9″.   Rule  8
\nsays  that the export authorisation contemplated by  Rule  7
\nshall  be  granted by the Narcotics  Commissioner  and\tthat
\nexcept\tin  the case of special permission  of\tthe  Central
\nGovernment,  the export of opium shall be on behalf  of\t the
\nCentral\t Government.  Rule 9 prescribes that opium shall  be
\nexported  by  sea  only from two  ports,  viz.,\t Bombay\t and
\nCalcutta.   Rules 11 and 12 deal with export by\t land  while
\nRules  13,  14 and 15 deal with export by air.\tRule  17  in
\nPart  V\t deals with transhipment.  (This  rule\tincidentally
\nmakes  it clear that transhipment contemplated by the  Rules
\nis  transhipment in the course of or as part of import\tinto
\nor export from India.)\n<\/p>\n
19.  We shall first deal with the contention of Shri  Salve,
\nlearned\t counsel  for  the appellant that  inasmuch  as\t the
\nmovement  of  poppy husks from Mandsaur district  in  Madhya
\nPradesh to Bombay Port for export to Holland is part of\t one
\nsingle integrated transaction, it is a case of “export\tfrom
\nIndia”\twithin the meaning of Section 2(k) and Section 7  of
\nthe Dangerous Drugs Act and, therefore, outside the  purview
\nof  the Opium Act.  Counsel submitted that first  the  Dutch
\nbuyer obtained the import permit from the Dutch\t authorities
\nfor  importing\tthe said quantity of poppy  husks  from\t the
\nappellant.   Correspondingly, the appellant applied for\t and
\nobtained   an  export  authorisation  from   the   Narcotics
\nCommissioner  for exporting the said quantity from  Mandsaur
\nDistrict in Madhya Pradesh to the said Dutch buyer.  On\t the
\nbasis  of the export authorisation issued by  the  Narcotics
\nCommissioner and the permit for import granted by the  Dutch
\nauthorities,  the  appellant  applied to  the  Collector  of
\nExcise,\t Mandsaur for grant of export permit.  It  was\tthus
\nnot a case of export from Madhya Pradesh to Maharashtra.  As
\nper the Rules, the poppy husks packages could not be  opened
\nin Maharashtra.\t In fact, the very same packages transported
\nfrom Madhya Pradesh were to be loaded on to the ship without
\nbreaking bulk and the same packages reached Holland.   Thus,
\nthere is a continuity and unity of movement.  Indeed,  there
\nis  no sale of poppy husks in Madhya Pradesh; the only\tsale
\nbeing  to  the\tDutch  buyer.\tThe  permit  issued  by\t the
\nCollector  of Excise, Mandsaur and the permit issued by\t the
\nMaharashtra Excise Authorities must all be read as part\t and
\nparcel\tof  one\t single transaction covered  by\t the  import
\npermit\t issued\t  by  the  Dutch  authorities\tand   export
\nauthorisation  granted by the Narcotics\t Commissioner.\t All
\nthese  permits dovetail into one another and  represent\t one
\nunbroken,  continuous  movement.  The levy of  export  duty,
\ntherefore,  by the Collector of Excise, Mandsaur  under\t the
\nRules made under Section 5 of the Opium Act is\tincompetent.
\nThe  Opium  Act\t itself\t has  no  application  to  the\tsaid
\ntransaction.  The only Act applicable is the Dangerous Drugs
\nAct  says the learned counsel.\n<\/p>\n
20.  For a proper appreciation of the said contention, it is
\nnecessary  to  reiterate certain features of both  the\tsaid
\nenactments.   Section 5 of the Opium Act empowers the  State
\nGovernment  to\tdo  two\t things, viz.,\t(i)  to\t make  Rules
\npermitting  absolutely or subject to the payment of duty  or
\nto   any  other\t conditions,  the   possession,\t  transport,
\nimport\/export  and  sale  of opium and (ii)  to\t make  Rules
\nregulating  the aforesaid matters relating to opium  in\t the
\nwhole or any specified part of the territories\tadministered
\nby such Government.  The matters specified in Section 5\t are
\nthe  very  same\t as  are  specified  in\t Section  4,   viz.,
\npossession,  transport,\t import\/export and  sale.  (We\thave
\nalready pointed out
\n64<\/span>
\nthat import and export as defined in the Opium Act does\t not
\nmean  import  into or export from India but import  into  or
\nexport\tout of a particular State otherwise than across\t any
\ncustoms\t frontiers.) In other words, Section 5 empowers\t the
\nState  Government  to  permit inter  alia  export  of  opium
\nsubject to such conditions, including payment of duty, as it
\nmay  deem  appropriate\tto impose, as part  of\tcontrol\t and
\nregulation  over  opium.  Another feature to  note  is\tthat
\nimport\tor  export, as defined in the Opium  Act,  does\t not
\nnecessarily  involve  the  element  of\tsale.\tIt  is\t not
\nnecessary that the import or export should be occasioned  by
\nor  result  in\ta sale.\t Mere movement\tfrom  one  State  to
\nanother is sufficient to constitute export or import, as the
\ncase  may be, within the meaning of the Act so long as\tsuch
\nmovement is not across the customs frontiers. (Sale of opium
\nis dealt with separately from import\/export under Sections 4
\nand  5.)  Now coming to the other Act, taking opium  out  of
\nIndia  across the customs frontiers is ” export from  India”
\nwithin\tthe  meaning  of  the Dangerous\t Drugs\tAct  and  is
\ngoverned  by  Section 7 of the Dangerous Drugs Act  and\t the
\nRules made thereunder.\tThe Rules under the Dangerous  Drugs
\nAct, referred to hereinbefore, specifically provide only two
\nports  from  which opium can be exported by sea.   They\t are
\nBombay and Calcutta.  Therefore, any opium to be exported by
\nsea  has  to first reach either Bombay or  Calcutta.   Thus,
\nwhile  movement within India from one State to another\t(not
\ninvolving crossing of any customs frontiers) is governed  by
\nthe Opium Act, the movement across the customs frontiers  is
\ngoverned by the Dangerous Drugs Act.  In all these  matters,
\nthe  element  of sale is irrelevant.  It is not one  of\t the
\nrequirements.\tMere  movement\tof  goods  is  enough.\t The
\nmovement  may be the result of sale or may not be;  that  is
\nimmaterial.   Therefore,  so far as the\t movement  of  poppy
\nhusks from Mandsaur District in Madhya Pradesh to the Bombay
\nPort in Maharashtra is concerned, it is an export within the
\nmeaning\t of the Opium Act.  It is export from the  State  of
\nMadhya\tPradesh\t to the State of Maharashtra.\tThe  “export
\nfrom  India”  begins  only from the Port of  Bombay  and  is
\ngoverned  by the Dangerous Drugs Act.  These  two  movements
\nmay  be parts of the same transaction but so far as  law  is
\nconcerned, they are two different movements governed by\t two
