tition No 1363683  11760 6684
Under Article 32 of the Constitution of India
G Ramaswamy AK Ganguli MK Ramamurthy Kapil Sibal RK Garg section Srinivasan DK Garg Ms A Subha shini B Parthasarthi CV Subba Rao MA Krishnamurthy V Shekhar HS Mann Ms Chandan Krishnamurthy and Ms Kamini Jaiswal for the appearing parties
The Judgment of the Court was delivered by RANGANATH MISRA J
These are applications under Article 32 of the Constitution
Petitioner No 1 in the first Writ Petition is the 341 National Union of All India Radio Staff Artists petitioner No 2 is an Announcer of the All India Radio and happens to be the General Secretary of the Union petitioners No 3 to 8 are an instrumentalist a few news readers announcers and the like
The petitioners in the other writ petitions are seven in number consisting of six announcers and a tanpura player connected with the All India Radio
According to the petitioners the prevailing practice in All India Radio used to be to offer appointments to various people as Staff Artists at the first instance ordinarily for an initial term of three months and on completion of appropriate formalities appointments used to be offered for a term of three years on contract basis at a minimum monthly fee
After the expiry of the initial period of two years out of the three years period of working which was considered as a period of proba tion contractual engagement up to the age of 55 years was being made available
On selection as alleged by the peti tioners Staff Artists used to be appointed to various posi tions like Announcer News Readers Conductor Music Com pere Instrumentalists Producer and Script Writer in the All India Radio or Producer Production Assistant Script Writer Translator and General Assistant in Doordarshan
In May 1982 the respondent Union of India bifurcated the Staff Artists into two categories like 1 Staff Artists to be treated as artists and 2 Staff Artists to be treated as Government Servants
This decision was conveyed in a letter dated 3582 and opportunity to exercise option to everyone by the end of December 1983 for final allocation to the two categories was provided
The letter stipulated that those of the Staff Artists who did not opt were to continue under the existing terms and conditions
The first writ petition was filed on 12th December 1983 challenging the Government s order of 3582 Annexure 3 and for a direction to the respondents to treat the Staff Artists at par with regular Government servants and to restrain the respondents from enforcing their direction for exercise of option
The other group of writ petitions was filed on 19th of March 1984 the challenge therein was also to the same Government letter and petitioners asked for a direction to the respondents to treat the Staff Artists as Government servants entitled to pensionary benefits
A return was made to the rule in the first writ petition by filing an 342 affidavit by the Under Secretary Ministry of Information and Broadcasting
The respondents maintained that the Staff Artists did not form one homogeneous group and job require ments of the Staff Artists were different from post to post
It was suggested that the Staff Artists could be convenient ly divided into two groups namely those who are appearing or performing before the micro phone and the others who are managing production and connected jobs
It was also pointed out that all Staff Artists did not have the same terms as to remuneration
It was suggested that the terms and conditions governing the Staff Artists after their transformation into Government servants became different
In the interests of quality of broadcasting services it was claimed periodical assessments became indispensable and inevitable
The affida vit further stated that the scheme which was enclosed to the letter marked Annexure 3 contained a scheme which had been evolved after due deliberations and there was no prejudice to the Artists if the scheme was allowed to become opera tive
On the 25th of April 1988 with special reference to the first writ petition and a connected civil appeal which is not before us at this stage the Director General of All India Radio sent the following communication to the respond ent s lawyer with a request that the same may be placed before the Court
The letter stated Under the directions of Hon ble Court the Government have further examined the aspects of the scheme for artist cate gory to safeguard the rights of the Staff Artists from any arbitrary factors in respect of discharge of duties under their contract of service renewable after satisfactory performance of their services
After careful examination the Government have now set up three types of committees to protect the rights of the staff artist from any arbitrary factors which are as under A Since the renewal of contract is automatic if the records are satisfactory it would be best to leave it to the Sta tion Director or the Head of the Office concerned to review the contract after verification of the records
In case the records are not satisfactory the question of renewal of contract may be considered by a Review Commit teeRepresentation Committee as under Bi Review Committee Both for AIRDoordarshan 343 i Station Director Chairman ii Two outside Assessors Members who have expertise in the field to which the Artists belong
Bii Representation Committee Both for AIRDoordarshan i Director General Chairman Addl
Director General Programme ii Deputy Director Member General Administration iii Representatives of Member the Ministry of Information and Broadcasting
I am to request that a Government Counsel may please be briefed accordingly to place the facts before the Honourable Court in the hearing today ie dated 25th April 88 at 2 PM On the basis of what transpired in Court after referring to the said letter this Court on that date made the following order In Civil Appeal No 384 of 1977 Union of India vs
MA Chowdhary AIR 1987 Supreme Court 1526 we have declared that all the Staff Artists of All India Radio are holding civil posts under the Government and they are governed by Article 3112 of the Constitution of India
In view of the above decision it is no longer necessary to make any further declaration in these petitions that the Staff Artists are Government servants
The Circular dated 3rd May 1982 beating No 450112680BA issued by the Ministry of Information and Broadcasting Government of India proceeded on the assumption that the Staff Artists who had entered the service of the All India RadioDoordarshan under the contracts were not Government servants and that only those Staff Artists specifically mentioned in that Circular could become and be treated as Government 344 Servants provided they satisfied the conditions mentioned therein
