Special Leave Petitions Civil Nos
2585 259479
From the Judgment and Order dated 9 3 1979 of the Delhi High Court in Civil Writ Petition Nos
116 122 and 135 13779
V section Desai In SLP 2585 L N Sinha In SLP
2586 L M Singhvi In SLP 2587 PP Rao In SLP 2588 R C Verma Y K Sabharwal D P Mukherjee In SLP 2589 94 and A K Ganguli In all the SLPs for the Petitioners
Soli J Sorabjee Addl
R K Bhatt and R N Sachthey for the Respondent
656 The Order of the Court was delivered by DESAI J Law touching manufacture import use or consumption of liquor as understood in common parlance is recently vigorously assailed with almost afflicted sentimentalism that even though we have dismissed this batch of Special Leave Petitions on 23rd March 1979 in fairness to petitioners on whose behalf all possible contentions that can be formulated by research and dialectics were advanced with eloquence and devoid of inebriation likely to be caused by the subject matter of dispute we propose shortly to state our reasons for dismissal of the petitions
To illumine the contours of controversy events preceding the promulgation of the Ordinance amending the Punjab Excise Act 1914  Act  for short as in force in the Union Territory of Delhi  Delhi  for short styled as Punjab Excise Delhi Amendment Ordinance 1979  Ordinance  for short may be stated
Punjab Excise Act 1914 has been extended to Delhi
While implementing the provisions of the Act the concerned authority used to hold auction for grant of licence in Form L 10 for selling country liquor and at one such auction held on 29th March 1978 the petitioners  bids were accepted and they were granted licences in Form L 10 for the period 1st April 1978 to 31st March 1979
The licence included a condition to sell a bottle of 750 ml of country liquor at Rs 15 which was inter alia made up of excise duty at the rate of Rs 1023 and profit of licensee at the rate of Rs 2 
This excise duty was styled as still head duty  for obvious reasons
In Writ Petition No 71678 filed in the High Court of Delhi by certain petitioners validity of the levy of still head duty  was challenged inter alia on the ground that it was nothing but countervailing duty and in the absence of manufacture of liquor in Delhi countervailing duty on the import of liquor cannot be constitutionally levied
This contention found favour with a learned single Judge of the Delhi High Court and a number of Letters Patent Appeals were filed against that judgment which were pending in the High Court
In the mean time on 20th January 1979 the President of India promulgated the Ordinance purporting to amend the Punjab Excise Act with retrospective effect and conferring power on the Government under the provisions of the Act to levy special duty on the import of country liquor in Delhi at rates not exceeding that set out in Schedule I A which was introduced in the Act by the Ordinance Pursuant to the Ordinance amending the principal Act the Delhi Fiscal Duty Order 1979 was issued levying special duty at the rates set out in the order on import of country liquor into Delhi
Some of the petitioners questioned the validity generally of the Ordinance and specifically of the import of special duty in Civil Writ No 11679
A Division Bench of the Delhi 657 High Court heard the Letters Patent Appeals against the judgment of the learned single Judge of the Delhi High Court as well as the aforementioned writ petition and by a common judgment held the Ordinance as well as the impost thereunder valid and dismissed the writ petition and allowed the Letters Patent Appeals setting aside the judgment of the learned single Judge
This bunch of petitions is filed against the judgment of the Delhi High Court in Civil Writ No 11679 and allied writ petitions and the Letters Patent Appeals
The cardinal question around which the various facts of controversy rotates turns upon the competence of Parliament to enact legislation under challenge which would directly impinge upon the competence of the President to issue the impugned Ordinance
Article 123 of the Constitution enables the President to issue an Ordinance in the circumstances thereunder mentioned and the power to issue Ordinance is co extensive with the legislative power of Parliament vide Article 1233
The question therefore is whether Parliament had the power to impose special duty on the import of country liquor in Delhi
In order to avoid the slightest confusion it must be reiterated that the power of Parliament to legislate for Delhi is in question
Article 2461 confers exclusive power on Parliament to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule
Sub article 3 confers similar power on the Legislature of any state with respect to any of the matters enumerated in List II
Sub article 2 confers power both on Parliament and the State Legislature to make laws with respect to any of the matters enumerated in List III Concurrent List
Sub article 4 reads as under Parliament has power to make laws with respect to any matter for any part of the Territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List
Article 2481 provides that Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List
In other words residuary power of legislation is conferred on Parliament Sub article 2 of Article 248 is material and may be extracted 2
Such power shall include the power of making any law imposing a tax not mentioned in either of those Lists
658 Entry 84 in the Union List reads as under 84
Duties of excise on tobacco and other goods manufactured or produced in India except a alcoholic liquors for human consumption b opium Indian hemp and other narcotic drugs and narcotics but including medicinal and toilet preparations containing alcohol or any substance included in sub paragraph b of this entry
Entry 97 of the Union List reads as under 97
Any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists
Entry 51 in the State List reads as under 51
Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same of lower rates on similar goods manufactured or produced elsewhere in India a alcoholic liquors for human consumption b opium Indian hemp and other narcotic drugs and narcotics but not including medicinal and toilet preparations containing alcohol or any substance included in sub paragraph b of this entry
Entry 52 is as under 52
Taxes on the entry of goods into a local area for consumption use or sale therein
The relevant provisions of the impugned Ordinance may also be extracted for convenience of reference
