Summarize the following court judgment. Civil Appeal No. 533 of 1979. From the judgment and order dated 2nd January	 1979 of the High Court of Kerala in original Petition No. 4935 of 1974 D. and Special Leave Petition No. 81 OF 1971. From the judgment and order dated the 27th July	 1971 of the Kerala High Court in O.P. No. 4706 of 1969. T.S. Krishnamoorthy Iyer	 C.J. Balakrishnan	 K Prabhakaran	 P. Parameswaran and A.S. Nambiar for the appellant in C.A. No. 533/79. P. Govindan Nair	 Mrs. Baby Krishnan	 K.R. Nambiar and K.M.K Nair for the respondent in C.A. No. 533/79. S.B. Sahariya and V.B. Sahariya for the petitioner in S.L.P. No. 81/72. The Judgment of the Court was delivered by SEN	 J. This appeal. by special leave	 is directed against a judgment of the Kerala High Court by which the High Court dismissed the writ petition of the appellants who are manufacturers of medicinal and toilet preparations containing alcohol and upholding the constitutional validity of sections 12A	 12B	 14(e) and (f) and 68A of the Abkari Act	 1077 (1 of 1077) (hereinafter called 'the Act ')	 introduced by the Abkari (Amendment) Act	 1967 (10 of 1967)	 and rr. 13 and 16 of the Kerala Rectified Spirit Rules	 1972. The main question in the appeal is as to the legislative competence of the State to enact a law relating to medicinal and toilet preparations containing alcohol under Entry 8	 List II of the Seventh Schedule to the Constitution. The appellants	 by virtue of a licence in Form 25 granted under the and a licence in Form Ll granted under the (hereinafter referred to as 'the Central Act ') are entitled to manufacture the drugs specified therein. They filed a writ petition in the High Court complaining that they were entitled to the supply of alcohol free of duty for the manufacture of their medicinal and toilet 525 preparations under r. 21 of the Medicinal and Toilet Preparations A (Excise Duties) Rules	 1956 (hereinafter referred to as 'the Central Rules ')	 and r. 8 of the Kerala Rectified Spirit Rules	 1972	 and challenged the validity of the impugned provisions mainly on the ground that the State Legislature has no power to enact the law relating to medicinal and toilet preparations as the topic of legislation is within the exclusive domain of Parliament under Entry 84	 List I of the Seventh Schedule to the Constitution. The High Court held that there was no conflict between the impugned provisions and the Central law as they dealt with different subjects. The impugned provisions	 as introduced by the Abkari Amendment) Act	 1967	 in so far as they are relevant	 are as follows: Section 12A reads: 12A. No preparation to which liquor or intoxicating drug is added during the process of its manufacture or in which alcohol is self generated during such process shall be manufactured in excess of the quantity specified by the Commissioner: Provided that in specifying the quantity of a medicinal preparation	 the Commissioner shall have due regard to the total requirement of that preparation for consumption or use in the State. Section 12B provides: 12B. (1) No person shall utilise liquor or intoxicating drug in the manufacture of any preparation	 in excess of the quantity specified by the Commissioner and except under and in accordance with the terms and conditions of a licence granted by the Commissioner in that behalf: G Provided that where such preparation is a medicinal preparation	 Commissioner shall	 in specifying the quantity of liquor or intoxicating drug have due regard to the total requirement of such medicinal preparation for consumption or use in the State. 526 Section 14 provides: 14. The Commissioner may	 with the previous approval of the Government . . . (d) prescribe the mode of supervision that may be necessary in a . manufactory where preparations containing liquor or intoxicating drugs are manufactured	 to ensure the proper collection of duties	 taxes and other dues payable under this Act or the proper utilisation of liquor or intoxicating drugs; (e) prescribe the size and nature of the establishment necessary for such supervision and the cost of the establishment and other incidental charges in connection with such supervision to be realised from the licensees: and (f) prescribe the allowance for wastage of alcohol that may occur in (i) . . (ii) the process of manufacture of any preparation containing alcohol; and (iii) . . Section 68A provides that the Government shall appoint an Expert Committee consisting of the Drugs Controller	 the Chemical Examiner to the Government	 two representatives each one of them shall be a non official	 of the Allopathic	 Indigenous and Homoeopathic systems of medicine appointed by the Government	 and an officer of the Excise Department not below the rank of Deputy Commissioner; and the Committee shall advise the Commissioner (a) as to whether a medicinal preparation is a bona fide medical preparation or not; and (b) as to the total requirements of medicinal preparations containing liquor or intoxicating drugs or in which alcohol is self generated during the process of their manufacture	 for the whole of the State during one year. Before this Court the constitutional validity of the impugned provisions was mainly challenged on these grounds	 namely: (I) The State Legislature had no legislative competence to enact the impugned 527 provisions because the field was occupied by the provisions of the A (the Central Act) and the Medicinal and Toilet Preparations (Excise Duties ) Rules	 1956 (the Central Rules)	 and alternatively	 the impugned provisions are violative of the fundamental right guaranteed in article 19(1) (g) of the Constitution. (2) The Parliament having made a declaration in section 2 of the Industries (Development and Regulation) Act	 1951	 declaring "Drugs and Pharmaceuticals" to be a scheduled industry	 being item 22 of the First Schedule thereof	 the power of the State Legislature to make a law in respect of medicinal and toilet preparations containing alcohol is taken away. (3) The provisions made in section 14(e) of the Act for the collection of supervisory charges was clearly invalid in as much as (a) they are in conflict with r. 45 of the Central Rules	 and (b) they could not be sustained as a fee as there was no quid pro quo. (4) Rule 13 of the Kerala Rectified Spirit Rules	 1972	 providing for the levy of excise duty as excess wastage of alcohol in the manufacture of medicinal and toilet preparations cannot be supported in terms of the charging provision contained in section 17 of the Act. We cannot accept any of these contentions With regard to the first ground	 it was submitted that the conferral of power on the Commissioner under section 12A of the Act to restrict the quantity of medicinal and toilet preparations to which liquor or intoxicating drug is added during the process of its manufacture with the requirement that the Commissioner shall	 in specifying such quantity	 have due regard to the total requirements of consumption or use in the State	 the prohibition contained in section 12B of the Act that no person shall utilise liquor or intoxicating drug in the manufacture of any preparation	 in excess of the quantity so specified by the Commissioner and the condition that no person shall manufacture any such preparations except under and in accordance with the terms and conditions of a licence granted by him	 is clearly contrary to the general scheme of the Central law and in particular	 rr. 18 and 21 of the Central Rules. In this respect	 it was said that under r. 18 of the Central Rules	 rectified spirit ordinarily had to be supplied to a manufacturer from a distillery or a spirit warehouse of the State in which the manufactory is situate	 and the manufacturer was not precluded from obtaining his requirements of rectified spirit from sources outside the State. Under r. 21	 rectified spirit had to be issued without previous payment of duty for the manufacture of medicinal and toilet preparations containing alcohol subject to the condition that 528 manufacturer enters into a bond in Form Bl with sufficient security as laid down in r. 96	 towards due payment of duty and observance of the rules. It is submitted that the State Legislature has no power to make any such law imposing restrictions on a person carrying on the business of manufacture and sale of medicinal and toilet preparations containing alcohol in as much as the matter relates to an occupied field. There is no merit in these contentions. The enactment of the by Parliament under Entry 84	 List I of the Seventh Schedule of the Constitution	 or the framing of the Medicinal and Toilet Preparations (Excise Duties) Rules	 1956 by the Central Government in exercise of their rule making power under section 19 of the Act	 for the purpose of levying duties of excise on medicinal and toilet preparations containing alcohol etc.	 do not prevent the State Legislature from making a law under Entry 8	 List II of the Seventh Schedule to the Constitution with respect to 'intoxicating liquors '	 or a law under Entry 51	 List II for levying excise duties on alcoholic liquor for human consumption. In order to appreciate the contention regarding the applicability of the doctrine of 'occupied field '	 it is necessary to examine the scheme of both the enactments. The scheme of the Act	 as reflected in the preamble	 is that it is an Act "to consolidate and amend the law relating to the import	 export	 transport	 manufacture	 sale and possession of intoxicating liquor and all intoxicating drugs in the State of Kerala". It is not necessary to set out all the provisions of the Act in question	 but reference may be made to the definitions of expressions 'spirit '	 'liquor '	 'country liquor '	 'foreign liquor and 'intoxicating liquor ' defined in sections 3(9)	 (10)	 (12)	 (13) and (14). The expression 'liquor ' as defined in section 3(10) reads: 3(10). 