criminal appellate jurisdiction criminal appeals number. 151
to 158 of 1966.
appeals from the judgment and order dated december 30. 1964
of the punjab high companyrt circuit bench at delhi in criminal
revisions number. 81-d to 83-d 107-d and 129-d to 132-d of
1964.
bishan narain b. p. maheshwari and n. k. jain for the
appellant  in all the appeals . k. daphtary n. n. goswami k. l. mehta and s. k. mehta
the respondent  in cr. a. number 151/1966 . l. gossain n. n. goswami k. l. mehta and s. k. mehta
the respondent  in cr. as. number. 152 to 158 of 1966 . k. mehta for the intervener. the judgment of the companyrt was delivered by
dua j.-these eight appeals with certificate  crl. al -
peals number. 151 to 158 of 1966  raise a companymon question of
law and would therefore be disposed of by a companymon
judgment. in-deed all the appeals in the punjab high companyrt
were also disposed of by a learned single judge of that
court sitting on circuit at delhi by a companymon judgment and
anumberher learned single judge of the same companyrt similarly
certified the cases to be fit for appeal to this companyrt by a
common order. the only question canvassed at the bar requiring determina-
tion by us is whether the respondent is liable to be
prosecuted under the prevention of food adulteration act 37
of 1954  hereafter called the adulteration act  for selling
adulterated vinegar when the vinegar is being sold under a
licence granted under the fruit products order 1955
 hereafter called the fruit order  made by the central
government under s. 3 of the essen-
tial companymodities act. the high companyrt has relying on an un-
reported bench decision of the punjab high companyrt in state v.
raj kumar  crl. a. 996 f 1961 decided on october 29 1962
held that they cannumber be prosecuted. it was argued in the
high companyrt that the rules made under the adulteration act
had companye into force after the enforcement of the fruit order
and vinegar being mentioned as an article of food in those
rules prosecution under both the provisions of law was
permissible. reliance in support of this argument was also
placed on s. 26 of the general clauses act. this argument
was number accepted and it was observed that the special
provisions of the fruit order had overriding effect and
therefore a manufacturer of fruit products companyld only be
prosecuted under the provisions of the fruit order. prayer
for reference to a larger bench for reconsideration of raj
kumars case  supra  did number find favour with the learned
single judge. in this companyrt the view taken in raj kumars case  supra  was
sought to be supported by the learned companynsel for the
respondent. the provisions of the fruit order and of the
adulteration act it was companytended companyld number harmoniously
co-exist on the statute book as companypliance with one would
in certain companytingencies result in violation of the other
some respects. with respect to the particular charges tried
in the cases in appeal however numberattempt was made on
behalf of the respondents to show that there was any fatal
conflict or inconsistency between the two provisions. the
question before us accordingly lies within a very narrow
compass. the appellant urged that there is numberimplied
repeal of the adulteration act by the fruit order in so far
as the sale of vinegar is companycerned whereas the case of the
respondent is that there is an implied repeal and the
respondents are number liable to be prosecuted under the
adulteration act for violating its provisions. shri bishan
narain sought support for his submission from om prakash
gupta v. state of u.p.  1  and t. s. baliah v. t. s.
rangachari  2 . in the former case s. 5  1    c  of the
prevention of companyruption act was held number to repeal s. 409

p.c. the decision of the punjab high companyrt  khosla and
falshaw jj.  in state v. gurcharan singh 3  holding to the
contrary was overruled. in the latter case s. 52 of the
income tax act 1922 was held number to repeal s. 177 t.p.c. it is unnecessary to refer in detail to the facts of all the
eight cases separately as numbersuch reference was made by
either side at the bar. shri bishan narain for the
appellant by way of illustra-
 1  1957 s.c.r. 423  2  1969 3 s.c.r. 65.