The Ordinance in its Preamble states that by reason of certain excisable articles not being manufactured or produced in Delhi one such being country liquor countervailing duty is not leviable on such articles which are imported into Delhi and proceeds to define duty in clause 5a of section 3 as under 5a
duty means the excise duty or countervailing duty or as the case may be special duty 659 Clause c was added to clause 6 of section 3 specifying the words any spirit
Clause 18a was added specifying thereunder the definition of special duty  which reads as under 18A Special duty means a tax on the import of any excisable article being an article on which countervailing duty as in mentioned in entry 51 of List II in the Seventh Schedule to the Constitution is not imposable on the ground merely that such article is not being manufactured or produced in the territory to which this Act extends
Section 31 was amended enabling the Government to levy over and above excise duty a countervailing duty or special duty at such rate or rates not exceeding the rates set forth in Schedule IA which was also added by the Ordinance
The contention is that Entry 51 in the State List enables the State Legislature to levy duty of excise or countervailing duty on alcoholic liquors for human consumption and that the almost corresponding Entry 84 of the Union List denies power to Parliament to levy duty of excise on alcoholic liquors for human consumption
Proceeding further it was said that initially countervailing duty was levied on the country liquor imported in Delhi and when it was found that as country liquor was not manufactured in Delhi countervailing duty could not be levied upon it an attempt was made to levy the same duty by a camouflage of changing the name and that in pith and substance the Ordinance levies countervailing duty which Parliament had no power to levy particularly because country liquor on which duty is levied is not manufactured in Delhi
It is an admitted position that country liquor the subject matter of impost is not manufactured in Delhi
It is again an admitted position that as country liquor is not manufactured in Delhi countervailing duty as is commonly understood could not be levied upon its import in Delhi
The question is does that exhaust the power of Parliament to levy a duty on the import of country liquor into Delhi  Scheme underlying distribution of legislative powers in Part XI Chapter I and especially Articles 246 and 248 is that except the matters specifically enumerated in List II State List in the Seventh Schedule Parliament s plenary power to legislate extends to all conceivable matters which can be topic of legislation and even this limitation on its power vanishes when Parliament legislates for part of the territory of India not included in a State
The three dimensional picture becomes complete viz i to select topic for legislation ii enactment of legislation on the topic and iii to impose tax in respect 660 of such subject matter of legislation by reference to article 248 which confers power to make any law with respect to any matter not enumerated in Lists II and III including the power to impose tax not mentioned in either of those Lists
Under Article 2464 Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List
Power of Parliament thus to legislate with respect to any matter for Delhi territory not included in a State is unabridged or unfettered by the entries in the State List
Further residuary power of legislation including the power to levy tax is conferred on Parliament by the combined operation of Articles 2464 2481  2 and Entry 97 in the Union List
That power is untramelled by the limitations prescribed by Articles 2462 and 3 and Entry 51 of State List and is plenary and absolute subject only to such restrictions as are imposed by the Constitution and we find none such which is material to the present question vide Mithan Lal vs State of Delhi 1
Accordingly if excise or countervailing duty could be levied on country liquor manufactured or imported into Delhi albeit other conditions for the levy of such duty being fulfilled Parliament would not lack competence to levy the same only because levy of such duty on alcoholic liquors for human consumption is within the competence of a State
But it must be confessed that as country liquor is not manufactured in Delhi the Parliament could not under Entry 51 of the State List levy either excise or countervailing duty on it
Merely because Parliament could not levy countervailing duty on country liquor imported into Delhi because country liquor is not manufactured in Delhi it does not exhaust the power of Parliament to levy some other duty on the import of liquor if it is otherwise constitutionally permissible
It was however said that Entry 51 in State List being a specific entry providing for levy of duty either on manufacture or import of country liquor and there being no other specific entry enabling to levy special duty it is inconceivable that the framers of the Constitution should have left some such levy on the import of country liquor in respect of Delhi under residuary entry
In other words it was said that where there is a specific entry the legislation must squarely fall within the entry and correspondingly is must be assumed that it would not be covered by the residuary entry
In fact the argument went so far that before resort could be had to the residuary Entry 97 the Court in 661 its exploration to ascertain under which Entry the legislation falls must proceed from the beginning and in its journey till Entry 97 if it falls somewhere removing the camouflage under which the legislation is sought to be taken out from the specific entry it would not be proper to say that the legislation is covered by the residuary entry
Whenever legislative competence is in question attempt of the Courts is to find out whether the legislation squarely falls in one or the other entry
If a particular legislation is covered by any specific entry well and good
If it does not the second question would be is it beyond the legislative competence of Parliament  In undertaking this exercise it is quite often known that a legislation may be covered by more than one entry because an analysis has shown that the entries are overlapping
If the legislation may fall in one entry partly and part of it may be covered by the residuary entry the legislation would none the less be immune from the attack on the ground of legislative competence