'Liquor ' includes spirits of wine	 methylated spirits	 spirits	 wine	 toddy	 beer	 and all liquid consisting of or containing alcohol. Section 12(1) provides: 12(1). No liquor or intoxicating drug shall be manufactured. except under the authority and subject to the terms and conditions of licence granted by the Commissioner in that behalf	 or under the provisions of section 21	 529 Section 15 provides: 15(1). No liquor or intoxicating drug shall be sold with out a licence from the Commissioner	 provided that a person having the right to the toddy drawn from any tree may sell the same without a licence to a person licensed to manufacture or sell toddy under this Act. B Section 17 provides: 17. A duty of excise or luxury tax or both shall	 if the Government so direct	 be levied on all liquor and intoxicating drugs: . . . (f) issued from a distillery	 brewery	 winery or other manufactory or warehouse licensed or established under section 21 or section 14; or The Act is clearly relatable to the State 's power to make a law on the topics of legislation covered by Entries 8 and 51	 List II of the Seventh Schedule to the Constitution which read as under: 8. Intoxicating liquors	 that is to say	 the production	 manufacture	 possession	 transport	 purchase and sale of intoxicating liquors. Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or 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. The legislative history of the Central Act is well known. Under Entry 40	 List II of the Seventh Schedule to the Government of 530 India Act	 1935	 medicinal and toilet preparations containing alcohol etc.	 were subjected to Provincial excise duties. Under the Constitution	 the entry relating to the excise duty on medicinal and toilet preparations containing alcohol was transferred to the Union List. In the light of experience gained	 there was necessity to achieve a synthesis from a vast body of existing rules and regulations in force in the States having regard to the sole object of the measure	 namely	 to bring about uniform treatment in excise matters. This was a highly complicated subject because	 firstly	 the excise duty was to be collected and retained by the State Governments	 and	 secondly	 a certain amount of flexibility in statutory operations was necessary if spurious medicines were not to defeat the policy of prohibition which is one of the Directive Principles of State Policy under article 47 of the Constitution. Some of the provisions of the Central Act are so designed as to lay down only broad principles. Matters of detail	 such as classification of the preparations as capable or not capable of being used as ordinary alcoholic beverages	 regulation for the purpose of the Act	 of production	 storage and movement	 were left to be regulated by rules. Parliament accordingly enacted the 	 to provide for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol. The Act is relatable to Entry 84	 List I of the Seventh Schedule to the Constitution	 which reads: 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. The scheme of the Central Act is to provide for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol etc. The Act is entitled as "An Act to provide for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol	 opium. Indian hemp or other narcotic drug or narcotic". Section 2 is the definition Section and 531 the expression 'dutiable goods ' as defined in section 2(c) takes in medicinal and toilet preparations specified in the Schedule. The expression 'medicinal preparation ' is defined in section 2(g) as: 2(g). 'medicinal preparation ' includes all drugs which are a remedy or prescription prepared for internal or external use of human beings or animals and all substances intended to be used for or in the treatment	 mitigation or prevention of disease in human beings or animals; It is not necessary to refer to the definition of toilet ' preparation in section 2(k) as it is not relevant for the present purpose. Section 3 is the charging section which levies duties of excise on all 'dutiable goods ' manufactured in India and also lays down the mode of collection of the said duties. Section 3 (1) reads: 3(1). There shall be levied duties of excise	 at the rates specified in the Schedule	 on all dutiable goods manufactured in India. Section 6 prohibits any person from engaging in the production or manufacture of any dutiable goods etc.	 except under the authority and in accordance with the terms and conditions of the licence granted under the Central Act. Section 19 (1) empowers the Central Government to make rules to carry out the purposes of the Act	 and sub section (2) thereof specifies the various matters in respect of which such rules may be made. Section 21 provides for the repeal and savings. The Schedule to the Act contains a description of 'dutiable goods ' and the rates of duty payable thereon. In exercise of the powers conferred by section 19 (1) of the Central Act	 the central Government framed the Central Rules which practically deal with all the facets of manufacture and production of medicinal and toilet preparations	 as required in cls. (i) to (xxi) of sub section (2) thereof	 with the ultimate object of providing a machinery for collection of duty on the said preparations. Chapter IV of the Central Rules deals with 'Manufacture '. Rule 18 in Chapter IV provides that rectified spirit shall ordinarily be supplied to a manufacturer from a distillery. Of the State in which the manufactory is situated. It further provides that the manufacturer is not precluded from obtaining his requirements of rectified spirit from sources outside the State. Rule 21 provides that rectified spirit H shall be issued without previous payment of duty to a manufacturer of medicinal and toilet preparations containing alcohol. Rule 33 532 provides for taking of samples of the manufactured product for analysis for determining the strength of alcohol and medicaments. Rule 38 provides for wastage in manufacture. Rule 45(1) enjoins that the officer in charge shall exercise such supervision as is required to ensure that alcohol issued for a certain preparation is added to the materials which go to make that preparation and that no portion of such alcohol is diverted to other purposes. These rules are intended and meant to carry out the main object of the Central Act	 i.e. to levy and collect duties of excise on medicinal and toilet preparations containing alcohol etc. It is the charging section which gives the true index to the a real character of a tax. The nature of the machinery by which the tax is to be assessed is not of assistance	 except in so far as it may throw light on the general character of the tax. The charging section in section 3 of the Central Act clearly shows that it does not seek to levy a duty of excise on alcoholic liquor for human consumption falling within Entry 51	 List II of the Seventh Schedule	 but to levy a duty of excise on medicinal and toilet preparations containing alcohol etc. The topic of legislation under Entry 84	 List I of the Seventh Schedule is not 'duties of excise on alcoholic liquors for human consumption ' but 'duties of excise on medicinal and toilet preparations containing alcohol etc '. There can be little doubt that the Central Act must	 in pith and substance	 be attributed to Entry 84	 List I. In determining whether an enactment is a legislation 'with respect to ' a given power	 what is relevant is not the consequences of the enactment on the subject matter or whether it affects it	 but whether	 in its pith and substance	 it is a law upon the subject matter in question. The Central and the State Legislations operate on two different and distinct fields. The Central Rules	 to some extent	 trench upon the field reserved to the State Legislature	 but that is merely incidental to the main purpose	 that is	 to levy duties of excise on medicinal and toilet preparations containing alcohol. Similarly	 some of the impugned provisions may be almost similar to some of the provisions of the Central Rules	 but that that does not imply that the State Legislature had no competence to enact the provisions. It is sufficient to say upon the first ground that the impugned legislation is confined to 'intoxicating liquor '	 that is	 to ensure proper utilisation of rectified spirit in the manufacture of medicinal and toilet preparations and	 therefore	 within the powers granted 533 to the State Legislature under Entry 8	 List II. It further seeks to regulate the manufacture of bona fide medicinal preparations and prevent misuse of rectified spirit in the manufacture of spurious medicinal and toilet preparations containing alcohol capable of being used as ordinary alcoholic beverages. It was suggested that the provisions are identical with the provisions contained in the Central Rules and	 in particular	 to rule 45(1) and	 therefore	 the legislation is in the occupied field. The answer is that the enumeration of 'intoxicating liquor ' in Entry 8	 List II	 confers exclusive power to the State to legislate in respect of medicinal and toilet preparations containing alcohol. In Prafulla Kumar Mukherjee and Ors. vs Bank of Commerce Ltd.	 