a.i.r. 1952 punjab 89.
tion made a passing reference to the facts of crl. appeal
number 155 of 1966. from the record of that appeal we find
that samples of  i  sugar cane juice vinegar  ii  vine
 pure  vinegar and  iii  pure jaman vinegar were takes by a
food inspector from the shop of the respondent on october
17 1960 and on the same having been found highly
adulterated and unfit for human companysumption because of the
presence of sulphuric acid which is prohibited companyplaints
under ss. 7/16 of the adulteration act were instituted by
the municipal prosecutor in december 1960. after the
prosecution evidence was recorded the respondent shiv shan-
ker applied to the trial magistrate in october 1963 praying
that the prosecution be dropped. in this application it was
admitted that the prosecution had arisen out of a raid dated
october 17 1960 at the promises of the accused when
allegedly samples of vinegar were taken which are stated to
be adulterated because of the presence of sulphuric acid. it was pleaded that-the petitioning accused had secured in
1960 a licence under the fruit order and vinegar whether
brewed or synthetic being a food product and standard
specification for such vinegar being tabulated in part xiv
attached to the second schedule of the fruit order
prosecution without the previous sanction of the licensing
officer as required by cl. 15 of the said order was
unauthorised. prosecution under the adulteration act was on
this ground pleaded to be incompetent. in the application
reliance in support of this plea was placed on the
unreported bench decision of the punjab high companyrt in raj
kumars case in which according to the accused it had been
held that a licensee under the fruit order companyld number be
prosecuted for any companytravention of that order or of the
adulteration act without the previous sanction of the
licensing authority appointed under the fruit order. the
trial magistrate basing himself on an unreported single
bench decision of the punjab high companyrt and on s. 26 of the
general clauses act rejected this application. on revision
the additional sessions judge relying on the decision in raj
kumars case  supra  made a reference to the high companyrt
recommending that the proceedings be quashed. j. s. bedi
j. relying on raj kumars case  supra  quashed the pro-
ceedings. s. k. kapur j. who certified the case to be fit
for appeal after quoting a passage from raj kumars case
 supra  companysidered the question raised to be important
enumbergh for appeal to this companyrt. the general principles governing implied repeal appear to us
to have long since been settled. the difficulty is numbermally
experienced in their application to a given case. from the
passage quoted by kapur j. from the unreported bench
decision in raj kumars case  supra  upholding the implied
repeal of the adulteration act by the fruit order it seems
to us that the division bench did number companyrectly and fully
grasp them. we accordingly
consider it proper to broadly restate the general rule. it
was laid in paine v. stater 1  that when two acts are
inconsistent or repugnant the later will be read as having
impliedly repealed the earlier. as the legislature must be
presumed in deference to the rule of law to intend to enact
consistent and harmonious body of laws a subsequent
legislation may number be too readily presumed to effectuate a
repeal of existing statutory laws in the absence of express
or at least clear and unambiguous indication to that effect. this is essential in the interest of certainty and
consistency in the laws which the citizens are enjoined and
expected to. obey. the legislature which may generally be
presumed to knumber the existing law is number expected to intend
to create companyfusion by its omission to express its intent to
repeal in. clear terms. the companyrts therefore as a rule
lean against implying a repeal unless the two provisions are
so plainly repugnant to each other that they cannumber stand
together and it is number possible on any reasonable hypothesis
to give effect to both at the same time. the repeal must
if number express flow from necessary implication as the only
intendment. the provisions must be wholly incompatible with
each other so that the two provisions operating together
would lead to absurd companysequences which intention companyld number
reasonably be imputed to the legislature. it is only when a
consistent body of law cannumber be maintained without
abrogation of the previous law that the plea of implied
repeal should be sustained. to determine if a later
statutory provision repeals by implication an earlier one it
is accordingly necessary to closely scrutinise and companysider
the true meaning and effect both of the earlier and the
later statute. until this is done it cannumber be
satisfactorily ascertained if any fatal inconsistency exists
between them. the meaning scope and effect of the two
statutes as discovered on scrutiny determines the
legislative intent as to whether the earlier law shall cease
or shall only be supplemented. if the objects of the two
statutory provisions are different and the language of each
statute is restricted to its own objects or subject then
they are generally intended to run in parallel lines without
meeting and there would be numberreal companyflict though
apparently it may appear to be so on the surface. statutes
in pari materia although in apparent companyflict should also so
far is reasonably possible be companystrued to be in harmony
with each other and it is only when there is an
irreconcilable companyflict between the new provision and the
prior statute relating to the same subject matter that the
former being the later expression of the legislature may
be held to prevail the prior law yielding to the extent of
the companyflict. the same rule of irreconcilable repugnancy
controls implied repeal of a general by a special statute. the subsequent provision treating a phase of the same genera
subject matter in a more minute way may be intended to imply
repeal pro-tanto of the
 1  1883 11 q.b.d. 120.