This was the approach adopted by a 7 Judges Bench of this Court in Union of India vs H section Dhillon1 wherein while examining the constitutional validity of the amended Wealth Tax Act which included the capital value of agricultural land for the purpose of computing net wealth the controversy was whether the impugned Act was a law with respect to entry including Entry 49 in the List II or was it one under Entry 86 read with Entry 97 or Entry 97 itself of the List I Repelling the contention of legislative incompetence this Court held that there is nothing in the Constitution to prevent Parliament from combining its powers under one or other Entry with its power under Entry 97
The terse observation is that this Court knows no principle which debars Parliament from relying on the powers under the specified entries 1 to 96 List I and supplement them with the powers under Entry 97 List I and Article 248 or even the powers under entries in the Concurrent List
This authoritative pronouncement would answer the contention that while legislating for the Union Territories the Parliament unhampered by Articles 2462 and 3 but enriched by Article 2481 and 2 could legislate on any of the topics either in the List I or in List II or in exercise of the residuary power under Entry 97
There is thus no dearth of legislative competence of Parliament to enact legislation for a territory not included in a State because the power to legislate takes within its sweep matters included in all the three Lists and added to it is the residuary power on matters not specifically included in any entry in any of the three Lists
It was however said that the observations in Dhillon s case supra are no more good law in view of the opinion of Judges constituting 662 majority in His Holiness Kesavananda Bharati Sripadagalavaru vs State of Kerala1
The controversy in Kesavananda Bharati s case was about the power of the Parliament to amend the Constitution and a contention being the spill over from IC Golaknath vs State of Punjab2 was that apart from Article 368 Entry 97 of List I would confer power on Parliament to amend the Constitution
After pointing out that when all the three Lists were exhaustively drawn up it is difficult to believe that an important power would be kept hidden in Entry 97 of the Union List leaving to the off chance of the courts locating that power in that entry it was said that if a subject of legislation was present to the minds of the framers of the Constitution it could not have been left to be found by the Courts in the residuary powers
Mr Seervai s commentary at p 1264 on Constitutional Law of India 2nd Edn was pressed into service wherein it is observed that a fortiori if a subject of legislative power was prominently present to the minds of the framers of our Constitution they would not have left it to be found by Courts in the residuary power
Proceeding ahead it was submitted that while enacting Entry 51 in List II the subject of levying duty on import of alcoholic liquor was present to the minds of the framers of the Constitution and therefore it is futile to search that power in the residuary Entry
The observations in Kesavananda s case supra have to be kept in focus in the context of the controversy whether Article 368 confers specific power of amendment of the Constitution and it was sought to be brushed aside by saying that it merely provided procedure for amendment of the Constitution and therefore the power for amendment must be located in the residuary Entry 97 of the Union List
The position here is materially different
With the advancement of society expanding horizons of scientific and technical knowledge probe into the mystery of creation it is impossible to conceive that every imaginable head of legislation within human comprehension and within the foreseeable future could have been within the contemplation of the founding fathers and was therefore specifically enumerated in one or the other of three Lists meaning thereby that three Lists were exhaustive of Governmental action and activity
Demands of welfare State hopes and aspirations and expectations in a developing society and the complex world situation with inter dependence and hostility amongst nations may necessitate legislation on some such topics that even for visionary they could not have within the contemplation of the founding fathers
Complex modern governmental administration in a federal set up pro 663 viding distribution of legislative powers coupled with power of judicial review may raise such situations that a subject of legislation may not squarely fall in any specific entry in List I or III
Simultaneously on correct appraisal it may not be covered by any entry in List II though apparently or on a superficial view it may be covered by an entry in List II
In such a situation Parliament would have power to legislate on the subject in exercise of residuary power under Entry 97 List I and it would not be proper to unduly circumscribe corrode or whittle down this power by saying that subject of legislation was present to the mind of the framers of the Constitution because apparently it falls in one of the entries in List II and thereby deny power to legislate under Entry 97
The history of freedom struggle demonstrates in unequivocal terms the importance of residuary power of legislation being conferred on Parliament
Therefore the scope and ambit of Entry 97 need not be whittled down or circumscribed by a process of interpretation
In any case majority decision in Dhillon s case supra is neither overruled not departed from in Kesavananda s case supra
Accordingly once the power of Parliament to legislate on a topic is not expressly taken away by any constitutional provision it remains intact under Entry 97 of List I Undoubtedly excise and countervailing duties on alcoholic liquors for human consumption were within the contemplation of the framers of the Constitution
That is a specific topic of legislation in List II
It does not exhaust all conceivable levy that can be legitimately imposed on such items if otherwise they could be legally levied by reference to constitutional power to levy the same
And Entry 97 is a complete answer to the contention
It was incidentally urged that Entry 52 in the State List which enables the levying of taxes on entry of goods in local area for consumption use or sale therein was also within the contemplation of the founding fathers and that power under Entry 52 having been exercised by the Delhi Municipal Administration in the form of terminal tax the same cannot be arrogated by Parliament to itself