\ndifferent enactments  a case of “string of movements”, if we
\nmay borrow the expression with a slight adaptation from\t the
\ndecision  of  this  Court in Mohd. Serajuddin  v.  State  of
\nOrissa1.  The two movements are links in the same chain\t but
\neach  subject to a different law.  As a matter of fact,\t the
\nprinciple  of  Serajuddin1  has a  close  bearing  upon\t the
\nquestion at issue herein.\n<\/p>\n
21.  Let us first examine the principle of Serajuddin1.\t The
\nappellant had entered into four contracts for sale of chrome
\nconcentrates.\tTwo of them were directly with\tthe  foreign
\nbuyers.\t   The\tother  two  were  with\tthe  State   Trading
\nCorporation  since  export  of mineral\tores  was  canalised
\nthrough the said Corporation.  The State Trading Corporation
\nin turn entered into contracts with the foreign buyers.\t  So
\nfar  as the first two contracts entered into  directly\twith
\nforeign buyers were concerned, it was held by the High Court
\nitself\tthat they were sales in the course of export  within
\nthe  meaning  of  Section 5 of the  Central  Sales  Tax\t Act
\n[before\t the insertion of sub-section (3) therein].  But  so
\nfar  as\t the two contracts entered into with  State  Trading
\nCorporation were concerned, it
\n1 (1975) 2 SCC 47: 1975 SCC (Tax) 269
\n65<\/span>
\nwas  held  that they were not export sales since  the  sales
\nwere to the State Trading Corporation and because the  State
\nTrading\t Corporation  had  in  turn  entered  into  separate
\ncontracts  with\t the  foreign buyers.\tThe  said  view\t was
\nchallenged by the appellant in this Court.  It was argued by
\nthe appellant that the said two sales too were really  sales
\nto the foreign buyers through the instrumentality and agency
\nof  the\t State Trading Corporation  which was termed  as  an
\n“agent\tof necessity”  and hence, export sales.\t This  Court
\n(by  majority)\trejected the said contention  holding  inter
\nalia: (SCC p. 60, para 26)
\n\t      “The appellant sold the goods directly to\t the
\n\t      Corporation.    The  circumstance\t  that\t the
\n\t      appellant did so to facilitate the performance
\n\t      of  the contract between the  Corporation\t and
\n\t      the foreign buyer on terms which were  similar
\n\t      did   not\t make  the  contract   between\t the
\n\t      appellant\t and the Corporation  the  immediate
\n\t      cause  of\t the  export.\tThe  Corporation  in
\n\t      regard to its contract with the foreign  buyer
\n\t      entered into a contract with the appellant  to
\n\t      procure\tthe  goods.   Such   contracts\t for
\n\t      procurement of goods for export are  described
\n\t      in   commercial  parlance\t as  back  to\tback
\n\t\t\t    contracts.\tIn export trade it is not unnatura
\nl
\n\t      to  find a string of contracts for  export  of
\n\t      goods.\tIt  is\tonly  the   contract   which
\n\t      occasions\t the export of goods which  will  be
\n\t      entitled\tto  exemption.\t The  appellant\t was
\n\t      under no contractual obligation to the foreign
\n\t      buyer  either  directly  or  indirectly.\t The
\n\t      rights  of  the appellants  were\tagainst\t the
\n\t      Corporation.  Similarly the obligations of the
\n\t      appellant\t  were\tto  the\t Corporation.\t The
\n\t      foreign  buyer  could  not  claim\t any   right
\n\t      against  the appellant nor did  the  appellant
\n\t      have any obligation to the foreign buyer.\t All
\n\t      acts done by the appellant were in performance
\n\t      of   the\tappellant’s  obligation\t under\t the
\n\t      contract\twith  the  Corporation\tand  not  in
\n\t      performance   of\t the  obligations   of\t the
\n\t      Corporation to the foreign buyer.”\n<\/p>\n
\t\t\t\t\t(emphasis supplied)
\n\t      It was further observed by the majority  that:
\n\t      (SCC pp. 60-61, para 27)
\n\t      “The expression ‘sale’ in Section 5 of the Act
\n\t      has the same meaning as in Sale of Goods\tAct.
\n\t      String   contracts  or  chain  contracts\t are
\n\t      separate\ttransactions  even  when  there\t  is
\n\t      similarity  relating to quantity,\t quality  of
\n\t      goods,   shipment,  sampling   and   analysis,
\n\t      weighment\t and  force majeure  etc.  or  other
\n\t      similar  terms.\tA  contract  of\t sale  is  a
\n\t      contract\twhereby\t the  seller  transfers\t  or
\n\t      agrees  to transfer the property in  goods  to
\n\t      the  buyer for the money consideration  called
\n\t      the price.  There were two separate contracts.
\n\t      The price was different in the two  contracts.
\n\t      This  difference\talso  dissociates  the\t two
\n\t      contracts from each other.  The High Court was
\n\t      right  in\t holding  that\tthe  sales  of\t the
\n\t      appellant to the Corporation were exigible  to
\n\t      tax  because  the\t appellant’s  sales  to\t the
\n\t      Corporation  were not sales in the  course  of
\n\t      export.”\n<\/p>\n
\t\t\t\t\t(emphasis supplied)\n<\/p>\n
22.  Since Serajuddin1 arose under the Sales Tax enactments,
\nthe  central concept was the sale of goods, whereas  in\t the
\nenactments  concerned  herein,\twe are\tconcerned  with\t the
\nmovement  of  opium  and not with  its\tsale,  as  explained
\nhereinbefore.\tIf we read the expression ‘movement’ in\t the
\nplace  of expression ,sale’ in the aforesaid  passages\tfrom
\nSerajuddin1  the matter will become self evident.  It  would
\nbe  a  case  of string of movements  links  in\ta  chain  of
\nmovement.  They would be separate movements even where there
\nis  similarity\trelating to quantity and quality  of  goods,
\nshipment, sampling and analysis.  It would thus be a case of
\nstring of movements resulting in export of opium.  It is
\n66<\/span>
\nonly the movement of goods across the customs frontiers that
\nconstitutes  the  “export from India” and  not\tthe  earlier
\nmovements.   The earlier movements, i.e., from one State  to
\nanother\t within\t India\tnot involving  crossing\t of  customs
\nfrontiers  would  be governed by the Opium Act\tand  if\t the
\nOpium  Act provides for levy of export duty on such  export,
\nit  has\t to  be\t paid.\t The  appellant\t cannot\t disown\t the
\nliability to pay the said export duty levied under Rule\t 3-A
\nread  with Rule 8 of the Madhya Pradesh Poppy  Husks  Rules,
\n1959 on the ground that it is one single movement commencing
\nin  Mandsaur  and  terminating in Holland.  So\tfar  as\t the
\nCollector  of  Excise,\tMandsaur is  concerned,\t the  permit