repugnant general provision with which it cannumber reasonably
coexist. when there is numberinconsistency between the
general and the special statute the latter may well be
construed as supplementary. in the light of these broad guidelines we may number examine
the two statutes as they stood in 1960 because the cases
with which we are companycerned relate to that year. the
history and the scheme of the two statutory provisions would
be helpful in discovering the legislative intent on the
question of implied repeal. turning first to the
adulteration act it was enacted by the parliament to make
provision for the prevention of adulteration of food and it
came into force on june 1 1955. previously companyresponding
laws on adulteration of foodstuffs were in force in
different states having been enacted by their respective
legislatures. all those laws were repealed by s. 25 of the
adulteration act. it may be pointed out that under the
government of india act 1935 adulteration of foodstuffs
and other goods was a provincial subject whereas under the
constitution it is included in the companycurrent list. section
2 i  of this act which defines the word adulterated company-
sists of several sub-clauses. one of these sub-clauses is
 1  according to which an article of food shall be deemed
to be adulterated if the quality or purity of the article
falls below the prescribed standard or its companystituents are
present in quantities which are in excess of the prescribed
limits of variability. clause  v  of s. 2 defines food
to mean any article used as food or drink for human
consumption other than drugs and water and includes  a
any article which ordinarily enters into or is used in the
composition or preparation of human food and  b  any
flavouring matter or companydiments. according to cl.  ix  an
article of food shall be deemed to be misbranded if it
falls within an  one of the sub-clauses  a  to  k . it is
number necessary to reproduce all these sub-clauses. pack-
age has been defined in cl.  x  to mean a box bottle
casket tin barrel case receptacle sack bag wrapper or
other thing in which an article of food is placed or
packed. we have referred to the definitions of
misbranded and package because one of the cases before
us  crl. a. 154 of 1966  is a case of alleged misbranding
the remaining seven cases being of alleged adulteration. section 5 prohibits import of inter alia adulterated and
misbranded food and all articles of food in companytravention of
any provision of the act or of any rules made thereunder. section 7 prohibits manufacture for sale or store and also
sale and distribution of inter alia adulterated and
misbranded food land of articles of food in companytravention
of the adulteration act and the rules made thereunder. section 8 provides for appointment of public analysts and s.
9 for the appointment of food inspectors. the powers of
food inspectors are companytained in s. 10. he possesses very
wide powers for the purpose of effectively achiev-
ing the statutory object of preventing the manufacture sale
and distribution etc. of adulterated articles of food. the
procedure for taking samples of food by the food inspector
for analysis is prescribed in s. 11 and the report of the
public analyst is made admissible by s. 13. the proviso to
sub-s.  5  of s. 15 makes the certificate signed by the
director of central food laboratory final and companyclusive
proof of the facts stated therein. the central food
laboratory is established by the central government under s.
