Appeal No 649 of 1964
Appeal by special leave from the judgment and order dated March 30 1963 of the Andhra Pradesh High Court in WP No 1061 of 1962
Arun B Saharya and Sardar Bahadur for the appellant
P Ram Reddy and T V R Tatachari for respondent No No 1
The Judgment of the Court was delivered by Wanchoo J
This is an appeal by special leave against the judgment of the Andhra Pradesh High Court
The appellant manufactures drugs in Hyderabad and among the drugs manufactured by it is chloral hydrate
In September 1962 the State of Andhra Pradesh issued rules called the Andhra Pradesh Telangana Area Chloral Hydrate Chloral Rules 1962 with respect to manufacture possession sale import export and transport of chloral hyd 12 rate hereinafter referred to as the Rules
We shall refer to the Rules in detail later but in brief they provide that the manufacture of chloral hydrate shall take place only in accordance with the conditions of a licence granted by the Excise Commissioner and only on payment of excise duty of Rs 5001 per annum
The Rules also provide for possession import export sale and transport of chloral hydrate
In consequence of the issue of the Rules the appellant was called upon to take out a licence and pay the necessary excise duty
The appellant refused to do so and in November 1962 filed a writ petition in the High Court challenging inter alia the validity of the Rules
It may be mentioned that the Rules were issued under the Andhra Pradesh Telangana Area Intoxicating Drugs Act No IV of 1333 Fasli hereinafter referred to as the 1333 F Act as amended by the Hyderabad Opium and Intoxicating Drugs Amendment Act No XXII of 1953
The main contention of the appellant in the High Court was that the 1333 F Act had been repealed in toto on the introduction of the Dangerous Drugs
Act No 2 of 1930 by the Opium and Revenue Laws Extension of application Act No 33 of 1950 and of the Drugs Act No 23 of 1940 by the Part B States Laws Act No III of 1951 and therefore there was no power in the Hyderabad legislature to amend it by Act 22 of 1953
In consequence there was no law in force on the basis of which the Rules could be promulgated in 1962
Secondly it was contended that even if the 1333 F Act did not stand repealed as above the Rules framed by the State of Andhra Pradesh in 1962 with respect to chloral hydrate were not within the powers conferred by the 1333 F Act as amended in 1953 as chloral hydrate was not a narcotic or narcotic drug and was not covered by item 51 of List II of the Seventh Schedule to the Constitution
The petition was opposed on behalf of the State and it con tended that there was no repeal of the 1333 F Act by the introduction of the Dangerous Drugs Act 1930 and the Drugs Act 1940 and consequently the amendment of the 1333 F Act by the Hyderabad Act No 22 of 1953 was good and the 1333 F Act as amended was in force in 1962 when the Rules were framed
It was further contended that the Rules were intra vires the 1333 F Act as amended in 1953 as chloral hydrate was a narcotic and an intoxicating drug
The High Court repelled the contentions raised on behalf of the appellant and dismissed the writ petition
The appellant then applied for a certificate for leave to appeal to this Court which was 113 refused
It then obtained special leave from this Court and that is how the matter has come before us
Before we consider the points raised in the High Court which have also been raised before us we should like to refer to certain provisions in the three legislative Lists in the Seventh Schedule to the Constitution dealing with various aspects that arise in this case
The first of these provisions is item 59 List I which deals with cultivation manufacture and sale for export of opium
Then there are
two items in List 11 item 8 which deals with intoxicating liquors that is to say the production manufacture possession transport and sale of intoxicating liquors and item 51 which deals with duties of excise on the following goods manufactured or produced in the State  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
Lastly reference may be made to item 19 of List III which deals with drugs and poisons subject to the provisions of entry 59 of List I with respect to opium
It will be seen from a perusal of these entries that a substance may fall in a number of them
For example opium falls under item 59 of List I for certain purposes mentioned therein but also falls in item 51 of List II for the purpose of duties of excise thereon and for such control as may be required for the purpose of collecting the duties of excise
Thus for the purpose of cultivation and manufacture opium is exclusively a Union subject but for the purpose of duties of excise it is an exclusive State subject
Take another substance like chloral hydrate with which we are concerned in the present appeal
It is undoubtedly a drug and therefore falls under item 19 of List Ill Drugs being in the Concurrent List both the Union and the States can legislate thereon
There are two Central Acts which deals with drugs namely the Dangerous Drugs Act 1930 and the Drugs Act 1940
Now a substance may fall under the Dangerous Drugs Act if it is so defined there
It may also fall under the Drugs Act and may be subject to its pro visions if so indicated therein
But at the same time a substance which is a drug may also fall under item 51 of List 11 if it is a narcotic or is a narcotic drug
Even intoxicating liquor which falls under entry 8 of List II as well as under entry 51 of List II may fall under entry 19 of List III if it is a drug