\ngranted\t by him is governed by Rule 8 of the Madhya  Pradesh
\nPoppy  Husks Rules, in Form P-H.  It is true that  he  would
\nnot  have  granted  such permit\t unless\t the  appellant\t had
\nproduced   the\texport\tauthorisation  from  the   Narcotics
\nCommissioner,  Government of India but that only shows\tthat
\nthe  said  export authorisation is the basis  for  grant  of
\nexport\tpermit by the Collector.  It does not mean that\t the
\nexport permit granted by the Collector is not an independent
\npermit.\t  The  Collector’s permit is limited  and  operative
\nwithin the four corners of the Opium Act and the Rules\tmade
\nthereunder.   He cannot grant a permit for export  of  opium
\nfrom  India.   It  is equally relevant to  notice  that\t the
\nauthorisation of export issued by the Narcotics Commissioner
\nmentions  ‘Bombay’  against  the Column\t “(e)  Name  of\t the
\ncustoms\t house through which export is to be  effected”\t and
\nunder clause (g), which requires the route to be followed by
\nthe goods to be specified, it says “Bombay to Holland”.\t  It
\ndoes not refer to the presence of poppy husks within  Madhya
\nPradesh or Mandsaur District nor does it say from where\t the
\npoppy husks should be moved or transported to Bombay.\tThis
\nshows  that  while the Narcotics Commissioner  is  concerned
\nonly  with  the\t movement of goods from\t Bombay\t across\t the
\ncustoms\t frontiers, by sea, to Holland, it is the  Collector
\nof  Excise, Mandsaur, who is concerned with the movement  of
\nthe  said  poppy  husks from  Mandsaur\tDistrict  in  Madhya
\nPradesh\t to a place beyond Madhya Pradesh.  As a  matter  of
\nfact,  even  for movement within the State  of\tMaharashtra,
\ni.e., from the Madhya Pradesh-Maharashtra border to the Port
\nof  Bombay,  a permit had to be and was\t obtained  from\t the
\nMaharashtra Excise Authorities.\t The Shipping Bill (found at
\np.  172 of Vol.\t V) furnished by the appellant\talso  refers
\nonly  to the export authorisation granted by  the  Narcotics
\nCommissioner  from  Bombay  to Holland\tand  not  the  prior
\nmovement.    Indeed,   it  may\tbe   said   that   Narcotics
\nCommissioner was not strictly concerned from which place was
\nthe appellant to procure the said quantity for being shipped
\nfrom the Port of Bombay though it is true, he would not have
\ngranted\t  the  said  export  authorisation  unless  he\t was
\nsatisfied that such quantity was available at some place  in
\nIndia  for  fulfilling\tthe  said  export  obligation.\t The
\nNarcotics  Commissioner, who is a creature of the  Dangerous
\nDrugs  Act  could  not\thave  permitted\t or  authorised\t the
\nmovement  of  poppy  husks  from  Madhya  Pradesh  (Mandsaur
\nDistrict) to Bombay Port, since the Dangerous Drugs Act does
\nnot  deal  with\t or govern that aspect.\t  Under\t the  export
\nauthorisation  granted\tby the Narcotics  Commissioner,\t the
\nappellant  could not have moved the poppy husks from  Madhya
\nPradesh\t to any other place within the country;\t the  export
\nauthorisation  does not purport to authorise such  movement.
\nThere  is  no provision in the Dangerous  Drugs\t Act  saying
\neither expressly or by necessary implication that an  export
\nof opium within the meaning of Opium Act shall
\n67<\/span>
\ncease  to  be an export under the said Act, if\tthat  export
\nforms  part of “export from India” as defined in  and  dealt
\nwith  by the Dangerous Drugs Act.  These are two Acts  which
\noperate\t in  two distinct spheres and respect  each  other’s
\njurisdiction.  The amendments effected in Opium Act in\t1930
\nsimultaneously\twith  the enactment of Dangerous  Drugs\t Act
\nwere  meant  to\t achieve  this\tprecise\t purpose.   We\tare,
\ntherefore,  of the opinion that the appellant cannot  refuse
\nto pay the export duty prescribed by Rule 3-A read with Rule
\n8 of the Madhya Pradesh Poppy Husks Rules on the ground that
\nthe  movement of poppy husks from Madhya Pradesh was  really
\nan  integral  part of the export of the said  quantity\tfrom
\nIndia,\ti.e.,  beyond  the customs  frontiers  of  India  to
\nHolland.\n<\/p>\n
23.  The  next\tcontention  of Shri Salve  pertains  to\t the
\nvalidity  of levy of duty (export duty in this\tcase)  under
\nthe  rules  made  by the  Madhya  Pradesh  Government  under
\nSection\t 5 of the Opium Act.  The learned  counsel  contends
\nthat Section 5 is in truth and in effect a taxing provision.
\nParliament  is\tnot competent to levy duty (tax)  on  opium.
\nEntry  59 of ListI or for that matter Entry 19 of  List\t III
\ndoes  not  encompass the power to levy duty on\topium.\t For
\nthis proposition, he relies upon the principle enunciated in
\nM.P.V.\tSundararamier  & Co. v. State of A.p.2\tThe  learned
\ncounsel contends that power to levy duty of excise on  opium
\nis  the exclusive province of the States under Entry  51  of
\nList II.  The duty levied in this case, it is true  says the
\ncounsel is levied under the rules made by the Madhya Pradesh
\nGovernment  but\t on that account it cannot be said to  be  a
\nduty  of  excise levied by the State inasmuch  as  the\tsaid
\nrules  are  made by the State Government as  a\tdelegate  of
\nParliament.   Only a State Legislature can levy the duty  of
\nexcise\tby  means of a law made by it. The  learned  counsel
\nsubmits\t that the said levy cannot be justified even on\t the
\nground\tof  being a “price for parting with  the  privilege”
\nevolved\t by this Court in matters relating  to\tintoxicating
\nliquors.  The said theory, the learned counsel contends, has
\nin any event been negatived by this Court in Synthetics\t and
\nChemicals  Ltd.\t v. State of Up.3 The  power  of  regulation
\nconferred  by the said section cannot also warrant the\tlevy
\nof  duty  of  excise  nor can the duty\tbe  justified  as  a
\nregulatory fees, says the counsel.\n<\/p>\n
24.  The first question that arises is whether Section 5  is
\na  taxing provision?  We think not.  Section 5 is  really  a
\ncontinuation of Section 4. Section 4, as it stands after the
\namendments  in\t1930, prohibits the  possession,  transport,
\nimport\/export  and  sale  of  opium  by\t anyone\t except\t  as
\npermitted by the said Act or by any other enactment relating
\nto opium for the time being in force or by the Rules  framed
\nunder the Opium Act or any such other enactment.  As  stated
\nhereinbefore,  opium is a noxious drug.\t It is dangerous  to
\nhealth.\t  Addiction to opium has brought nations  to  grief.