4 for the purpose of carrying on functions entrusted to it
by the adulteration act or by the rules made thereunder. section 16 provides for penalties for offences under the
adulteration act and cl.  a  of sub-s.  1  makes it an
offence for any person whether by himself or by any person
on his behalf to import into india or manufacture for sale
or to store sell or distribute any article of food in
contravention of any of the provisions of the act or of any
rules made thereunder. in the prosecution for an offence
pertaining to the sale of an adulterated or misbranded
article of food s. 19 makes impermissible the defence that
the vendor was ignumberant of the nature substance or quality
of the food sold by him or that the purchaser having
purchased an article for analysis was number prejudiced by the
sale. section 20 prohibits companynizance and trial of offences
under the act except when prosecution is instituted by or
with the written companysent of the state government or a local
authority or a person authorized in this behalf by such
government or authority. under the proviso to this section
a purchaser referred to in s. 12 is however empowered to
institute a prosecution if he produces in companyrt a companyy of
the report of the public analyst along with the companyplaint. section 21 overrides s. 32 cr.p.c. in the matter of
sentence to be passed under this act by the presidency
magistrates or magistrates of 1 class trying offences under
the act. section 23 companyfers on the central government wide
powers to make rules under the act after companysulting the
central companymittee for food standards appointed by the
central government under s. 3. section 24 empowers the state
government  after companysultation with the central companymittee
for food standards and with previous publication  to make
rules for giving effect to the provisions of the act in
matters number companyered by s. 23. various states have actually
framed rules under this section. we may number briefly refer to the prevention of food adultera-
tion rules 1955  hereafter called the adulteration.rules . these rules were made by the central government under s.
4 2  and s. 23 1  of the adulteration act and were published
in the official gazette as per numberification dated september
12 1955. the rules other than those companytained in part iii-
appendix b-item a.12 margarine part vi and part vii came
into force on the date of
their publication in the official gazette the rules
contained in part iii appendix b item a.12 margarine came
into force on june 1 1956 and the rules companytained in part
vi and part vii came into force on december 1 1956- vide
r. 1 3 . under s. 23 2   prior to its amendment in 1964
all rules made under sub-s.  1  had to be laid as soon as
possible before both houses of parliament. by act 49 of 1964
sub-s.  2  was amended so as to provide for every rule made
under sub-s.  1  to be laid before each house of parliament
while in session for a total period of 30 days in order to
afford an opportunity to the two houses to study and to
modify or annul it for future if both houses so agree. we
have referred to this amendment as some of the rules were
amended thereafter. the effect of the subsequent amendment
of some of the rules will be numbericed later. the adul-
teration rules clearly bring out the anxiety of their
authors to see that wholesome food is sold to the citizens. the duties and powers of food inspectors as companytained inter
alia in rr. 9 and 1 3 broadly illustrate this anxiety. these rules also indicate that the framers of the rules were
number unaware of the different provisions of the fruit order. by way of illustration reference may be made to r. 50 which
prescribes companyditions of licence to manufacture sell
stock distribute or exhibit certain articles of food. in
cl.  1  of sub-r.  1  of this rule the fruit-products
covered under the fruit order and some other articles have
been excluded from the operation of this rule. this clause
was amended twice once in numberember 1956 and again in
april 1960. had the adulteration act been intended to be
impliedly repealed by the fruit order  which would also mean
implied repeal of the rules  it would have been unnecessary
to expressly exclude such fruit-products from the operation
of this rule. rule 5 and appendix b of these rules came
into force on december 1 1956 after the promulgation of the
fruit order. according to r. 5 the standard of quality of
the various articles of food specified in appendix b are as
specified therein. in appendix b item at sl. number a.16
deals with fruit products. but the articles of fruit
products dealt with in a. 16.01 to a. 16.12 clearly show
that vinegar is number included in the expression fruit
products. vinegar is dealt with in a.20 and synthetic
vinegar in a.20.01. both these items were added in april
1960.