In view of the decision referred to above it has now become necessary for the Government to review the entire question covered by the Circular dated 3rd May 1982
We therefore direct the Government of India to review the entire situation and to prepare a fresh scheme in accordance with law having regard to the nature of duties performed by each category of Staff Artists
While preparing such a scheme the Government may also keep in view the cases of Staff Artists who have already exercised their option as provided by the circular dated 3rd May 1982
Such scheme shall be prepared on or before 3171988
After the scheme is prepared a copy of it shall be made available to all the parties to this case
The parties aggrieved may file objec tions before this Court within August 15 1988
This case shall come up for directions on 5th September 1988
 In terms of the direction given on the 25th of April 1988 a draft scheme framed by the Government has been produced before the Court along with an accompanying affidavit
Paragraph 2 of the said scheme states In pursuance of the above mentioned orders those Staff Artists who opted for becoming Government Servants  and were found fit by duly constituted Screening Committee were treated as Government Servants with effect from 63 1982
Such Staff Artists were made entitled to the same pensionary benefits as are applicable to Government Servants
They were however not entitled to any special benefits avail able to them as Staff Artists
Likewise Staff Artists in the Artists  category
who opted for being treated as Artists  and come over to the new terms and conditions were treated as Artists  with effect from 631982
 Paragraph 3 provides The following categories of Staff ArtistsArtists in All India RadioDoordarshan are however still to be treated as Government Servants 345 i Staff Artists who opted for being declared as Government Servants  but were not found fit by the Screen ing Committee ii Staff Artists who opted for being treated as Artists  category and were declared as Artists  after screening by the Screening Committee  iii Staff Artists who opted for being treated as Artists  but were not found fit by the Screening Committee for being treated as Artists  and iv Staff Artists who did not opt for being treat ed as Government Servants  or for being treated as Art ists 
The scheme further indicates 4
The Government has reconsidered the entire Scheme in the light of the judgment of the Hon ble Supreme Court delivered on 2541988 in Writ Petitions Nos
13636 of 1983 and 11760 66 of 1984 in National Union of All India Radio and Others v
Union of India
In partial modification of this Ministry s letter No 450012680 BA dated 351982 and No 450112680 BA dated 2681983 it has been decided as under i All Staff ArtistsArtists working in All India Radio and Doordarshan except foreign nationals will be deemed as Government Servants holding civil posts on pre scribed Central Government scales of pay
ii All such Staff ArtistsArtists working in All India Radio and Doordarshan will be entitled to pensionary and other benefits on the same terms and conditions as are applicable to other Government Servants holding civil posts
They will be governed by all rules and regulations and general instructions issued by Government from time to time like FR and SR GFR CCS CCA Rules CCS Conduct Rules and Pension Rules etc
All facilities benefits avail able to regular Central Government employees will be auto matically applicable to them also on the same terms and conditions as are applicable to regular Central Government servants
However any special bene 346 fitconcession available to such Staff ArtistsArtists of AIR and Doordarshan in so far these are not in accordance with rules and regulations and general instructions applica ble to Central Government servants will be withdrawn from the date of issue of these orders
iii The date of retirement on superannuation in respect of such Staff ArtistsArtists of All India Radio and Doordarshan deemed as Government Servants will be the same as applicable to holders of civil posts in Central Govern ment
iv The contribution of such Staff ArtistsArt ists working in AIR and Doordarshan made to Contributory Provident Fund CPF along with interest thereon will be transferred to their General Provident Fund GPF
The Staff ArtistsArtists working in AIR and Doordarshan deemed as Government Servants will continue to be in their existing categories and grades with regular pay scales
The future recruitment to each grade will be made according to the Recruitment Rules as per procedures prescribed for recruitment to different posts
The posts held by the Staff ArtistsArtists working in All India Radio and Doordarshan will stand converted into civil posts from the date of issue of these orders
 The order made by this Court on 25th of April 1988 was not a final judgment and this Court had directed the Union of India to review the entire situation and to prepare a fresh scheme in accordance with law having regard to the nature of duties performed by each of the categories of Staff Artists
Obviously the intention of the Court while making the order dated 25th April 1988 was to have the scheme placed before the Court for consideration
Though the scheme has been styled as a draft scheme its contents indicate that it has been implemented
The main objection of the petitioners against the present scheme is the stipulation therein that the Staff Artists will be taken as Government servants from the date of the order
According to them the Allahabad High Court had in its decision dated 12th of July 1974 given a declaration that all the Staff Artists were Government servants and the said decision was affirmed by this Court in a judgment dated May 7 1987 reported in  Union of 347 India vs MA Chowdhary
It is the contention of the peti tioners that the benefit of conversion or declaration should be effective from 1271974 and those who were in employment then as Staff Artists should be considered as Government from this date and others who joined after 12774 should be conferred the status of Government servants from the date of joining
There is also a claim by the petitioners to pension for those who have retired after 1271974 and prior to the present scheme
It is the further contention of the peti tioners that while formulating the present scheme the Court s direction of 25th of April 1988 has not been strictly kept in view
Reliance has been placed on this Court s order dated 3rd April 1984 where it was indicated that failure of Staff Artists to exercise the option should not prejudice their right in any manner and either a fresh opportunity to exercise the option should be given or even in the absence of option the same benefits should be given
Some of the objections which have been raised and are no ticed above seem to be germane and require consideration