\nIt is several times more dangerous to health than liquor  or
\ntobacco.   In  the  modern era, it has\tgot  mixed  up\twith
\ninternational crime and terror.\t It is but natural that\t the
\nState should seek to prohibit its possession, movement, sale
\nand  all  dealings  therein except under  strict  and  close
\ncontrol.   To  start with, there is the\t prohibition,  which
\nprohibition is lifted only to the extent provided for by the
\nstatute or the rules made thereunder.  Sections 4 and 5\t are
\nthus  motifs  of the same pattern.  Section 4  provides\t the
\nprohibition
\n2 1958 SCR 1422: AIR 1958 SC 468 : (1958) 9 STC 298
\n3 (1990) 1 SCC 109
\n68<\/span>
\nwhile  Section\t5 empowers the State Government\t to  specify
\nsituations  in which the prohibition will be lifted,  either
\nfully or partially and either unconditionally or subject  to
\nsuch  conditions,  as  may be  deemed  necessary,  including
\n“payment of duty”.  Section 5 provides for two things, viz.,\n<\/p>\n
(a)  the  State\t Government  may,  from\t time  to  time,  by
\nnotification  in the Official Gazette make rules  consistent
\nwith this Act to permit absolutely or subject to the payment
\nof  duty or to any other conditions, possession,  transport,
\nimport\/export  and  sale  of opium and the  farm  of  duties
\nleviable  on the sale of opium by retail and (b)  the  State
\nGovernment  may, from time to time, by notification  in\t the
\nOfficial  Gazette  make rules consistent with  this  Act  to
\nregulate  within  the  whole or any specified  part  of\t the
\nterritories  administered by such Government, all or any  of
\nthe   following\t  matters,  viz.,   possession,\t  transport,
\nimport\/export  and  sale  of opium and the  farm  of  duties
\nleviable  on  the  sale of opium  by  retail.\tThe  primary
\npurpose\t of  Section  5 is controlling\tand  regulating\t the
\npossession,  transport, import\/export and sale of opium\t and
\nnot collection of revenue  though the relevance and validity
\nof  the\t said purpose is undeniable in the case\t of  noxious
\ngoods, as emphasised by this Court in Cooverjee B.  Bharucha
\nv.  Excise  Commr.  & Chief  Commr.,  Ajmer4.\tThe<\/a>  section
\nempowers the State Government to make rules prescribing\t the
\nsituations  in\twhich the possession etc. of opium  will  be
\npermitted  and\talso  to specify  in  which  situations\t the
\npermission  would  be absolute, i.e., unconditional  and  in
\nwhich\tsituations  would  it  be  subject   to\t  prescribed
\nconditions.  One of the conditions that can be so prescribed
\nis “payment of duty”.  The other part of Section 5 speaks of
\nregulating possession etc. of opium again by means of rules.
\nCan  it be said in the above situation that Section 5  is  a
\nprovision  primarily concerned with levy of duty.  Would  it
\nnot  be more correct to say that it is a provision  designed
\nto  control and regulate the possession, transport  etc.  of
\nopium  and  it\tis  only  as a\tpart  of  such\tcontrol\t and
\nregulation  (which  must be understood in the light  of\t the
\nprohibition  contained in Section 4) that it  provides\tthat
\npayment of duty can also be insisted upon as a condition for
\npermitting  the possession, transport etc. of  opium.\tMuch
\nshould\tnot  be\t read into the\texpression  ‘duty’  used  in
\nSection\t 5. Having regard to the context in which  the\tsaid
\nexpression  occurs, it cannot be understood in the sense  it
\ncarries\t in  Entry  51\tof List II.  Opium  Act\t is  a\tpre-
\nConstitutional Act.  Indeed, it is a law preceding the\t1935
\nAct.   In  the\tcontext,  the  expression  ‘duty’  means  an
\n,amount’  which\t shall\tbe  collected  as  a  condition\t for
\ngranting the permission to possess, transport, import\/export
\nor sell opium. [We need not say anything about “the farm  of
\nduties leviable on the sale of opium by retail” referred  to
\nin  clause  (d) of Section 5 since we are  concerned  herein
\nonly with the validity of the “payment of duty” referred  to
\nin the main limb of Section 5.1 All that it means is that it
\nis open to the State Government to make rules providing\t for
\npayment\t of  such  amount  as it  thinks  appropriate  as  a
\ncondition  for\tgranting  the  permission  contemplated\t  by
\nSection\t 5. The idea is not to allow  possession,  transport
\netc.  of opium freely (except in those cases where it is  to
\nbe so permitted having regard to the objects and purposes of
\nAct and public interest) but to make it prohibitive, to make
\nit  a non-paying proposition in commercial sense.   In\tthis
\ncontext, it would be appropriate to refer to the decision of
\nthis Court in Har Shankar v. Dy.\n<\/p>\n
4 AIR 1954 SC 220: 1954 SCR 873
\n69<\/span>
\nExcise and Taxation Commr.5 which affirms the fact that\t the
\nname given to a particular payment is not always  indicative
\nof  the true nature of the payment.  The following  passages
\nbring out the said principle: (SCC pp. 759-60, paras 55-56)
\n\t      “Section 34 of the Act read with Section 59(d)
\n\t      empowers the Financial Commissioner to  direct
\n\t      that  a  licence, permit or  pass\t be  granted
\n\t      under  the  Act on payment of  such  fees\t and
\n\t      subject  to  such\t restrictions  and  on\tsuch
\n\t      conditions  as  he may prescribe.\t In  such  a
\n\t      scheme,  it is not of the essence whether\t the
\n\t      amount\tcharged\t  to   the   licensees\t  is
\n\t      predetermined  as in the appeals\tof  Northern
\n\t      India  Caterers and of Green Hotel or  whether
\n\t      it is left to be determined by bids offered in
\n\t      auctions\theld  for granting those  rights  to
\n\t      licensees.   The\tpower of the  Government  to
\n\t      charge a price for parting with its rights and
\n\t      not  the\tmode of fixing that  price  is\twhat
\n\t      constitutes  the essence of the  matter.\t Nor
\n\t      indeed  does  the label affixed to  the  price
\n\t      determine either the true nature of the charge
\n\t      levied by the Government or its right to\tlevy
\n\t      the same.\n<\/p>\n
\t      The  distinction which the Constitution  makes
\n\t      for legislative purposes between a ‘tax’ and a
\n\t      ‘fee’  and the characteristic of these two  as
\n\t      also of ,excise duty’ are well-known.  ‘A\t tax
\n\t      is  a compulsory exaction of money  by  public
\n\t      authority\t for public purposes enforceable  by
\n\t      law   and\t is  not  a  payment  for   services
\n\t      rendered’.   A  fee is a\tcharge\tfor  special
\n\t      services\trendered  to  individuals  by\tsome
\n\t      governmental  agency and such a charge has  an
\n\t      element in it of a quid pro quo.\tExcise\tduty
\n\t      is  primarily  a\tduty on\t the  production  or
\n\t      manufacture of goods produced or\tmanufactured
\n\t      within  the country.  The amounts\t charged  to
\n\t      the   licensees  in  the\tinstant\t case\tare,
\n\t      evidently, neither in the nature of a tax\t nor
\n\t      of  excise duty.\tBut then, the ‘licence\tfee’
\n\t      which  the  State Government  charged  to\t the
\n\t      licensees\t through the medium of\tauctions  or
\n\t      the  ‘fixed  fee’\t which\tit  charged  to\t the
\n\t      vendors of foreign liquor holding licences  in
\n\t      Forms  L-3, L-4 and L-5 need bear no quid\t pro
\n\t      quo to the services rendered to the licensees.
