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2008 DIGILAW 588 (ALL)

COX INDIA LTD. v. STATE OF UTTAR PRADESH

2008-03-14

RAKESH SHARMA, SUSHIL HARKAULI

body2008
JUDGMENT By the Court.—By this writ petition, the petitioner challenges the validity of U.P. Excise (Liquor Transit) Rules, 2003 (hereinafter referred to as the Rules). 2. The facts are that the petitioner being a company registered under the Companies Act, 1956 runs a distillery manufacturing country liquor and foreign liquor. The distillery is located in Naugaon in the district Chhatarpur (Madhya Pradesh). The petitioner while transporting whisky manufactured by it from its distillery at Naugaon to Gwalior experienced difficulty, inasmuch as, whisky had to pass through the territory of the State of Uttar Pradesh. According to the petitioner, the consignment was on unbroken transit by the route Naugaon-Mauranipur-Jhansi-Dabra-Gwalior. The reason for the difficulty, according to the petitioner, was that the Rules contemplate issue of a transit pass known as "permit" only if liquor is being transported from one State, through the territory of Uttar Pradesh, to another State. The petitioner says that because the goods were being transported from one place in the State of Madhya Pradesh to another place in the same State of Madhya Pradesh and during such transport they were passing through the territory of Uttar Pradesh, therefore the permit could not have been issued under the said Rules. The regulatory measure under the Rules thus amounts to unreasonable restrictions on the freedom of the trade of the petitioner guaranteed under Article 19 and is also violative of freedom of trade and commerce guaranteed under Articles 301, 302 and 304 (b) of the Constitution of India. The petitioner has also urged that under Entry 30 of the List-I (union list) of the 7th Schedule to the Constitution of India carriage of goods by railways, sea or airways or by national waterways in mechanically propelled vessels is the subject matter exclusively within the domain of the Parliament and consequently out of the legislative competence of the State Government. According to the petitioner Entry-13 of List-II is subject to the provision of List-I and List-III. 3. We have heard the learned counsel for the petitioner and the learned Standing Counsel for the State of U.P. at some length. 4. Section 15 of U.P. Excise Act, 1910 provides that no intoxicant shall be transported except under the provision of Section 16. Section 16 provides for grant of passes for transport of intoxicant by the Collector. 3. We have heard the learned counsel for the petitioner and the learned Standing Counsel for the State of U.P. at some length. 4. Section 15 of U.P. Excise Act, 1910 provides that no intoxicant shall be transported except under the provision of Section 16. Section 16 provides for grant of passes for transport of intoxicant by the Collector. Section 40 (2)(d) gives the power to the State Government to make Rules regulating the transport of any intoxicant. Pursuant to these statutory provisions, the Rules known as U.P. Excise (Liquor Transit) Rules, 2003 have been framed. 5. The preamble of these Rules says that with a view to stop smuggling of liquor from other provinces of India the Governor has made these Rules for the transport of liquor of "one province" to "other province" through Uttar Pradesh. Rule 3(1) also says that no liquor shall be transported from "one State to other State" through the State of U.P. except in accordance with a permit issued under these Rules. 6. It is the use of the words "from one State to other State" in the Rules, which is the ground for challenge. 7. It is well settled that for upholding the vires of a Statute or Statutory Rules, it is permissible for the Court to read wide" or read down" the Statute or Rules. 8. Having given due consideration to the matter, we are of the opinion that the words "other State" as used in the Rules is not confined to a State different from the State from which the consignment originated but means a State other than the State of Uttar Pradesh. Thus the words "from one State to other State" includes not only the cases where the transport is from a State on one side the territory of Uttar Pradesh to any other State on the other side of the said territory, but also includes cases where the transport is from one place in a State (other than Uttar Pradesh) to any other part of the same State during which transit liquor has to pass through the territory of Uttar Pradesh. Therefore transit pass known as "permit" under the Rules can be issued to cover consignments which are being transported from one place to other place of the same State where such transit requires the consignment to pass through any part of the territory of Uttar Pradesh. 9. Therefore transit pass known as "permit" under the Rules can be issued to cover consignments which are being transported from one place to other place of the same State where such transit requires the consignment to pass through any part of the territory of Uttar Pradesh. 9. In the above view of the matter, the Rules being regulatory in nature do not infringe either Article 19 or Articles 301, 302 or 304 (b) of the Constitution of India. Regulatory measures do not offend Article 301, 302 or 304 (b) of the Constitution of India. The power to regulate and tax liquor meant for human consumption, includes the incidental and regulatory power and as such it cannot be said that the Rules are outside the domain of the legislative power of the State. 10. Although no relief has been claimed on that basis, but during the course of arguments, the learned counsel for the petitioner invited our attention to an office order dated 25.2.2003 issued by the Excise Commissioner, U.P. a copy of which has been enclosed as Annexure-8 to this writ petition, which prescribes that the country liquor and foreign liquor exported from or imported into the State of Uttar Pradesh has necessarily to be done through one or the other of the 29 check posts which are detailed in that office order. There are two check posts on the two sides of Jhansi-Madhya Pradesh border, one on Jhansi-Shivpuri road and the other on Jhansi-Gwalior road. Apparently, this is also a regulatory measure safeguarding against infiltration of liquor through minor routes at other places along the border of Uttar Pradesh. It is obvious that the check posts of Uttar Pradesh Excise Department can only be located on important routes and, therefore, we do not find anything unreasonable in the regulatory measure provided by the said office order. 11. It is obvious that the check posts of Uttar Pradesh Excise Department can only be located on important routes and, therefore, we do not find anything unreasonable in the regulatory measure provided by the said office order. 11. The other reliefs prayed for in this writ petition seeking restraint on the transport of liquor through the State of U.P. in violation of the Rules and seeking restraint of prosecution of the petitioner for violation of Rules by transporting liquor through territory of Uttar Pradesh without a permit cannot be granted, inasmuch as, there is no pleading in the writ petition that the petitioner had ever sought a permit for such transport and the respondents had refused to issue the permit on the ground that the goods transported by the petitioner were being carried from one place in the same State of Madhya Pradesh to another place in the same State of Madhya Pradesh and not to another State. 12. The writ petition is, accordingly, dismissed. ————