Terminal tax is entirely different from the special duty sought to be imposed by the impugned Ordinance
The impost is on entry of country liquor into Delhi to be recovered by the Delhi Administration for its own use
Delhi Administration and Delhi Municipal Administration are entirely different and therefore it cannot be said that Entry 52 excludes the power of the Parliament to levy tax on import of country liquor in Delhi
Incidentally the argument is that the taxing event being the import of liquor in Delhi it is exposed to double taxation namely the special 664 duty levied by Parliament and the terminal tax imposed by the Municipal Administration and that is impermissible
This has merely to be mentioned to be rejected in view of the decision of this Court in Avinder Singh  Ors
vs State of Punjab  Ors
1 wherein it was observed that if on the same subject the legislature chooses to levy tax twice over there is no inherent invalidity in the fiscal adventure save wherever prohibitions exist
It was next contended that what is sought to be done by the impugned Ordinance is to circumvent the decision of the learned single Judge of the High Court which invalidated the levy of countervailing duty and that at best it is a colourable legislation and that in pith and substance it is re introduction of countervailing duty under a different nomenclature and hence unsustainable
If by a legislation tax is sought to be imposed in exercise of certain legislative power which under judicial review is found to be wanting it does not prohibit the legislature from exercising the same power if it can be traced to provisions of the Constitution
Merely because an incorrect exercise of legislative power under a misconception of power itself is once invalidated that very legislative power if it is traceable to provisions in the Constitution cannot be struck down on the ground that it is a colourable legislation or a mere camouflage
Undoubtedly initially countervailing duty was levied but it was found that as country liquor was not manufactured in Delhi legally it was impermissible to levy countervailing duty
This is admitted in the Preamble of the Ordinance itself
It was a constitutional error to have levied such a duty and the same was pointed out
Now if the very duty could be levied under the power which is available it can never be said that it is a colourable exercise of power or that the new impost is a camouflage for the old one
What is colourable legislation was explained by this Court in K C Gajapati Narayan Deo vs State of Orissa2 and it was re affirmed in Maharana Shri Jayvant Singhji Ranmal Singhji etc
vs State of Gujarat3 This Court said that the idea conveyed by the expression colourable legislation is that although apparently a legislature in passing a statute purported to act within the limits of its powers yet in substance and in reality it transgressed those powers the transgression being veiled by what appears on proper examination to be a more pretence or disguise
Applying this test it is difficult to say that the impugned impost is either a camouflage or a colourable legislation
Conditions for levy of countervailing duty may not be satisfied
That 665 does not debar the Parliament from levying tax on import of country liquor if it has otherwise power to do so
It would be too trite a saying that if countervailing duty cannot be imposed there would be no power to impose duty in any form on the import of country liquor into a territory where that country liquor is not manufactured
In fact where particular pre requisites for levying a tax are not satisfied and it is so pointed out by a Court of law the legislature would not lack power to levy that tax if it could be traced to the provisions of the Constitution
In such a situation Legislature has power to set at naught the judgment of the court by resort to appropriate power
This is well settled by the decision of this Court in Patel Gordhandas Hargovindas vs Municipal Commissioner Ahmedabad1 where the word rate  as used in Bombay Municipal Boroughs Act 1925 came up for interpretation and it was held that it can be imposed on the annual letting value of the property but not on the capital value of the property
The legislature stepped in by enacting Gujarat Imposition of Tax by Municipalities Validation Act 1963 providing in section 3 thereof assessment and collection of rate on lands and buildings on the basis of capital value or a percentage of the capital value and declaring the past levy to be valid by further providing that tax on lands and buildings may be imposed either on the basis of annual letting value or on the basis of capital value
When the amending and validating Act was questioned Prithvi Cotton Mills Ltd  Anr
vs Broach Borough Municipality  Ors
2 this Court observed that the legislature exercised its undoubted powers of redefining rate  so as to equate it to a tax on capital value and convert the tax purported to be collected as a rate  into a tax on lands and buildings and thus got rid of the judgment in Patel Gordhandas s case supra
It would thus follow that merely because a statute was found to be invalid on the ground of legislative competence that does not permanently inhibit the Legislature from re enacting the statute if the power to enact the same is properly traced and established
In such a situation it would not be correct to say that the subsequent legislation would be merely a colourable legislation or a camouflage to re enact the invalidated previous legislation
In passing it was mentioned that there is inherent evidence to show that the fresh impost was nothing but the invalidated countervailing duty under a guise of different nomenclature
It was said that special duty can be levied under the Act amended by the Ordinance only on the import of any excisable article  being an article on which countervailing duty as is mentioned in Entry 51 of List 2 Seventh Schedule to the Constitution is not imposable on the ground merely that such 666 article is not being manufactured or produced in the territory to which the Act is extended
Reference was then made to the definition of excisable article  in section 3 of the Act
Excisable article has been defined to mean a an alcoholic liquor for human consumption or b any intoxicating drug c spirit the last being added by the impugned Ordinance
Apart from the definition it was urged that excisable article in common parlance or by judicial interpretation has been understood to mean article on which excise is levied or leviable
