J. M. SHELAT, J. ( 1 ) THESE two petitions challenge the validity of secs. 2 (10a) 59 and 595 of the Bombay Prohibition Act XXV of 1949 certain rules made thereunder the two notifications issued by the Government of Gujarat dated April 6 1962 and the order dated September 26 1962 refusing the wholesalers licence and the pass to import French Polish and Varnish from outside the State of Gujarat. As both the petitions raise identical questions it is expedient to dispose of both of them together by a common judgment ( 2 ) BOTH the petitioners carry on business as wholesale dealers in French Polish and Varnish and have been importing for their business these two articles from States such as the Uttar Pradesh Madhya Pradesh etc. The petitioners in Special Civil Application No. 996 of 1962 have been importing on an average about 1500 gallons of French Polish per month and have been selling the same both wholesale and retail the average monthly sale of French Polish coming to about 1500 gallons per month. ( 3 ) PRIOR to June 1 1962 there were no restrictions on the import export transport possession use consumption and sale of these articles in the State of Gujarat but as these articles are commodities liable to central excise duty there existed supervision on their manufacture under the relevant provisions of the Central Excise Act and the rules made thereunder. Whenever barrels of French Polish and Varnish are taken after their manufacture outside the gates of the manufactory the manufacturer has to pay central excise duty and a seal is affixed on every such barrel by the excise department and a label is further affixed on every such barrel bearing the inscription French Polish Poison and these labels are stamped by the excise department. Besides secs. 21 21 67 and 67 (1) (a) of the Bombay Prohibition Act contain provisions to prevent any alteration of denatured spirits or denatured spirituous preparations. On April 6 1962 the State of Gujarat purporting to exercise powers conferred upon it by sec. 143 of the Act made and published rules known as the Gujarat Denatured Spirituous Preparations Rules 1962 These rules were brought into force with effect from June 1 1962 They purport to impose certain restrictions on the manufacture import export transport possession use consumption and sale of French Polish and Varnish. 143 of the Act made and published rules known as the Gujarat Denatured Spirituous Preparations Rules 1962 These rules were brought into force with effect from June 1 1962 They purport to impose certain restrictions on the manufacture import export transport possession use consumption and sale of French Polish and Varnish. After these rules were brought into force the petitioners in application No. 996 of 1962 made an application required under the said rules for an import pass and a wholesalers licence to the Prohibition Excise Sub-Inspectors Surat dated August 17 1962 The third respondent by his letter dated September 26 1962 in reply to this application stated that the petitioners application was rejected as there was no necessity to give a licence to them. Correspondence thereafter ensued between the petitioners and the petitioners attorneys on the one hand and respondents 1 and 2 on the other and the third respondent by his letter dated November 8 1962 in continuation of his earlier letter dated September 26 1962 alleged that in Surat city and Surat district there were adequate licences to sell and manufacture French Polish and therefore it was not necessary to issue licences for sale of wholesale imported French Polish and that for that reason the petitioners aforesaid application was rejected. The petitioners application for an import pass was not expressly rejected by these letters but since his application for wholesalers licence was refused his application for an import pass was taken as having been rejected. The petitioner in Special Civil Application No. 415 of 1962 has also like the petitioners in the other application been carrying on business as wholesale dealer of French Polish at Baroda and for that purpose has been importing barrels of French Polish from States like Rajasthan and Uttar Pradesh. As a wholesaler he is also selling these barrels so imported by him in the same condition in which he receives them. Both these petitioners as aforesaid have challenged the constitutional validity of the aforesaid sections of the Act the rules made thereunder the said notifications dated April 6 1962 and the said order rejecting the aforesaid application. As a wholesaler he is also selling these barrels so imported by him in the same condition in which he receives them. Both these petitioners as aforesaid have challenged the constitutional validity of the aforesaid sections of the Act the rules made thereunder the said notifications dated April 6 1962 and the said order rejecting the aforesaid application. ( 4 ) THE Bombay Prohibition Act XXV of 1949 passed by the Legislature of the then Province of Bombay came into force on June 16 1949 and prohibition under the Act was enforced as from April 6 1950 Thereafter the Act came to be amended from time to time. On May 12 1954 the Act was amended by Bombay Act XXXVI of 1953. On April 30 1960 the Act was further amended by Bombay Act XXII of 1960 which introduced into the Act sec. 2 (10) (a) Chapter IV-B and certain other incidental amendments. On the establishment of the State of Gujarat on May 1 1960 the Act stood extended and applied to the new State of Gujarat. As aforesaid prior to June 1 1962 there were no restrictions as regards the use possession sale purchase import etc of French Polish and Varnish. But by a notification dated April 6 1962 the Government of Gujarat promulgated the aforesaid rules viz. the Denatured Spirituous Preparations Rules of 1962. These rules were brought in force on and from June 1 1962 On the same day the State of Gujarat also promulgated another notification under sec. 59 (c) whereby certain quantities of these articles were fixed and exempted from the application of these rules. By yet another notification dated April 6 1962 issued under sec. 139 (1) (d) of the Act all denatured spirituous preparations other than French Polish were exempted from the application of these rules. By a notification dated May 25 1962 issued under sec. By yet another notification dated April 6 1962 issued under sec. 139 (1) (d) of the Act all denatured spirituous preparations other than French Polish were exempted from the application of these rules. By a notification dated May 25 1962 issued under sec. 124 the Government of Gujarat ordered that any person who was in possession of French Polish and Varnish in the State of Gujarat should on or before June 1 1962 furnish to the Superintendent of Prohibition and Excise or the District Inspector of Prohibition and Excise of the District concerned information relating to the quantity of each of these articles in his possession on June 1 1962 ( 5 ) BEFORE we pass on to the matters in issue in these two petitions it is necessary to acquaint oneself with certain provisions of the Act. Section 2 defines denatured spirituous preparation as meaning any preparation made with denatured spirit or denatured alcohol and includes lacquers French Polish and Varnish prepared out of such spirit or alcohol. Section 2 (13) defines excisable article as meaning any alcoholic liquor for human consumption an intoxicating drug or hemp opium and other narcotic drugs and narcotics which the State Government may by notification in the Official Gazette declare to be an excisable article. Under sec. 2 (14) excise duty and countervailing duty mean such excise duty or countervailing duty as the case may be as is mentioned in entry 51 in list II in the Seventh Schedule to the Constitution. Sec. 2 (20) defines import as meaning bringing into the State otherwise than across a customs frontier. Section 2 (22) defines intoxicant as meaning any liquor intoxicating drug opium or any other substance which the State Government may by notification in the Official Gazette declare to be an intoxicant. Section 2 (24) defines liquor as including spirits denatured spirits wine beer toddy and all liquids consisting of or containing alcohol and any other intoxicating substance which the State Government may by notification in the Official Gazette declare to be liquor for the purposes of this Act. Chapter III of the Act contains certain prohibitions. Sections 21 and 21a prohibit alteration of denatured spirit and denatured spirituous preparations. Section 24a was inserted in the Act as a result of the decision by the Supreme Court in the case of the Province of Bombay v. Balsara 53 Bom. Chapter III of the Act contains certain prohibitions. Sections 21 and 21a prohibit alteration of denatured spirit and denatured spirituous preparations. Section 24a was inserted in the Act as a result of the decision by the Supreme Court in the case of the Province of Bombay v. Balsara 53 Bom. L. R. 982 and exempts certain toilet preparations and medicinal preparations from the application of the Act. As aforesaid Chapter IV-B containing the impugned sections 59c and 59d was inserted in the Act by section 45 of the Bombay Act XXII of 1960. The heading of that Chapter is Control and Regulation of Denatured Spirituous preparations to prevent their use as intoxicating liquor. Section 59c provides that no person shall have in his possession except under a permit granted by any officer empowered by the State Government in that behalf any quantity of denatured spirituous preparation in excess of such quantity as the State Government may by notification in the Official Gazette specify. It also provides that in specifying the quantity for possession of denatured spirituous preparation under sub-sec. (1) regard shall be had to the necessity for the free possession of such preparation for legitimate domestic and other purposes and different limits may be fixed for different local areas different classes of persons and different occasions. Section 59d provides that no person shall manufacture sell or bottle for sale any denatured spirituous preparation except under the authority and in accordance with the terms and conditions of a licence or import export or transport any denatured spirituous preparation in excess of the limit of possession specified under sub-sec. (1) of sec. 59c except under the authority and in accordance with the terms and conditions of a pass drink any denatured spirituous preparation. Sub-sec. (2) of that section provides that a licence or pass required under sub-sec. (1) shall be granted by any officer empowered in writing in that behalf by the State Government. ( 6 ) THE first contention raised by Mr. Sub-sec. (2) of that section provides that a licence or pass required under sub-sec. (1) shall be granted by any officer empowered in writing in that behalf by the State Government. ( 6 ) THE first contention raised by Mr. Sorabji on behalf of the petitioners is that the State Legislature had no legislative competence to legislate in respect of French Polish and Varnish as it has purported to do that entry 8 in list II of the Seventh Schedule to the Constitution enables a State Legislature to make laws as regards intoxicating liquors but not to legislate in respect of articles such as French Polish and Varnish as neither of them can be used as beverage since both contain ingredients like shellac and raisin which are poisonous and dangerous to human life and also because pyridine and caoutchouchtre are mixed with ethyl alcohol as denature agent which render the alcohol poisonous; and that entry 8 does not empower the State Legislature to legislate in regard to import of French Polish and Varnish. It is true that entry 8 in list II does not expressly mention import but it is well settled that entries in such lists are enumerative and not exhaustive and therefore legislation with regard to import of intoxicating liquor would it is conceded be included within the purview of the entry The last part therefore. of his contention would not survive. ( 7 ) THE question that arises for consideration in regard to this contention is whether French Polish and Varnish fall within the expression intoxicating liquor as used in entry 8 of list II. It was urged that French Polish is intended to be used and is used for polishing furniture and other wooden objects and varnish is used for furniture and also for the protection of wood and for the manufacture of paints. The components of French Polish and Varnish are denatured spirit shallac and raisin. Denatured spirit can be made by adding caoutchouchtre and pyridine both of which are poisonous substances in themselves. Shellac and raisin which are the necessary components of French Polish are also poisonous and dangerous to human life. That being so from the very nature of things French Polish and Varnish are articles or preparations which are intrinsically unfit and are not meant for human consumption. Shellac and raisin which are the necessary components of French Polish are also poisonous and dangerous to human life. That being so from the very nature of things French Polish and Varnish are articles or preparations which are intrinsically unfit and are not meant for human consumption. Besides they are legitimate articles of trade and commerce and are used for industrial purposes affording a source of livelihood inter alia to carpenters artisans and furniture makers in addition to dealers and manufacturers of these articles. The contention was that these two articles therefore cannot be regarded as included in the expression intoxicating liquor in entry 8. Mr. Sorabji also relied upon the meaning given to the words alcohol and denatured alcohol in Websters Third New International Dictionary and in a passage in Encyclopedia Britannica Vol. I p. 539. Since alcohol has not been defined in the Act it would be necessary to resort to its dictionary meaning. According to Webster alcohol meaning thereby ethyl alcohol is a colourless volatile inflammable liquid C*h*oh formed by vinous fermentation and contained in wine beer whisky and the other fermented and distilled liquors of which it is the intoxicating principle. According to the passage in Encyclopedia Britannica Vol. I page 539 alcohol is the name in scientific terminology to any member of a class of organic compounds of Arabic origin the original words being al-Kohl. For many centuries the word (Kohl) was used to designate an impalpable powder used in the east for painting eyebrows. Its modern meaning is however of a comparatively late date. But in contradistinction to the broad scientific use of the word the term alcohol is popularly used to designate one particular member of the scientific group (ethyl alcohol or ethenol) having the formula C*h*0h. as an article of widespread consumption and use and has various other names e. g. spirits of wine eau-de-vie etc. Denatured alcohol on the other hand according to its meaning in Websters Dictionary is ethyl alcohol made unfit for drinking but suitable for industrial and domestic purposes and to which are added malodorous and obnoxious substances to prevent its use completely for beverage purposes. Caoutchoucine which is added to ethyl alcohol to make it denatured and unfit for human consumption is a thin volatile oily liquid obtained from caoutchoc i. e. India rubber or gum by dry distillation. Mr. Caoutchoucine which is added to ethyl alcohol to make it denatured and unfit for human consumption is a thin volatile oily liquid obtained from caoutchoc i. e. India rubber or gum by dry distillation. Mr. Sorabji argued from these meanings that ethyl alcohol and denatured alcohol were fundamentally distinct articles and he relied upon certain provisions in the Act to show that even the legislature had recognised the basic distinction between the two articles. He pointed out that the definition of denatured alcohol in sec. 2 (10a) itself makes a distinction between denatured spirit and denatured alcohol as against spirit and ethyl alcohol. In order to make good his argument for such a distinction he also relied upon secs. 120 128 139 and section 143 (b) (c) (h1) (k) and (p ). Prom this distinction he further argued that secs. 12 and 13 of the Act which prohibit the manufacture and bottling for sale of liquor etc. deal with liquor and not with denatured alcohol and it was for that reason said he that the State Legislature had to make separate provisions in the Act by way of secs. 59c and 59d. ( 8 ) BEFORE we proceed to deal with this contention we