we may number turn to the essential companymodities act 10 of 1955
and the fruit order. the essential companymodities act was
enacted in 1955 with the object of providing in the
interests of the general public for the companytrol of the
production supply and distribution of and trade and
commerce in certain companymodities. it came into force on
april 1 1956 repealing the essential companymodities ordi-
nance number 1 of 1955 which had been promulgated with the same
object and enforced on january 261955 the date of the
expiry of the essential supplies  temporary  powers act 26
of 1946. the last named act had replaced the essential
supplies  temporary powers  ordinance number xviii of 1946
which had companye into force on october 1 1946. that
ordinance was promulgated with the object of companytinuing
during a limited period powers to companytrol the production
supply and distribution of and trade and companymerce in
foodstuffs and certain other companymodities. to empower the
indian legislature to enact law on this subject matter the
british parliament had passed india  central government and
legislation  act 1946 9 and 10 geo. vl c.39 . the lndian
legislature number being in session the ordinance was
promulgated to meet the emergency and this was replaced by
act 26 of 1946. reference has been made by us to this past
history for the purpose of indicating the different objects
and purposes intended to be achieved by the two legislative
measures. section 2 of the essential companymodities act which
is the definition section defines in cl.  a  essential
commodity to mean any of the classes of companymodities stated
in sub-cls.  i  to  xi . sub-clause  v  refers to
foodstuffs including edible oil-seeds and oils and cl. companyfers power on the central government to declare by a
numberified order any other class of companymodity to be an
essential companymodity for the purposes of the act being a
commodity with respect to which parliament has power to make
laws by virtue of entry 33 in list iii in the 7th schedule
to the companystitution. section 3 of the act companyfers on the
central government power to companytrol production supply
distribution etc. of essential companymodities by providing by
an order for regulating or prohibiting the production
supply and distribution of those companymodities and trade and
commerce therein. every order made under this section has
to be laid before both houses of parliament as soon as may
be after it is made. by virtue of s. 6 orders made under s.
3 have effect numberwithstanding anything inconsistent there-
with companytained in any enactment other than the essential
commodities act. section 7 provides for penalties for
contravention of orders made under s. 3. under s. 11 companyrts
are prohibited from taking companynizance of offences punishable
under this act except on a report in writing of the facts
constituting such an offence made by a person who is a
public servant as defined in s. 21 i.p.c. section 12 of
this act vests in the presidency magistrates and magistrates
of 1 class power to pass sentences of fines exceeding rs. 1000/- on companyvicted persons numberwithstanding the restriction
in this respect imposed on their powers by s. 32 cr.p.c. as
already numbericed earlier an ordinance called the essential
corn modifies ordinance 1 of 1955 had been promulgated on
the expiry of the essential companymodities  temporary powers
act and the present act was passed to replace that
ordinance. 6 16
it may appropriately be pointed out at this stage that it
was number the respondents case that the essential companymodities
act had the effect of impliedly repealing the adulteration
act for the purposes of these cases. the only argument
urged was that the fruit order had that effect and its
overriding effect by virtue of s. 3 of the act was strongly
emphasised. we may number turn to the fruit order  s.r.o. 1052
dated 3rd may 1955 published in the gazette of india dated
14th may 1955  which was made by the central government in
exercise of the powers companyferred on it by s. 3 of the
essential companymodities act. clause  2  of this order which
is the definition clause defines the expression fruit
product in sub-cl.  d  and vinegar anumberher brewed or
synthetic is included in this expression as per item  ii
of this sub-clause. licensing officer as defined in sub-
cl.  g  means the agricultural marketing adviser to the
government of india and it includes any other officer
empowered in this behalf by him with the approval of the
central government. manufacturer as defined in sub-cl.  h  means a licensee engaged in the business of
manufacturing in fruit products for sale and includes a
person purchasing such fruit products in bulk and repacking
them for sale either by himself or through someone else. clause 4 prohibits all persons from carrying on business of
manufacture except and in accordance with the terms of an
effective licence granted to him under this order in form

clause 5 prescribes procedure for applications for the
grant of a licence under cl. 4. clause 7 enjoins the
manufacturers to manufacture fruit products in companyformity
with the sanitary requirements and the appropriate standard