\n\t\t\t    The\t word  fee’ is not used in the Act  or\tth
\ne
\n\t      Rules   in   the\ttechnical   sense   of\t the
\n\t      expression.   By ‘licence fee’ or ‘fixed\tfee’
\n\t      is meant the price or consideration which\t the
\n\t      Government   charges  to\tthe  licensees\t for
\n\t      parting with its privileges and granting\tthem
\n\t      to the\t licensees.  As the State can  carry
\n\t      on a trade or business, such a charge is
\n\t      the   normal incident of a trading or business
\n\t      transaction.”\n<\/p>\n
\t\t\t\t\t (emphasis supplied)\n<\/p>\n
25. We are also not prepared to place  the tag of “price for
\nparting with the privilege” on the said payment.  We  refuse
\nto  be\tdrawn into the controversy whether  such  a  concept
\naffirmed  by this Court consistently over a period of  forty
\nyears\thas  been  negatived in\t this  Court’s\tdecision  in
\nSynthetics  & Chemicals Ltd 3 Incidentally, we may say\tthat
\nthe  majority opinion delivered by Sabyasachi Mukharji,\t J.,
\non behalf of the six learned Judges, does not expressly\t say
\nso.   The  said question was not put in issue  and  was\t not
\npronounced  upon  expressly.   Rejection  of  such  a  well-
\nestablished  proposition  cannot  be  inferred.\t  If  it  is
\nproposed  to  be  rejected, it must be put  in\tissue  in  a
\nstraight  manner and be pronounced upon.  This has not\tbeen
\ndone in the majority judgment.\tActually, the said case\t was
\nconcerned  only\t with the States’ power to  levy  taxes\t and
\nother  regulatory fees on industrial alcohol.  It  was\theld
\nthat the States are denuded of
\n5 (1975) 1 SCC 737 :(1975) 3 SCR 254
\n70<\/span>
\nthe legislative power to do so under Entry 24 of List II  by
\nvirtue\tof the declaration made by Parliament under  and  in
\nterms  of Entry 52 of List I. Only the\tseparate  concurring
\nopinion delivered by G.L. Oza, J. says that the said concept
\nis  unacceptable under our constitutional scheme.   We\tneed
\nexpress no opinion on the said opinion.\t It is enough to say
\nfor the present purpose that Section 5 of the Opium Act does
\nnot purport to levy duty of excise but that it only purports
\nto  empower  the State Government to make  rules  to  permit
\npossession, export etc. of opium subject to such  conditions
\nas it may think appropriate to impose including the  payment
\nof  an amount (called ‘duty’ by the section).  In this\tview
\nof  the matter, the principle enunciated  in  Sundararamier2
\nhas  no\t application herein.  That principle  could  perhaps
\nhave  been relevant if Section 5 had purported to levy\tduty
\nof  excise  or other tax on opium.  Perhaps, it\t could\tthen
\nhave  been argued that Entry 59 of ListI or for that  matter
\nEntry  19  of List III does not take in the  power  to\tlevy
\ntaxes  and duties on opium.  We need express no\t opinion  on
\nthe said aspect.  For the same reason, the argument of\tShri
\nSalve  that  opium  among  other  narcotic  drugs  has\tbeen
\nexcluded  from the purview of Entry 84 of ListI need not  be
\ndealt with.\n<\/p>\n
26.  We\t are,  therefore,  of  the  opinion  that  the\tduty
\nprovided by Rule 3-A read with Rule 8 of the Madhya  Pradesh
\nPoppy  Husks Rules is perfectly within the four\t corners  of
\nSection 5 and cannot be faulted on the ground aforesaid.\n<\/p>\n
27.  It\t is  then  submitted by\t learned  counsel  that\t the
\npayment\t of  so-called\tduty (which  according\tto  us\tmust
\nproperly  be called ‘an amount’) is excessive and is  almost
\nas  much as or more than the price of poppy husks.   In\t our
\nopinion, this contention is equally unsustainable.  Firstly,
\nno  material has been placed before us to show the price  of
\npoppy  husks during the several years  under  consideration.
\nSecondly,  even\t if  the contention is\tfactually  true,  it
\nmatters very little for the very idea underlying Sections  4
\nand   5\t is  to\t make  possession  and\tdealings  in   opium
\nprohibitive   and,  commercially  speaking,   a\t  non-paying
\nproposition.   The  idea is to discourage  the\tpeople\tfrom
\npossessing  or\totherwise dealing in  matters  specified  in
\nSections  4 and 5. Even otherwise, duties of excise at\tmore
\nthan 100% is not unknown in law. [See in this connection the
\nobservations of this Court in Har Shankar5 (SCR at p. 279  E
\nto G : SCC p. 760, para 57).]\n<\/p>\n
28.  There is another good reason for upholding the validity
\nof Section 5, viz., the provision in Article 372.  Opium Act
\nis  a law preceding the Government of India Act, 1935.\t The
\ndivision of powers between the Centre and the provinces\t was
\nfirst  introduced by the 1935 Act.  Section 292 of the\tsaid
\nAct provided that:\n<\/p>\n
\t      “Notwithstanding the repeal by this Act of the
\n\t      Government  of India Act, but subject  to\t the
\n\t      other  provisions of this Act, all the law  in
\n\t      force in British India immediately before\t the
\n\t      commencement  of\tPart III of this  Act  shall
\n\t      continue\t inforce  in  British  India   until
\n\t      altered or repealed or amended by a  competent
\n\t      Legislature or other competent authority.”
\n\t      Article 372(1) provides similarly that:
\n\t      “Notwithstanding\t  the\trepeal\t  by\tthis
\n\t      Constitution of the enactments referred to  in
\n\t      Article\t395   but  subject  to\t the   other
\n\t      provisions of this Constitution, all the\tlaws
\n\t      in force in the territory of India immediately
\n\t      71<\/span>
\n\t      before  the commencement of this\tConstitution
\n\t      shall continue in force therein until  altered
\n\t      or   repealed  or\t amended  by   a   competent
\n\t      Legislature or other competent authority.”
