Case: Glaxosmithkline Pharmaceuticals Limited &amp; Another Vs. Union of India &amp; Others

for the said formulation be period of exemption and thereby would be action against the public interest. In this regard the learned counsel for the respondents particularly highlighted the fact that the quantity manufactured by the petitioner company during 1st January, 1995 to 17th July, 1995 was only 38,32,975 strips whereas the quantity sold during the said period as per the ORG was Rs.1,58,45,148 strips. The purpose of Guideline 1 of 1989 is to sub serve the provisions of DPCO and the guidelines should not be interpreted in such a mariner as to conflict with the provisions of DPCO itself. If the interpretation suggested by the petitioners is accepted it would make the provisions of the DPCO especially paras 15 and 17 completely meaningless. The DPCO, 1987 specifically provide that the ceiling price has to be adopted by all the units within the prescribed period and Guideline 1 of 1987 cannot be interpreted contrary to the said provisions of DFCO, 1987. 13. In B.K. Industry & ors. vs. Union of India, AIR 1993 SC 2123 , the Supreme Court applying the previous decision in Keshavanand Shiratis case held that the power of exemption cannot be utilized for, nor can it extend to the scrapping of the very Act itself. Applying the same analogy the court observed that the power of exemption cannot be utilized to License with the very levy created under section 3 of the Essential Commodities Act and for that matter under section 3 of he Central Excise Act in the light of this settled position of law, we are inclined to hold that the interpretation suggested by the petitioner company cannot be accepted as it would render or frustrate the object of DPCO, 1987. Primarily the objective behind the Essential Commodities Act, 1955 and DPCO, 1987 is to ensure that essential commodities are made available and accessible to the consumers at large at a reasonable and fair price and with this objective that the Central Government has been empowered to fix the ceiling price. Therefore it would not be open for the company to sell a drug beyond the ceiling price once exemption comes to an end. We have therefore no hesitation in rejecting the submission that recovery should be restricted only to the drug manufactured during the period from 1st January 1995 to 17th July, 1995.14. The next submission made an behalf of the petitioner company is that there was no provision in DPCO, 1987 compelling the petitioner company to adopt ceiling price fixed by the Government of India. DPCO, 1987 specifically contemplated that before expiry of the exemption period a manufacturer Would submit an application in Form 1 for Taxation of the price of such a building under the provisions of the DPCO, 1987. Our attention was also drawn to Clause (L) of Guideline 1 of 1995, which reads as under:"The manufacturer who has been given such price exemption for a bulk drug shall submit application(s) in form I and form II of the Drugs (Price Control) Orders 1995 for fixation of price of such bulk drug(s) and formulations respectively under the provisions of the said Order, four months before the expiry of the period of exemption. However, if there is an existing notified price for bulk drug or ceiling price for formulations, the manufacturer shall follow the same on the expiry of the exemption and obtain price approval for non-ceiling packs of formulation(s) based an that bulk drug"It is submitted that in the absence of similar provision in DPCO, 1987 the company was not bound to accept the ceiling price fixed by the Government and till the ceiling price was fixed in accordance with the Guidelines the company was entitled to sell the drug at such price fixed by it.15. In our opinion, the submission is devoid of any substance. Under the substantive part of DPCO, 1987 the ceiling price in respect of scheduled formulation was included in paras 8 and 9(6) and all the manufacturers of the formulations had to adopt ceiling price within 15 days of the date of notification Paras 8 and 9(6) are reproduced herein below:"8. Power of Government to fix ceiling prices of formulations specified in Category I of the Third Schedule- (1) The Government may, from time to time, by notification in the Official Gazette, fix the ceiling price of a formulation specified in Category I of the Third Schedule in accordance with provisions of paragraphs 6 and 7 and such price shall operate as the ceiling sale price for every manufacturer of such formulations.(2) The Government may, of its own motion or an application, made to it in this behalf by a manufacturer in form 2 or form 3 as the case may be, after, calling for such information as it may consider necessary, by notification in the Official Gazette for a revised ceiling price for a formulation.9(6). Without prejudice to the provisions of the preceding sub-paragraphs-a) The Government may, if it considers necessary or expedient so to do, by notification in the Official Gazette, fix or revise a ceiling price for any formulation specified in the Third Schedule and any manufacturer of such formulation may sell such formulation at a price not exceeding the price so notified and intimate the Government accordingly.(b) With a view to enabling the manufacturers of similar formulations in pack sizes other than those for which ceiling prices referred to in the above sub-paragraphs have been notified, to market such formulation packs at worked out prices, the Government may, by notification in the Official Gazette fix norms from time to time and such manufacturer shall work out the price of their respective formulation packs in accordance with such norms and marks such formulation packs after thirty days of intimation to the Government in this behalf.Provided that the Government; may, if it considers necessary by order, revise the price so intimated by the manufacturer and upon such revision, such manufacturer shall not sell such formulation at a price exceeding the price so revised".

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]15. In our opinion, the submission is devoid of any substance. Under the substantive part of DPCO, 1987 the ceiling price in respect of scheduled formulation was included in paras 8 and 9(6) and all the manufacturers of the formulations had to adopt ceiling price within 15 days of the date of notification Paras 8 and 9(6) are reproduced herein below:"8. Power of Government to fix ceiling prices of formulations specified in Category I of the Third Schedule(1) The Government may, from time to time, by notification in the Official Gazette, fix the ceiling price of a formulation specified in Category I of the Third Schedule in accordance with provisions of paragraphs 6 and 7 and such price shall operate as the ceiling sale price for every manufacturer of such formulations.(2) The Government may, of its own motion or an application, made to it in this behalf by a manufacturer in form 2 or form 3 as the case may be, after, calling for such information as it may consider necessary, by notification in the Official Gazette for a revised ceiling price for a formulation.9(6). Without prejudice to the provisions of the precedingThe Government may, if it considers necessary or expedient so to do, by notification in the Official Gazette, fix or revise a ceiling price for any formulation specified in the Third Schedule and any manufacturer of such formulation may sell such formulation at a price not exceeding the price so notified and intimate the Government accordingly.(b) With a view to enabling the manufacturers of similar formulations in pack sizes other than those for which ceiling prices referred to in the abovehave been notified, to market such formulation packs at worked out prices, the Government may, by notification in the Official Gazette fix norms from time to time and such manufacturer shall work out the price of their respective formulation packs in accordance with such norms and marks such formulation packs after thirty days of intimation to the Government in this behalf.Provided that the Government; may, if it considers necessary by order, revise the price so intimated by the manufacturer and upon such revision, such manufacturer shall not sell such formulation at a price exceeding the price so revised".