Khulna(1) the Privy Council in dealing with the question or distribution of powers laid down the tests that in order to see whether an Act is in respect of a particular subject	 one must look to "its true nature and character"; "its pith and substance". Lord Porter	 in delivering the judgment of the Judicial Committee	 observed: "As Sir Maurice Gwyer	 C.J. said in the Subramanyam Chettiar Case: ' It must inevitably happen from time to time that legislation	 though purporting to deal with a subject in one list	 touches also on a subject in another list	 and the different provisions of the enactment may be so closely inter twined that blind observance to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee	 whereby the impugned statute is examined to ascertain its 'pith and substance '	 or 'its true nature and character '	 for the purpose of determining whether it is legislation with respect to matters in this list or in that" . The doctrine of 'pith and substance ' evolved by the Privy Council has been followed by this Court throughout. Thus	 in State of Bombay vs F. N. Balsara(2) Fazl Ali	 J.	 followed the decision of the Judicial Committee	 reiterated: 534 "If the Act	 when so viewed	 substantially falls within the powers expressly conferred upon the Legislature which enacted it	 then it cannot be held to be invalid	 merely because it incidentally encroaches on matters which have been assigned to another Legislature. " In such matters of seeming conflict or encroachment of jurisdictions	 what is more important is the true nature and character of the legislation. A necessary corollary of the doctrine of pith and substance is that once it is found that in pith and substance the impugned Act is a law on a permitted field	 any incidental encroachment on a forbidden field does not affect the competence of the legislature to enact the law. The main thrust of the argument is the decision of this Court in Hyderabad Chemical and Pharmaceutical Works Ltd. vs State of n Andhra Pradesh and Ors(1) which	 we are afraid	 is clearly distinguishable. There the Court was concerned with the question whether r. 36 of the Medical Preparations and Spirituous Rules	 1345 Fasli	 framed under the Hyderabad Abkari Act	 136 Fasli which provided that "the expenses of the establishment for the supervision of the work shall be borne by the pharmaceutical laboratory (licensee) as per the decision of the Commissioner of Excise"	 was still enforceable having regard to section 21 of the Central Act and r. 143 of the Central Rules. It was held that the effect of section 21 of the Central Act was that so far as the Hyderabad Act applied to the use of alcohol in the manufacture of medicinal and toilet preparations	 the Act must be deemed to have been repealed and	 therefore	 r. 36 could not survive. In that case	 the Court was concerned with the levy of supervisory charge at the stage of manufacture of medicinal and toilet preparations	 and not with the levy of supervisory charges at the stage of the supply and utilisation of rectified spirit in the manufacture of medicinal and toilet preparations. This is clear from an observation at p. 380 of the Report to the effect: The supervisory staff which has to be paid for under r. 36 therefore is meant for the supervision of the manufacture of medicinal preparations and it is for that purpose only that expenses have to borne by the laboratory con 535 cerned. The purpose of the rule therefore is clearly covered by the Act and the Rules framed thereunder and it cannot survive the Act and the rules in view of section 21 of the Act and r 143 of the 1956 Rules	 and the proviso to s 21 cannot be availed of by the State. While repelling the contention that r. 36 could still be good law as it was meant to carry out the general law relating to alcohol and intoxicating drugs	 the Court pointed out that the Central Rules make no provision for recovery of supervisory charges	 the intention being that the duty under the Act would cover all expenses for enforcing it and observed (1) We are of opinion that there is no force hl this contention either. In the first place	 as we have already indicated	 the main object of the supervisory staff mentioned in r. 36 is to supervise the manufacture of medicinal preparations. In that connection the supervisory staff will certainly see that the alcohol supplied is used for the purpose for which it is supplied and it is not used in any other manner. Rule 36 is only concerned with seeing that the manufacture of medicinal preparations is made properly and is done under the supervision of the establishment attached to each laboratory; and it is only incidentally that in that connection the establishment is also to see that the alcohol supplied is not used otherwise than for the purpose of manufacture. Further	 the Central Act	 which the Court was considering	 was a fiscal measure. The whole object and purpose of that Act is to levy a duty of excise on medicinal and toilet preparations containing alcohol. The Central Rules have mainly been framed to achieve this object. Rule 45(1) on which reliance was placed	 reads: 45(1). The officer in charge shall exercise such supervision as is required to ensure that alcohol issued for a certain preparation is added to the materials which go to make that preparation and that no portion of such alcohol is diverted to other purposes. The provision is merely incidental to the main purpose	 i.e.	 collection of excise duty on medicinal and toilet preparations containing alcohol. 536 There can be no doubt that the impugned Act is relatable to Entry 8	 List II of the Seventh Schedule. In Balsara 's case(1) the Court held that the expression 'liquor ' in Entry 31	 List II of the Seventh Schedule to the Government of India Act	 1935	 took within its sweep all liquids containing alcohol. In dealing with the question	 Fazal Ali	 J. Observed: The framers of the Government of India Act	 1935	 could not have been entirely ignorant of the accepted sense in which the word 'liquor ' has been used in the various excise Acts of this country and	 accordingly I consider the appropriate conclusion to be that the word 'liquor ' covers not only those alcoholic liquids which are generally used for beverage purposes and produce intoxication	 but also all liquids containing alcohol. It may be that the latter meaning is not the meaning which is attributed to the word 'liquor ' in common parlance especially when that word is prefixed by the qualifying word 'intoxicating '	 but in my opinion having regard to the numerous statutory definitions of that word	 such a meaning could not have been intended to be excluded from the scope of the term 'intoxicating liquor ' as used in entry 31 of List II. It is not disputed by the appellants that the impugned Act does not levy a duty of excise on medicinal and toilet preparations containing alcohol	 but they contend that	 whatever be the intention	 the State Legislature had	 in fact	 encroached upon an occupied field. The contention is	 in our opinion	 wholly misconceived. The main purpose of the impugned Act is to consolidate the law relating to manufacture	 sale and possession of intoxicating liquor and intoxicating drugs which squarely falls under Entry 8	 List II of the Seventh Schedule	 while the main object of the Central Act is to provide for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol falling under Entry 84	 List I of the Seventh Schedule. When the frame work of the two enactments is examined	 it would be apparent that the Central and the State Legislations operate in two different and distinct fields. In the matter of making rules or detailed provisions to achieve the object and purpose of a legislation	 there may be some provisions seemingly overlapping or encroaching upon the forbidden field	 but 537 that does not warrant the striking down the impugned Act as ultra virus the State Legislature. The alternative contention that the impugned provisions are violative of article 19(1)(g) of the Constitution	 is wholly devoid of any merit. No citizen has any fundamental right guaranteed under article 19(1)(g) of the Constitution to carry on trade in any noxious and dangerous goods like intoxicating