think it necessary to bear in mind certain rules of construction which are now well settled while dealing with entries in the lists in the Seventh Schedule to the Constitution. The first of such rules is that such entries are not to be regarded as exhaustive but only enumerative. The second rule is that such entries should be liberally construed so as to include in them all subsidiary and incidental purposes Taken in the light of these two principles the expression intoxicating liquor in entry No. 8 must be held to include both ethyl alcohol and denatured alcohol for the latter is not basically different from the former as contended by Mr. Sorabji inasmuch as denatured alcohol is nothing else but ethyl alcohol to which is added a very small percentage of other ingredients to make it impotable but which ingredients are removable by chemical process or made innocuous when diluted with other substances so as to make it a substitute for intoxicating liquor. The expression intoxicating liquors in entry 8 besides has a wide connotation and must prima facie include all articles made from ethyl alcohol which are capable of intoxication. The expression intoxicating liquors in entry 8 besides has a wide connotation and must prima facie include all articles made from ethyl alcohol which are capable of intoxication. In point of fact there is no indication in the entry of any distinction between those that are potable and those that are not. Even if an alcoholic liquid is rendered unfit for human consumption by adding to the ethyl alcohol in it some other ingredient or ingredients it cannot be said that it looses its primal character of alcohol and therefore such an article must fall within the category of intoxicating liquor. It may be that certain provisions of the Act pointed out by Mr. Sorabji seek to make a distinction between ethyl alcohol and denatured alcohol but the definitions given in the Act and the distinction found in those provisions cannot obviously govern the connotation of the expression intoxicating liquors in entry 8. In interpreting any particular entry it is a well settled rule that widest import must be given to the language used therein. The words that is to say in entry No. 8 themselves show that the contents of the entry are merely illustrative and therefore the words following them are not words of limitation. Consequently the State Legislature would have ample authority to legislate in respect of all aspects of intoxicating liquors. ( 9 ) BUT Mr. Sorabji relied upon the decision of the Bombay High Court in Balsara v. The State of Bombay 52 Bom. L. R. 799 where that High Court held that item No. 31 in the Government of India Act 1935 which corresponds to entry No. 8 in the Constitution excluded from the class of alcoholic drinks non-intoxicating drinks and that medicinal and toilet preparations containing alcohol found in item 40 (c) were neither liquor nor intoxicating drinks and therefore they were excluded from the scope of item No. 31. The High Court also held that although the legislature might while legislating upon item No. 31 prevent the consumption of non-intoxicating beverages and also prevent the use as drinks of alcoholic liquors which were not normally consumed as drinks they could not prevent the legitimate use of alcoholic preparations which were not beverages nor the use of medicinal and toilet preparations containing alcohol. The Prohibition Act therefore had gone beyond the scope of the directive principles of the State Policy laid down in Article 47 of the Constitution inasmuch as it did not appear to have made adequate provision for allowing the use and consumption of alcoholic articles meant for medicinal purposes. To the extent to which the Prohibition Act prevented possession use and consumption of non-beverages and medicines and toilet preparations containing alcohol for legitimate purposes the provisions were held to be void and offending against Article 19 (1) (f) of the Constitution even if they were within the legislative competence of the provincial legislature. The High Court in that decision also rejected the contention on behalf of the State that it would be necessary to have legislation regarding even articles containing alcohol though they were not and could not be used as beverages in order to make the-scheme of prohibition watertight. Relying upon the dictum of Viscount Simon in Atlantic Smoke Shops Ltd. v. Conlon (1944) 7 F. L. J. 1 that the validity of sec. 5 (of the New Brunswick Tobacco Tax Act) must be judged according to its terms and if its enactment by the provincial legislature be beyond the powers of that legislature it cannot be justified on the ground that it is enacted to make the whole scheme water-tight the High Court held that although the State legislature might by legislation under item No. 31 prevent consumption of non-intoxicating beverages and also prevent the use as drinks of alcoholic liquors which are not normally consumed as drinks they could not prevent the legitimate use of alcoholic preparations which were not beverages nor the use of medicinal and toilet preparations containing alcohol. When the case went up to the Supreme Court as reported in the State of Bombay v. Balsara 53 Bom. When the case went up to the Supreme Court as reported in the State of Bombay v. Balsara 53 Bom. L. R. 982 the Supreme Court after examining various excise statutes came to the conclusion that the rather narrow meaning given by the High Court to the expression intoxicating liquors in item No. 31 was not correct and in holding so the learned Judges expressed themselves at page 992 of the report as follows:- ( 10 ) 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 liquors which are generally used for beverage purposes and produce intoxication but also all liquors 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. ( 11 ) WHILE giving the broader meaning to the expression intoxicating liquor the Supreme Court observed that remembering that the object of the Prohibition Act was not merely to levy excise duty but also to prohibit the use consumption possession and sale of intoxicating liquor the legislature had the power to make legislation upon the subjects included in the Act not only under item 31 of list II but also under item 14 which refers to public health. The Supreme Court also took into account the directory principle contained in Article 47 of the Constitution which provides that the State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and in particular the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health. Though Article 47 had no direct bearing to the Act which was passed in 1949 the Supreme Court referred to it as that Article supported to some extent the conclusion that the idea of prohibition was connected with public health and to enforce prohibition effectively the wider definition of the word liquor would have to be adopted so as to include all alcoholic liquors which may be used as substitutes for intoxicating drinks to the detriment of health. It is thus clear that the expression intoxicating liquors in entry No. 8 not only means alcoholic liquors which are generally used for beverage purposes but also includes all liquors containing alcohol which are capable of intoxication that is even alcoholic liquids which may be used as substitutes for intoxicating drinks to the detriment of health. That being the position the State Legislature while dealing with denatured alcohol and denatured spirituous preparations which admittedly contain alcohol and which may be used as substitutes for intoxicating drinks to the detriment of health would be within its legislative competence and such legislation cannot be held to be invalid or void on the ground of its being beyond the scope of entry 8 in list II. The Supreme Court having given a wider connotation to the expression intoxicating liquors the dictionary meanings relied upon by Mr. Sorabji would be of little avail. Alcoholic liquids must therefore include all preparations made from alcohol whether denatured or not. ( 12 ) THERE is yet another consideration which one must bear in mind while construing an entry in a list contained in a federal constitution. As we said in Krishna Rangnath Mudholkar and another v. The Gujarat University and others (1962) 3 G. L. R. 204 at page 233 it is a well settled principle that while considering the scope of an entry in a legislative list the widest possible amplitude must be given to the words used therein and each general word must be interpreted to include ancillary or subsidiary matters which can be said to be comprehended in it. ( See also State of Rajasthan v. Chavda A. I. R. 1959 S. C. 544 ). A recent decision of the High Court of Madras in Messrs. Indian Aluminum Company Ltd. v. State of Madras A. I. R. 1953 Mad. ( See also State of Rajasthan v. Chavda A. I. R. 1959 S. C. 544 ). A recent decision of the High Court of Madras in Messrs. Indian Aluminum Company Ltd. v. State of Madras A. I. R. 1953 Mad. 116 is an apt illustration of the exercise of such incidental power as it was a case similar to the instant case where an amendment to the main Act namely the Madras General Sales Tax Act IX of 1939 was challenged on the ground of legislative incompetence. The amendment introduced sec. 8 (b) (2) of the Madras General Sales Tax Act 1939 by Madras Act I of 1957 conferring power on the State Government to compel payment of amounts illegally collected by persons taking advantage of the machinery of the Act was challenged as beyond the purview of entry 54 in list II of the Seventh Schedule to the Constitution. Negativing the contention the High Court held that the words describing the legislative powers must also be effectively put in operation by legislation for an impotent piece of legislation while it might adorn the statute book is as good as not having been enacted at all and therefore the doctrine of incidental and ancillary power has necessarily to be invoked to prevent a statute becoming ineffective. The High Court also held that in order to ensure the proper working of a law relating to tax on sale and purchase and to prevent the law from being abused it can introduce measures interdicting such abuses or enact provisions to prevent any mischief from being done under the colour of the Act. The presumption of such power to a legislature can be regarded as incidental or ancillary power where it is invoked to effectuate the undoubted proper power to enact a tax-law. The competency of the power of the State Legislature should not be judged merely from the result of the impugned enactment only but one must examine the pith and substance of the enactment and when so examined the impugned amendment was not to levy an ad hoc tax on transactions which are not sales or purchases but to introduce in the measure a forfeiture or confiscation of the unlawful gains made by persons who found themselves in the position to take undue advantage of the Act. ( 13 ) THUS the insertion of Chapter IV-B and other incidental amendments in the main Act cannot but be regarded as ancillary to the main Act for the purpose of effectuating the policy of that Act and to prevent the abuse of its provisions. Chapter IV-B forms part of the main statute and is not either distinct or alien to it. It is incidental to the legislative power contained in entry 8 and therefore that entry must be held to include the power to enact such legislation as is necessary for the purpose of effectuating the object or the policy of the main legislation. The purpose of Chapter IV-B as indicated in its heading is to effectuate the policy of prohibition and in effectuating such a policy there would be the power to prevent abuse such as the illicit use of denatured spirituous preparations as substitutes for intoxicating liquor harmful to public health. Whenever a State Legislature discovers any evil or impediment to the policy laid down by it in an enactment such a legislature must necessarily have power to remove such evil or impediment in order to effectuate its policy. Dealing with the Bombay City Civil Court Act XL of 1948 and its constitutional validity in the State of Bombay v. Narotamdas Jethabhai (1951) 2 S. C. R. 51 at page 73 the Supreme Court quoted with approval the doctrine of the true aspect of the Act as stated in Lefroys Treatise on Canadian Constitutional Law viz. that a particular Act regarded from one aspect be intra vires of the provincial legislature and regarded from another aspect might also be intra vires of the Dominion Parliament. In other words what is properly to be called a subject matter of an Act might depend upon what is the true aspect of the Act. By aspect here must be understood the aspect or point of view of the legislator in legislating the object purpose and scope of the legislation. The word is used subjectively of the legislator rather than objectively of the matter legislated upon. By aspect here must be understood the aspect or point of view of the legislator in legislating the object purpose and scope of the legislation. The word is used subjectively of the legislator rather than objectively of the matter legislated upon. Applying that test the Supreme Court observed that there would be little doubt that the act impugned before them was in its pith and substance attributable to list II as the legislature of Bombay was certainly not conferring on the new Court which was constituted under the Act jurisdiction with respect to any of the matters in list I but was investing the new Court with general jurisdiction to try suits of civil nature within certain pecuniary and territorial limits. ( 14 ) WHILE considering Chapter IV-B we have therefore to keep in mind three principles namely (1) that the entire Act has to be looked at as an organic whole in order to decide whether the impugned amendment falls under the entry or not; (2) whether the enactment impugned is in exercise of the ancillary or subsidiary power and (3) whether in the true aspect of the legislation as viewed by the legislature the true nature of it falls within the scope of the entry. This proposition has been lucidly laid down by the Supreme Court in A. S. Krishna v. State of Madras A. I. R. 1957 S. C. 297 at page 303. The Supreme Court there stated that when a law is impugned on the ground that it is ultra vires the powers of the legislature to enact it what has to be ascertained is the true character of the legislation. To do that one must have regard to the enactment as a whole to its objects and to the scope and effect of its provisions. If on such examination it is found that the legislation is in substance one on a matter assigned to the legislature then it must be held to be valid in its entirety even though it might incidentally trench on matters which are beyond its competence. If on such examination it is found that the legislation is in substance one on a matter assigned to the legislature then it must be held to be valid in its entirety even though it might incidentally trench on matters which are beyond its competence. It would be an erroneous approach to the question to view such a statute not as an organic whole but as a mere collection of sections then disintegrate it into parts examine under what heads of legislation those parts would severely fall and by that process determine what portions thereof are intra vires and what are not. Dealing with the presumptions raised by sec. 4 (2) of the Madras Prohibition Act. the Supreme Court held that such presumptions were to be raised only in the trial of offences under sec. 4 (1) of the Act and were therefore purely ancillary to the exercise of the legislative powers in respect of entry 31 in list II. Similarly the provisions relating to search seizure and arrest provided in secs. 28 and 32 of the Act they held were only with reference to offences committed or suspected to have been committed under the Act and therefore no presumption under sec. 4 (2) nor the provision contained in secs. 29 to 32 had any operation apart from the offences created by the Act and must therefore be held to be wholly ancillary to the legislation under entry 31 in list II. On this reasoning the Supreme Court held that the Madras Prohibition Act was in its entirety a law within the exclusive competence of the provincial legislature and the question of repugnancy under sec. 107 (1) did not arise. The true way of deciding whether an impugned legislation is ultra vires or not is that the statute must be looked as a whole and its true scope effect and character must first be