This Court s order of 25th April 1988 requiring a fresh scheme to be formulated obviously meant that the exercise of option in terms of the order dated 3rd May 1982 was not taken to be the final date for exercise of option
Opportu nity to exercise fresh option should have been given or perhaps the new scheme could have accepted the position that unless one wanted to be not absorbed he should have been deemed to be accepting absorption
As in the changed setting the class of Staff Artists was really intended to be done away with in due course such a deeming base should have been accepted for convenient implementation
One class of Staff Artists engaged under contracts wants such status to continue
Otherwise stated they do not want the contractual base to be changed into employment
While dealing with the Artists as a class it is neces sary that their special status be borne in mind
It is a class of people who are indeed specially privileged either by natural gift or by their own culturing of the article This category of people cannot be equated with ordinary Govern ment servants for every purpose
The All India Radio and the Doordarshan in their normal functioning would to a consider able extent depend upon qualitative and efficient artists in order to make their programmes reach the desired level
The scheme necessarily contemplates a transitional period
The age old practice of the job of the Staff Artists being contractual whether short or long is being given up and contractual employment is being substituted by status based Government service
If there are really efficient Artists of different 348 classifications who do not want to be branded as Government servants there is no immediate justification for discontin uing and disturbing them in toto
The transitional period could be elongated to accommodate the appropriate category of Artists not willing to be absorbed as Government serv ants
Of late Government themselves are having a re look at the matter
It is their stipulation that All India Radio and Doordarshan should be made into autonomous corporations and for that purpose legislation is in the process
What is in contemplation is contrary to what is in the scheme
This means that the matter is still in a fluid stage
It is therefore appropriate that either a deeming position should have been accepted in the scheme as indicated above or a fresh opportunity for exercise of option should have been provided
Again the demand of the above group of artists should have also been considered
The question of deeming the employees as Government servants from the date of the Allahabad High Court s judg ment is another issue which requires examination
Connected with it would be the question of entitlement to pension
We are of the view that these are aspects which should first be initially examined by a Committee to be set up by the Gov ernment and after a definite view is taken it would be open to the petitioners to approach the appropriate Court to redress the remaining grievances if any
The matter is such that administrative scrutiny instead of judicial determina tion would be more helpful
We therefore refrain from expressing any final view
We reiterate that the order dated 25th of April 1988 intended a draft scheme to be drawn up for consideration of the Court
The scheme as produced in the Court along with the accompanying affidavit has also been described as a draft scheme
The objections raised by the petitioners to the said scheme are available on the record
We direct that in the appropriate Ministry a High Power Committee be set up for examination of the objections with reference to the terms of the scheme and the final decision be taken by the Government within six months
The views expressed in the present decision be taken into ac count while dealing with the objections for purposes of finalising the scheme
Liberty is given to the aggrieved parties when final decision is taken by Government to move the Court
These writ petitions are disposed of with these directions
No costs
Y Lal Petition disposed of


Summary:
Writ PetitionsCivil appeals challenging the notifica tion dated 31st May 1979 which substituted a new rule 172 of UP Excise Rules and provided for a vend fee the amend ment to section 49 of the Bombay Prohibition Act 1949 treating exclusive privilege for State in liquor trade and imposing a transport fee the Bombay Prohibition Act 1949 as amended from time to time along with ordinance No 15 of 1981 amending the Bombay Prohibition Act 1949 and Section 49 added by reason of which the State was granted exclusive privilege of importing exporting transporting manufactur ing bottling selling buying processing or using any intoxicant and seeking a declaration that alcohol plant of the petitioner company was not covered by the AP Excise Act 1968 AP Distillery Rules 1970 and AP Rectified Spirit Rules
1971 and that alcohol plant of the company was not a distillery  within the meaning of the said expression under the AP Distillery Rules and therefore the Distill ery Rules had no application thereto and seeking an order to restrain from interfering with andor regulating and con trolling production distribution movement and supply of alcohol from the plant of the company and the Tamil Nadu Prohibition Act were filed in this Court
Review Petitions against the judgment and order of this Court dated 19th December 1979 in State of UP etc
vs Synthetics and Chemicals Ltd and Ors
  re agitating challenge 625 to sections 24A and 24B of the UP Excise Act 1910 as amended in 1972 and 1976 declaring exclusive privilege of the Government for manufacture and sale of foreign liquor as defined which included denatured spirit and industrial alcohol were also filed
The petitionersappellants contended that the levies made by the respondent States on alcohol which was utilised as raw material by the industries for manufacturing the products were invalid
Some of three industries themselves manufactured alcohol as they had their own distillaries  and from where it passed through pipelines to their industrial units where this was used as a raw material whereas some purchased alcohol or denatured spirit on being allotted by the Government
It was alleged that in addition to excise duty levied by the Central Government excise duty and various levies in various names like vend lee transport fee and others numbering about eight levies were imposed by the State Government
It was also contended that the State Legislature had no authority in view of Entry 84 of List I read with Entry 51 of List I1 to impose such levies this being alcohol which did not within the ambit of alcoholic liquors for human consumption