drugs or intoxicating liquors. The power to legislate with regard to intoxicating liquor carries with it the power to regulate the manufacture	 sale aud possession of medicinal and toilet preparations containing alcohol	 not for the purpose of interfering with the right of citizens in the matter of consumption or use for bona fide medicinal and toilet preparations	 but for preventing intoxicating liquors from being passed on under the guise of medicinal and toilet preparations. It was within the competence of the State Legislature to prevent the noxious use of such preparations	 i.e. their use as a substitute for alcoholic beverages. The general test for determining what medicinal preparations containing alcohol are capable of being misused and	 therefore	 must be considered intoxicating within the meaning of the term 'intoxicating liquor '	 is the capability of the article in question tor use as a beverage. The impugned provisions have been enacted to ensure that rectified spirit is not misused under the pretext of being used for medicinal and toilet preparations containing alcohol. Such regulation is a necessary concomitant of the police power of the State to regulate such trade or business which is inherently dangerous to public health. Section 12A of the Act provides that no preparation to which liquor or intoxicating drug is added during the process of its manufacture or in which alcohol is self generated during such process shall be manufactured in excess of the quantity specified by the Commissioner: Provided that in specifying the quantity of a medicinal preparation	 the Commissioner shall have due regard to the total requirement of that preparation for consumption or use in the State. Section 12 provides that no person shall utilise liquor or intoxicating drug in the manufacture of any preparation	 in excess of the quantity specified by the Commissioner and except under and in accordance with the terms and conditions of a licence granted by the Commissioner in that behalf: Provided that where such preparation is a medicinal preparation	 the Commissioner shall	 in 538 specifying the quantity of liquor or intoxicating drug	 have due regard to the total requirement of such medicinal preparation for consumption or use in the State. Now	 section 68A provides for the Government to appoint an Expert Committee to advise the Commissioner as to whether a medicinal preparation is a bona fide medicinal preparation or not and as to the total requirement of the medicinal preparations containing alcohol or intoxicating drug or in which alcohol is self generated during the process of their manufacture for the whole of the State during one year. The challenge to the validity of sections 12A and of the Act is mainly based on the words "shall have due regard to the total requirement of such medicinal preparations for consumption or use in the State "occurring in the provisions thereof. The submission is that the quantity of medicinal preparations manufactured by the appellants would be restricted looking to the total requirements of such preparations for consumption or use in the State. The medicines are in demand not only in the State	 but throughout the country and to limit consideration by the Commissioner in granting a licence only to the requirements of preparations for consumption or use in the State	 would be an unreasonable restriction on the fundamental right guaranteed under article 19(1) (g) of the Constitution. We do not think that the impugned provisions contained in sections 12A and 12B have that effect. All that the provisions ordain is that the Commissioner shall 'have regard to the total requirements for use and consumption within the State '. The expression 'shall have regard to ' had been subject to judicial interpretation in Ryots of Garabandho and other villages vs Zamindar of Parlakimidi and Anr.(1) It only means 'take into consideration '. Understood in the light of this judicial exposition	 the Commissioner only has to take into account the total requirements within the State as an element which should enter the assessment and no more. As a necessary corollary	 it follows that in fixing the quantity of medicinal and toilet preparations to which alcohol is added or in which it is self generated	 normally the Commissioner shall have regard to larger requirements of the manufacturer	 if the manufactured product has a market outside the State. As a corollary	 it must result in the consequence that in the case of medicinal and toilet preparations which are capable of being misused as alcoholic beverages	 or which are not bona fide medicinal preparations in the opinion of the Expert Committee	 the Commissioner may totally prohibit the manufacture of such pre 539 parations. The restrictions imposed by section 12B as to the alcoholic content of medicinal and toilet preparations and the requirement that they shall not be manufactured except and in accordance with the terms and conditions of a licence granted by him	 are nothing but reasonable restrictions within the meaning of article 19(6). The impugned provisions	 therefore	 cannot be struck down as offending article (1) (g) of the Constitution. As regards the second ground	 the contention that Parliament having made the requisite declaration in section 2 of the Industries (Development and Regulation) Act	 1951 declaring "drugs and pharmaceuticals" to be a scheduled industry	 being item 22 of Schedule I thereof	 the State Legislature was denuded of its competence to enact the impugned provisions under Entry 8	 List II	 cannot be accepted. In Ishwari Khetan Sugar Mills (P) Ltd. vs State of Uttar Pradesh(1)	 this Court held that the legislative power of the States under Entry 24	 List II is eroded only to the extent of control assumed by the Union by reason of a declaration made by Parliament in respect of a 'declared industry ' as spelt out by a legislative enactment under Entry 52	 List I	 and the field occupied by such enactments is the measure of erosion. But subject to such erosion	 on the remainder the State Legislature will still have power to legislate in respect of a declared industry without	 in any way	 trenching upon the occupied field. Now	 the impugned Act	 in pith and substance	 is not a legislation under Entry 24	 List II and	 therefore	 the question really does not arise. The third ground that the levy of supervisory charges under s.14(e) of the Act and r.16(4) of the Kerala Rectified Spirit Rules	 1972 being in conflict with r. 45(1) of the Central Rules	 is constitutionally impermissible	 cannot be accepted. The submission rests on a misconception as to the scope and effect of the decision of this Court in the Hyderabad Chemicals and Pharmaceutical 's case (supra). As we have already explained	 the Court in that case was concerned with the levy of supervisory charges at the stage of manufacture of medicinal and toilet preparations and not with the levy of supervisory charges at the stage of supply and utilisation of rectified spirit in the manufacture of medicinal and toilet preparations. There can be supervision at both the stages. Merely because the Central Rules made no provision for realisation of supervisory charges at the stage of manufacture of medicinal and toilet preparations	 does not imply 540 that the State has no power to prescribe the mode of supervision in a manufactory where preparations containing intoxicating liquor or intoxicating drugs are manufactured	 or to ensure proper collection of duties	 taxes and other dues payable under the Act	 or to the proper utilisation of liquor or intoxicating drug. The provision contained in section 14(e) of the Act is clearly relatable to the State 's power to make a law under entry 8	 read with Entry 51(a)	 List II of the Seventh Schedule. It necessarily follows that section 14(e) of the Act is valid in so far as it provides that the Commissioner may prescribe the size and nature of the establishment for such supervision and the cost of establishment and other incidental charges in connection with such supervision to be realised from the licensee. There is no f ' warrant for the submission that the framing of such an incidental provision like r. 45(1) of the Central Rules takes away the State 's power to recover supervisory charges from the licensee. There still remains the question whether the levy of supervisory charges must be regarded as a fee and	 therefore	 cannot be sustained	 there being no quid pro quo. In support of the contention	 reliance is placed on the decision in Indian Mica Micanite Industries vs The State of Bihar and Ors.(1) The distinction between a 'tax ' and a 'fee ' is well settled. The question came up for consideration for the first time in this Court in the Commissioner	 H.R.E. Madras vs Lakshmindra Thirtha Swamiar of Shirur Mutt.