discovered so as to ascertain whether the legislation is ancillary to the exercise of the legislative power. Prom the above discussion it appears to us to be clear that denatured spirituous preparations including French Polish and Varnish fall within the expression intoxicating liquors in view of the liberal meaning given to that expression in Balsaras case by the Supreme Court. Prom the above discussion it appears to us to be clear that denatured spirituous preparations including French Polish and Varnish fall within the expression intoxicating liquors in view of the liberal meaning given to that expression in Balsaras case by the Supreme Court. Even if it were not so Chapter IV-H and the other allied sections considering them as part of one organic legislation were inserted in the main Act in exercise of the ancillary power of the legislature under entry 8 in view of the experience gained by the State after working the Act for about ten years and with a view to effectuate the policy of prohibition and that in our view is the true aspect of the impugned enactment. The first contention raised by Mr. Sorabji on the legislative competence of the State Legislature must therefore fail. ( 15 ) THE second contention raised by Mr. Sorabji was that Chapter IV B the definition clause in section 2 (10a) and the rules framed by the State Government especially rules 22 32 36 and 37 ran counter to and were violative of the freedom of trade commerce and intercourse guaranteed by Article 301 and were not reasonable restrictions within the meaning of Article 304 (b) and its proviso and that to the extent that they were so they were invalid. It was urged that these articles were contained in Part XIII of the Constitution which deals with trade commerce and intercourse within the territory of India that Article 301 ensured freedom of trade commerce and intercourse throughout the country and that any restriction to the smooth flow of such trade commerce and intercourse which did not fall within the purview of Article 304 (b) would be invalid. It was further urged that though under Article 304 (b) and its proviso a State can legislate and impose reasonable restrictions on the freedom of trade commerce or intercourse with or within that State as are required in the public interest no Bill or amendment laying down such restrictions can be introduced or moved in the State legislature without the Presidents previous sanction. It was urged that though power had been given to the States of impose restrictions on the freedom of trade etc. It was urged that though power had been given to the States of impose restrictions on the freedom of trade etc. that power had been qualified by three conditions (1) that the restrictions are reasonable (2) that they are required in the public interest and (3) that the Bill or the amendment has obtained the Presidents sanction. ( 16 ) IT was pointed out that these conditions were inserted by the Constitution makers ill their anxiety to maintain the flow of trade and commerce throughout the country and to see that the States did not create artificial barriers against trade and commerce between one State and another or between one State and the rest. In support of his argument Mr. Sorabji relied upon the State of Bombay v. R. M. D. Chamarbaugwala. 57 Bom. L. R. 288 where the petitioner claimed a writ of mandamus ordering the State of Bombay to forbear from enforcing the Bombay Lotteries and Prize Competition Control and Tax Act 1948 as amended by Amending Act XXX of 1952. The Act as originally enacted did not extend or apply to prize competitions contained in newspapers printed or published outside the province of Bombay; but by the Amending Act the scope of application of the Act was extended to prize competitions contained in newspapers printed and published even outside the State of Bombay. The petitioners challenged the Act in so far as it purported to extend and apply to prize competitions contained in newspapers and other publications printed and published outside the State of Bombay and also challenged the provisions of that Act providing for taxation restriction and control of prize competitions conducted outside the State of Bombay. The High Court there held that the legislative competence of Parliament and the State legislatures must be weighed subject to Article 301 of the Constitution of India and that neither the Parliament nor the State legislature could legislate so as to interfere with the freedom of trade commerce and intercourse throughout India. Article 301 is not a restriction on any one or the other entry in the Seventh Schedule. It is perfectly general and every legislation under whichever topic it may fall must be subjected to the overriding provisions of Article 301 which makes trade commerce and intercourse throughout the territory of India free. The article is an overriding article both with regard to restriction and taxation. Mr. It is perfectly general and every legislation under whichever topic it may fall must be subjected to the overriding provisions of Article 301 which makes trade commerce and intercourse throughout the territory of India free. The article is an overriding article both with regard to restriction and taxation. Mr. Sorabji not only relied upon this decision for the observations aforesaid but also for the view expressed by the High Court there that even if the restrictions in such an enactment were held to be reasonable and in public interest such restrictions must not only have a legislative fiat but must also have a Presidential fiat. The restrictions complained of in that case were in respect of certain rules which were brought into force on December 8 1952 that is to say after the President had given his assent to the Amending Act XXX of 1952 and therefore it was held that the President had neither given his previous assent nor had he given his subsequent assent to the rules and in particular to the form introduced by the Act which contained the restrictions. Considering these rules as also the aforesaid form the High Court held that even the legislature never gave its fiat to those restrictions as those restrictions did not form part of the Act. But the High Court was cautious to observe that it could not be suggested that in every case the legislature must frame rules and that it cannot delegate the rule-making power to Government. It also observed that if the legislature had indicated its policy and given a mandate to the Government and pursuant to that mandate the Government had framed rules then it could have been said that the President had already applied his mind to the policy underlying the rules. The High Court took exception to sec. 31 (1) of the Act which merely provided that the State Government might make rules for the purpose of carrying out the provisions of the Act and sub-sec. (2) of sec. 31 which dealt with the subjects to be dealt with under the rules merely provided for the form of licence and fees on payment of which and the conditions subject to which a licence could be granted under sec. 9. (2) of sec. 31 which dealt with the subjects to be dealt with under the rules merely provided for the form of licence and fees on payment of which and the conditions subject to which a licence could be granted under sec. 9. The High Court on a consideration of this section held that there was no indication anywhere in the Act as to what conditions there should be subject to which a licence should be granted and therefore held that those restrictions although they fell within Article 304 (b) and were reasonable and in public interest suffered from the infirmity of not having been assented to by the President. Mr. Sorabji also relied upon the Supreme Courts decision in Atiabari Tea Co. Ltd. v. State of Assam A. I. R. 1961 S. C. 232 where the Supreme Court bad to deal with the Assam Taxation (On Goods carried by Roads and Inland Waterways) Act XIII of 1954. The Supreme Court held on an examination of the provisions of the Act that the purpose or object of 6 Act passed under entry 56 in list II was to collect taxes on goods solely on the ground that they were carried by road or by waterways within the area of the State and that that being so the Act had placed a direct restriction on the freedom of trade and since in doing so it had not complied with the provisions of Article 304 (b) nor had it been validated by the assent of the President under Article 250 (c) the Act was void. Dealing with the concept of freedom of trade contained in Article 301 the Supreme Court observed that the Article was not a mere declaration of a platitude or an expression of a pious hope of a declaratory character nor a mere statement of the directive principles of the State policy. It embodied and enshrined the principle of paramount importance that the economic unity of the country should provide the means and sustaining force for the stability and progress of the political and cultural unity of the country. The freedom of trade guaranteed by Article 301 applied not only to inter-State trade commerce and intercourse but also to intra-State trade commerce and intercourse and the freedom guaranteed by Article 301 was freedom free of restrictions except those which were provided by the other Articles in Part XIII. The freedom of trade guaranteed by Article 301 applied not only to inter-State trade commerce and intercourse but also to intra-State trade commerce and intercourse and the freedom guaranteed by Article 301 was freedom free of restrictions except those which were provided by the other Articles in Part XIII. The Supreme Court also observed that on a careful examination of Part XIII as a whole as also the principle of economic unity which it was intended to safeguard by making the said provisions the conclusion was inevitable that the concept of freedom provided for by Article 301 was larger than the freedom contemplated by the corresponding sec. 297 of the Government of India Act 1935 and that whatever else it might or might not include it included the movement of trade which was of the very essence of all trade and was its integral part. If the transport and movement of goods were taxed solely on the basis that the goods were carried or transported it directly affected the freedom of trade as contemplated by Article 301. On the basis of these observations Mr. Sorabji contended (1) that the impugned sections and the rules violated the provisions of Article 301 and (2) that oven if these restrictions were to be regarded as reasonable restrictions within the meaning of Article 304 (b) the impugned rules never received the assent of the President and for that reason alone they would be invalid. ( 17 ) IN examining the contention that an impugned legislation is in violation of Article 301 the first question that must arise for consideration would be what exactly is the direct result of the legislation in question and whether it hampers the freedom of trade commerce or intercourse or whether it is merely regulatory? In the case of Atiabari Tea Co. Ltd. (supra) relied on by Mr. Sorabji the Supreme Court answered this question by observing that it would be reasonable and proper to hold that restrictions freedom from which is guaranteed by Article 301 should be such restrictions as directly and immediately restrict or impede the free flow or movement of trade. As the impugned law imposed certain taxes the Supreme Court said that taxes may and do amount to restrictions but it is only such taxes as directly and immediately restrict the trade that would fall within the purview of Article 301. As the impugned law imposed certain taxes the Supreme Court said that taxes may and do amount to restrictions but it is only such taxes as directly and immediately restrict the trade that would fall within the purview of Article 301. Negativing the argument that all taxes should be governed by Article 301 whether or not their impact on trade or commerce was immediate direct or remote they observed that such an argument would be an extreme approach which cannot be upheld. In Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan A. I. R. 1962 S. C 1406 the Supreme Court was again called upon to consider the constitutional validity of the Rajasthan Motor Vehicles Taxation Act Xl of 1951 in the light of Article 301. The Supreme Court there held that the taxes imposed under that Act were compensatory taxes which in their impact did not hinder the freedom of trade commerce or intercourse assured by Article 301. Regulatory measures or measures imposing compensatory taxes for the use of trading facilities did not come within the purview of restrictions contemplated by Article 301 and therefore such measures need not comply with the requirements of the proviso to Article 304 (b ). They also observed that if a statute fixed a charge for a convenience or service provided by the State or an agency of the State and imposes it upon those who choose to avail themselves of the service or convenience the freedom of trade and commerce may well be considered unimpaired. In such a case the imposition assumes the character of remuneration or consideration or charges in respect of an advantage sought and received. The concept of freedom of trade commerce and intercourse postulated by Article 301 must be understood in the context of an orderly society and as part of the Constitution which envisages a distribution of powers between the States and the Union and if so understood the concept must recognise the need and the legitimacy of some degree of regulatory control whether by the Union or the States. This is irrespective of the restrictions imposed by the other Articles in Part XIII of the Constitution. They further observed that it would be the reality or the substance of the matter that has to be determined. This is irrespective of the restrictions imposed by the other Articles in Part XIII of the Constitution. They further observed that it would be the reality or the substance of the matter that has to be determined. That which in reality facilitates trade and commerce is not a restriction and that which in reality hampers or burdens trade and commerce is a restriction. It is not possible a priori to draw a dividing line between that which would really be a charge for a facility provided and that which would really be a deterrent to a trade; but the distinction if it has to be drawn is real and clear. For the tax to become a prohibited tax it has to be a direct tax the effect of which is to hinder the movement part of trade. But so long as a tax remains compensatory or regulatory it cannot operate as a hindrance. This principle was succinctly brought out by Lord Porter in Commonwealth of Australia and others v. Bank of New South Wales and others ( 1950 ) A. C. 235 where the constitutional validity of the Banking Act ( Commonwealth ) No. 57 of 1947 was challenged as being violative of sec. 92 of the Commonwealth of Australia Constitution 1900 At page 310 of the report the Privy Council adopted the dictum of Griffith C. J. in Dancan v. State of Queensland 22 C. L. R. 556 at page 573 namely; But the word `free does not mean extra legem any more than freedom means anarchy. We boast of being an absolutely free people but that does not mean that we are not subject to law and observed that through all subsequent cases in which sec. 92 had been discussed the problem had been to define the qualification of that which in the Constitution was left unqualified. Their Lordships then observed that though there was no golden thread in the labyrinth of those cases two general propositions might be accepted:- (I) that regulation of trade commerce and intercourse among the States was compatible with its absolute freedom and (2) that sec. 92 was violated only when a legislative or executive act operated to restrict such trade commerce and intercourse directly and immediately as distinct from creating some indirect or consequential impediment which might fairly be regarded as remote. 