It is only the centre which had the authority to tax under Entry 84 and that Entry 8 In List II only authorised the State Legislature to enact laws to regulate but did not empower it to impose any levy and the various levies which hod been imposed by the State Legislature on industrial alcohol and even methylated spirit could not be brought within the ambit of regulatory duties for purposes of regulation only and therefore could not be justified under Entry 8 of List H that doctrine of privilege and consideration for sale of privilege could be available to the State only in respect of alcohol or alco holic liquors which were for human consumption
that by merely widening the definition of intoxicating liquors in respective excise laws enacted by the States the ambit of authority of taxation could not be enlarged by the State Legislature when in List II Entry 51 the words used were alcoholic liquors for human consumption
It was further contended that though the direction and commitment to im provement of the standards of living contained in Article 47 of the Constitution must be kept in view this improvement could be achieved primarily by industrialisation involving increased production and employment and giving priority to the core sectors that the Industries Development  Regula tion Act 1951 was enacted with a view to developing and controlling various important industries and that the peti tionersappellants were predominantly and primarily con cerned with using ethyl alcohol rectified spirit as an industrial raw material and this industrial alcohol is required as an input for further manufacture of downstream products
626 It was submitted on behalf of Union of India that the legislative competence of the State enactments in the var ious States would have to be determined by reference to Entries 7 52 59 84 96 and 97 of List I and Entries 8 24 26 27 51 52 54 56 62 of List II and Entries 19 and 33 of List III that then was a dichotomy between Entry 84 of List I and Entry 52 of List II but this would not con trol the interpretation of other entries and that there was no such dichotomy in Entry 8 of List II that the power to levy taxes had to be read from entry relating to the taxes and not from general entry that none of the taxing entries in List II was controlled by Entry 52 of List I that State s privilege to completely prohibit or farm out liquor containing alcohol for consumption did not comprehend a similar right of the State with regard to other intoxicating liquids containing alcohol and to so prohibit or collect fee for farming out would be unconstitutional under Article 191g of the Constitution that under Entry 51 of List II State Legislature had no power to levy excise duty on industrial alcohol as it was not fit for human consumption and though the State could collect an amount called vend fee shop rent etc
for conferring on a citizen the right to manufacture and sell alcoholic liquors if it is for human consumption this power did not extend to industrial alcohol or alcohol contained in the medicinal or toilet prepara tions On behalf of the respondent States it was contended that a Entry 52 of List I was an exceptional entry which not only prescribed the field of legislation but also ena bled and empowered the Parliament to make laws to the exclu sion of the State and that being exclusionary in nature unlike entries merely delineating fields of legislation this entry had to be strictly and therefore narrowly construed b whenever the Constitution intended the Parliament to assume legislative competence in respect of the entire field a declaration of an unqualified nature was provided for unlike qualified provi sion like Entry 52 of List 1 c the words control  and regulation  were at times held to he interchangeable or used synonymously but their use in the various entries either singly or jointly indi cated that they were sought to convey a different sense and the word control  had in the context a narrower meaning excluding details of regulatory nature by the State d comparing Entries 7 23 24 27 62 64 and 67 of List I with Entry 52 would demonstrate that under entry 52 it was not the entire 627 field which was sought to be covered but only the control of industries and that the absence of inclusion of qualifying words like the control of which  could not be brushed aside e in view of the declaration made in Section 2 of the IDR Act 1951 and the provisions made therein the entire field was not occupied and the vend fee or other impost by the State legislatures were not infringing in the field treaded by the Central Legislature the Act did not preclude or eclipse the legislative powers of the State the Act also did not apply on its own terms to the levy these operated on different tracks f the Parliament had no power to legislate on indus trial alcohol since industrial alcohol was also alcoholic liquor for human consumption and Entry 84 in List I express ly excluded this category and therefore the residuary Entry 97 of List I would not operate as against its own legislative intent g the State had legislative competence to impose the levy since it was both on its language and in pith and substance legislation failing under Entry 8 List II intox icating liquor and Entry 51 List II alcoholic liquor for human consumption and what was required was intoxicating liquor andor alcoholic liquor for human consumption h that the State had exclusive right to deal in liq uor and this power was reserved by andor derived under Article 196 and 196ii of the Constitution for parting which a charge was levied and in a series of decisions it had been ruled that the charge was neither a fee nor a tax and was termed as privilege i there was no dichotomy between Ethyl Alcohol to be used for beverages and for industrial purposes and in any case the levy was on manufacture of the Ethyl Alcohol and the dichotomy attempted to be drawn in Entry 84 of List I on the basis of the development of the concept of industrial alcohol and the inapplicability of the concept of potable liquor to the industry of alcohol was not valid