This will show that even if a substance is governed by the Dangerous Drugs Act and the Drugs Act it may well be liable to duties of excise under entry 114 51 of List II and of such control as is incidental thereto
It is in this background that we have to consider the points raised on behalf of the appellant
We now come to the first point raised on behalf of the appellant namely whether the 1333 F Act survived the introduction of the Dangerous Drugs Act and the Drugs Act in the State of Hyderabad
The 1333 F Act was in force in Hyderabad State as it was before the Constitution from 1924
At that time the State of Hyderabad was a sovereign State and had full power to deal with all subjects now contained in Lists 1 II and III of the Seventh Schedule to the Constitution subject of course to British paramountly and effect thereof on the sovereignty of the Hyderabad State
The 1333 F Act dealt with opium and intoxicating drugs
Intoxicating drugs were defined in this Act as meaning ganja bhang charas cocaine and all such things which are prepared therefrom and will also include such intoxicating substances which the Government may by gazette notification include in it section 2
This definition shows that besides the four substances mentioned therein intoxicating drugs could include other substances if a notification was issued by the Government in that behalf
We do not know as a fact whether any notification was issued after 1924 and before the Constitution came into force under this provision
But in any case the 1333 F Act applied not only to the four substances mentioned therein but also to others which might be notified
The 1333 F Act further provided that save as authorised under this Act or rules thereunder no person shall possess sell manufacture opium or intoxicating drug s  4
The Government was also given the power to make rules regarding administration and supervision grant of licences and collection of duties of excise section 5
The 1333 F Act also provided for punishment for the contravention of the Act and the Rules and for confiscation under certain circumstances sections 7 to 11
It gave powers to excise officers for search of houses and arrest of accused persons section 16
It also provided for other powers for such officers section 17
There were other provisions therein to which it is unnecessary to refer
It will be seen from this brief analysis of the 1333 F Act that it was in the nature of an excise Act and provided for licences and collection of duties of excise and made provisions incidental thereto
We have already said that this Act applied not only to opium and he four intoxicating drugs mentioned therein but also to other substances which might be notified thereunder
It continued in force in the Part B State of Hyderabad after the Constitution came into force in January 1950
115 In 1950 Parliament applied the Opium Act No 13 of 1857 the Opium Act t of 1878 and the Dangerous Drugs Act No 2 of 1930 to the Part B State of Hyderabad by Central Act 33 of 1950
Section 4 of this Act inter alia provided that if immediately before the commencement of this Act there was in force in any Part B State other than Jammu and Kashmir any law corresponding to any of the Acts specified therein that law would upon the commencement of this Act stand repealed
The Dangerous Drugs Act deals with coca leaf coca derivative hemp including bhang siddhi ganja charas medicinal hemp opium and opium derivative
It also gave power to Central Government to notify any other narcotic substance as a manufactured drug under certain circumstances
The Dangerous Drugs Act thus deals among others with coca leaf hemp opium and all manufactured drugs therefrom though there is power in the Central Gov ernment to notify other substances
The Act further provides for prohibition and control of these drugs
Further section 391 lays down that nothing in this Act or in the rules made thereunder shall affect the validity of any Provincial Act or an Act of any State Legislature for the time being in force or of any rule made thereunder which imposes any restriction not imposed by or under this Act or imposes a restriction greater in degree than a corresponding restriction imposed by or under this Act on the consumption of or traffic in any dangerous drug within India
It will be seen that the Dangerous Drugs Act provides for prohibition or control creates offences provides for penalties and lays down procedure in that behalf
It is not an Act imposing duties of excise
Therefore when this Act deals with hemp which includes ganja bhang and charas it does not deal with that aspect of hemp which is concerned with the imposition and collection of duties of excise on it and with incidental provisions in that behalf
We have already said that a substance can come both under the Dangerous Drugs Act as well as under the Drugs Act and may also be liable to duties of excise under entry 51 of List II of the Seventh Schedule
The fact that hemp is defined as a dangerous drug under this Act would not therefore in any way affect any law dealing with the imposition and collection of duties of excise on hemp
Consequently when the Dangerous Drugs Act was introduced in the Part B State of Hyderabad in 1950 it could not affect that part of the 1333 F Act which dealt with ganja bhang and charas as intoxicating drugs and provided for grant of licences and collection of duties of excise thereon