Proceeding further it was said that as country liquor was not manufactured in Delhi excise could not be levied on it not countervailing duty could be imposed on its import though that very liquor where manufactured may be an excisable article in that area
It was therefore said that subject matter of impost being an excisable article meaning if manufactured in Delhi excise could be levied on it the special duty is nothing but invalidated countervailing duty on excisable article
There is no merit in this submission because the expression excisable article  which alone can be the subject matter of levy of special duty is merely descriptive of the goods subject to charge
It is only an identifying mark a tag which would attract special duty
If liquor was manufactured in Delhi it would be an excisable article
It is that article on which if manufactured in Delhi excise could be levied which when imported would provide the taxing event for the levy of special duty because in the absence of manufacture in Delhi countervailing duty cannot be imposed upon it
The expression is used for identifying the subject matter of impost and nothing more need be read into it
The next important contention was that this impost imposed unreasonable restrictions on the freedom of inter State trade commerce and intercourse guaranteed by Article 301 or the freedom to carry on trade or business in liquor is a fundamental right under Article 191 being not in public interest the enactment is constitutionally invalid
That raises the oft repeated vexed question whether right to carry on trade or business in liquor is a fundamental right under Article 19 1 g and that same considerations would apply for acting under Article 301
This question has cropped up before the Court at regular intervals but it would be sufficient to take note of two decisions to dispose of the contention
In Har Shankar  Ors etc
vs Dy
Excise  Taxation Commissioner  Ors1 after referring to Crowley vs Christansen2 and several cases of this Court it was in terms stated that there is no fundamental right to do trade or business in intoxicants
The State 667 under its regulatory powers has right to prohibit absolutely every form of activity in relation to intoxicants its manufacture storage export import sale and possession
In all their manifestations these rights are vested in the State and indeed without such vesting there can be no effective regulation of various forms of activities in relation to intoxicants
In reaching this conclusion the Court took note of an important observation made in the State of Bombay vs R M D Chamarbaugwala1 which may be extracted as under We find it difficult to persuade ourselves that gambling was ever intended to form any part of this ancient country s trade commerce or intercourse to be declared as free under article 301
It is not our purpose nor is it necessary for us in deciding this case to attempt an exhaustive definition of the word trade  business  or intercourse 
We are however clearly of opinion that whatever else may or may not be regarded as falling within the meaning of these words gambling cannot certainly be taken as one of them
We are convinced and satisfied that the real purpose of articles 191g and 301 could not possibly have been to guarantee or declare the freedom of gambling
Gambling activities from their very nature and in essence are extra commercium although the external forms formalities and instruments of trade may be employed and they are not protected either by article 191 g or article 301 of our Constitution
After extracting these observations this Court observed in Har Shankar s case supra that the reasons mentioned by Das C J for holding that there can be no fundamental right to do trade or business in an activity like gambling apply with equal force to the alleged right to trade in liquor and those reasons may not be brushed aside by restricting them to gambling operations
Recently in P N Kaushal  Ors vs Union of India  Ors2 after an exhaustive review of all previous decisions this conclusion was affirmed that there is no fundamental right to trade or business in nauseous drinks which includes liquor
If there is no fundamental right to carry on trade or business in liquor there is no question of its abridgement by any restriction which can be styled as unreasonable
In fact as stated in Har Shankar s case supra the State under its regulatory power has a right to control or even to prohibit absolutely every form of activity in relation to intoxicants apart from anything else its import 668 too
This power of control is question of society s right to self protection and it rests upon the right of the State to act for the health moral and welfare of the people
Liquor traffic is a source of pauperism and crime
In this background it is now too late in the day to entertain an argument that imposition of tax on the import of liquor which serves the double purpose of restraining its use by making it costly and prohibiting its use on the ground that it trenches upon the manufacturers slowly and gradually to restrict its manufacture directly impinging upon its unrestricted consumption
Such an impost therefore can be said to be one in the public interest for preserving public health and public morals and cannot be said to be one as infringing the inter State freedom of trade and commerce
Mr Rao who appeared for some of the petitioners specifically submitted that this question is no more res integra in view of the decision of a Constitution Bench of this Court in Kalyani Stores vs The State of Orissa  Ors1 In that case the validity of a Notification enhancing the duty on the import of foreign liquors from Rs 40 to Rs 70 per LP Gallon was questioned on the ground that it interferes with freedom of inter State trade and commerce guaranteed by Article 301
This challenge was upheld by the majority decision observing that the notification levying duty at the enhanced rate is purely a fiscal measure and cannot be said to be a reasonable restriction on the freedom of trade in the public interest
Without entering upon an exhaustive categorisation of what may be deemed required in the public interest it may be said that restrictions which may validly be imposed under article 304b are those which seek to protect public health safety morals and property within the territory
Since Kalyani Stores case supra judicial opinion on the vexed question of right to carry on trade or business in intoxicating drinks has undergone a sea change culminating into Har Shankar s case supra which again is a decision of 5 Judges Constitution Bench of this Court