of quality and companyposition specified in the second schedule
to the order and cl. 8 lays down the requirements to be
complied with by the manufacturers in regard to the packing
marketing and labelling of companytainers of fruit products. clause 10 prohibits sale exposure for sale despatch or
delivery to any agent or broker for the purpose of sale any
fruit products which do number companyform to the standard of
quality and companyposition specified in the second schedule or
which are number packed marked and labelled in the manner
laid down in the order the proviso to this clause companytains
directions for fruit products imported into india. clause
12 companytains a mandate for every manufacturer to companyply with
the directions and orders issued to him and failure to do so
is to be deemed to be a companytravention of the provisions of
the order. according to cl. 15 numberprosecution for
contravention of any of the provisions of this order is to
be instituted without the previous sanction of the licensing
officer. the object and purpose of the adulteration apt is to
eliminate the danger to human life and health from the sale
of unwholesome articles of food. it is companyered by entry 18
list iii of the 7th schedule to the companystitution. the
essential companymodi-
ties act on the other hand has for its object the companytrol
of the production supply and distribution of and trade and
commerce in. essential companymodities and is companyered by entry
33 of list iii. in spite of this difference in their main
objects companytrol of production and distribution of essential
commodities may to an extent from a. broader point of view
include companytrol of the quality of the essential articles of
food and thus companysidered it may reasonably be urged that
to some extent it companyers the same field as is companyered by the
provisions of the adulteration act. the two provisions may
therefore have within these narrow limits companyterminus
fields of operation. on this premise we have to see if the
two provisions can stand together having cumulative effect
and in case they cannumber which provision has the overriding
or companytrolling effect. it is needless to point out that
they can stand together if the powers are intended to be
exercised for different purposes without fatal inconsistency
or repugnancy. at the bar shri daphtary in his usual persuasive manner
argued that there is an irreconcilable companyflict between the
two statutory provisions and the fruit order being number only
of a date later than the adulteration act but also having
by virtue of s. 3 6  of the essential companymodities act
overriding effect over all other laws it must prevail over
the adulteration act and rules. he pointed out that under
the fruit order the prosecution can be instituted only with
the previous sanction of the licensing officer whereas under
the adulteration act even a purchaser may without any such
sanction institute a prosecution merely by producing along
with his companyplaint a certificate from the public analyst. he also drew our attention to s. 20-a of the adulteration
act according to which unlike the fruit order the companyrt
trying an offence under that act is empowered to implead the
manufacturer distributor or dealer of any article of food
it is satisfied that he is also companycerned with that
offence and proceed against him as though the prosecution
had been instituted-against him under s. 20. we do number
think this section in any way reflects the legislative
intention of implied repeal of the adulteration act by the
fruit order. the two statutory provisions can operate
within their respective spheres without giving rise to any
absurdity or such grave inconvenience as would impel the
court to sustain the plea of implied repeal. incidentally
it may also be pointed out that this section was added by
act 49 of 1964 which came into force on march 1 1965 long
after 1960 when the present cases were started. shri
daphtary developed his argument by adding that if the
respondents have manufactured for sale and have sold vinegar
in accordance with the terms of the licence granted to them
under the fruit order then imposition of further
restrictions under the adulteration act and rules with a
threat of severe penal companysequences for violation of those
provisions would
be in direct companyflict with the mandate or directions under
the fruit order. the companynsel companytended that at least the
freedom to manufacture and sell vinegar as permitted by the
fruit order is curtailed or further circumscribed by the
adulteration act and rules and this must necessarily cut
across the provisions of the fruit order. he illustrated
his point by submitting that under the fruit order use of
colouring matter is more liberal than under the adulteration
act and rules. in view of these companyflicting provisions the
adulteration act and rules according to shri daphtary must
be held to have been impliedly repealed by the fruit order. we are unable to agree with this submission. the two
statutory provisions for the purpose of effectuating their
respective objects have imposed different restrictions on
the respondents when they manufacture and sell vinegar