Similarly with the introduction of the Dangerous Drugs Act the operation of the 1333 F Act could not be affected with respect even to opium insofar as that Act dealt with grant of licence and 116 collection of duties of excise thereon though insofar as it dealt with manufacture of opium which comes under entry 59 of List 1 there was a repeal of the provisions relating to manufacture contained in the 1333 F Act and the Rules
We are therefore of opinion that the introduction of the Dangerous Drugs Act in the Part B State of Hyderabad in 1950 did not result in complete effacement of the 1333 F Act
It remained alive even so far as opium charas bhang and ganja were concerned for the purpose of collection of duties of excise thereon
It also remained alive with respect to other substances which might be notified as intoxicating drugs under the 1333 F Act
If there was any such notifica tion between 1924 and 1950 that notification would remain valid and the 1333 F Act would apply  to it
If there was no such notification the 1333 F Act would remain on the statute book as a conditional statute under which a notification in respect of any substance could be issued
The argument that the introduction of the Dangerous Drugs Act in 1950 completely repealed the 1333F Act has no force and must fail
Then we come to the Drugs Act of 1940 which was extended to the Part B State of Hyderabad by the Central Act III of 1951
Section 6 of the 1951 Act provides that if immediately before the appointed day there is in force in any Part B State any law corresponding to any of the Acts or Ordinances now extended to that State that law shall save as otherwise expressly provided in this Act stand repealed
It is not in dispute that chloral hydrate was controlled under the Drugs Act and the argument on behalf of the appellant is that on the coming into force of the Drugs Act the 1333 F Act so far as it applied to intoxicating drugs which could be notified thereunder must be deemed to have been repealed
We are of opinion that there is no force in this argument either
The Drugs Act is mainly concerned with standard and quality of drugs manufactured in this country and therefore controls the manufacture sale and distribution of drugs
It has nothing to do with duties of excise and with their imposition on narcotics and narcotic drugs
We have already indicated that narcotics and narcotic drugs are to be found in entry 51 of List II which provides for imposition of duties of excise on such drugs
If a substance is a narcotic drug it is liable to be controlled under the Drugs Act as a drug
But at the same time it is liable to duties of excise under entry 51 of List 11 and such duties can be imposed only by the State legislature
Further the State legislature will have power to enact necessary provisions for the imposition and collection of duties of excise and for all incidental matters which might be neces 117 sary for such imposition and collection
The fact that the Drugs Act was introduced in the Part B State of Hyderabad in 1951 would not therefore affect in any way that part of the 1333 F Act which dealt with collection of duties of excise and provided for licences in that connection
As we have said before the 1333 F Act is more in the nature of an excise Act while the Drugs Act has nothing to do with the collection of duties of excise
Further section 2 of the Drugs Act specifically provides that the provisions of this Act shall be in addition to and not in derogation of the Dan gerous Drugs Act 1930 and any other law for the time being in force
 Therefore even if section 6 of the Central Act III of 1951 cad be said to have repealed any provision of the 1333 F Act which is concerned with matters other than collection of duties of excise thereunder that will not affect the later amendment made in the 1333 F Act by the Hyderabad Act No 22 of 1953 for that amendment will be treated in addition to the provisions of the Drugs Act so long as the 1333 F Act was not completely dead before the Hyderabad Act No 22 of 1953 was passed
We have already said when dealing with the Dangerous Drugs Act that the introduction of that Act could not be said to have completely repealed the 1333F Act which dealt with matters not covered by the Dangerous Drugs Act at all namely collection of duties of excise and matters incidental thereto
The same in our opinion applies to the Drugs Act which did not deal at all with the collection of duties of excise on drugs covered by it
Therefore the 1333 F Act insofar as it deals with the collection of duties of excise on any drugs which are narcotics or narcotic drugs would remain alive to that extent
There can be no doubt therefore that the 1333 F Act continued in existence so far as it dealt with collection of duties of excise on substances covered by it and it could therefore be amended by Hyderabad Act No 22 of 1953
This brings us to the second point raised in the present appeal namely that even if the 1333 F Act had not been completely repealed by the introduction of the Dangerous Drugs Act and the Drugs Act and could be properly amended by the Hyderabad Act of 1953 the Rules were not within the power conferred by the Act
For that purpose we have to look at the 1333 F Act as it stands after the amendment of 1953
The amended Act defines intoxicating drugs to mean i Indian hemp including all forms known as bhang sendhi or ganja ii charas iii any mixture of the above or any drink prepared therefrom and iv any other intoxicating and narcotic substance which the Government may by notification declare to be an intoxicating drug such substance not being opium 118 coca leaf or a manufactured drug as defined in section 2 of the Dangerous Drugs Act