(2) Therein	 the Court speaking through Mukherjee	 J. quoted with approval the definition of 'tax ' given by Latham	 C.J. in Matthews vs Chickoory Marketing Board(3). In that case	 the learned Chief Justice observed: A tax is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment for services rendered. Dealing with the distinction between 'tax ' and 'fee ' the learned Judge observed :(4) It is said that the essence of taxation is compulsion	 that is to say	 it is imposed under statutory power without 541 the tax payer 's consent and the payment is enforced by law. A The second characteristic of tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax. This is expressed by saying that the levy of tax is for the purposes of general revenue	 which when collected forms part of the public revenues of the State. As the object of a tax is not to confer any special benefit upon any particular individual	 there is	 as it is said	 no element of quid pro quo between the tax payer and the public authority. Another feature of taxation is that as it is a part of the common burden	 the quantum of imposition upon the tax payer depends gene rally upon his capacity to pay. Coming now to fees	 'a fee ' is generally defined to be a charge for a special service rendered to individuals by some Governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service	 though in many cases the costs are arbitrarily assessed. Ordinarily	 the fees are uniform and no account is taken of the varying abilities of different recipients to pay. These are undoubtedly some of the general characteristics	 but as there may be various kinds of fees	 it is not possible to formulate a definition that would be applicable to all cases. . If	 as we hold	 a fee is regarded as a sort of return or consideration for services rendered	 it is absolutely necessary that the levy of fees should on the face of the legislative provision	 be co related to the expenses incurred by Government in rendering the services. The same view was reiterated by this Court in Mahant Sri Jagannath Ramanuj Das vs The State of Orissa(1) and in Ratilal Pannchand Gandhi vs The State of Bombay. (2) 'Fees ' are the amounts paid for a privilege	 and are not an obligation	 but the payment is voluntary. Fees are distinguished 542 from taxes in that the chief purpose of a tax is to raise funds for the support of the Government or for a public purpose	 while a fee may be charged for the privilege or benefit conferred	 or service rendered or to meet the expenses connected therewith. Thus	 fees are nothing but payment for some special privilege granted or service rendered. Taxes and taxation are	 therefore	 distinguishable from various other contributions	 charges	 or burdens paid or imposed for particular purposes and under particular powers or functions of the Government. It is now increasingly realised that merely because the collections for the services rendered or grant of a privilege or licence	 are taken to the consolidated fund of the State and are not separately appropriated towards the expenditure for rendering the service is not by itself decisive. That is because the Constitution did not contemplate it to be an essential element of a fee that it should be credited to J a separate fund and not to the consolidated fund. It is also increasingly realised that the element of quid pro quo stricto senso is not always a sine qua non of a fee. It is needless to stress that the element of quid pro quo is not necessarily absent in every tax. We may	 Din this connection	 refer with profit to the observations of Seervai in his Costitutional Law	 to the effect: (1) It is submitted that as recognised by Mukherjee	 J. him self	 the fact that the collections are not merged in the consolidated fund	 is not conclusive	 though that fact may enable a court to say that very important feature of a fee was present. But the attention of the Supreme Court does not appear to have been called to article 266 which requires that all revenues of the Union of India and the States must go into their respective consolidated funds and all other public moneys must go into the respective public accounts of the Union and the States. It is submitted that if the services rendered are not by a separate body like the Charity Com missioner	 but by a government department	 the character of imposition would not change because under article 266 the moneys collected for the services must be credited to the consolidated fund. It may be mentioned that the element of quid pro quo is not necessarily absent in every tax. (emphasis added) Our attention has been drawn to the observations in Kewal Krishan Puri & Anr vs State of Punjab and Ors. (2) 543 The element of quid pro quo must be established A between the payer of the fee and the authority charging it. It may not be exact equivalent of the fee by a mathematical precision	 yet	 by and large	 or predominantly	 the authority collecting the fee must show that the service which they are rendering in lieu of fee is for some special benefit of the payer of the fee. To our mind	 these observations are not intended and meant as laying down a rule of universal application. The Court was considering the rate of a market fee	 and the question was whether there was any justification for the increase in rate from Rs. 2/ per every hundred rupees to Rs. 31 . There was no material placed to justify the increase in rate of the fee and	 therefore	 it partook the nature of a tax. It seems that the Court proceeded on the assumption that the element of quid pro quo must always be present in a fee. The traditional concept of quid pro quo is undergoing a transformation. It seems obvious that. in the case of a manufacturer of medicinal and toilet preparations containing alcohol in a bonded manufactory	 the imposition of the cost of establishment under section 14(e) of the Act calculated in accordance with the nature and extent of that establishment could not be said to be an imposition of a duty of excise	 but is a price for his franchise to carry on the business. If an exaction is to be classed as a duty of excise	 it must	 of course	 be a tax; its essential distinguishing feature is that it is a tax imposed "upon" or "in respect of ' or "in relation to" goods: Matthews vs Chickory Marketing Board (l). The exaction is in truth	 as it purports to be	 simply a fee payable as a condition of a right to carry on a business. No one has a fundamental right to the supply of rectified spirit which is an intoxicating liquor. It is up to the State to control and regulate its supply from a distillery or a spirit warehouse in the State under and in accordance with terms and conditions of a licence or permit its import from outside by grant of a privilege and charge a fee for the same. A fee may be charged for the privilege or benefit conferred	 or service rendered	 or to meet the expenses connected therewith. A fee may be levided to meet the cost of supervision and maybe	 something more. It is in consideration for the privilege	 licence or service. The State is undoubtedly entitled to levy H 544 excise duty on the rectified spirit issued from a distillery under section 17(f) of the Act read with r. 13 of the Kerala Rectified Spirit Rules	 1972	 but it refrained from making any such levy by reason of r. 21 of the Central Rules and has	 therefore	 by proviso to r. 8	 allowed a manufacturer of medicinal and toilet preparations to draw rectified spirit from a distillery without payment of duty. It is thus a privilege conferred on the licensee. To claim the privilege he must comply with the conditions prescribed. If one of the condition is the payment of cost of establishment under section 14(e) of the Act read with r. 16(4) of the Central Rules	 the manufacturer of such preparations must necessarily bear the burden as the licensee gets services in return in lieu of such payment. The decision in the Indian Mica Micanite Industries case (supra) on which reliance is placed furnishes a complete answer to the appellant 's contention. The Court there was concerned with the validity of supervisory charges of the excise establishment from a consumer and not from the manufacturer under the Bihar and Orissa Excise Act	 1915. It was clearly indicated that the burden of the cost of supervisory charges must fall on the manufacturer and not on the consumer because there was no co relationship between the levy of fee and the services rendered. Further	 though there was a double duty on the manufacturer as well as the consumer	 the Court did not strike down the levy on the consumer because it was observed that the question of co relationship between the services rendered and the fee levied is essentially a question of fact. In dealing with the question whether the impugned levy could be justified as a fee on the basis of the law as enunciated by this Court	 it was observed : (1) According to the finding of the High Court the only services rendered by the Government to the appellant and to other similar licensees is that the Excise Department have to maintain an elaborate staff not only for the purposes of ensuring that denaturing is done properly by the manufacturer but also for the purpose of seeing that the subsequent possession of. denatured spirit in the hands either of a wholesale dealer or retail seller or any other licensee or permit holder is not