92 was violated only when a legislative or executive act operated to restrict such trade commerce and intercourse directly and immediately as distinct from creating some indirect or consequential impediment which might fairly be regarded as remote. The distinction between a regulatory legislation a against a prohibitory one was also equally succinctly brought out by the Privy Council by adopting the dictum from yet another case viz. Australian National Airways Proprietary Ltd. v. The Commonwealth 71 C. L. R. 29 at page 61 were the learned Judge taking the cue from an earlier decision of his had stated as follows:-ONE proposition which I regard as established is that simple legislative prohibition (Federal or State) as distinct from regulation of inter-State trade and commerce is invalid. Further a law which is directed against inter-State trade and commerce is invalid. Such a law does not regulate such trade it merely prevents it. But a law prescribing rules as to the manner in which trade (including transport) is to be conducted is not a mere prohibition and may be valid in its application to inter-State trade notwithstanding section 92. ( 18 ) IF for instance the impugned Act was directed against all competition with the inter-State service of the Commission and the exclusion of other services was based simply upon the fact that the competing services were themselves inter-State services the exclusion of competition with the Commission was not a system of regulation but was violation of sec. 92 of the Australian Constitution. The Privy Council however qualified such a broad proposition by laying down that it would not be as if in no circumstance could the exclusion of competition so as to create the monopoly either in a State or Commonwealth agency or in some other body be justified. Every case must be judged on its own facts and in its own setting of time and circumstance and it might be that in regard to some economic activities and at some stage of social development it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation and that inter-State trade commerce and intercourse thus prohibited and thus monopolized remained absolutely free. The result of these decisions is that legislation Federal or State infringes the freedom of trade commerce or intercourse where it operates directly but not merely incidentally to burden hamper or prevent persons or corporations engaged in the trade or commerce across the State boundaries and that trade and commerce can be regulated unless such regulation is pressed to the point of impairing true freedom of inter-State trade and commerce. A regulatory measure would not collide with the freedom of trade merely because inter-State trade or commerce might be affected consequentially. To put it in another way freedom as at State boundaries had no narrower meaning than that there should not be imposed prohibitions restrictions and burdens preventing impeding or prejudicing the Passing from State to State of trade commerce and intercourse ( cf. W. A. Wynes; Legislative Executive and Judicial Powers in Australia Second Edition 373 to 374 ). ( 19 ) BEARING in mind these principles the question that we have to ask ourselves is what is the direct and immediate effect of Chapter IV-B and its insertion in the main Act ? In considering the direct and immediate effect of that Chapter it is permissible to take into account the heading which the Legislature gave to that Chapter and that heading is Control and Regulation of Denatured Spirituous Preparations to prevent their use as Intoxicating Liquor. It is also not without significance that Chapter IV-B has been inserted in the main Act along with Chapter IV and Chapter IV-A both of which deal respectively with control regulation and exemptions and control and regulation of articles mentioned in sec. 24a to prevent their use as intoxicating liquor. Chapter IV was originally enacted along with the main Act and Chapter IV-A was enacted in 1952 by Bombay Act No. XXVI of 1952. 24a to prevent their use as intoxicating liquor. Chapter IV was originally enacted along with the main Act and Chapter IV-A was enacted in 1952 by Bombay Act No. XXVI of 1952. It was only when the Legislature found that the policy of prohibition adopted by it in pursuance of Article 47 of the Constitution was not being and could not be in the circumstances then existing effectually enforced and there were loopholes in the main Act making it possible for denatured spirituous preparations and in particular French Polish and Varnish being abused as substitutes for intoxicating liquor that it thought necessary to enact Chapter IV-B and to place it in the Act along with Chapters IV and IV-A. The history of legislation in regard to this very Act thus indicates that Chapter IV-B was introduced as a regulatory rather than as a prohibitory enactment. ( 20 ) SECTION 59c which is one of the two impugned sections provides that no person shall have in his possession except under a permit granted by any officer empowered by the State Government in that behalf any quantity of denatured spirituous preparation in excess of such quantity as the State Government may by notification in the Official Gazette specify. Sub-sec. (2) of that section provides that in specifying quantity of possession of denatured spirituous preparations under sub-sec. (1) regard shall be had to the necessity for the free possession of such preparations for legitimate domestic and other purposes and different limits may be fixed for different local areas different classes of persons and different occasions. Similarly section 59d provides that no person shall manufacture sell or bottle for sale any denatured spirituous preparation except under the authority and in accordance with the terms and conditions of a licence and shall not import export or transport any denatured spirituous preparation in excess of the limit of possession specified under sub-sec. (1) except under the authority and in accordance with the terms and conditions of a pass. Prima facie it would appear from a reading of these provisions that their effect would not be directly or immediately to impede the trade in these articles but to regulate their trade with a view to prevent these articles being abused as substitutes for intoxicating liquor. Prima facie it would appear from a reading of these provisions that their effect would not be directly or immediately to impede the trade in these articles but to regulate their trade with a view to prevent these articles being abused as substitutes for intoxicating liquor. It may be that regulating trade in these articles may result in a consequence which is restrictive but in view of the principles laid down in the decisions cited above that by itself would not be enough. . ( 21 ) MR. Sorabji however argued that though these two sections are couched in the language of a regulatory enactment there is no basic difference between them and secs. 12 13 14 and 15 in Chapter III of the Act which the Legislature has termed as prohibitions and which the High Court of Bombay and the Supreme Court struck down in part at least. In our view there is a basic difference between the sections contained in Chapter III and those contained in Chapter IV-B under review. The principal difference is that whereas secs. 12 13 14 and 15 are completely prohibitory the same cannot be said of secs. 59c and 59d. It is true that sec. 11 which is the first section in Chapter III provides that notwithstanding anything contained in the provisions following it in that Chapter it shall be lawful to import export transport manufacture bottle sale buy purchase use or consume any intoxicant etc. in the manner and to the extent provided by the provisions of this Act or any rules regulations orders made or in accordance with the terms and conditions of a licence permit pass or authorization granted thereunder. Mr. Sorabji contended that secs. 12 to 15 read along with sec. 11 might well be regarded as regulatory though the heading of Chapter III is Prohibitions for a subject can import export transport sale buy purchase use or consume any intoxicant in the manner and to the extent provided by the provisions of the Act or any rules regulations or orders made or in accordance with the terms and conditions of a licence permit or authority granted thereunder. But the only exemptions on which Mr. But the only exemptions on which Mr. Sorabji could lay his hand were those contained in Chapter IV but even those exemptions were governed by conditions that may be laid down by the State Government by a general or a special order or by rules made by it. This was precisely the argument put forward by the learned Advocate General on behalf of the State in Balsaras case before the Supreme Court namely that there was no use striking down the offending portions in secs. 12 13 14 and 15 of the Act in view of the fact that the import export transport manufacture sale purchase possession use or consumption of an intoxicant was exempted by the notifications and rules issued by the State Government. That argument was however negatived by the Supreme Court upon the ground that the impugned sections provided for total prohibition and that though the State had issued notifications laying down exemptions from such total prohibition the same could be superseded altered or withdrawn at any time at its sweet will by the State Government. It is clear from the decision in Balsaras case that both the High Court and the Supreme Court regarded Chapter III as laying down total prohibition of all alcoholic liquids including medicinal and toilet preparations notwithstanding the fact that section 11 made provisions for certain exemptions Mr. Sorabji therefore is not correct in submitting that secs. 12 to 15 are merely regulatory provisions or in placing Chapter IV-B on a par with Chapter III. It is true that both the impugned sections require a licence a permit or a pass and such requirement at first sight might appear to be a restriction but as the Supreme Court said in the Rajasthan case such requirement has to be looked at from the point of view of a regulated society and that there is no such thing as an absolute freedom in modern societies. Mere requirement of a licence therefore is not enough to constitute a direct and immediate impediment against trade or commerce first because it forms part of regulatory provisions enacted for the purpose of preventing a particular abuse or mischief which abuse or mischief is detrimental to public health and secondly because the aim and purpose of the two impugned sections is not to create any obstruction or impediment in the way of a legitimate trade in genuine French Polish and Varnish. It is possible that a trader concerned in an inter-State trade in these articles may find the necessity of obtaining a licence or a pass or a permit somewhat irksome but that does not constitute an impediment in the way of such trade or commerce. For the reasons aforesaid it is not possible to agree with Mr. Sorabji that the provisions of sections 59c and 59d and section 2 (10a) are either prohibitive in character or are violative of the freedom guaranteed by Article 301 In the view that we take it is therefore not necessary to go to Article 304 part (b) as the condition precedent for the application of that Article is that Article 301 must first be violated. ( 22 ) ASSUMING that we are not correct in our conclusion and that Mr. Sorabji is right in his contention that the impugned sections do lay down restrictions against trade or commerce it is not as if all restrictions against trade and commerce are necessarily invalid. In a Federal Constitution where powers of legislation are distributed between the Central and the State Legislatures the legislative powers entrusted to the States are plenary powers and therefore a State Legislature has competence to provide for restrictions provided that such restrictions are in accordance with the provisions of Article 304. Even if it is assumed that the two sections lay down restrictions and such restrictions are restrictions in respect of trade and commerce even then it is difficult to accede to the contention that these provisions are invalid. It is admitted that the Bill which sought to insert Chapter IV-B and the other incidental amendments in the Act had received the Presidential assent as required by the provisions of Article 304 The next question is whether on the assumption that Chapter IV-B lays down restrictions against trade and commerce those restrictions are not reasonable. It is admitted that the Bill which sought to insert Chapter IV-B and the other incidental amendments in the Act had received the Presidential assent as required by the provisions of Article 304 The next question is whether on the assumption that Chapter IV-B lays down restrictions against trade and commerce those restrictions are not reasonable. Regulating a trade in articles such as French Polish and Varnish which in our view is precisely what Chapter IV-B seeks to do is surely not impeding or obstructing trade or commerce especially if such a regulatory measure is enacted in pursuance of a policy namely public health. Such a regulatory enactment cannot be said to be an unreasonable restriction merely on the ground that the enactment requires a permit or a licence. The object and effect of such a regulatory enactment is not prohibition but regulation. If a State Legislature after experience of about ten years of enforcement of an Act passed by it such as the Prohibition Act finds that certain articles not so far regulated by it are being abused to the detriment of public health it surely cannot be said if it were to pass an enactment regulating such articles that such an enactment is in substance and effect impeding a legitimate trade or commerce in such articles. Abuse or misuse of denatured spirituous preparations such as French Polish and Varnish is neither trade nor commerce and a measure seeking to put down such abuse or misuse cannot be regarded as an impediment in the way of trade or commerce. Article 304 therefore in connection with this aspect of the contention Cannot be availed of by the petitioners. ( 23 ) THE remaining attack in regard to the constitutional invalidity Was with regard to the Gujarat Denatured Spirituous Preparations Rules 1962 passed in pursuance of the power conferred by sec. 143 of the Act. We propose to examine these rules in two aspects (1) that being statutory rules since they have the same force as the Act whether they are violative of Article 301 and (2) whether they constitute unreasonable restrictions not falling within the purview of either Article 304 (b) or Article 19 (6 ). 