The amended Act is also clearly an excise Act as will be clear from the definition of intoxicating drugs revenue in section 22 which means revenue from any duty fee tax fine or confiscation imposed or ordered under the provisions of this Act
It was therefore open to the State Government to declare by notification any substance as an intoxicating drug within the meaning of the Act provided it was an intoxicating and narcotic substance If such a declaration is made the substance will be liable to excise duty under the amended Act and the Rules framed thereunder and will be liable to such incidental control as may be necessary for the collection of duties
Further drugs being in the Concurrent List the provisions of the 1953 amendment Act will also be a law under item 19 of List III and will be in addition to the Drugs Act of 1940 by virtue of section 2 thereof
Now it appears that chloral hydrate has been notified by the Government of Andhra Pradesh as an intoxicating drug within the meaning of the amended Act
It was thereafter that the Rules were framed
The Rules provide for the manufacture of chloral hydrate under a licence and for payment of duties of excise of Rs 500 per year on such manufacture
They also provide for possession sale import export and transport
If chloral hydrate is a narcotic drug or a narcotic within the meaning of entry 51 of List II of the Seventh Schedule and is an intoxicating drug and narcotic substance within the meaning of section 21 iv of the Amended Act it could be notified under the amended Act and on such notification it would be liable to excise duty and to such incidental control as may be necessary for the purpose of collection of excise duty
We are in the present case mainly concerned with the grant of licence and imposition of excise duty of Rs 5001per annum
If chloral hydrate is an intoxicating and narcotic substance the Rules could be framed with respect to its control and the appellant could be asked to take out a licence and pay excise duty on the manufacture thereof even though chloral hydrate may be a drug which is controlled under the Drugs Act
The case of the State Government in this connection is that chloral hydrate is a narcotic drug or a narcotic within the meaning of entry 51 of List II of the Seventh Schedule
Its further case is that it increases intoxication if mixed with liquor and that it is being produced in large quantities in order that it may be mixed with liquor
That is the reason why the State has framed the Rules to control the production of chloral hydrate
The appellant in its writ petition admitted that chloral hydrate was used in small doses as a hypnotic and sedative
Now the dictionary meaning of 119 the word narcotic is a substance which relieves pain produces sleep and in large doses brings on stupor coma and even death as opium hemlock alcohol etc
Obviously therefore if chloral hydrate is hypnotic and sedative as admitted by the appellant it would be a narcotic
The appellant however relies on the statement in the affidavit filed on behalf of the State to show that chloral hydrate is not a narcotic or a narcotic drug within the meaning of entry 5 1 of List II for if it is not a narcotic or a narcotic drug within that meaning no duty of excise can be imposed by the State legislature thereon
The part of the affidavit on behalf of the State relied upon by the appellant was dealing with a vague allegation of the appellant that chloral hydrate was a medicinal preparation
In that connection it was submitted on behalf of the State that chloral hydrate was not a medicinal or toilet preparation coming within the definition of the Medicinal and
Toilet Preparations Excise Duties Act 16 of 1955 as this substance in a finished form does not contain either alcohol opium Indian hemp or other narcotic drug or narcotics
These last words were taken from the schedule to the Act of 1955 which mentions any medicinal preparation not containing alcohol but containing opium Indian hemp or other narcotic drug or narcotic
In the 1955 Act narcotic drug or narcotic has been defined as meaning a substance other than alcohol which when swallowed or inhaled by or injected into a human being induces drowsiness sleep stupefaction or insensibility in the human being and which is a dangerous drug within the meaning of the Dangerous Drugs Act 1930
Obviously therefore the words  narcotic drug and narcotic used in the 1955 Act have a special meaning and this was all that was intended when in the affidavit filed by the State these words were used
But all narcotics or narcotic drugs are not covered by the Dangerous Drugs Act and there can be narcotics and narcotic drugs which are not covered by the Dangerous Drugs Act
There can be no other conclusion on the evidence in the present case than that chloral hydrate is a narcotic or a narcotic drug within the meaning of entry 51 of List 11 of the Seventh Schedule
It also has intoxicating effect when mixed with liquor and so is an intoxicating drug within the meaning of the amended Act
The appellant also relies on the  No 16 of 1955 in this Court
It is true that the appellant stated in its writ petition that it was holding a licence under the 1955 Act but there was no clear averment in the petition that chloral hydrate was being manufactured as a medicinal preparation under the 1955 Act