Unfortunately the judgment in Kalyani Stores case is not referred to in Har Shankar s case
However the undisputed position that now emerges is that there is no fundamental right to do trade or business in intoxicants
Once that latter pronouncement is unambiguous and incontrovertible a regulatory measure imposing a tax cannot be questioned on the ground of unreasonableness or want to public interest because one must not lose sight of the well accepted legal proposition that all taxes are imposed in public interest
Even apart from this the majority judgment in Kalyani Stores case supra clearly recognises the test of 669 reasonable restrictions to be judged in the light of the purpose for which the restriction is imposed ie as may be required in the public interest and restrictions that may validly be imposed under Article 304b are those which seek to protect public health safety morals and property within the territory
The Preamble to the impugned Ordinance clearly recites that the special duty on the importation of country liquor into Delhi is an endeavour towards bringing about prohibition of consumption of alcoholic drinks and therefore it is a step in the direction of safeguarding public health
Incidentally however it was stated that when the Minister piloted the Bill replacing the Ordinance it was in terms said that the Act replacing the Ordinance was purely a fiscal measure and had nothing to do with the prohibition
In the same breath it was stated that the Government was committed to total prohibition and would sincerely try to achieve this objective
Opinion of the Minister would be hardly relevant in examining the object and purpose behind enacting a certain legislation
Provision in Punjab Excise Act 1914 conferring power on the State to direct closure of liquor shops on certain days in a week month or year was challenged as one not of a regulatory character but introduced with the avowed object of enforcing prohibition and a contention was raised that way back in 1914 the then rulers could not have thought of enforcing prohibition through the provisions of the Punjab Act which was specifically enacted for the purpose of collecting revenue from liquor vendors and indirectly from liquor consumers
This Court in P N Kaushal s case supra while repelling this contention observed as under In short while the imperial masters were concerned about the revenues they could make from the liquor trade they were not indifferent to the social control of this business which if left unbridled was fraught with danger to health morals public order and the flow of life without stress or distress
Indeed even collection of revenue was intertwined with orderly milieu and these twin objects are reflected in the scheme and provisions of the Act
The present levy under the amended provisions of the Act in its application to Delhi could certainly be said to be one enacted both with the object of regulating the trade or business in intoxicants and with a view to realising the goal fixed in Article 47 of the Constitution Therefore one can look upon this measure both as a fiscal measure and the one safeguarding public health and even public morals because it is 670 well recognised that liquor trade is instinct with injury to individual and community and has serious side effects recognised everywhere in every age
Not to control alcohol business is to abdicate the right to rule for the good of the people see P N Kaushal s case supra
In this very breath it was however contended that if this Ordinance was promulgated with a view to advancing the policy of prohibition enunciated in article 47 it could only be prospective and not retrospective because one cannot introduce prohibition retrospectively
This argument overlooks the twin objects sought to be achieved by the measure namely validating an import which was found to be invalid on the ground that it was countervailing duty which could not have been legitimately imposed and also a measure to safeguard public health and public morals
These twin objects underlying the measure would clearly permit its being retrospective because retrospective validation of impost has been recognised in a number of decisions see Prithvi Cotton Mills case supra
Therefore there is no substance in the contention that the retrospectivity of the Ordinance is illegal and invalid
Having given the matter our anxious consideration not swayed in any manner by moral religious ethical or extraneous preachers  considerations the altruistic grievance of the petitioners by proxy for consumers strikes as hollow because even with the impost the petitioners  profit of Rs 2 per bottle is guaranteed and they are in no way adversely affected by the impost because the levy is passed on to consumers
For years the impugned levy was paid as countervailing duty
Then a loophole appeared which is sought to be plugged by a valid legislation
And even with this turmoil the licensee in L 10 Form having country liquor vend is assured of this profit of Rs 2 per bottle
The entire impost is passed on to the shoulder of consumers except for the detention of his money for a day or two when he pays in advance while taking the bottles from the Warehouse and recovers it when he sells the bottle and this detention of his money for a period of two days is a triviality which need not detain any one
It is a part of any business
Therefore we see no substance in these petitions
VDK Petitions dismissed


Summary:
While implementing the provisions of the Punjab Excise Act 1914 as in force in the Union Territory of Delhi the concerned authority used to hold auction for grant of licence in Form L 10 for selling country liquor and at one such auction held on 29th March 1978 the petitioners  bids were accepted and they were granted licences in Form L 10 for the period 1st April 1978 to 31st March 1979
The licence included a condition to sell a bottle of 750 ml of country liquor at Rs 15 which was inter alia made up at excise duty styled as still head duty at the rate of Rs 1023 and profit of licensee at the rate of Rs 2 
In WP 71678 validity of the levy of still head duty  was challenged by certain petitioners inter alia on the ground that it was nothing but countervailing duty and in the absence of manufacture of liquor in Delhi countervailing duty on the import of liquor cannot be constitutionally levied