143 of the Act. We propose to examine these rules in two aspects (1) that being statutory rules since they have the same force as the Act whether they are violative of Article 301 and (2) whether they constitute unreasonable restrictions not falling within the purview of either Article 304 (b) or Article 19 (6 ). If these rules are held not to be violative of Article 301 it is obvious that Article 304 (b) would have no application and in that view the enquiry would be restricted only to the question whether they are violative of Article 19 and (g ). During his arguments Mr. Sorabji confined his attack Upon rules 22 32 and (10) and rule 37 only though in the petition several other rules also have been challenged on the ground of constitutional invalidity. While we are dealing with these rules we proposes for that time being to leave aside the proviso to rule 22 and the provision in rule 37 which seeks to levy any fee of seventy five naye paise per gallon of French Polish and Varnish imported in the State of Gujarat. ( 24 ) BEFORE we take up the consideration of rule 2 it is necessary to consider rule 21 first which deals with applications for wholesalers licence. That rule provides that a person desiring to sell denatured spirituous preparations wholesale shall apply for a licence to the licensing officer and such application shall contain the particulars therein set out Besides the name and address of the applicant and the place where his shop is situate the rule requires certain other particulars (1) the quantity of each spirituous preparation intended to be sold during the period of the licence (2) the average yearly sale of denatured spirituous preparations in the three years immediately preceding the date of the application and (3) the quantity of each denatured spirituous preparation intended to be stored at the said place and finally a declaration whether the applicant has been convicted at any time of an offence under the Prohibition Act or any excise law in force in any part of India and whether any prosecution under the Act or excise law is pending against him in any Court of law. Rule 22 then provides that on receipt of an application under rule 21 the licensing officer shall make such enquiry as he deems necessary and if he is satisfied that there is no objection to granting the licence applied for he may grant a licence in form DSP. 4 on payment into the nearest Government Treasury of a fee according to the scale therein laid down. The proviso to rule 22 lays down that no licence under this rule shall be granted to a person who holds a licence for the retail sale of denatured spirituous preparation in form DSP. 5. Rule 32 provides for the conduct of business by a wholesaler or a retailer and besides demanding from the licence-holder certain accounts registers in prescribed forms and furnishing facilities for inspection of such accounts and registers provides in sub-clause (9) that the licensee shall not admit any person as his partner for the purpose of the licence unless the partnership has been declared t o the licensing officer before the licence is granted and the names of the partners have been ( 25 ) ENTERED jointly in the licence or if the partnership is entered into after the granting of the licence unless the Collector agrees on application made to him to alter the licence and add the names of the partners in the licence. Clause (10) of that rule provides that the licensee shall not use denatured spirituous preparations in any art or industry or for any other purpose without the permission of the licensing officer. Rule 36 lays down certain particulars which are necessary in an application for an import licence. Since that rule is not challenged before us it does not become necessary for us to give the details of those particulars. Rule 37 which deals with the grant of an import pass provides that on receipt of the application under rule 36 the licensing officer shall make such enquiry as he deems necessary and if he is satisfied that there is no objection to granting the pass applied for he may grant the applicant a pass in form DSP 8. It further provides that in the case of Varnish or Polish such pass shall be granted only on payment into the nearest Government Treasury of a vend fee of seventy five naye paise per gallon of Varnish or Polish imported. It further provides that in the case of Varnish or Polish such pass shall be granted only on payment into the nearest Government Treasury of a vend fee of seventy five naye paise per gallon of Varnish or Polish imported. ( 26 ) THE attack by Mr. Sorabji on these rules may be summarised as follows:- - (1) that the requirement of a licence for a-wholesale dealer as the petitioners are and of an import pass are per se restrictions of which the direct and immediate effect is to impede or obstruct free trade and commerce; (2) that the provisions of rule 22 and rule 37 leave the grant of a licence or a pass to the unbridled and arbitrary discretion of the licensing authority and is made dependant on a mere subjective satisfaction of such authority and are restrictions which are bound to impede and obstruct the free flow of trade and commerce guaranteed by Article 301 (3) that leaving the grant of a licence or a pass on the basis that there is no objection to granting such licence or pass is equally a restriction per se unreasonable for these rules do not provide for any hearing or any opportunity to the applicant to have his say nor do they provide for the necessity for the licensing authority to give his reasons for not arriving at a finding that there is no objection to grant such a licence or a pass and his refusal thereupon to grant such a pass or a licence and (4) that the levy of a vend fee of seventy-five naye paise per gallon on French Polish and Varnish is not only violative of Article 14 but also constitutes an unreasonable restriction which is bound to affect adversely the freedom to carry on inter-State trade of which the principal feature is the free movement of goods from one State to another. Such an imposition of a fee would have also the effect of creating a monopoly in favour of manufacturers within the State as against other manufacturers outside the State and furthermore has no co-relation between the fee imposed and the services said to be rendered. Such an imposition of a fee would have also the effect of creating a monopoly in favour of manufacturers within the State as against other manufacturers outside the State and furthermore has no co-relation between the fee imposed and the services said to be rendered. ( 27 ) LEAVING aside for the time being as we have already said questions arising from the proviso to rule 22 and the imposition of vend fee by rule 37 the first question that arises is whether these rules or any of them are violative of Article 301. In the first place rule 22 being one requiring a licence for a wholesaler obviously does not affect intra-State trade. Its consideration therefore would be relevant only so far as inter-State trade and commerce is concerned. In its latter aspect the requirement of a licence would prima facie appear to be a regulatory measure for the purpose of implementing the policy laid down by the State Legislature in the main Act namely the policy of prohibition and the prevention of mischief which as aforesaid was its principal aim in inserting Chapter IV-B in the Act. In Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan A. I. R. 1962 S. C. 1406 mr. Justice Subba Rao in his concurrent judgment while defining the content of the concept of freedom stated that though the word freedom was not capable of a precise definition it was possible to tell what would infringe or detract from such freedom. In dealing with that aspect the learned Judge stated that among other things a licensing system with compensatory fee would not be a restrictive but a regulatory provision. This is of course not to say that every provision couched in the form of a regulation but in effect and substance a restriction can pass off as a permissible regulation and therefore it would be for the Court in a given case to decide whether a provision purporting to regulate trade is in fact a restriction on freedom. If it be a colourable exercise of power and the regulatory provision is in fact a restriction unless such a provision is one of the permissible restrictions under the articles succeeding Article 301 it would be struck down. But Mr. If it be a colourable exercise of power and the regulatory provision is in fact a restriction unless such a provision is one of the permissible restrictions under the articles succeeding Article 301 it would be struck down. But Mr. Sorabji argued that a rule under which an applicant for either a wholesalers licence or an import pass has to depend upon the subjective satisfaction of the competent authority and which does not lay down either the content of the concept of non-objection or the manner of its proof and which furthermore does not lay down any specified requirements which an applicant has to satisfy except a vague and nebulous no objection requirement is not and cannot be regarded as a mere regulatory measure but must be regarded as one hampering or obstructing the freedom of trade and commerce. The learned Advocate General on the other hand contended that the provision as to subjective satisfaction of the licensing authority as also the provision as to his arriving at his conclusion on such enquiry as he thinks fit that there is no objection to grant a licence to an applicant are not obnoxious provisions in themselves. In support of his argument he relied upon the decision of the late Mr. Justice Tendolkar in C. R. H. Readymoney Ltd. v. State of Bombay A. I. R 1956 Bom. 304 where the learned Judge had to deal with rule 5 of the Bombay Spirituous Medicinal Preparations (Sales) Rules 1954 It was there contended that that rule conferred an arbitrary and unbridled power on the Collector to grant or refuse licence for sale of spirituous medicinal preparations. The learned Judge there came to the conclusion on the authority of Liversidge v. Sir John Anderson (1942) A. C. 206 and a previous decision given by himself in Doreen Roy v. State of Bombay Miscellaneous Petition No. 39 of 1955 decided on April 13 1955 that where power is conferred upon an authority to do an act which concerns the fundamental rights of a subject and an appeal is provided against the decision of such authority although on the statute the power conferred on the authority may appear to suggest that the authority had uncontrolled and arbitrary power the authority is bound to act on reasonable grounds and to give his reasons for coming to such a decision. In that view the learned Judge held that the power to grant a licence under rule 5 of those rules did not confer on the Collector an arbitrary and uncontrolled power. The control ultimately was with the appellate authority who could correct any error committed by the Collector. The words If he is satisfied in rule 22 that there is no objection to granting the licence applied for must necessarily mean that on such enquiry as he deems necessary he must come to the conclusion that there are reasonable grounds to believe that there is no objection to granting the licence. Such reasonable grounds would necessarily be with reference to some criterion before the licensing authority and that criterion would be the policy and the object laid down in Chapter IV-B of the Act namely the prevention of abuse and misuse to the detriment of public health of denatured spirituous preparations such as French Polish and Varnish ( 28 ) MR. Sorabji on the other hand placed reliance upon the decision in the State of Madras v. V. G. Row (1952) 3 S. C. R. 597 where the Supreme Court whilst dealing with sec. 15 (2) (b) of the Indian Criminal Law Amendment Act 1908 as amended by the Indian Criminal Law Amendment (Madras) Act 1950 stated that the formula of subjective satisfaction of the Government or of its officers with an Advisory Body to review the materials on which the Government seeks to override a basic freedom guaranteed to the citizen should be viewed as reasonable only in very exceptional circumstances and within the narrowest limits. At page 607 of the report the Supreme Court however observed that while dealing with the reasonableness or otherwise of the restrictions on the exercise of a fundamental right the Court must bear in mind the nature of the right alleged to have been infringed the underlying purpose of the restrictions imposed the extent of the urgency of the evil sought to be remedied thereby the disproportion of the imposition and the prevailing conditions at the time and that all these factors should enter into the judicial verdict. From the observations at page 608 it appears that Their Lordships were of the view that though the Advisory Board was appointed to review the decision of the competent authority such a review even where its verdict were binding on the executive Government could hardly be a substitute for a judicial enquiry. Reliance was also placed on the decision in Thakur Raghubir Singh v. Court of Wards Ajmer and another (1953) 4 S. C. R. 1049 where the constitutional validity of sec. 112 of the Ajmer Tenancy and Land Records Act XLII of 1950 was under review. The Supreme Court there observed that the result of the combined operation of sec. 112 and sec. 6 and 7 of Regulation I of 1888 was that the Court of Wards could in its own discretion and on its subjective determination assume the superintendence of the property of a landlord who habitually infringed the rights of his tenants and the exercise of the discretion of the Court of Wards could not be questioned in a Civil Court. The Supreme Court held that the provisions of section 112 in the circumstances of that case infringed the fundamental right of the petitioner guaranteed by Article 19 (1) and those provisions could not be regarded as reasonable restrictions imposed in the interest of the general public because they completely negatived the right to hold property by making its enjoyment depend on the mere discretion of the executive. It must however be observed that the provisions of the impugned sec. 112 were general in nature and were intended by way of punishment of a landlord who habitually infringed the rights of his tenants. As the Supreme Court observed he was punished by being placed at the mercy of the Court of Wards and by being made subject to the stringent provisions of Regulation I of 1888. An enactment, which prescribed punishment or penalty for bad behaviour or for misconduct by a landlord could not in the opinion of the Supreme Court possibly be regarded as a restriction of a fundamental right. Indeed a punishment was not a restriction. An enactment, which prescribed punishment or penalty for bad behaviour or for misconduct by a landlord could not in the opinion of the Supreme Court possibly be regarded as a restriction of a fundamental right. Indeed a punishment was not a restriction. The Supreme Court therefore held that it was difficult to regard such a provision as a reasonable restriction on the fundamental right and observed that when a law deprived a person of possession of his property for an indefinite period of time merely on the subjective determination of an executive officer such a law could on no construction of the word reasonable be described as coming within that expression because it completely negatived the fundamental right by making its enjoyment depend on the mere pleasure and discretion of the executive the citizen affected having no right to have recourse for establishing the contrary in a Civil Court. These observations were made in view of the general character of sec. 112 read with Regulation I of 1888 and it was principally for that reason that the provision as to the subjective satisfaction of the Court of Wards coupled with the citizen being prevented from establishing his right in a Civil Court was held to be an unreasonable restriction. It is true that in some of the earlier cases the trend was to treat interference with the proprietary rights as unreasonable if there was no provision for an appeal to a Court from the order of the competent authority or where the right of suit was barred. The observations in these earlier cases suggest that with respect to the rights of association and property reasonableness of restriction could not be deduced by anything short of a judicial supervision of the administrative decision. But in later cases such as in Tika Ramji v. State of Uttar Pradesh (1956) S. C. R. 393 where the right of carrying on business was concerned the Supreme Court considered the requirement of procedural reasonableness to be satisfied if the statute provided for an administrative appeal instead of an appeal to the Court that is to say an appeal from the order of an administrative authority to the State Government. In Shri Kishan Singh and others v. The State of Rajasthan (1955) 2 S. C. R. 531 krishna Rangnath Mudholkar and another v. The Gujarat University and others (1962) 3 G. L. R. 204 Atlantic Smoke Shops Ltd. v. Conlon (1944) 7 F. L. J. 1 balsara v. The State of Bombay 52 Bom. L. R. 799 this exception appears to have been extended to a case where there was interference with the right of property. In that case sec. 86 of the Marwar Land Revenue Act 1949 empowered the Settlement Officer at his discretion to give retrospective affect to the rent settled by him. The contention that this was an unreasonable restriction upon the right of property inasmuch as the discretion so vested was not controlled in any way was repelled on the ground that the discretion was not really uncontrolled as the orders of the Settlement Officers were subject to revision by the Board of Revenue under sec. 62 of the Act. In this decision the earlier decision in Thakur Raghubir Singh v. Court of Wards Ajmer and another (1953) 4 S. C. R. 1049 was distinguished on the ground that in that case the statute made the order of the administrative authority final and that in the instant case a Civil Court could not be invested with jurisdiction the subject matter being revenue and settlement and it was held that in such cases the revisional jurisdiction of a higher administrative authority was sufficient to control the discretion of the inferior authority and thus to ensure the reasonableness of the restriction imposed by the statute. The principle upon which this change in the trend of decisions appears to have been reached is that if there is a possibility of getting relief from a higher authority the power of the authority to issue the impugned order cannot be said to be uncontrolled or absolute. In Chaturbhai M. Patel v. Union of India A. I. R. 1960 S. C. 424 the Supreme Court while dealing with certain provisions of the Central Excise and Salt Act 1944 held that the Tribunal under the Act did not have to function as a quasi-judicial body and that besides there was a right