\n\t      Explanation  1  to  the  article\tdefines\t the
\n\t      expression “law in force”.  It reads thus:
\n\t      “Explanation \/.- The expression ‘law in force’
\n\t      in this article shall include a law passed  or
\n\t      made  by\ta  Legislature\tor  other  competent
\n\t      authority in the territory of India before the
\n\t      commencement  of\tthis  Constitution  and\t not
\n\t      previously  repealed, notwithstanding that  it
\n\t      or  parts of it may not be then  in  operation
\n\t      either at all or in particular areas.”\n<\/p><\/blockquote>\n
The  effect  of\t these\tprovisions  was\t considered  by\t the
\nConstitution  Bench of this Court in South India Corpn.\t (P)
\nLtd. v. Secy., Board of Revenue6.  It was held that the said
\nprovisions save and continue a law notwithstanding the\tfact
\nthat  according to the provisions of the  Constitution,\t the
\nlaw  could not have been made by the legislature  which\t had
\nenacted\t it,  though they do not save  such  enactment\tfrom
\ninconsistency  with  other provisions of  the  Constitution,
\nviz.,  provisions other than those relating  to\t legislative
\ncompetence.   The following statement of law brings out\t the
\nratio: (AIR pp. 213-14, paras 13-14)
\n\t      “The object of this article is to maintain the
\n\t      continuity  of the preexisting laws after\t the
\n\t      Constitution  came into force till  they\twere
\n\t      repealed,\t altered or amended by\ta  competent
\n\t      authority.  Without the aid of such an article
\n\t      there would be utter confusion in the field of
\n\t      law.  The assumption underlying the article is
\n\t      that  the State laws may or may not be  within
\n\t      the legislative competence of the\t appropriate
\n\t      authority under the Constitution.\t The article
\n\t      would become ineffective and purposeless if it
\n\t      was held that pre-Constitution laws should  be
\n\t      such  as\tcould  be made\tby  the\t appropriate
\n\t      authority\t under the Constitution.  The  words
\n\t      ‘subject\tto  the\t other\tprovisions  of\t the
\n\t      Constitution’  should, therefore, be  given  a
\n\t      reasonable  interpretation, an  interpretation
\n\t      which  would  carry out the intention  of\t the
\n\t      makers  of the Constitution and also which  is
\n\t      in accord with the constitutional practice  in
\n\t      such   matters.\t The  article\tposits\t the
\n\t\t\t    continuation of the pre-existing laws made by
\na
\n\t      competent authority notwithstanding the repeal
\n\t      of  (in?)\t Article  395;\tand  the  expression
\n\t      ‘other’  in  the\tarticle can  only  apply  to
\n\t      provisions  other\t than  those  dealing\twith
\n\t      legislative competence.\n<\/p>\n
\t      The  learned Advocate General relied upon\t the
\n\t      following\t  decisions  for  the\tsaid   legal
\n\t      position;\t Gannon Dunkerley and Co.  v.  Sales
\n\t      Tax   Officer,  Mattancheri7;  Sagar  Mal\t  v.\n<\/p>\n
\t      State8;  Kanpur Oil Mills v.  Judge  (Appeals)
\n\t      Sales  Tax9;  Amalgamated Coalfields  Ltd.  v.
\n\t      Janapada\tSabha,\tChhindwara10<\/a>;  Lala  Jagdish
\n\t      Prasad\tv.    Saharanpur     Municipality11;\n<\/p>\n
\t      Sheoshankar v. State Govt. of M. P. 12;  State
\n\t      v. Yash Pal 1 3 and Binoy Bhusan
\n6    AIR 1964 SC 207: (1964) 15 STC 74
\n7    ILR 1957 Ker 462: AIR 1957 Ker 146
\n8    ILR (1952) 1 All 862: AIR 1951 All 816
\n9     AIR 1955 All 99: 1955 All LJ 19: (1955) 6STC 77
\n10   (1962) 1 SCR 1 : AIR 1961 SC 964
\n11   AIR 1961 All 583: 1961 All LJ 386: 1961 All WR (HC) 262
\n12   AIR 1951 Nag 58 :52 Cri LJ 1140: ILR 1951 Nag 646
\n13   AIR 1957 Punj 91 : ILR 1956 Punj 1377 : 1957 Cri LJ 540
\n72<\/span>
\n\t      v.  State of Bihar14.  It is not necessary  to
\n\t      consider in detail the said decisions, as they
\n\t      either  resume  the  said\t legal\tposition  or
\n\t      sustain it, but do not go further.  They\theld
\n\t      that  a  law  made by  a\tcompetent  authority
\n\t      before  the  Constitution continues to  be  in
\n\t      force  after  the\t Constitution  till  it\t  is
\n\t      altered\tor  modified  or  repealed  by\t the
\n\t      appropriate  authority,  even  though  it\t  is
\n\t      beyond the legislative competence of the\tsaid
\n\t      authority under the Constitution.\t We give our
\n\t      full  assent to the view and hold that  a\t pre
\n\t      Constitution   law   made\t  by   a   competent
\n\t      authority, though it has lost its\t legislative
\n\t      competency   under  the  Constitution,   shall
\n\t      continue\tin force, provided the law does\t not
\n\t      contravene  the  ‘other  provisions’  of\t the
\n\t      Constitution.”\n<\/p>\n
\t\t\t\t      (emphasis added)\n<\/p>\n
29.Now, objection of Shri Salve to Section 5 is this: It  is
\na  taxing provision.  It levies excise duty on\topium.\t But
\nexcise\tduty on opium can be levied only by a law made by  a
\nState  Legislature with reference to Entry 51 of List II  of
\nthe Seventh Schedule to the Constitution.  Parliament has no
\nsuch   power,  though  it  can\tmake  a\t law   relating\t  to
\ncultivation,  manufacture  and sale for export of  opium  by
\nvirtue\tof Entry 59 List I- or for that matter with  respect
\nto  opium generally with reference to Entry 19 of List\tIII.
\nThe  said section is thus alleged to be beyond\tParliament’s
\nlegislative competence.\t Assuming that the said argument  is
\ncorrect,   which  argument  we\thave  rejected\thereinbefore
\nstill  such a law is saved by virtue of Article 372  of\t the
\nConstitution  as  interpreted by this Court in\tSouth  India
\nCorpn.6\t It  is not suggested by the  learned  counsel\tthat
\nSection\t 5 is inconsistent with any other provision  of\t the
\nConstitution.\n<\/p>\n
30.Once it is held that the Opium Act is a  pre-Constitution
\nstatute\t and is saved by Article 372, the rules made by\t the
\nMadhya\tPradesh\t Government in 1959 under Section 5  of\t the
\nsaid  Act are equally within the protection.  The  principle
\nof  the decision of the Constitution Bench in  Sardar  Inder
\nSingh\tv.  State  of  Rajasthan15  clearly  supports\tthis
\nproposition.   It  was held in the said decision:  (SCR\t pp.