j the levy was consistent with wider interpretation of alcoholic liquor based on pre existing legislative history k when two interpretations were possible the choice must fall on that interpretation which validated existing State legislations designed to raise revenues and rejection of the other interpretation 628 which was destructive of the scheme of distribution of powers 1 the words alcoholic liquor  in Lists I  II of the 7th Schedule to the Constitution must be interpretated so as to mean and take within its sweep alcohol as first obtained in the process of or as a product of fermentation industry at which stage it was capable of being rendered potable and the fact that it may be rendered unfit for human con sumption did not render the substance any less liable for taxation m imposition of a fee would be the most effective method of regulating intoxicating liquor other than alcohol and could be justified as the reasonable measure in regard to intoxicating liquor as it is the duty of the State being a welfare State to denature by incurring extra cost and effort quid pro quo was not necessary and even if it was necessary the requirements were met and the price fixation was a valid method in regulation of consumption n under its police powers the State had to regulate health morality welfare of society and incidental pauper ism and crime o in enacting a law with respect to intoxication liquor as part of the legislative power measures of social control and regulation of private rights were permissible and as such may even amount to prohibition p it has been accepted by Courts all along that the police power  of the State enabled regulations to be made regarding manufacture transport possession and sale of intoxicating liquor and such police power could be exer cised as to impose reasonable restrictions as to effectuate the power q trade in alcoholic drinks or intoxicating drinks being obnoxious and injurious to health a citizen had no fundamental right under Article 191g of the Constitution and it Is the privilege of the State alone and it can part with this privilege on receipt of a consideration r the levy was stipulated jointly or severally both under  Entries 8 of List II Entry 51 of List II Entry 33 of List III and what was described as police powers regula tory and other incidental charges and the levy was justi fied being a regulatory power under Article 196 and 196ii the State had
a monopoly in alcohol trade and Article 31C 629 granted immunity to the challenge under Articles 13 14 and 19 of the Constitution and under Article 298 trading power of the State must be recognised coupled with century old monopoly of the State in alcohol and t the vend fee was a pre constitutional levy and so saved under Article 277 of the Constitution it was not a law either under Article 246 or Article 254 and was there fore outside the purview of the Central Act
On the questions i whether the vend fee in respect of the industrial alcohol under different legislations and rules in different States was valid ii whether the power to levy excise duty m case of industrial alcohol was with the State legislature or the Central legislature iii what was the scope and ambit of Entry 8 List Ii of the Seventh schedule of the Constitution and iv whether the State Government had exclusive right or privilege of manufactur ing selling distributing etc
of alcohols including industrial alcohol and what was the extent scope and ambit of such right of privilege Allowing the Writ Petitions Civil Appeals and Review Petitions this Court HELD Majority ES Venkataramiah CJI Sabyasachi Mukharji Ranganath Misra BC Ray KN Singh and section Natarajan JJ Per Sabyasachi Mukharji J 11 The relevant provisions of the UP Excise Act 1910 AP Excise Act 1968 Tamil Nadu Act and Bombay Prohibi tion Act 1949 are unconstitutional insofar as these purport to levy a tax or charge imposts upon industrial alcohol namely alcohol used and usable for industrial purposes
680G H 12 Having regard to the principles of interpretation and the Constitutional provisions in the light of the language used and having considered the impost and the composition of industrial alcohol and the legislative practice of this country
the imposts in question cannot be justified as State imposts
680G H 13 The different provisions in question are not merely regulatory but are much more than that
These seek to levy imposition in their pith and substance not as incidental or as merely disincentives 630 but as attempts to raise revenue for States  purposes
There is no taxing provision permitting these in the lists in the field of industrial alcohol for the State to legislate
Furthermore in view of the occupation of the field by the Industrial Development and Regulation Act it was not possi ble to levy this impost
Besides in view of the language used in the specific provision the levy is not on the manu facture of alcohol as such
Therefore these levies cannot in essence be sustained as duty of excise 681A B 21 The meaning of the expressions used in the Constitu tion must be found from the language used
The words of the Constitution should be interpreted on the same principle of interpretation as one applies to an ordinary law but these very principles of interpretation compel one to take into account the nature and scope of the Act which requires interpretation
672H 673A 22 A Constitution is the mechanism under which laws are to be made and not merely an Act which declares what the law is to be
673B 23 It is also well settled that a Constitution must not be construed in any narrow or pedantic sense and that con struction which is most beneficial to the widest possible amplitude of its power must be adopted
An exclusionary clause in any of the entries should be strictly and there fore narrowly construed
No entry should however be so read as not to rob it of entire content
A broad and liberal spirit should therefore inspire those whose duty it is to interpret the Constitution and the Courts are not free to stretch or to pervert the language of an enactment in the interest of any legal or constitutional theory
Constitu tional adjudication is not strengthened by such an attempt but it must seek to declare the law
It must not try to give meaning on the theory of what the law should be but must so look upon a Constitution that it is a living and organic thing and must adapt itself to the changing situations and pattern in which it has to be interpreted
Where division of powers and jurisdiction in a federal Constitution is the scheme it is desirable to read the Constitution in harmoni ous way
Further in deciding whether any particular enact ment is within the purview of one Legislature or the other it is the pith and substance of the legislation in question that has to be looked into
673B E 31 It is well settled that the various entries in the three lists of the Indian Constitution are not powers but fields of legislation
The power to legislate is given by Article 246 and other Articles of the Constitution
The three lists of the 7th Schedule to the Constitution are legislative heads or fields of legislation
These demarcate the area over 631 which the appropriate legislatures can operate
673F 32 It is also well settled that widest amplitude should be given to the language of the three entries but some of these entries in different lists or in the same list may over ride and sometimes may appear to be in direct conflict with each other then and then comes the duty of the Court to find the true intent and purpose and to examine the particular legislature in question