of appeal and a revision which did away with the contention that the restrictions were unreasonable. Similarly in Jyoti Pershad and others v. Administrator for the Union Territory of Delhi A. I. R. 1961 S. C. 1602 the fact that an appeal to the Administrator was provided for by the provisions of Slum Areas (Improvement and Clearance) Act 1956 was considered a relevant factor in ascertaining whether the restrictions imposed on the right to hold property were reasonable or not. It is true that if the provision for an appeal or a revision were to be hollow or merely farcical the fact of the existence of such a provision would not save the restriction from being held unreasonable. ( 29 ) IN the instant case the rules framed under the Act called the Bombay Prohibition (Appeal) Rules of 1953 cannot by any test be treated as either hollow farcical or insubstantial for they provide elaborately the form and contents of appeal its presentation and the applicability of the Court Fees Act 1870 Clause (1) of rule 4 provides that if an appeal does not comply with the requirements of rules 2 and 3 it might summarily be rejected provided however that it cannot be so rejected unless the appellant is given such opportunity as the appellate authority thinks fit to enable him to comply with the requirements of those rules. Clause (2) of rule 4 then provides that an appeal may also be rejected on other grounds, which shall be reduced to writing by the appellate authority but further provides that before such an order of rejection is passed the appellant should be given a reasonable opportunity of being heard. Rule 5 provides for fixing a date for hearing the appellant or his agent and rule 6 provides that before the appellate authority passes any order in appeal likely to affect any person adversely it shall send to such a person a notice and give such person a reasonable opportunity of being heard. It is clear from these rules that the function of the appellate authority thereunder is a quasi-judicial one providing for a notice and a reasonable opportunity of being heard and requiring the appellate authority to give reasons in writing for the rejection of the appeal. It is clear from these rules that the function of the appellate authority thereunder is a quasi-judicial one providing for a notice and a reasonable opportunity of being heard and requiring the appellate authority to give reasons in writing for the rejection of the appeal. The fact therefore that the rule does not provide the necessity of giving reasons for his decision and the decision is left to the subjective satisfaction of the competent authority upon his making such enquiry as he thinks fit by itself would not render the discretion unbridled or the restriction unreasonable. This is so because the provisions of Chapter IV B themselves provide a criterion and an objective as the basis for the subjective satisfaction of the competent authority and secondly because the rules framed under sec. 143 of the Act provide an appeal the hearing of which has been made a quasi-judicial function. The provision as to subjective satisfaction the absence of hearing and the absence of the necessity of giving reasons for the decision by themselves cannot thus render rules 22 and 37 such an impediment or restriction in the way of trade commerce or intercourse as to be violative of Article 301. In that view so far as these rules are concerned Article 304 would not apply. ( 30 ) MR. Sorabji next contended though upon an assumption that these rules are restrictions violating the freedom guaranteed by Article 301 that they were invalid by reason of the fact that they had not received the Presidential assent under Article 304 of the Constitution. Though the amendment to the Act carried out by Act XXII of 1960 had received the Presidential fiat these rules made subsequent to the passing of the Act had not. The rules being statutory rules and therefore having the force of law required such sanction. The learned Advocate General produced a letter dated January 21 1960 sanctioning the introduction of the Amendment Bill No. 59 which when passed became Act XXII of 1960. This means that Presidential fiat was given to the Bill including that part which became sec. 143 of the Act when the Bill was passed and which reserved power to the State Government to make these rules. This means that Presidential fiat was given to the Bill including that part which became sec. 143 of the Act when the Bill was passed and which reserved power to the State Government to make these rules. ( 31 ) IT must be remembered that Article 304 talks about a Bill or an amendment for the purposes of clause (b) of Article 304 and sanction is necessary for moving or introducing such a Bill or amendment. It therefore follows that the stage at which the sanction is to be obtained is at the stage when the proposed legislation is introduced and not at the stage when it is passed or at any other subsequent stage. When there fore a law gives power to the executive to frame rules consistently with that law and the Presidential assent is already obtained for moving such a law the rules made thereunder subsequently would not again require the sanction of the President for it must be deemed that he has given his sanction to the rule-making power contained in that law. Assuming however that the contention has validity let us examine the section which confers power to the executive to frame rules and see whether the President can be said to have been conscious or not that the impugned rules would be made under the rule-making power contained in the Act and whether he was also conscious of the subjects covered by them. If that be so then the President again must be said to have given his assent to the Bill or the amendment knowing or being aware that the State executive would make rules on those subjects and therefore his sanction would and must be deemed to be not only in respect of the Bill itself but also the rules made thereunder though such rules may be made subsequently. He would be deemed to be aware that such rules would form part of that very law which when passed would find its place in the statute book. ( 32 ) SUB-SECTION (1) of sec. 143 confers in general terms power to make rules for the purpose of carrying out the provisions of the Act or any other law for the time being in force relating to excise revenues. Subsection (2) then particularises the various subjects upon which the State Government is authorised to make rules. ( 32 ) SUB-SECTION (1) of sec. 143 confers in general terms power to make rules for the purpose of carrying out the provisions of the Act or any other law for the time being in force relating to excise revenues. Subsection (2) then particularises the various subjects upon which the State Government is authorised to make rules. So far as the present applications are concerned the relevant subjects upon which such rules can be made by the State Government are contained in clauses (b) (c) (f) (hi) (h1-iii) (h1-vi) (h2-i) (h2-ii) (h3-iii) (k) (p) and (u ). There is no dispute (1) that the impugned rules are within the scope of section 143 and (2) that they have been made in pursuance of the power conferred by this section and therefore are competently made. Since these items have been deliberately particularised by the Legislature in the section itself and the Bill containing section 143 had received the Presidential fiat it must be held that the President was conscious that the State Government was given power to frame rules on these subjects and that it was with that knowledge that he had given his assent. The contention therefore that these rules require a separate assent apart from the one given by the President to the Bill when it was moved in the State Legislature has no validity. ( 33 ) MR. Sorabji however relied upon the decision in State of Bombay v. R. M. D. Chamarbangwalla 57 Bom. L. R. 288 were the High Court of Bombay held the rules made under the Bombay Lotteries and Prize Competition Control and Tax Act LIV of 1948 invalid on the ground of being violative of Article 304 and also on the ground that they had neither obtained the Legislative not the Presidential fiat. This decision however has no application for the rule-making power given under that Act was different from the one given under sec. 143 of the present Act. It will be seen from that decision that the only subject upon which the Legislature gave power to frame rules to the State Government was with regard to the form of licence the fees therefore and in respect of the necessity of keeping certain accounts and statements of accounts. That section is thus not comparable with sec. It will be seen from that decision that the only subject upon which the Legislature gave power to frame rules to the State Government was with regard to the form of licence the fees therefore and in respect of the necessity of keeping certain accounts and statements of accounts. That section is thus not comparable with sec. 143 which gives elaborate particulars regarding the subjects upon which the Legislature conferred power upon the State Government to frame rules giving to the State Government the mandate and indicating the policy consistently to which the rules were to be framed. The learned Judges who decided that case have observed at page 341 of the report that they felt that Article 304 was violated because the Legislature had not given any indication anywhere in the Act as to what the conditions should be for obtaining a licence. That is not the position with regard to the Act before us for not only the Legislature has indicated its policy in Chapter IV-B of the Act but has given a clear mandate to the State executive to frame rules for the purpose of effectuating that policy and for that purpose to make rules on the several subjects described in the several sub-clauses of section 143. ( 34 ) THAT being the position and Article 301 not having been violated and consequently Article 304 being inapplicable the next question is whether these rules though restrictions are unreasonable restrictions not protected by clause (6) of Article 19. The contention of Mr. Sorabji was that even if Chapter IV-B were to be Competent legislation rules 22 32 and (10) and 37 are invalid on the ground of their being unreasonable and excessive restrictions and therefore are not saved by Article 19 (6 ). Now the question as to the reasonableness of a statute or a rule is always a justifiable question. But no abstract proposition can be laid down as a conclusive test of reasonableness and therefore whenever a statute or a rule is being challenged on the ground of its being unreasonable or excessive it becomes the duty of the Court to look into the nature of the restriction and come to its conclusion from the circumstances of each case. But no abstract proposition can be laid down as a conclusive test of reasonableness and therefore whenever a statute or a rule is being challenged on the ground of its being unreasonable or excessive it becomes the duty of the Court to look into the nature of the restriction and come to its conclusion from the circumstances of each case. While dealing with such a question the Court has to take into consideration (1) the nature of the right claimed (2) whether the impugned restriction is necessary in relation to the object sought to be achieved and (3) even when such a restriction is necessary whether it is excessive and disproportionate and whether it unduly interferes with the rights of the subject. The nature of the right in the instant case is of course the right of business to deal in French Polish and Varnish which apparently are legitimate articles of trade and industry and though they fall under the category of intoxicating liquor are unfit for human consumption. But the case of the State is that though alcohol in these articles is denatured and certain other ingredients in them make these articles unfit for potable purposes these articles have within its experience been known to have been misused as substitutes for intoxicating liquor by the removal of those ingredients which make them unfit and obnoxious principally because of the fact of their being manufactured contrary to or below the standard formulas. As against this contention the counter-contention was a two-fold one (1) that the Act provides sufficient machinery to prevent such an abuse in the form of sec. 21 and 21a ii properly enforced and (2) that it is improper to subject the public at large to restrictions merely because some misguided persons misuse these articles of legitimate use to satiate their perverted fancy and their thirst for intoxicating liquors. Mr. Sorabji submitted that it was precisely on this very ground that the rules framed by the Bombay Government in 1950 were struck down by the Supreme Court in Balsaras case. Mr. Sorabji submitted that it was precisely on this very ground that the rules framed by the Bombay Government in 1950 were struck down by the Supreme Court in Balsaras case. But as we have already pointed out the Supreme Court took the view which it did not merely because those rules laid down restrictions but because the provisions of the statute themselves prohibited the use and possession of medicinal and toilet articles and also because those restrictions were in respect of medicinal and toilet preparations which were exempted not only under Article 47 of the Constitution but even under the Volstead Act of the United States. As regards the first part of the submission of Mr. Sorabji the mere fact that the Act contains sec. 21 and 21a cannot by itself be a ground to hold that further measures to prevent the mischief are unreasonable. As regards the second part of the submission the mere fact that control is provided for to prevent that mischief cannot again be by itself a ground to hold it to be unreasonable. ( 35 ) WHILE considering the question of reasonableness or otherwise of a restriction either under a statute or a rule the Court has to consider not only the nature of the right restricted but also the circumstances necessitating the restriction. It is in the affidavit filed on behalf of the State that prior to the making of these rules there was no control on the import of French Polish and Varnish in the State of Gujarat and consequently anyone could import these commodities from other States without any licence or permit. There was also no regular supervision or check on the consignments of imported French Polish and Varnish but in view of large scale import unwarranted by the reasonable requirements of the State samples used to be drawn from time to time from the consignments of French Polish and Varnish imported into the State and in cases of doubt such samples were subjected to chemical analysis to ascertain that what was being imported in the name of French Polish and Varnish was in fact genuine French Polish and Varnish. The affidavit then states that as a result of these checks it was detected in a number of cases that these preparations contained very little of the ingredients which French Polish or Varnish should contain and which rendered such preparations unfit for potable purposes. Moreover from the samples drawn from the preparations sold in retail it was found that the ingredients, which rendered French Polish and Varnish, unfit for potable purposes were removed by precipitation. These findings and the unreasonably large import of French Polish and Varnish indicated that such preparations were being used for potable purposes. Imported preparations were generally found to be of a standard which made possible those preparations to be converted for potable purposes and hence such preparations were it was found being used for potable purposes instead of being used for sale to bona fide industries. Reports received from the Prohibition Officers of the State indicated large-scale use of such French Polish and Varnish for potable purposes and it was to prevent such misuse of denatured spirituous preparations like French Polish and Varnish that Chapter IV-B of the Act containing provisions for control and regulation of trade in such preparations had to be enacted. It was in these circumstances that the Government of Gujarat framed these rules. The case of the State in this affidavit is that the object of the State in making these rules was to prevent such anti-social activity in the interest of public health in general. The State Government had already taken steps to ensure that bona fide users of such preparations did Not suffer and it was for that