misused by coverting the denatured spirit into alcohol fit for human consumption and thereby 545 evade payment of heavy duty. So far as the manufacturing A process is concerned	 the appellant or other similar licensees have nothing to do with it. They are only the purchasers of manufactured denatured spirit. Hence the cost of super vising the manufacturing process or any assistance rendered to the manufacturers cannot be recovered from the consumers like the appellant. Further	 under Rule 9 of the Board 's rules the actual cost of supervision of the manufacturing process by the Excise Department is required to be borne by the manufacturer	 There cannot be a double levy in that regard. (emphasis added) The Court then went into the question whether there was any corelationship between the services rendered and the fee levied and whether the levy in question was not disproportionate to the value of the services rendered by the State	 and observed: D In the opinion of the High Court the subsequent transfer of denatured spirit and possession of the same in the hands of various persons such as whole sale dealer	 retail dealer or other manufacturers also requires close and effective supervision because of the risk of the denatured spirit being converted into palatable liquor and thus evading heavy duty. Assuming this conclusion to be correct	 by doing so	 the State is rendering no service to the consumer. It is merely protecting its own rights. Further in this case	 the State which was in a position to place material before the Court to show what services had been rendered by it to the appellant and other similar licensees	 the costs or at any rate the probable costs that can be said to have been incurred for rendering those services and the amount realised as fees has failed to do so. On the side of the appellant	 it is alleged that the State is collecting huge amounts as fees and that it is rendering little or no service in return. The co relationship between the services rendered and the fee levied is essentially a question of fact. Prima facie	 the levy appears to be excessive even if the State can be said to be rendering some service to the licensees. The State ought to be in possession of the material from which the co relationship between the levy and the services 546 rendered can be established at least in a general way. But the State has not chosen to place those materials before the Court. Therefore the levy under the impugned Rule can not be justified. Nevertheless	 the Court remitted the matter to the High Court with a direction that opportunity be given to the State to place material to show that the value of the services rendered has reasonable co relationship with the fee charged. We fail to see how the decision in the Indian Mica Micanite case (supra) can be of any help to the appellants. The portions extracted above clearly show that the levy of service charges on the manufacturer are valid. There is a broad co relationship between the fee collected and the cost of the establishment. Under section 14(e) of the Act it is provided that the Commissioner	 with the previous approval of the Government	 may prescribe the size and nature of the establishment necessary for supervision of a manufactory and the cost of the establishment and other incidental charges in connection with such supervision be realised from the licence. There can be no doubt that the supervisory staff is deployed in a bonded manufactory by the Government for its own protection to prevent the leakage of revenue	 but there is no denying the fact that a licensee undoubtedly receives a service in return. The cost of the establishment levied under section 14(e) of the Act is to be collected from the licensee in the manner provided by r. 16(4) of the Kerala Rectified Spirit Rules	 1972	 relevant part of which reads: (4) All the transactions in the spirit store shall be conducted only in the presence of an Excise officer not below the rank of an Excise Inspector. Such officer shall be assisted by at least two Excise Guards. The cost of establishment of such officer and the guards shall be payable by the licensee in advance in the first week of every month as per countersigned chalan to be obtained from such officer. The rate at which the cost of establishment is to be paid by the licensee shall be fixed by the Commissioner from time to time and intimated to the licensee in writing There is admittedly no provision made in the Central Rules for the recover of supervisor charges	 perhaps because as the Court 547 Observed in the Hyderabad Chemicals and Pharmaceutical 's case A (supra) it was felt that the duty on medicinal and toilet preparations containing alcohol would be sufficient to defray the cost of such supervision. But the absence of such a provision in the Central Rules	 as we have already indicated	 does not deprive the State from making a provision in that behalf. It is true that the supervisory charges are in the nature of a compulsory exaction from a licensee and the collections are not credited to a separate fund	 but are taken to the consolidated fund of the State and are not separately appropriated towards the expenditure incurred in rendering the service. However	 as observed in Government of Madras vs Zenith Lamp and Electricals Ltd. (1) followed in State of Rajasthan vs Sajjanlal Panjawat and Ors. (2)	 that by itself is not decisive	 by reason of article 266 of the Constitution. lt is equally true that normally a fee is uniform and no account is taken of the paying capacity of the recipient of the service	 but absence of uniformity will not make it a tax if co relationship is established (see Commissioner	 H.R.E. Madras vs Lakshmindra Thirtha Swamiar of Shirur Mutt and Government of Madras vs Zenith Lamp and chemicals Ltd. supra). The cost of supervisory charges can be sustained even if they are regarded as a fee for services rendered by the State or its instrumentalities. The last ground on which the appellants took their stand is even less tenable. It is urged that r. 13 of the Kerala Rectified Spirit Rules	 1972	 providing for the levy of excise duty on excess wastage of alcohol in the manufacture of medicinal and toilet preparations cannot be supported in terms of the charging provision contained in section 17 of the Act. Rule 13 reads as follows: 13(1) If the rectified spirit imported or purchased P under these rules is used for the manufacture of medicinal and toilet preparations which duty of excise is leviable under the (Central Act 16 of 1955)	 no duty shall be collected under the Abkari Act 1 of 1077 on so much quantity of alcohol	 as is present in the finished product. (2) The assessment of duty under the Medicinal and Toilet Preparations Excise Duties) Act	 1955 (Central Act 548 16 of 1955) being applicable only to the quantity of spirit existing in the finished product	 all spirit wasted during the course of manufacture of any medicinal or toilet preparation shall be assessable to duty under the Abkari Act	 1 of 1077. Provided that the Government may	 in consultation with the Drugs Controller and the Chemical Examiner	 by notification in the Gazette. permit such allowance as they think fit for such wastages occurring during the manufacture. No exception is taken to r. 13(1) which provides that no duty shall be collected under the Act on so much quantity of alcohol "as is present in the finished product". The objection is to the validity of r. 13(2) in so far as it enables the levy of duty on excess wastage of alcohol. We find it difficult to appreciate the contention that r. 13(2) cannot be supported in terms of the charging provision in section 17(f). Rule 13(2) is nothing but a corollary of r. 13(1). On a combined reading of section 17(f) and r. 8 read with the proviso thereof	 no duty is chargeable on alcohol actually used in the manufacture of medicinal and toilet preparations. The Government fully realised that some margin for wastage should be allowed and	 therefore inserted the proviso to r. 13(1). It provides that the Government may	 in consultation with the Drugs Controller and the Chemical Examiner	 by notification in the Gazette	 permit such allowance as they think fit for such wastages occurring during the manufacture. Beyond the permissible limit	 the State has the right to levy a duty on excess wastage of alcohol	 i.e. On alcohol not accounted for. In the connected Special Leave Petition	 the petitioner	 P. Krishna Wariyar	 Managing Trustee	 Arya Vaidyasala	 Kottakkal	 who is engaged in the business of manufacture for sale of ayurvedic medicinal preparations	 challenges the validity of sections 12A	 56A and 68A of the Act and rr. 5	 6 and 7 of the Kerala Spirituous Preparations Rules. Apart from the question of legislative competence	 two other grounds were raised: (1) the power to restrict the quantity of medicinal preparations to be manufactured	 by the Commissioner under section 12 cannot be exercised in relation to ayurvedic preparations as alcohol is self generated in the process of manufac 549 ture; and (2) the impugned provisions offend