This contention found favour with a learned single judge of the Delhi High Court and a number of Letters Patent Appeals were filed against that Judgment
During the pendency of these appeals President of India promulgated an Ordinance purporting to amend the Punjab Excise Act 1914 styled as Punjab Excise Delhi Amendment Ordinance 1979 with retrospective effect conferring power on the Government under the provisions of the Act to levy special duty  on the import of country liquor in Delhi at rates not exceeding that set out in Schedule I A which was introduced in the Act by the Ordinance
Pursuant to the Ordinance amending the Principal Act the Delhi Fiscal Duty Order 1979 was issued levying special duty at the rates set out in the order on import of country liquor into Delhi
Some of the petitioners questioned the validity generally of the Ordinance and specifically of the impost of special duty in Civil Writ No 1679
A Division Bench of the Delhi High Court heard the Letters Patent Appeals and the Writ Petition No 11679 and by a common judgment held the ordinance as well as the impost of the special duty thereunder valid dismissed the Writ Petition and allowed the Letters Patent Appeals
652 Dismissing the special leave petitions the Court  HELD 1
Scheme underlying distribution of Legislative power in Part XI Chapter I and especially Articles 246 and 248 is that except the matters specifically enumerated in List II State List in the Seventh Schedule Parliament s plenary power to legislate extends to all conceivable matters which can be topic of legislation and even this limitation on its power vanishes when Parliament legislates for part of the territory of India not included in a State
The three dimensional picture becomes complete viz i to select topic for legislation ii enactment of legislation on the topic and iii to impose tax in respect of such subject matter of legislation by reference to article 248 which confers power to make any law with respect to any matter not enumerated in Lists II and III including the power to impose tax not mentioned in either of those lists
Under article 246 4 Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List
Power of Parliament thus to legislate with respect to any matter for Delhi territory not included in a State is unabridged or unfettered by the entries in the State List
Further residuary power of legislation including the power to levy tax is conferred on Parliament by the combined operation of Articles 2464 2481 and 2 and Entry 97 in the Union List
That power is untrammelled by the limitations prescribed by Article 2462 and 3 and Entry 51 of State List and is plenary and absolute subject only to such restrictions as imposed by the Constitution
659 G H 660 A C Mithan Lal vs State of Delhi   451 referred to
While legislating for the Union Territories the Parliament unhampered by Articles 2462 and 3 but enriched by Article 2481 and 2 could legislate on any of the topics either in the List I and III or in List II or in exercise of the residuary power under Entry 97
There is nothing in the Constitution to prevent Parliament from combining its powers under one or other Entry with its power under Entry 97
Parliament can rely on the powers under specified Entries I to 96 List I and supplement them with the powers under Entry 97 List I and Article 24 or even the powers under Entries in the concurrent list
There is no dearth of legislative competence of Parliament to enact legislation for a territory not included in a State because the power to legislate takes within its sweep matters included in all the three lists and added to it is the residuary power on matters not specifically included in any entry in any of the three lists
661 D G If exercise or countervailing duty could be levied on country liquor manufactured or imported into Delhi Parliament would not lack competence to levy the same only because levy of such duty on alcoholic liquors for human consumption is within the competence of a State
As country liquor is not manufactured in Delhi the Parliament could not under Entry 51 of the State List levy either excise or countervailing duty on it
Merely because Parliament could not levy countervailing duty on country liquor imported into Delhi because country liquor is not manufactured in Delhi it does not exhaust the power of Parliament to levy some other duty on the import of liquor if it is otherwise constitutionally permissible
660 D F Union of India vs H section Dhillon   followed
653 3
With the advancement of society expanding horizons of scientific and technical knowledge probe into the mystery of creation it is impossible to conceive that every imaginable head of legislation within human comprehension and within the foreseeable future could have been within the contemplation of the founding fathers and was therefore specifically enumerated in one or the other of the three Lists meaning thereby that three Lists were exhaustive of Governmental action and activity
Demands of welfare State hopes and aspirations and expectations in a developing society and the complex world situation with inter dependence and hostility amongst nations may necessitate legislation on some such topics that even for visionary they could not have been within the contemplation of the founding fathers
Complex modern governmental administration in a federal set up providing distribution of legislative power coupled with power of judicial review may raise such situations that a subject of legislation may not squarely fall in any specific entry in List I or II
Simultaneously on correct appraisal it may not be covered by any entry in List II though apparently or on a superficial view it may be covered by an entry in List II
In such a situation Parliament would have power to legislate on the subject in exercise of residuary power under Entry 97 List I and it would not be proper to unduly circumscribe corrode or whittle down this power by a process of interpretation by saying that subject of legislation was present to the mind of the framers of the Constitution because apparently it falls in one of the entries in List II and thereby deny power to legislate under Entry 97
The history of freedom struggle demonstrates in unequivocal terms the importance of residuary power of legislation being conferred on Parliament
Accordingly once the power of Parliament to legislate on a topic is not expressly taken away by any constitutional provision it remains intact under Entry 97 of List I 662 G H 663 A D Undoubtedly excise and countervailing duties on alcoholic liquors for human consumption were within the contemplation of the framers of the Constitution