purpose that exemptions were granted for possession and use of French Polish and Varnish in certain quantities to carpenters and artisans actively engaged in the profession of polishing wooden articles and making furniture. In paragraph 5 of the affidavit it is stated that French Polish and Varnish are apparently not meant for human consumption but there was evidence with the State Government of a large scale misuse of French Polish and Varnish for potable purposes particularly amongst illiterate and ignorant people that the preparations which were being imported on a large scale in the name of French Polish and Varnish were neither genuine French Polish nor Varnish but intoxicating liquors capable of being used for potable purposes containing negligible proportions of other solid ingredients which could be removed by precipitation. It was to prevent this mischief that the import of French Polish and Varnish had to be regulated by the issue of licences. The rules framed by the State Government did not envisage prohibition of import sale possession use etc. of French Polish or Varnish for genuine purposes. ( 36 ) THE argument of the learned Advocate General was that these rules were made when the State Government was faced with this situation and it was to meet that situation which affected public health that restrictive regulations had to be made in the matter of issuing of licences and permits for possession sale and import amongst other things. The question therefore is (1) are the restrictions contained in these rules for the benefit of the public and (2) are the restrictions excessive and not in proportion to the object sought to be achieved? It is clear from Chapter IV-B itself and the affidavit made on behalf of the State that the object in making these rules was to prevent abuse of denatured spirituous preparations namely French Polish and Varnish and thereby to effectuate the policy of prohibition as directed by Article 47 and adopted by the State Legislature while enacting the impugned Act. Since the rules were made to meet the situation which had arisen owing to the unregulated import and sale of these two commodities which as the affidavit states made the abuse of these articles possible the object of providing for these restrictions cannot be said to prevent the legitimate use of genuine French Polish and Varnish but to so regulate its use possession sale import etc. as to render its abuse and mischief impossible. ( 37 ) SO far as rule 22 is concerned as we have already pointed out the principal attack against that rule as also rule 37 was on the ground that the granting of a wholesalers licence and an import pass was made dependant upon the subjective satisfaction of the competent authority and the absence of any requirement for hearing or of giving any reasons for refusal of the grant of the licence or the pass. We have already held while dealing with the question whether these rules are violative or not of Article 301 that the rules cannot be said to be an impediment or obstruction against trade or commerce nor can they be said to be unreasonable as the discretion left to the competent authority cannot be said to be either arbitrary or unbridled by reason of elaborate rules having been made providing for an appeal and a revision against the decision of such a competent authority. It is true that rule 22 lays down a graded scale of fees for the wholesalers licence. But it is not necessary for us to deal with that part of the rule as Mr. Sorabji stated before us that he did not wish to challenge that rule upon that ground. So far as clauses (9) and (10) of rule 32 are concerned Mr. Sorabji did at one stage challenge their validity but ultimately agreed that they were regulatory in nature and can be said to be necessary for the purpose of enforcing the policy of preventing the abuse against which Chapter IV-B was intended to be a bar. This being the position it is not possible for us to hold that rules 22 32 and 37 except for the proviso to rule 22 and the provision for the vend fee in rule 37 which we shall deal separately hereafter can be said to be unreasonable restrictions not covered by clause (6) of Article 19 of the Constitution. ( 38 ) LASTLY it was urged that these rules were invalid as being violative of Article 14 inasmuch as only French Polish and Varnish amongst several other denatured Spirituous preparations were selected for restrictive regulations. But this contention was put half-heartedly and as soon as Mr. Sorabji was told that the State Government selected these two articles because it was in regard to them only that the mischief sought to be eradicated was noticed he at once stated that he would not press the point but it must at the same time be stated in fairness to him that he said that he did not give it up as he wished to keep it alive for a possible future use. ( 39 ) WE now proceed to deal with the contention as regards first the proviso to rule 22 and secondly with regard to the provision of vend fee in rule 37. The proviso to rule 22 provides that no licence under this rule i. e. no wholesalers licence shall be granted to a person who holds a licence for the retail sale of denatured spirituous preparations in form DSP. 5. Similarly rule 24 provides that no retailers licence shall be granted to a person holding a licence for wholesale of denatured spirituous preparations in form DSP. 4. Reading these two provisos together it is clear that the policy under these rules is that a wholesaler should not be granted a retailers licence and a retailer should not be granted a wholesalers licence. Mr. Sorabji strenuously contended that these restrictions were unnecessary and excessive and were disproportionate to the object sought to be achieved by the statute and therefore contravened the provisions of Article 19 (1) (f) and (g) and were not covered by clause (6) of that Article. The learned Advocate General on the other hand submitted that the proviso to rule 22 was a mere regulatory one and was necessary in order to prevent evasion of the provisions of Chapter IV-B and to make inspection and check on the sales of these two commodities watertight. He also argued that without such a proviso it would not be possible for the enforcement officers to prevent the mischief or abuse of French Polish and Varnish. We do not however find anywhere in the affidavit filed on behalf of the State that such a proviso is necessary for the purpose of effectuating the policy of prohibition of the Legislature nor any averment in specific terms that without preventing a wholesaler from doing retail trade the abuse of which prevention is sought for cannot be avoided. It is not possible also to agree with the learned Advocate General that prohibiting a wholesaler from doing retail trade in these commodities is merely a regulatory provision. On the contrary such a provision effected by means of a mere rule is prohibitive in character and makes nugatory the right of a subject to conduct his business in these commodities. It is not possible also to agree with the learned Advocate General that prohibiting a wholesaler from doing retail trade in these commodities is merely a regulatory provision. On the contrary such a provision effected by means of a mere rule is prohibitive in character and makes nugatory the right of a subject to conduct his business in these commodities. It might perhaps be that if wholesalers were also to be permitted to carry on business in retail inspection and checks provided for in this rule and other rules might become a little more difficult but such a difficulty cannot be put forward as a justifiable ground for preventing altogether a subject from conducting his business both in wholesale and in retail. The several requirements provided for before a trader is granted a licence either as a wholesaler or as a retailer are sufficient in our view to enable the State Government to enforce effectively the policy of prohibition and to prevent the abuse and mischief of these commodities being used as substitutes for intoxicating liquor. Prevention of a subject to conduct his business both as a wholesaler as well as a retailer is in our view neither necessary nor reasonable and is in excess of the necessary checks required for the enforcement of the policy and the objective of the Act. The proviso to rule 22 therefore in our view is an unreasonable restriction in so far as it prevents a person who holds a licence for retail sale from being granted a wholesalers licence. Rule 24 likewise also would be invalid in so far as it prevents a wholesaler from obtaining a retailers licence but Mr. Sorabji did not press for rule 24 being struck down. ( 40 ) AS regards rule 37 Mr. Sorabji contended that the provision therein for a vend fee of seventy-five naye paise per gallon of Varnish or Polish imported was beyond the powers of the State Government and was in any event violative of Article 301 and was an unreasonable restriction both under Article 304 (b) and Article 19 (1) (f) and (g) It is obvious that the expression vend fee in rule 37 is an inappropriate expression for there cannot be a vend fee in respect of goods imported by a trader into the State of Gujarat. This was conceded by the learned Advocate General but his contention was that it was a pure and simple licence fee and the State Government was competent to levy such a licence fee. On the other hand it was argued by Mr. Sorabji that the vend fee sought to be charged under rule 37 cannot be fee but was an imposition of a tax which admittedly the State had no power to levy. The learned Advocate General contended that while enforcing the provisions of Chapter IV-B and the rules made by the State the State would be required to render certain services. Certain investigations had to be made while deciding whether an applicant should be granted an import pass or not and if in consideration of these services to be rendered by the State Government certain charges were levied those charges would be in the nature of fee and not in the nature of a tax and no objection could therefore be taken against the levy of such fee. . ( 41 ) THE question that we have to address ourselves is whether such a levy is by way of fee or whether it amounts to a tax. As to what is the nature of fee and what are its characteristics came to be debated before the Supreme Court in four cases and it is possible to derive assistance from the decisions in those four cases. The first of these decisions is to be found in The Commissioner Hindu Religious Endowments Madras v. Sri Laxhmindra Tirtha Swamiar of Sri Shirur Mutt A. I. R. 1954 S. C. 282 where amongst other things the constitutional validity of sec. 76 of the Madras Hindu Religious and Charitable Endowments Act XIX of 1951 was challenged. That section provided that in respect of services rendered by Government and their officers every religious institution shall from the income derived by it pay to the Government annually such contribution not exceeding five per centum of its income as may be prescribed. 76 of the Madras Hindu Religious and Charitable Endowments Act XIX of 1951 was challenged. That section provided that in respect of services rendered by Government and their officers every religious institution shall from the income derived by it pay to the Government annually such contribution not exceeding five per centum of its income as may be prescribed. It also provided that every religious institution the annual income of which for the fasli year immediately preceding as calculated for the purposes of the levy of contribution under sub-section (1) is not less than one thousand rupees shall pay to the Government annually for meeting the cost of auditing its accounts such further sum not exceeding one and a half per centum of its income as the Commissioner may determine. Subsec. (4) of sec. 76 provided that the Government shall pay the salaries pensions and other beneficial remuneration of the Commissioner Deputy Commissioners Assistant Commissioners and other officers and servants employed for the purposes of this Act and the other expenses incurred for such purposes including the expenses of Area Committees and the costs of auditing the accounts of religious institutions. The validity of this section was attacked on a two-fold ground:- (1) that the contribution was really a tax and as such it was beyond the legislative competence of the State Legislature to enact such a provision and (2) that the contribution being a tax or an imposition the proceeds of which were specifically appropriated for the maintenance of a particular religion or religious denomination it fell within the mischief of Art. 27 of the Constitution and was hence void. We are not concerned in this case with the second ground. But as regards the first ground the Supreme Court in this decision adopted the famous definition of tax given by Latham C. J. of the High Court of Australia in Matthews v. Chicory Marketing Board 60 CLR 263 namely that a tax is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment for services rendered. Approving this definition the Supreme Court stated that the essential characteristics of a tax as distinguished from other forms of imposition was well brought out in this definition by the learned Chief Justice that the essence of taxation was compulsion that is to say it is imposed under the statutory power without the tax-payers consent and that the payment is enforced by law. 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 taxpayer and the public authority. It is part of the common burden and the quantum of imposition upon the taxpayer depends generally upon his capacity to pay. As against those characteristics of a tax a fee is generally defined to be a charge for a special service rendered to individuals by some Governmental agency. What is levied is supposed to be based on the expenses incurred by Government in rendering the service though in many cases costs are arbitrarily assessed. Ordinarily fees are uniform and no account is taken of varying abilities of different recipients to pay. These are some of the general characteristics but as there may be various kinds of fees it is not possible to formulate a definition, which would be applicable to all cases. Summarising the distinction between a tax and a fee the Supreme Court observed that the distinction between the two lay primarily in the fact that a tax is levied as part of common burden while a fee is payment for a special benefit or a privilege. Fee confers a special benefit although the special advantage as for example in the case of registration fees for documents or marriage licences is secondary to the primary motive of regulation in the public interest. Public interest seems to be the basis of all imposition but in a fee it is some special benefit accruing to the individual, which is the reason for its payment. Public interest seems to be the basis of all imposition but in a fee it is some special benefit accruing to the individual, which is the reason for its payment. In the case of a tax the particular advantage if it exists at all is an incidental result of State action. At page 296 of the report the Supreme Court observed that in the case of fee the Government does some positive work for the benefit of persons and the money is taken as a return for the work done or services rendered. If the money thus paid is set apart and appropriated specifically for the performance of such work and is not merged in the public revenues for the benefit of the general public it could be counted as fee and not a tax. In the case before them Their Lordships hold that the imposition of a levy by sec. 76 of the Act did not amount to fee for the material fact which negatived the theory of fee was that the money raised by levying of the contribution was not ear-marked or specified for defraying the expenses that the Government had to incur in performing the services. All the collections went to the consolidated fund of the State and all the expenses had to be met not out of these collections but out of the general revenues by a proper method of appropriation as is done in the case of other Government expenses. They however stated that that in itself might not be conclusive but in the case before them there vas also a total absence of any co-relation between the expenses incurred by the Government and the amounts raised by contribution under the provisions of sec. 76 and they therefore thought that in those circumstances the theory of a return or counter-payment or quid pro quo could