Each general word should be held to extend to all anciliary or subsidiary matters which can fairly and reasonably be comprehended in it
673F G 33 In interpreting an entry it would not be reasonable to import any limitation by comparing or contrasting that entry with any other in the same list
It has to be inter preted that the Constitution must be interpreted as the organic document in the light of the experience gathered
673H 34 In the Constitutional scheme of division of power under the legislative lists there are separate entries pertaining to taxation and other laws
674A The relevant entries in the Seventh Schedule to the Constitution demarcate legislative fields and are closely linked and supplement one another
674E The Constitution of India like most other Constitutions is an organic document
It should be interpreted in the light of the experience
It has to be flexible and dynamic so that it adapts itself to the changing conditions and accommodates itself in a pragmatic way to the goals of national development and the industrialisation of the coun try
This Court should therefore endeavour to interpret the entries and the powers in the Constitution in such a way that it helps to the attainment of undisputed national goals as permitted by the Constitution
674C D MPV Sundararamier  Co vs State of AP  at pages 1480 82 relied on
The India Cement Ltd etc
vs The State of Tamil Nadu etc and Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act 1938 at 37 38 referred to
41 The expression of a Constitution must be understood in its common and normal sense
Industrial alcohol as it ISI is incapable of 632 being consumed by a normal human being
The expression consumption  must also be understood in the sense of direct physical intake by human beings in this context
No doubt utilisation in some form or the other is consumption for the benefit of the human beings if industrial alcohol is uti lised for production of rubber tyres used
But the utilisa tion of those tyres in the vehicle of man cannot in the context in which the expression has been used in the Consti tution be understood to mean that the alcohol has been used for human consumption
665C D 42 The expression alcoholic liquor for human consump tion  was meant and still means that liquor which as it is is consumable in the sense capable of being taken by human beings as such as beverage of drinks
Hence the expression under Entry 84 List I must be understood in the light
665E 43 Constitutional provisions specially dealing with delimitation of powers in a federal polity must be under stood in a broad commonsense point of view as understood by common people for whom the Constitution is made
In termi nology as understood by the framers of the Constitution and as also viewed at the relevant time of its intepretation it is not possible to proceed otherwise
Alcoholic or intoxi cating liquors must be understood as these are what these are capable of or able to become
665G H 51 By common standards ethyl alcohol which has 95 is an industrial alcohol and is not fit for human consumption
The petitioners and the appellants were manufacturing ethyl alcohol 95 also known as rectified spirit which is an industrial alcohol
ISI specification has divided ethyl alcohol as known in the trade into several kinds of alco hol
Beverage and industrial alcohols are clearly and dif ferently treated
Rectified spirit for industrial purposes is defined as spirit purified by distillation having a strength not less than 95 of volume by ethyl alcohol
Dictionaries and technical books would show that rectified spirit 95 is an industrial alcohol and is not potable as such
Therefore industrial alcohol which is ethyl alcohol 95 by itself is not only non potable but is highly toxic
The range of spirits of potable alcohol is from country spirit to whisky and the Ethyl Alcohol content varies be tween 19 to about 43 per cent
These standards are according to the ISI specifications
Therefore ethyl alcohol 95 is not alcoholic liquors for human consumption but can be used as raw material input after processing and substantial dilution in the production of whisky Gin Country Liquor etc
677D G 633 Delhi Cloth and General Mills Co Ltd vs The Excise Commissioner UP Allahabad and Anr Special Appeal No 177 of 1970 decided on 2931973 referred to
61 Entry 8 of List I which contains the words intoxi cating liquor   cannot support a tax
The meaning of this expression has been rightly interpreted by the High Court in Balsara  s case
Hence the observations of this Court in Balsara s case require consideration
677H 675A B 62 In the light of the new experience and development intoxicating liquor must mean liquor which is consumable by human being as it is
When the word liquor was used by this Court it did not have the awareness of full use of alcohol as industrial alcohol
It is true that alcohol was used for industrial purposes then also but the full poten tiality of that user was not then comprehended or under stood
With the passage of time meanings do not change but new experience give new colour to the meaning
675B C FN Balsara vs State of Bombay AIR 1951 Born 210  214 approved
State of Bombay  Anr
vs FN Balsara  Har Shankar  Ors etc
vs The Dy
Excise  Taxation Commissioner  Ors   Adhyaksha Mathur Babu s Sakti Oushadhalaya Dacca P Ltd vs Union of India  Ms Guruswamy  Co etc
vs State of Mysore  Ors
  State of Mysore vs SD Cawasji  Co  Ors   RC Jallv
Union of India 1962 Suppl 3 SCR 436 Om Prakash vs Giriraj Kishore   Inspector of Taxes vs Australian Mutual Provident Society 1959 3 All England Law Report 245 and Commonwealth of Massachusetts Et AI vs USA 92 Lawyers Edition p 968 referred to
63 Article 47 of the Constitution imposes upon the State the duty to endeavour to bring about prohibition of the consumption except for medicinal purpose of intoxicating drinks and products which are injurious to health
If the meaning of the expression intoxicating liquor is taken in the wide sense adopted in Balsara s case it would lead to an anamolous result and would oblige the State to prohibit even such industries as are licensed under the IDR Act but which manufacture industrial alcohol
This was never intend ed by the Constitution or judgments of this Court
There fore the decision in the Synthetics  Chemicals Ltd s case was not correct on this aspect
679C D State of UP etc
vs Synthetics  Chemicals Ltd  Ors
etc 634  and State of Bombay  Anr
vs FN Balsara  overruled
KK Narula vs State of J  K   referred to
The Indian Constitution does not recognise police power as such
But the exercise of sovereign power which gives the State sufficient authority to enact any law subject to the limitations of the Constitution to discharge its functions must be recognised