against article 301 of the Constitution. As regards the Rules	 it was generally said that they constitute unreasonable restrictions on the fundamental right guaranteed under article 19(1) (g) of the Constitution. None of these contentions can prevail. It is to be observed that restriction imposed by section 12A of the Act as to the quantity of medicinal preparations to be manufactured relates not only to such preparations to which alcohol is added	 but also to medicinal preparations in which alcohol is self generated. There can be no doubt that ayurvedic asavas and aristhas which are capable of being misused as alcoholic beverages can come within the purview of the definition of 'liquor ' contained in section 3(10) of the Act being of the Spirituous Preparations (Control) Rules	 1969 liquids containing alcohol The contention that Note to r. 3(1) is an unreasonable restriction on the freedom of trade guaranteed under article 19(1) (g) of the Constitution has no substance. It provides that unless otherwise declared by the Expert Committee	 asavas and aristas and other preparations containing alcohal are deemed to be spurious if their self generated alcohol content exceeds 12% by volume. It is a matter of common knowledge that such preparations are always likely to be misused as a substitute for alcoholic beverages and	 therefore	 the restriction imposed by section 12A is a reasonable restriction within the meaning of s 19(6) of the Constitution	 So far as the contention based on article 301 of the constitution is concerned	 it is urged that there is demand for the petitioner 's medicinal preparations not only in the State	 but throughout the country and to limit the quantity to be manufactured	 taking into account the requirements of the State alone	 is but an abridgment on the freedom of inter State trade and commerce. In our opinion	 section 12A has no such effect. As already stated	 the expression 'shall have regard to ' as interpreted by the Judicial Committee in the Ryots of Garobandho 's case (supra)	 means 'shall take into consideration '. All that the provision enjoins is that the Commissioner shall have regard to the total requirements for consumption and use in the State	 while fixing the quantity of the medicinal preparations to be manufactured. Furthermore	 the challenge with regard to article 301 does not arise as	 admittedly	 the Bill was reserved for the assent of the President	 and 550 is	 therefore	 protected by article 304(b) of the Constitution. It is not disputed that the provisions are regulatory in nature and they impose reasonable restrictions on the freedom of trade. For these reasons	 both the Appeal and the Special Leave Petition must fail and are dismissed with costs.

The appellants	 who were manufacturers of medicinal and toilet preparations containing alcohol challenged the constitutional validity in their writ petitions under article 226 of the Constitution of the provisions of sections 12A	 12B	 14(e) and (f )	 56A and section 68A of the Kerala Abkari Act	 1967 (Act No. X of 1967) and Rules 13 and 16 of the Kerala Rectified Spirit Rules	 1973 and rr. 5	 6 and 7 of the Kerala Spiritious Preparations Rules	 1969 on the ground that the State Legislature had no power to enact a law relating to medicinal and toilet preparations as the topic of the legislation was within the exclusive domain of Parliament under Entry 84	 List I of the Seventh Schedule of the Constitution and also on the ground that they were violative of article 19(1) (g) read with article 301 of the Constitution. The High Court dismissed the writ petition holding that there was no conflict between the impugned provisions and the Central law	 i.e.	 the or the Medicinal and Toilet Preparations (Excise Duties) Rules	 1956 framed thereunder as they dealt with different subjects. The High Court further held that the impugned provisions do not offend against article 19(1) (g) or article 301 of the Constitution. In the appeal and the special leave petition to this Court it was contended on behalf of the appellants (t) The State Legislature had no legislative competence 520 to enact the impugned provisions because the field was occupied by the provisions of The (The Central Act) and the Medicinal and Toilet Preparations (Excise Duties) Rules	 1956 (the Central Rules)	 and alternatively	 the impugned provisions are violative of the fundamental right guaranteed in article 19(1) (g) of the Constitution. (2) "Drugs and Pharmaceuticals" having been declared by Parliament under section 2 of the Industries Development and Regulation) Act	 1951 to be a scheduled industry	 being item 22 of the First Schedule thereof	 the power of the State Legislature to make a law in respect of medicinal and toilet preparations containing alcohol was taken away. (3) The provisions made in section 14(e) of the Act for the collection of supervisory charges was clearly invalid in as much as (a) they are in conflict with r. 45 of the Central Rules	 and (b) they could not be sustained as a fee as there was no quid pro quo. (4) Rule 13 of the Kerala Rectified Spirit Rules	 1972	 providing for the levy of excise duty as excess wastage of alcohol in the manufacture of medicinal and toilet preparations cannot be supported in terms of the charging provision contained in section 17 of the Act. (S) The power to restrict the quantity of ayurvedic asavas and arishtas in which alcohol is self generated in the process of manufacture having regard to the total requirement of such medicinal preparations for consumption or use in the State is an unreasonable restriction on The fundamental right to carry on trade or business guaranteed under An. 19(1) (g) and was also violative of article 301 as there was demand for such medicinal preparations not only in The Slate but throughout the country. Dismissing The Appeal and Special Leave Petition	 ^ HELD: (l) The Central and State Acts operate in two separate and distinct fields and are not in conflict with each other. While the main purpose of the impugned Act is to consolidate the law relating to manufacture	 sale and possession of intoxicating liquors and intoxicating drugs	 a subject which falls under Entry 8 of List II of the Seventh Schedule	 the main object of the Central Act is lo provide for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol falling under Entry 84 List I. [536 G F] 2(i). The enactment of the by Parliament under Entry 84	 List I of the Seventh Schedule of the Constitution	 or the framing of the Medicinal and Toilet Preparations (Excise Duties) Rules	 1956 by the Central Government in exercise of their rule making power under section 19 of the Act	 for the purpose of levying duties of excise on medicinal and toilet preparations containing alcohol etc.	 do not pre vent the State Legislature from making a law under Entry 8	 List II of the Seventh Schedule to the Constitution with respect to 'intoxicating liquors ' or a law under Entry 51 List II for levying excise duties on alcoholic requirements for human consumption. [528 C D] (ii) It is the charging section which gives the true index to the real character of a tax. The nature of the machinery by which the tax is to be assessed is not of assistance	 except in so far as it may throw light on the general character of the tax. The charging section in section 3 of the Central Act clearly shows that it does not seek to levy a duty of excise on alcohol liquor for human consumption falling within Entry 51 List II of the Seventh Schedule	 but to levy a duty of 521 excise on medicinal and toilet preparations containing alcohol etc. The topic of legislation under Entry 84	 List I of the Seventh Schedule is 'duties of excise on medicinal and toilet preparations containing alcohol etc. The Central Act must in pith and substance	 be attributed to Entry 84	 List. [532 C E] (iii) The Central and the State Legislations operate on two different and distinct fields. The Central Rules	 to some extent	 trench upon the field reserved to the State Legislature	 but that is merely incidental to the main purpose	 that is	 to levy duties of excise on medicinal and toilet preparation containing alcohol. Some of the impugned provisions may be almost similar to some of the provisions of the Central Rules	 but that does not imply that the State Legislature had no competence to enact the provisions. The State Legislation is confined to 'intoxicating liquor '	 that is	 to ensure proper utilisation of rectified spirit in the manufacture of medicinal and toilet preparations and	 therefore	 within the powers granted to the State Legislature under Entry 8	 List II. It further seeks to regulate the manufacture of bona fide medicinal preparations and prevent misuse of rectified spirit in the manufacture of spurious medicinal and toilet preparations containing alcohol capable of being used as ordinary alcoholic beverages. [532 F 533 A] (iv) The enumeration of 'intoxicating liqour ' in Entry 8	 List II	 confers exclusive power to the State to legislate in respect of medicinal and toilet preparations containing alcohol. [533 B] (v) In