not have any possible application. The second case where this question was canvassed was in Ratilal Panachand Gandhi v. State of Bombay A. I. R. 1954 SC. 76 and they therefore thought that in those circumstances the theory of a return or counter-payment or quid pro quo could not have any possible application. The second case where this question was canvassed was in Ratilal Panachand Gandhi v. State of Bombay A. I. R. 1954 SC. 388 where the Supreme Court was called upon to decide the constitutional validity of certain provisions of the Bombay Public Trusts Act XXIX of 1950 In this case also the Supreme Court laid down that fees as contrasted with taxes were payments though primarily in the public interest but for some special service rendered or some special work done for the benefit of those from whom the payments were demanded. Thus in fees there is always an element of quid pro quo, which is absent in taxes. In order that the collections made by the Government can rank as fees there must also be co-relation between the levy imposed and the expenses incurred by the State for the purpose of rendering such service. Two elements are therefore essential in order that a payment may be regarded as a fee. In the first place it must be levied in consideration of certain services which the individuals accepted either willingly or unwillingly and in the second place the amount collected must be ear-marked to meet the expenses of rendering these services and must not go to the general revenues of the State to be spent for general public purposes. In that case sec. 58 of the Bombay Public Trusts Act 1950 was held to be intra vires of the State Legislature by reason of the fact that the impost there was not a tax but a fee which fell within the purview of entry 47 of list III in Schedule Seven of the Constitution. The third case wherein this distinction was brought out was the case of Sri Jagannath Ramanuj Das and another v. State of Orissa A. I. R. 1954 S. C. 400 where the Supreme Court dealt with the Orissa Hindu Religious Endowments Act IV of 1939. The third case wherein this distinction was brought out was the case of Sri Jagannath Ramanuj Das and another v. State of Orissa A. I. R. 1954 S. C. 400 where the Supreme Court dealt with the Orissa Hindu Religious Endowments Act IV of 1939. The Supreme Court there observed that though there was no generic difference between a tax and a fee and both were different forms in which the taxing power of a State manifested itself the Constitution had made a distinction between a tax and a fee for legislative purposes and while there were various entries in the three lists with regard to various forms of taxation there was an entry at the end of each one of these lists as regards fees which could be levied in respect of every one of the matters that was included therein. Dealing with the distinction between a tax and a fee the Supreme Court there observed that the essential thing in a tax was that the imposition was made for public purposes to meet the general expenses of the State without reference to any special benefit to be conferred upon the payers of the tax. The taxes collected are all merged in the general revenues of the State to be applied for general public purposes. Thus tax is a common burden and the only return, which the taxpayer gets, is the participation in the common benefits of the State. Fees an the other hand are payments primarily in public interest but for some special service rendered or some special work done for the benefit of those from whom payments are demanded. Thus in fees there is always an element of quid pro quo, which is absent in a tax. Two elements are thus essential in order that a payment may be regarded as a fee. In the first place it must be levied in consideration of certain services which the individuals accepted either willingly or unwillingly But this by itself is not enough to make the imposition a fee if the payments demanded for rendering of such services are not set apart or specifically appropriated for that purpose but are merged in the general revenues of the State to be spent for general public purposes. Lastly in Hingir-Rampur Coal Co. Lastly in Hingir-Rampur Coal Co. Ltd. v. The State of Orissa A. I. R. 1961 S. C. 459 the Supreme Court reiterated the same distinction between a tax and a fee. The Supreme Court there said that though both were compulsory exactions a tax is imposed for public purposes and is not and need not be supported by any consideration of service rendered in return while a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it. If specific services are rendered in a specific area or to a specific class of persons or trade or business in any local area and as a condition precedent for such services or in return for them a cess is levied against that area or that class of persons or trade or business the cess is distinguishable from a tax and is described as a fee. The second characteristic brought out was that whereas a tax recovered by public authority invariably goes into the consolidated fund which ultimately is utilised for all public purposes a cess levied by way of fee is not intended to be and does not become a part of the consolidated fund It is ear-marked and set apart for the purpose of services for which it is levied. Cases may however arise where under the excuse of levying a fee the Legislature may attempt to impose a tax. In the case of such colourable exercise of legislative power Courts would have to scrutinise the scheme of the levy very carefully and determine whether in fact there is a co relation between the service and the levy or whether the levy is either not co-related with service or is levied to such an excessive extent as to be a pretence of a fee and not a fee in reality. In other words whether or not a particular cess levied by a statute amounts to a fee or a tax would always be a question of fact to be determined from the circumstances of each case. In other words whether or not a particular cess levied by a statute amounts to a fee or a tax would always be a question of fact to be determined from the circumstances of each case. It is thus clear that two essentials are necessary to constitute a fee (1) the existence of the element of quid pro quo and (2) the necessity of ear-marking and setting apart the collections of such an impost to meet the expenses of services for which it is levied and not merging them into the consolidated funds meant for utilization for all public purposes. ( 42 ) THE learned Advocate General tried to argue that the imposition by rule 3 of seventy-five naye paise as and by way of what is called a vend fee was really fee for import passes which the State Government was entitled to levy under sec. 53 of the Act. But he had to concede that the cess was neither set apart as a separate fund for the rendition of services to those applying for import passes nor were its collections earmarked for such a purpose and that they were in fact merged in the general consolidated fund which is utilised by means of proper appropriations for all general public purposes. Under these circumstances it is impossible to say that the levy amounts to a fee within the definition laid down by the Supreme Court. It is admitted that if this levy is held to be a tax and not fee it was beyond the competence of the legislature and much more so of the State executive. Rule 37 in so far as it seeks to levy such a vend fee would therefore be invalid even on the assumption that the Legislature authorised under sec. 53 of the Act the State Government to levy such a cess. ( 43 ) MR. Sorabji also attacked this part of the rule on the ground that a cess of seventy-five naye paise per gallon on imported French Polish or Varnish is both harsh and excessive having no co-relation between the extent of the services to be rendered to the importer by the State or its officers and the expenses which the State authorities would have to incur in the rendition of such services. There is no indication in the affidavit as conceded by the learned Advocate General that rendering of such services would require any staff in addition to the existing staff or the extent of additional burden that might be imposed upon the existing staff by reason of the insertion of Chapter IV-B in the Act and the rules made by the State Government. There is also no indication in the affidavit of even an approximate expenditure that the State would have to incur in rendering these services and equally there is no indication in the affidavit in reply as to whether the levy of seventy-five naye paise per gallon on imported French Polish and Varnish was worked out and if so on what basis and whether it was proportionate to the expenditure and costs that the State might have to incur in rendering services. It is therefore obvious that the fixing of seventy-five naye paise per gallon on imported French Polish and Varnish was arbitrary and without any co-relation between that amount and the costs of services to be rendered. That conclusion becomes inevitable in view of the absence of any Government justifying such a levy in the affidavit in reply. We are fortified in this conclusion by the decision in Chandrakant Jagjit Singh A. I. R. 1962 S. C. 204 at page 209 where the Supreme Court dealt with rule 11 of the Custom House Agents Licensing Rules 1960 framed under sec. 202 of the Sea Customs Act 1878 as amended in 1955. Dealing with that rule which enjoined payment of a fee of Rs. 50/for a fresh application as well as for renewal of a licence the Supreme Court observed that 50 far as the fee for the grant of the licence in the first instance was concerned it could not be said that it was exorbitant. The fee was an amount collected to reimburse the Government for the expenses of licensing. The Supreme Court however observed that such a fee must reasonably be measured against the cost, which might be entailed in the process of granting licences. In the initial stage the customs authorities would have to scrutinise applications subject the candidates to an examination and provide them with licences to carry on their work. A fee of Rs. 50/initially cannot therefore be considered unreasonable regard being had to the services involved. In the initial stage the customs authorities would have to scrutinise applications subject the candidates to an examination and provide them with licences to carry on their work. A fee of Rs. 50/initially cannot therefore be considered unreasonable regard being had to the services involved. But the Supreme Court held that the same could not be said in the case of renewals for which formerly the charge was only fifty naye paise. The petition showed that all that the licensing authority did in the matter of renewal of a licence was to make an endorsement on the application that it was renewed for a further period. Their Lordships observed that under the guise of a fee there should not be an attempt to raise the revenue for the general fund of the State and held that the renewal fee of Rs50/did not entail services which could be reasonably said to measure against the charge. They held therefore that the renewal fee of Rs. 50/ceased to be a fee and was in its nature a tax to raise revenue. Such an impost could not be justified as a fee and they there fore held that the charge was improper. The same reasoning can pari materia be applied to the provision for what is called a vend fee in rule 37 of the present rules. A provision for imposition of such a levy as seventy-five naye paise per gallon of Polish and Varnish works out in the case of the petitioners who asked for an import pass for 1500 gallons a month at Rs. 1125/per month Such an imposition is bound to unduly tilt the balance in business and trade in favour of local manufacturers as against those from outside the State. Such an impost must obviously be regarded as an impediment and an obstruction against the free flow of inter-State trade and commerce. We hold therefore that such an imposition is a colourable exercise of the right to levy fee and amounts in fact to an imposition of a tax. Such an impost must obviously be regarded as an impediment and an obstruction against the free flow of inter-State trade and commerce. We hold therefore that such an imposition is a colourable exercise of the right to levy fee and amounts in fact to an imposition of a tax. The imposition of such a levy as seventy-five naye paise per gallon on imported French Polish and Varnish without any proportion or co-relation with the expenses that may have to be incurred by the State while rendering services to the importers amounts also to an impediment or an obstruction in the way of freedom of trade and commerce guaranteed by Article 301 and is not protected by the provisions of Article 304 (b) as such an imposition is not only beyond the competence of the State Legislature and the State Government but it is also an imposition as and by way of a tax and is in violation of Article 301 and is unreasonable and excessive both under Article 304 and Article 19 (1) (f) and (g) and must therefore be declared to be invalid. ( 44 ) AS we have already pointed out the application of the petitioner in Special Civil Application No. 996 of 1962 was rejected by the Superintendent of Prohibition and Central Excise Surat Division Surat by his order dated September 26 1962 on the mere ground that since there is no necessity to give a licence your application is rejected. Subsequently however reasons were given by the same authority by his letter dated November 8 1962 wherein it was sought to be explained that it was not necessary to issue a wholesalers licence as in the District of Surat and in the City of Surat there were adequate licences to sell the manufactured French Polish and consequently the petitioners application was rejected. It is obvious that the ground given in this letter if at all it can be considered to be a ground was totally extraneous and not germane to Chapter IV-B or the aforesaid rules. It is obvious that the ground given in this letter if at all it can be considered to be a ground was totally extraneous and not germane to Chapter IV-B or the aforesaid rules. There is nothing in these two letters to indicate that the licensing authority had come to even a subjective satisfaction based even on such enquiry as he thought proper to make that the petitioner was not a person against whom there could be no objection to grant the licence on the basis that he had any reasonable ground to believe or to come to a decision even an his subjective satisfaction that the petitioner was likely to commit the abuse or the mischief aimed against by Chapter IV-B of the Act or was such as to defeat the purpose and object of the provisions of that chapter. To say that because an adequate number of licences was granted sufficient for reasonable use of these two commodities and therefore there was no more any necessity of granting licences to anyone else must entail an unreasonable result for it would bar totally anyone entering the trade prevent competitive business in these commodities and create an exclusive monopoly in favour of those among other applicants to whom the licensing authority has been pleased to grant the first licences. That being so the order passed by the licensing authority was not in accordance with the provisions of the Act and was therefore ultra vires. The order of rejection passed by the licensing authority must consequently be held to be bad in law. In the result we hold that though the provisions of Chapter IV-B and the Gujarat Denatured Spirituous Preparation Rules 1962 cannot be challenged successfully on the ground of constitutional validity the proviso to rule 22 the effect of which is to prohibit a subject from obtaining both a wholesalers and a retailers licence and the provision in rule 37 levying what is called there a vend fee of seventy-five naye paise per gallon of French Polish and Varnish and the said order of rejection are invalid. To this extent the petitioners succeed and the rules in these two petitions to that extent are made absolute. ( 45 ) SO far as the costs are concerned we have heard both the parties and in our opinion the fair order would be that each party should bear his own costs. To this extent the petitioners succeed and the rules in these two petitions to that extent are made absolute. ( 45 ) SO far as the costs are concerned we have heard both the parties and in our opinion the fair order would be that each party should bear his own costs. Order accordingly. .