The Indian Constitution as a sovereign State has power to legislate on all branches except to the limitation as to the division of powers be tween the Centre and the States and also subject to the fundamental rights guaranteed under the Constitution
The Indian State between the Centre and the States has sover eign power
The sovereign power is plenary and inherent in every sovereign State to do all things which promote the peace morals education and good order of the people
Sovereignty is difficult to define
This power of sovereign ty is however subject to Constitutional limitations
666F H 81 In interpreting the provisions of the Constitution one should go by the plain words used by the Constitution makers
Importing of expression like police power  which is a term of variable and indefinite connotation can only make the task of interpretation more difficult
671B State of West Bengal vs Subodh Gopal  Ors at 601 604 and Kameshwar Prasad  Ors
vs The State of Bihar  Anr   referred to
82 The power of the State to regulate though not as emanation of police power but as an expression of the sovereign power of the State is recognised but that power has its limitations
671G 83 Whether the States have the police power or not they have the power to regulate the use of alcohol and that power must include power to make provisions to prevent andor check industrial alcohol being used as intoxicating or drinkable alcohol
However the question is whether in the garb of regulations a legislation which is in pith and substance fee or levy which has no connection with the cost or expenses administering the regulation could be imposed purely as regulatory measure
671D E In the instant case judged by the pith and substance of the legisla 635 tion in question these levies cannot be treated as part of regulatory measures671E 91 The activity in potable liquor which was regarded as a safe and exclusive right of the State earlier cannot be justified under the police power of the State ie the power to preserve public health morals etc
This reasoning can never apply to industrial alcohol manufactured by indus tries which are to be developed in the public interest and which are being encouraged by the State
In such a situa tion it is essential to strike a balance and while doing so it is difficult to find any justification for any exclu sive right of a State to deal with industrial alcohol
Restriction valid under one circumstance may become invalid in changing circumstances
680C D Nashville Chattangooga  St Louis Railway vs Herbert section Walters 79 Lawyers  Edition 949 Leo Nebbia vs People of the State of New York 78 Lawyers  Edn
940 at p 941 and Motor General Traders  Anr
vs State of Andhra Pradesh 92 Arbitrary and excessive imposts under the so called privilege of the States are a great disincentive for devel opment of industries in the public interest and for indus trial development in general and can render units unviable and sick
It is essential that there should be uniformity in the industry so that these are free from the vagaries and arbitrary and differential treatment meted out from State to State and even in the same State from time to time
644C D 93 Right to tax or levy must be in accordance with the provisions of the Constitution
It is clear that all duties of excise save and except the items specifically excepted in entry 84 of List 1 are generally within the taxing power of the Central Legislature
The State Legislature has power though limited in imposing duties of excise
That power is circumscribed under Entry 51 of List II of the 7th Schedule to the Constitution
666H 667A 674G 10
In view of the subsequent amendments and additions to the levies the levies in question are not pre Constitu tional levies
662E 111 After 1956 amendment to the Industries Develop ment and Regulation Act 1951 bringing alcohol industries under fermentation industriesas item 26 of the First Schedule to the Act the control of this industry has vested exclusively in the Union
Thereafter licences to 636 manufacture both potable and non potable alcohol is vested in the Central Government
Distilleries are manufacturing alcohol under the Central Licences under IDR Act
No privi lege for manufacture even if one existed has been trans ferred to the distilleries by the State
The State cannot itself manufacture industrial alcohol withoutthe permission of the Central Government
The States cannot claim to pass a right which these do not possess
Nor can these States claim exclusive right to produce and manufacture industrial alco hol which are manufactured under the grant of licence from the Central Government
Industrial alcohol cannot upon coming into existence under such grant be amenable to States  claim of exclusive possession of privilege
The State can neither rely on Entry 8 of List II nor Entry 33 of list III as a basis for such a claim
It cannot claim that under Entry 33 of List III it can regulate industrial alcohol as a product of the scheduled industry because the Union under section 18 G of the IDR Act has evinced clear intention to occupy tile whole field
Even otherwise sec tions like Section 24A and 24B of the UP Act do not con stitute any regulation in respect of the industrial alcohol as product of the scheduled industry
On the contrary these purport to deal with the so called transfer of privilege regarding manufacturing and sale
This power admittedly has been exercised by the State purporting to act under Entry 8 of list II and not under Entry 33 of list III
681C F 112 The position with regard to control of alcohol industry has therefore undergone material and significant change and the State is left with only powers to pass any legislation in the nature of prohibition of potable liquor referable to Entry 6 of list II and regulating powers lay down regulations to ensure that non potable alcohol is not diverted and misused as a substitute for potable alcohol and charge excise duty on potable alcohol and sales tax under Entry 52 of list II however sales tax cannot be charged on industrial alcohol in the present case because under the Ethyl Alcohol Price Control Orders sales tax cannot be charged by the State on industrial alcohol and in case State is rendering any service as distinct from its claim of so called grant of privilege it may charge fees based on quidpro quo
681G H 682A C Indian Mica and Micanite Industries vs State of Bihar  relied on
121 On an analysis of the various Abkari Acts and Excise Acts it is clear that various provincesStates reserve to themselves in their respective States the right to transfer exclusive or other privileges only in respect of manufacture and sale of alcohol and not in respect of 637 possession and use
Not all but some of States have provided such reservation in their favour