matters of seeming conflict or encroachment of jurisdictions	 what is more important is the true nature and character of the legislation. A necessary corollary of the doctrine of pith and substance is that once it is found that in pith and substance the impugned Act is a law on a permitted field	 any incidental encroachment on a forbidden field does not affect the competence of the legislature to enact the law. [534 B C] Prafulla Kumar Mukherjee and Ors. vs Bank of Commerce Ltd. Khulna A.I.R. 1947 PC 60 at 65 and State of Bombay vs F. N. Balsara ; at 694 5 referred to. (vi) There can be no doubt that the impugned Act is relatable to Entry 8	 List II of the Seventh Schedule. [536 A] (vii) When the frame work of the two enactments is examined	 it would be apparent that the Central and the State Legislature operate in two different and distinct fields. In the matter of making rules or detailed provisions to achieve the object and purpose of a legislation	 there may be some provisions seemingly overlapping or encroaching upon the forbidden field	 but that does not warrant the striking down of the impugned Act as ultra vires the State Legislature. [536 G 537 A] Hyderabad Chemical and Pharmaceutical Works Ltd. vs State of Andhra Pradesh and Ors. ; distinguished. (viii) No citizen has any fundamental right guaranteed under article 19(1) (g) of the Constitution to carry on trade in any noxious and dangerous goods like intoxicating drugs or intoxicating liquors	 The power to legislate with regard to intoxicating liqour carries with it the power to regulate the manufacture	 sale and possession of medicinal and toilet preparations containing alcohol	 not for the 522 purpose of interfering with the right of citizens in the matter of consumption or use for bonafide medicinal and toilet preparations	 but for preventing intoxicating liquors from being passed on under the guise of medicinal and toilet 'preparations. It was within the competence of the State Legislature to prevent the noxious use of such preparations i.e. their use as a substitute for alcoholic beverages. [537B D] In the instant case the provisions have been enacted to ensure that rectified spirit is not misused under the pretext of being used for medicinal and toilet preparations containing alcohol. Such regulation is a necessary concomitant of the police power of the State to regulate such trade or business which is inherently dangerous to public health. [537 E] (ix) All that the provisions of sections 12A and 12B ordain is that the Commissioner "shall have due regard to the total requirement of such medicinal preparations for consumption or use in the State". The Commissioner has	 therefore	 only to take into account the total requirements within the State as an element which should enter the assessment and no more. As a necessary corollary	 it follows that in fixing the quantity of medicinal and toilet preparations to which alcohol is added or in which it is self generated	 normally the Commissioner shall have regard to larger requirements of the manufacture	 if the manufactured product has a market outside the State. The restrictions imposed by section 12B as to the alcoholic content of medicinal and toilet preparations and the requirement that they shall not be manufactured except and in accordance with the terms and conditions of a licence granted by him	 are nothing but reasonable restrictions within the meaning of article 19(6). The impugned provisions	 therefore	 cannot be struck down as offending article 19(1) (g) of the Constitution. [538 E 539 B] 3. The State Act	 in pith and substance	 is not a legislation under Entry 24	 List 11 and	 therefore	 the question does not arise. [539 E 539 B] 4(i) (a) The provision contained in section 14(e) of the Act is clearly relatable to the State 's power to make a law under Entry read with Entry 51(a)	 List II of the Seventh Schedule. section 14(e) of the Act is valid in so far as it provides that the Commissioner may prescribe the size and nature of the establishment for such supervision and the cost of establishment and other incidental charges in connection with such supervision to be realised from the licensee. There is no warrant for the submission that the framing of such an incidental provision like r. 45(1) of the Central Rules takes away the State 's power to recover supervisory charges from the licensee. [540 B C] (b) 'Fees ' are the amounts paid for a privilege and are not an obligation. Fees are distinguished from taxes in that the chief purpose of a tax is to raise funds for the support of the Government or for a public purpose	 while a fee may be charged for the privilege or benefit conferred	 or service rendered or to meet the expenses connected therewith. Thus	 fees are nothing but payment for some special privilege granted or service rendered. Taxes and taxation are	 therefore	 distinguishable from various other contributions	 charges	 or burdens paid or imposed for particular purposes and under particular powers or functions of the Government. It is now increasingly realised that merely because the collections for the services rendered or grant of a privilege or licence	 are taken to the Consolidated Fund of the State and are not separately appropriated towards the expenditure for rendering the service is not by itself decisive. It is also increasingly realised that the element of quid pro quo stricto sensu is not 523 always a sine qua non of a fee. It is needless to stress that the element of quid A pro quo is not necessarily absent in every tax	 [541 G 542 D] Mahant Shri Jagannath Ramanuj Das vs The State of Orissa ; 	 Ratilal Panachand Gandhi vs The State of Bombay [1954] SCR 1055	 Constitutional Law of India by H.M. Seervai	 2nd Edn. Vol. 2	 p. 1252	 para 22.39 & Kewal Krishan Puri & Anr. vs State of Punjab & Ors. at 1230 referred to. (ii) In the case of a manufacturer of medicinal and toilet preparations containing alcohol in a bonded manufactory	 the imposition of the cost of establishment under section 14(e) of the Act calculated in accordance with the nature and extent of that establishment could not be said to be an imposition of a duty of excise	 but is a price for his franchise to carry on the business. [543 D E] (iii) No one has a fundamental right to the supply of rectified spirit which is an intoxicating liquor. It is upto the State to control and regulate its supply from a distillery or a spirit warehouse in the State under and in accordance with the terms and conditions of a licence or permit its import from outside by grant of a privilege and charge a fee for the same. A fee may be charged for the privilege or benefit conferred	 or service rendered	 or to meet the expenses connected therewith. A fee may be levied to meet the cost of supervision and may be something more. It is in consideration for the privilege	 licence or service. The State is undoubtedly entitled to levy excise duty on the rectified spirit issued from a distillery under section 17(f) of the Act read with r. 13 of the Kerala Rectified Spirit Rules	 1972 but it refrained from making any such levy by reason of rule 21 of the Central Rules and has	 therefore	 by proviso tc) rule 8 allowed a manufacturer of medicinal and toilet preparations to draw rectified spirit from a distillery without payment of duty. It is thus a privilege conferred on the licensee. To claim the privilege he must comply with the conditions prescribed If one of the conditions is the payment of cost of establishment under section 14(e) of the Act read with rule 16(4) of the Central Rules	 the manufacturer of such preparations must necessarily bear the burden s the licensee gets services in return in lieu of such payment. [543 G 544 C] 5. Rule 13(2) is nothing but a corollary of rule 13(1). On a combined reading of section 17(f) and rule 8 read with the proviso thereof	 no duty is chargeable on alcohol actually used in the manufacture of medicinal and toilet preparations. The Government realised that some margin for wastage should be allowed and	 therefore	 inserted the proviso to rule 13(2)	 which provides that the Government may	 in consultation with the Drugs Controller and the Chemical Examiner	 by notification in the Gazette	 permit allowance for wastage occurring during the manufacture. Beyond the permissible limit	 the State has the right to levy a duty on excess wastage of alcohol	 i.e. on alcohol not accounted for. [548 D F] 6. The restriction imposed by section 12A of the Act as to the quantity of medicinal preparations to be manufactured relate not only to preparations to which alcohol is added but also to medicinal preparations in which alcohol is self generated. There can be no doubt that ayurvedic asavas and aristhas which are capable of being misused as alcoholic beverage and come within the purview of the definition of 'liquor ' contained in section 3(10) of the Act being liquid containing alcohol. The contention that Note to rule 3(1) is an unreasonable restriction on the freedom of trade guaranteed under. Article 19(1) (g) of the Constitution has no substance. [549 B D] 524