The licence which has been produced shows that chloral hydrate is being manufactured under the 120 Drugs Act and the rules framed thereunder
Further the judgment of the High Court shows that no argument was raised before it to the effect that choral hydrate was a medicinal preparation under the 1955 Act
In the circumstances we are not prepared to allow the appellant to raise this point for the first time before us even though there was some kind of denial on this point by the State Government in its affidavit to which we have already referred
In the result the appeal fails and is hereby dismissed with costs
Appeal dismissed


Summary:
The appellant was a manufacturer of drugs including chloral hydrate in Hyderabad
In 1962 the State of Andhra Pradesh issued the Andhra Pradesh Telangana Area
Chloral Hydrate Chloral Rules with respect to manufacture possession sale import export and transport of chloral hydrate under the Andhra Pradesh Telangana Area Intoxicating Drugs Act of 1333 Fasli as amended by the Hyderabad Opium and Intoxicating Drugs Amendment Act of 1953
The Rules provided that the manufacture of chloral hydrate shall be in accordance with the conditions of a licence granted by the Excise Commissioner on payment of the excise duty of Rs 500 per annum
The appellant refused to take licence and challenged the validity of the Rules by a writ petition but the High Court dismissed the petition
In appeal to this Court the appellant contended that i the 1333 F Act had been repealed in toto by the introduction into the State of the Dangerous Drugs Act 1930 and the Drugs Act 1940 and therefore
 there was no power in the Hyderabad legislature to amend the 1333 F Act by the 1953 Act and in consequence there was no law in force on the basis of which the Rules could be promulgated in 1962 and ii even if the Act was not repealed the Rules were not within the powers conferred by the 1333 F Act as amended in 1953 as chloral hydrate was not a narcotic or narcotic drug within the meaning of item 51 List II of the 7th Schedule to the Constitution
HELD The 1333 F Act continued in existence in so far as it dealt with collection of duties of excise on substances covered by it and it could therefore be amended by the 1953 Act
117 F The 1333 F Act was in the nature of an excise Act and provided for licences and collection of duties of excise and made provisions incidental thereto
It applied to the intoxicating drugs mentioned therein and other intoxicating drugs which might be notified by the Government
The Act continued in force in Hyderabad after 26th January 1950
In 1950 the Dangerous Drugs Act was applied by Parliament to Hyderabad by Central Act 33 of 1950
This Act however
is not an Act imposing duties of excise
Consequently it could not affect that part of the 1333 F Act which dealt with the grant of licences and collection of duties of excise
Further as a result of section 391 of the Dangerous Drugs Act dealing With the saving of local and special laws and entry 51 of List II the introduction of the Act in Hyderabad did not result in complete effacement of the 1333 F Act
It remained alive with respect to substances which might be notified as intoxicating drugs under the 1333 F Act
If there was any such notification before 1950 that notification would be valid and the Act would apply to it
If there was no such notification the Act would remain on the statute book as a conditional statute under which a notification could be issued
 114 G H 115 E F 116 A C 111 The Drugs Act was extended to Hyderabad by Central Act 3 of 1951
This Act is mainly concerned with the standard and quality of drugs manufactured and therefore controls the manufacture sale and distribution of drugs
It has also nothing to do with duties of excise and with their imposition on narcotics and narcotic drugs
Therefore the fact that this
Act was introduced into Hyderabad in 1951 would not affect in any way that part of the 1333 F Act which dealt with collection of excise duties and provided for licences in that connection as such duties can be imposed only by the State legislature under item 51 of List II
Hence the 1333 F Act in so far as it deals with the collection of duties of excise on any drugs which are narcotics or narcotic drugs would remain alive to that extent
116 D G 117 D F ii Narcotic is a substance which in small doses relieves pain and produces sleep and since it was admitted by the appellant that chloral hydrate is hypnotic and sedative it would be a narcotic within the meaning of entry 51 of List II
The statement in the respondents  affidavit that it did not contain narcotic or a narcotic drug was only made in reply to the appellants allegation that chloral hydrate was a medicinal preparation
All that was intended by the State by using those words was that chloral hydrate did not contain any narcotic drug or narcotic is defined in the 
Chloral hydrate has also an intoxicating effect when mixed with liquor and so is an intoxicating drug within the meaning of the Amendment Act
119 A F The 1333 F Act after the amendment of 1953 is also an excise Act and defines intoxicating drugs to mean inter alia any intoxicating and narcotic substance which the Government may by notification declare to be an intoxicating drug
118 A B Since chloral hydrate is an intoxicating and narcotic substance it could be notified under the Amendment Act
It would be liable to excise duty and therefore the Rules could be framed with respect to its control and the appellant could be asked to take out a licence and pay excise duty on the manufacture thereof
118 D F