\n619-20)
\n\t      “It  is next contended that  the\tnotification
\n\t      dated  20-6-1953,\t is bad, because  after\t the
\n\t      Constitution  came into force, the  Rajpramukh
\n\t      derived\this  authority\tto  legislate\tfrom
\n\t      Article  385, and that under that article\t his
\n\t      authority\t ceased when the Legislature of\t the
\n\t      State  was  constituted,\twhich  was  in\t the
\n\t      present  case,  on 29-3-1952.   This  argument
\n\t      proceeds\ton  a misconception as to  the\ttrue
\n\t      character\t of  a\tnotification  issued   under
\n\t      Section  3  of the Ordinance.  It was  not  an
\n\t      independent piece of legislation such as could
\n\t      be   enacted  only  by  the   then   competent
\n\t      legislative authority of the State, but merely
\n\t      an exercise of a power conferred by a  statute
\n\t      which  had  been\tpreviously  enacted  by\t the
\n\t      appropriate   legislative\t  authority.\t The
\n\t      exercise\tof such a power is referable not  to
\n\t      the  legislative competence of the  Rajpramukh
\n\t      but to Ordinance No. IX of 1949, and  provided
\n\t      Section  3  is  valid,  the  validity  of\t the
\n\t      notification  is coextensive with that of\t the
\n\t      Ordinance.   If the Ordinance did not come  to
\n\t      an  end  by  reason  of  the  fact  that\t the
\n\t      authority of the Rajpramukh to legislate\tcame
\n\t      to  an  end   and that is not  and  cannot  be
\n\t      disputed\t neither  did the power to  issue  a
\n\t      notification which is conferred therein.\t The
\n\t      true  position is that it is in his  character
\n\t      as
\n\t      14 AIR 1954 Pat 346
\n\t      15 1957 SCR 605: AIR 1957 SC 510
\n\t      73<\/span>
\n\t      the  authority  on whom  power  was  conferred
\n\t      under  Section  3 of the\tOrdinance  that\t the
\n\t      Rajpramukh  issued the impugned  notification,
\n\t      and  not as the legislative authority  of\t the
\n\t      State.   This objection should accordingly  be
\n\t      overruled.”\n<\/p>\n
31.If Section 5 is supposed to empower levy of duty by State
\nGovernment by making rules, as contended by Shri Salve, this
\npower is saved by Article 372.\tOnce the power is saved,  it
\ncan  be\t exercised  even  after\t the  commencement  of\t the
\nConstitution.\tOtherwise, there would be no meaning  behind
\nthe  saving  clause in Article 372.  The reliance  upon\t the
\ndecision  of  this  Court  in Kalyani  Stores  v.  State  of
\nOrissa16  by  Shri  Salve is of no  help  to  the  appellant
\ninasmuch as the notification of 1961 considered therein\t was
\nheld to be violative of Article 301 and not saved by Article
\n305   which too is a provision saving the existing law\tfrom
\nthe  operation of Articles 301 and 303.\t The  said  decision
\ndid  not  really turn upon the language of Article  372,  as
\nwould  be evident from the discussion (at SCR p. 874).\t The
\nprinciple  of  the  said decision cannot be  extended  to  a
\nprovision  like Section 5 of the Opium Act.  The  scheme  of
\nPart XIII of the Constitution is different and the object of
\nArticle 305 is a limited one.\n<\/p>\n
32.We  are also of the opinion that it is unnecessary to  go
\ninto the question whether Mandsaur District was a part of  a
\nPrincely State and whether the Opium Act was extended to the
\nsaid area after the commencement of the Constitution because
\nno factual foundation has been laid for this argument in the
\nHigh Court, though Article 372 was expressly relied upon  by
\nthe  State.   In  any event, Explanation 1  to\tArticle\t 372
\nappears\t to be a complete answer to this argument.  For\t all
\nthe  above  reasons, we hold that Section 5 is\ta  perfectly
\nvalid  piece  of legislation and cannot be  faulted  on\t the
\ngrounds suggested.\n<\/p>\n
33.The\tlast submission of Shri Salve is that Section  5  is
\nvoid   on  the\tground\tof  excessive  delegation   of\t the
\nlegislative power.  It is argued that Section 5 empowers the
\nState Government to levy duty without prescribing either the
\nminima or the maxima.  The rate of duty is left entirely  to
\nthe State Government.  No guidance whatsoever is provided by
\nthe  Act  in  the  said matter.\t It is\topen  to  the  State
\nGovernment  to\tprescribe  such rate of duty  as  it  thinks
\nappropriate.  This is a clear case of excessive\t delegation.
\nParliament has not retained any control over the acts of its
\ndelegate, viz., the State Government; it is a case of  total
\nabnegation,  it is submitted.  It is brought to\t our  notice
\nthat  the  Allahabad  High Court has held  so  in  Rameshwar
\nPrasad\tKishan Gopal v. State of U.<\/a> p. 17 It is pointed\t out
\nthat  appeals  were  preferred by the State  in\t this  Court
\nagainst\t the said decision but by the time the said  appeals
\ncame  up  for  hearing, the Uttar  Pradesh  Legislature\t had
\nintervened  and\t effected  local  amendments  purporting  to
\nremedy the defect pointed out by the High Court.  In view of
\nthe  said  amendments, this Court disposed  of\tthe  appeals
\n(Civil\tAppeal Nos. 1657-58 of 1975 and batch on  13-7-1993)
\nwithout going into the said question.  This Court also\ttook
\nnote  of the fact that the respondents in the  said  appeals
\nhad filed another writ petition in this Court (WP No. 314 of
\n1991) challenging the said State Amendments.\n<\/p>\n
34.It is not possible to agree with the learned counsel.  It
\nwould  be seen at once that this argument is based upon\t the
\nsame premise as the previous
\n16 (1966) 1 SCR 865 : AIR 1966 SC 1686
\n17 1973 Tax LR 2503 :(1973) 71 All LJ 739 (All)
\n74<\/span>
\nargument.   The\t argument proceeds on  the  assumption\tthat
\nSection 5 is a taxing provision; that its main purpose is to
\nlevy  excise  duty.  We have pointed out  hereinbefore\tthat
\nSection\t 5  is\tnot  a taxing  provision,  that\t the  ‘duty’
\nreferred  to therein is not ‘duty’ in the sense in which  it
\nis  used in Entry 51 of List II of the Seventh\tSchedule  to
\nthe  Constitution and that the said expression really  means
\nan  amount.   As  explained hereinbefore,  Section  5  is  a
\ncontinuation  of Section 4 and it merely empowers the  State
\nGovernment  to\tlift  the  prohibition\ton  the\t possession,
\ntransport, import\/export and sale of opium in such cases  as
\nit  deems appropriate and subject to such conditions, as  it
\nmay  deem fit to impose including payment of an amount.\t  It
\nhas  been held that it is a regulatory provision.  For\tthis
\nreason,\t the decisions of this Court (e.g., Devi  Das  Gopal
\nKrishnan   v.  State  of  Punjabl81  which  lay\t  down\t the
\nproposition that where the taxing power to fix rates of\t tax
\nis  delegated  by  the\tLegislature  to\t another  body,\t the
\nLegislature must either fix minima or maxima or retain\tsome