That is a specific topic of legislation in List II
It does not exhaust a conceivable levy that can be legitimately imposed on such items if otherwise they could be legally imposed on such items by reference to constitutional power to levy the same
And Entry 97 is a complete answer to the contention
663 D E His Holiness Kesavananda Bharati Sripadagalavaru vs State of Kerala  explained and discussed
I C Golaknath vs State of Punjab  referred to
Union of India vs H section Dhillon   affirmed
Terminal tax is entirely different from the special duty sought to be imposed by the impugned Ordinance
The impost is on entry of country liquor into Delhi to be recovered by the Delhi Administration for its own use
Delhi Administration and Delhi Municipal Administration are entirely different and therefore it cannot be said that Entry 52 excludes the power of the Parliament to levy tax on import of country liquor in Delhi
663 F G 5
If on the same subject the legislature chooses to levy tax twice over there is no inherent invalidity in the fiscal adventure
More so when Special Duty levied by Parliament and the terminal tax imposed by the Municipal Administration on the import of liquor in Delhi can be traced to independent source of power
664 A B 654 Avinder Singh and Ors
vs State of Punjab and Ors
  followed
The idea conveyed by the expression colourable legislation is that although apparently a legislature in passing a statute purported to be within the limits of its powers yet in substance and in reality it transgressed those powers the transgression being veiled by what appears on proper examination to be a mere pretence or disguise
Applying this test it is difficult to say that the impugned impost is either a camouflage or a colourable legislation
664 G H Merely because a statute was found to be invalid on the ground of legislative competence that does not permanently inhibit the legislature from re enacting the statute if the power to enact the same is properly traced and established
In such a situation it would not be correct to say that the subsequent legislation would be merely a colourable legislation or a camouflage to re enact the invalidated previous legislation
665 E F K C Gajapati Narayan Deo vs State of Orissa   Maharana Sri Jayvant Singhji Ranmal Singhji etc
vs State of Gujarat 1962 Suppl
2 SCR 411  440 Patel Gordhandas Hargovindas vs Municipal Commissioner Ahmedabad   Prithvi Cotton Mills Ltd and Ors
vs Broach Borough Municipality and Ors  referred to
The expression excisable article  which alone can be the subject matter of levy special duty is merely descriptive of the goods subject to change
It is only an identifying mark a tag which would attract special duty
If liquor was manufactured in Delhi it would be an excisable article
It is that article on which if manufactured in Delhi excise duty could be levied which when imported would provide the taxing event for the levy of special duty because in the absence of manufacture in Delhi countervailing duty cannot be imposed upon it
The expression is used for identifying the subject matter of impost and nothing more need be read into it
666D E 8
There is no fundamental right to do trade or business in intoxicants
The State under its regulatory powers has right to prohibit absolutely every form of activity in relation to intoxicants its manufacture storage export import sale and possession
In all their manifestations these rights are vested in the State and indeed without such vesting there can be no effective regulation of various forms of activities in relation to intoxicants
666 H 667 A If there is no fundamental right to carry on trade or business in liquor there is no question of its abridgement by any restriction which can be styled as unreasonable
The State under its regulatory power has a right to control or even to prohibit absolutely every form of activity in relation to intoxicants apart from anything else its import too
This power of control is question of society s right to self protection and it rests upon the right of the State to act for the health moral and welfare of the people
Liquor traffic is a source of pauperism and crime
Such an impost therefore is one in the public interest for preserving public health and public moral and is not one as infringing the interstate freedom of trade and commerce
All taxes are imposed in public interest
667 F H 668 A B In the instant case the Preamble to the impugned Ordinance clearly recites that the special duty on the importation of country liquor into Delhi an endeavour towards bringing about prohibition of consumption of alcoholic drinks and 655 therefore it is a step in the direction of safeguarding public health and with a view to realising the goal fixed in Article 47 of the Constitution
It is a fiscal measure and the one safeguarding public health and even public morals because it is well recognised that liquor trade is instinct with injury to individual and community and has serious side effects recognized everywhere in every age
Not to control alcohol business is to abdicate the right to rule for the good of the people
669 B G H 670 A Har Shanker and Ors etc
vs Dy
Excise and Taxation Commissioner and Ors
  State of Bombay vs RMD Chamarbaughwala   P N Kaushal and Ors
vs Union of India and Ors
   applied
Crowley vs Christansen  quoted with approval
P N Kaushal and Ors
vs Union of India and Ors
   referred to
There is no substance in the contention that the retrospectivity of the Ordinance is illegal and invalid
The argument overlooks the twin objects sought to be achieved by the measure namely validating an import which was found to be invalid on the ground that it was countervailing duty which could not have been legitimately imposed and also the object to safeguard public health and public moral 670 B D Prithvi Cotton Mills Ltd and Anr
vs Broach Borough Municipality and Ors  applied
The altruistic grievance of the petitioner by proxy for consumers strikes as hollow because even with the impost the petitioners  profit of Rs 2 per bottle is guaranteed and they are in no way adversely affected by the impost because the levy is passed on to consumers except for the detention of their money for a day or two when they pay in advance while taking the bottles from the Warehouse and recovers it when they sell the bottle and this detention of their money for a period of two days is a triviality and is a part of any business
670 E F