The price charged as a consideration for the grant of exclusive and other privi leges was generally regarded as an excise duty
In other words excise duty and price for privileges were regarded as one and the same thing
So called privilege was reserved by the State mostly in respect of country liquor and not for eign liquor which included denatured spirit
682D E 122 On an analysis of various decisions and practice it is clear that is respect of industrial alcohol the States are not authorised to impose the impost they have purported to do
Hence such impositions and impost must go as being invalid
However this would not affect any impost so far as potable alcohol as commonly understood is concerned
It will also not affect any impositions of levy on industrial alco hol fee where there are circumstances to establish that there was quid pro quo for the fee sought to be imposed
This will also not affect any regulating measure as such
682F G The provisions are therefore declared to be illegal and invalid prospectively
The Respondent States are re strained from enforcing the said levy any further but they will not be liable for any refund and the tax already col lected and paid will not be refunded
683B In respect of Tamil Nadu no further realisations will be made in future by the State Government from the petition ers
Regarding past realisations the application for that part of the direction should be placed before a Division Bench for disposal upon notice both to the State and the Central Governments
683F Calcutta Gas Co Proprietory Ltd vs The State of West Bengal 
and Ors 1962 Suppl
3 SCR 1 Nashirwar etc
vs The State of MP   SheopatRai  Ors
vs State of U P 1972 All
LJ 1000 Indian Mica  Mican ite Industries Ltd vs State of Bihar  Ors 1971 Suppl
SCR 319 Town Municipal Committee Amraoti vs Ramachandra Vasudeo Chimote  Anr   PN Kaushal etc
vs Union of India   Ms Guruswamy  Co etc
vs State of Mysore  Ors  Coo verjee B Bharucha vs The Excise Commissioner and the Chief Commissioner Ajmer  Ors 19541 SCR 873 Crowley vs Christensen 1890 34 Lawyers  Edn 620 and Southern Phar maceuticals  Chemicals Trichur  Ors
vs State of Kerala  Ors etc
  at 537 referred to
638 Per Oza J Concurring 131 The State Legislature had no authority to levy duty or tax on alcohol which is not for human consumption as that could only be levied by the Centre
686G 132 A comparison of the language of Entries 84 of List I and 51 of List II clearly demonstrates that the powers of taxation on alcoholic liquors have been based on the way in which they are used
Admittedly alcoholic liquor is a very wide term and may include variety of types of alcoholic liquors but our Constitution makers have distributed them into heads namely a for human consumption and b other than for human consumption
Alcoholic liquors which are for human consumption were put in Entry 51 List II authorising the State Legislature to levy tax on them whereas alcoholic liquors other than for human consumption have been left to the Central Legislature under Entry 84 for levy of duty of excise
This scheme of these two entries in List I and II is clear enough to indicate the line of demarcation for pur poses of taxation of alcoholic liquors
What has been ex cluded in Entry 84 has specifically been put within the authority of the State for purposes of taxation
685E H 133 From the scheme of entries in the three lists it is clear that taxing entries have been specifically enacted conferring powers of taxation whereas other entries pertain to the authority of the Legislature to enact laws for pur poses of regulation
If Entry 8 in List II is compared with Entry 51 it is clear that while Entry 51 authorises the State Legislature to levy tax and duties on alcoholic liq uors failing under this entry Entry 8 confers authority on the State Legislature to enact laws for regulation
Similar ly are Entries in List I
But since a declaration has been made by the Parliament under Entry 52 List I declaring the industry based on fermentation and alcohol to be an industry under the Industrial Development and Regulation Act 1951 and placing it directly under the control of the Centre even in respect of regulation the authority of the State Legislature in Entry 8 List II could only be subject to the Act or rules made by the Centre
Therefore in view of clear demarcation of authority under various items in the three Lists Entry 8 List II could not be invoked to justify the levies which have been imposed by the State in respect of alcoholic liquors which are not meant for human consumption
686C D F G The State in exercise of powers under Entry 8 of List II and by appropriate law may however regulate and that regulation could be to 639 prevent the conversion of alcoholic liquors for industrial use to one for human consumption and for the purpose of regulation the regulatory fees only could be justified
In fact the regulation should be the main purpose the fee or earning out of it has to be incidental
690H 691A 141 There is nothing like privilege vested in any one of the functionaries of the State
In the background of this basic feature of our Constitution the doctrine of privilege is difficult to reconcile with when this privilege of trad ing in commodities injurious to health and dangerous to life is examined especially in the context of Article 21 and Article 47 of our Constitution
688C D 142 Article 21 castes a duty on the State to protect the life of every citizen except as is provided under the Article
If this duty of the State is compared with the scheme of privilege it means that the State has a privilege to endanger human life the life of a citizen
Such a privilege runs contrary to Article 21 688F 143 Article 47 appears in the Chapter of Directive Principles of State Policy
Inclusion of this Article in this Chapter clearly goes to show that it is the duty of the State to do what has been provided in this Article
It has provided that it is the duty of the State to improve public health and this duty will be discharged by endeavouring to bring about prohibition
It therefore sounds contradictory for a State which is duty bound to protect human life to claim that it has the privilege of manufacture and sale of alcoholic beverages which are expected to be dangerous to human life and injurious to human health and transferring this privilege of selling this privilege on consideration to earn huge revenue without thinking that this trade in liquor ultimately results in degradation of human life even endan gering human life and is nothing but moving contrary to the duty cast under Articles 21 and 47 and ideal of prohibition enshrined in Article 47
688H 689A C Therefore in view of Articles 21 and 47 the State cannot claim the privilege of having the right to trade in goods obnoxious and injurious to health
689D