\ncontrol\t over  the  Acts  of the  delegate  are\t not  really
\nrelevant and need not be dealt with.  So far as guidance  in
\nthe  matter  of making of rules providing  for\tthe  matters
\ncontemplated  by Section 5 is concerned, the  provisions  of
\nthe  Act  do furnish sufficient guidance in  the  matter  of
\nmaking\trules  under  Section  5.  The\tscheme\tof  the\t Act
\nincluding  Section 4, which bars any and every\tperson\tfrom
\npossessing,  transporting, importing\/exporting\tand  selling
\nopium  except as provided by the said Act or the rules\tmade
\nthereunder  (or\t by any other Act or rules made\t under\tsuch
\nother\tAct)   furnish\tadequate  guidance  to\t the   State
\nGovernment.   It must also be noticed that  the\t rule-making
\npower  is conferred upon a responsible body like  the  State
\nGovernment.   The  very\t noxious nature\t of  opium  and\t the
\ndesirability  to  closely control and  regulate\t possession,
\ntransport,  movement  and all dealings therein\tare  matters
\nwhich  the State Government has also to keep in\t mind  while
\nmaking\tthe rules.  We may in this connection refer  to\t the
\ndecision  of  the  Constitution\t Bench\tof  this  Court\t  in
\nHarishankar  Bagla v. State of M.P. 19 Section 3(1)  of\t the
\nEssential  Supplies (Temporary Powers) Act,  1946  conferred
\nrule-making power upon the Central Government.\tSub-section
\n(1)  read as follows: (SCR p. 384)
\n\t      “3.  (1) The Central Government, so far as  it
\n\t      appears to it to be necessary or expedient for
\n\t      maintaining  or  increasing  supplies  or\t any
\n\t      essential\t commodity,  or for  securing  their
\n\t      equitable\t distribution  and  availability  at
\n\t      fair   prices,  may  by  order   provide\t for
\n\t      regulating  or  prohibiting  the\t production,
\n\t      supply and distribution thereof and trade\t and
\n\t      commerce therein……\n<\/p>\n
35.  Sub-section  (2)  elucidated the grounds  mentioned  in
\nsub-section  (1).  It was argued before this Court that\t the
\nCotton Textiles (Control of Movement) Order, 1948 made under
\nSection 3 is invalid inasmuch as the said section  delegated
\nlegislative  power  beyond  the\t permissible  limits.\t The
\nargument was rejected in the following words: (SCR p. 388)
\n\t      “It  was settled by the majority\tjudgment  in
\n\t      the  Delhi  Laws\tAct  case2O  that  essential
\n\t      powers of legislature cannot be delegated.  In
\n\t      other words, the
\n\t      18 (1967) 3 SCR 557: AIR 1967 SC 1895:  (1967)
\n\t      20 STC 430
\n\t      19 (1955) 1 SCR 380: AIR 1954 SC 465
\n\t      20 Delhi Laws Act, 1912, Re, 1951 SCR 747: AIR
\n\t      1951 SC 332
\n\t      75<\/span>
\n\t      legislature  cannot delegate its\tfunction  of
\n\t      laying down legislative policy in respect of a
\n\t      measure  and  its\t formulation as\t a  rule  of
\n\t      conduct.\t The  legislature must\tdeclare\t the
\n\t      policy  of  the law and the  legal  principles
\n\t      which are to control any given cases and\tmust
\n\t      provide  a standard to guide the officials  or
\n\t      the  body\t in power to execute the  law.\t The
\n\t      essential legislative function consists in the
\n\t      determination  or\t choice of  the\t legislative
\n\t      policy  and of formally enacting\tthat  policy
\n\t      into  a  binding\trule  of  conduct.   In\t the
\n\t      present  case  the legislature has  laid\tdown
\n\t      such  a  principle and that principle  is\t the
\n\t      maintenance or increase in supply of essential
\n\t      commodities   and\t  of   securing\t   equitable
\n\t      distribution and availability at fair  prices.
\n\t      The  principle is clear and offers  sufficient
\n\t      guidance\t to   the  Central   Government\t  in
\n\t      exercising its powers under Section 3.”\n<\/p>\n
36.  The  same principle was reiterated in State of  TN.  v.
\nHind Stone21. It was contended before this Court that a rule
\nmade by the Government of Tamil Nadu under Section 15 of the
\nMines\tand  Minerals  (Regulation  and\t  Development)\t Act
\nproviding  that no lease for quarrying black granite  should
\nbe  granted  to private persons and creating a\tmonopoly  in
\nfavour of a Corporation wholly owned by the State Government
\nwas  beyond  the  rule-making  power.\tThis  argument\t was
\nrejected  holding that the provisions of the  Act  furnished
\nsufficient guidance.  It was held: (SCC p. 213, para 6)
\n\t      “The public interest which induced  Parliament
\n\t      to make the declaration contained in Section 2
\n\t      of  the  Mines  &\t Minerals  (Regulation\t and
\n\t      Development)  Act, 1957, has naturally  to  be
\n\t      the  paramount  consideration in\tall  matters
\n\t      concerning  the  regulation of mines  and\t the
\n\t      development of minerals.\tParliament’s  policy
\n\t      is clearly discernible from the provisions  of
\n\t      the  Act.\t  It  is the  conservation  and\t the
\n\t      prudent  and  discriminating  exploitation  of
\n\t      minerals,\t with  a  view\tto  secure   maximum
\n\t      benefit  to  the community.  There  are  clear
\n\t      sign  posts to lead and guide the\t subordinate
\n\t      legislating  authority  in the matter  of\t the
\n\t      making of rules.”\n<\/p>\n
We  are, therefore, of the opinion that Section 5 cannot  be
\nfaulted\t either\t on the ground that it\tdelegates  essential
\nlegislative  functions\tto the State Government\t or  on\t the
\nground\tthat  it confers rule-making power  upon  the  State
\nGovernment  without  furnishing\t any  guidance\tand  without
\nlaying down any policy in that behalf.\tIn this view of\t the
\nmatter, it is not possible to agree with the decision of the
\nAllahabad High Court in Rameshwar Prasad Kishan Gopal17.\n<\/p>\n
37.  For  the  above  reasons,\tthe  appeals  fail  and\t are
\ndismissed  with\t costs.\t Advocate’s  fee  quantified  at  Rs
\n10,000.\n<\/p>\n
21 (1981) 2 SCC 205 : (1981) 2 SCR 742
\n76<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Organon (India) Ltd vs Collector Of Excise on 22 July, 1994 Equivalent citations: 1994 AIR 2489, 1995 SCC Supl. (1) 53 Author: B Jeevan Reddy Bench: Jeevan Reddy, B.P. (J) PETITIONER: ORGANON (INDIA) LTD. Vs. RESPONDENT: COLLECTOR OF EXCISE DATE OF JUDGMENT22\/07\/1994 BENCH: JEEVAN REDDY, B.P. (J) BENCH: JEEVAN REDDY, B.P. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-37476","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nOrganon (India) Ltd vs Collector Of Excise on 22 July, 1994 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/organon-india-ltd-vs-collector-of-excise-on-22-july-1994\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Organon (India) Ltd vs Collector Of Excise on 22 July, 1994 - 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