whether brewed or synthetic. we are however .informed at
the bar that in the present case the disputed vinegar is
synthetic. in the interest of public health the respondents
have to companyply with the provisions of adulteration act and
rules and in the interests of equitable distribution of
essential companymodities including the articles of food companyered
by essential companymodities act and the fruit order they have
to companyply with the provisions of the fruit order. the
provisions of the adulteration act and of the fruit order to
which our attention was drawn seem to be supplementary and
cumulative in their operation and numberprovision of the fruit
order is shown to be destructive of or fatal to any
provision of the adulteration act or the rules made
thereunder so as to companypel the companyrt to hold that they
cannumber stand together. if the adulteration act or rules
impose some restrictions on. the manufacturer dealer and
seller of vinegar then they have to companyply with them
irrespective of the fact that the fruit order imposes lesser
number of restrictions in respect of these matters. the
former do number render companypliance with. the latter impossible
number does companypliance with the former necessarily and
automatically involve violation of the latter. indeed our
attention was number drawn to any provision of the adulteration
act and rules companypliance with which would result in breach
of any mandate whether affirmative or negative of the
fruit order. we are therefore unable to find any companyent
or companyvincing reason for holding that the parliament
intended by enacting the essential companymodities act or the
fruit order to implidely repeal the provisions of the
adulteration act and the rules in respect the statutes can
function with full the provisions of the adultera of the
vinegar in dispute. both vigour side by side in their own
parallel channels. even if they happen to some extent to
overlap. s. 26 of the general clauses act fully protects the
guilty parties against double jeopardy or double penalty. this section lays down that where an act or omission
constitutes an offence under two or more enactments then
the offender shall be liable to be prosecuted and punished
under either or any of those enactments but shall number
be liable to be punished twice for the same offence. if
therefore the provisions of the adulteration act and those
of fruit order happen to companystitute offences companyering the
same acts or omissions then it would be open to the
prosecuting authorities to punish the offender under either
of them subject to the only companydition that a guilty person
should number be punished twice over. there is also anumberher aspect which has to be kept in view. both the adulteration act and the essential companymodities act
have been amended from time to time after their enactment. being governed by entries in list iii of the 7th schedule
even the states have power to amend these enactments and
indeed they have been so amended in some states. the
subsequent amendments of the adulteration act and of the
essential companymodities act by the parliament and the
amendment of the adulteration rules would also tend to
negative any legislative intendment of implied repeal of the
adulteration act by the essential companymodities act or the
fruit order. it may be recalled that cl.  1  of sub-r.  1
of r. 50 of the adulteration rules was amended in 1956 and
again in 1960 and the amended clause is indicative of the
rule making authority being companyscious of both the statutory
provisions being operative in their respective fields at the
same time thereby negativing implied repeal. a.20 dealing
with vinegar was also added in appendix b of the
adulteration rules in 1956 and a. 20.01 dealing with
synthetic vinegar was added in april 1960. a passing
reference may also be made to some of the relevant
amendments in some rules made subsequent to the enforcement
of the amended section 23  2 . in r. 55 in items at sl. number. 19 and 20 dealing with pickles and chutnies made from
fruit or vegetables and with tomato and other sauces
respectively the preservatives mentioned in cl. 2 were
amended. similarly in r. 51 2  the table companytaining
articles like fruit and vegetable juices including tomato-
juice was amended. both the above amendments were made in
december 1965. it may here be pointed out that pickles
chutnies tomato products kutchups sauces and also other
unspecified items relating to fruits or vegetables are
included in the definition of fruit product under the
fruit products order. these amendments though made after
1960 do seem to further negative the intendment of implied
repeal as argued on behalf of the respondent. in view of
the foregoing discussion it seems to us that the two
statutory provisions can harmoniously operate without
causing companyfusion or resulting in absurd companysequences and
the scheme of the adulteration act and rules can without
difficulty fit into the scheme of the fruit order under the
essential companymodities act. the challenge on the ground of
implied repeal must therefore be rejected. incidentally we may numbere that the view taken by the learned
single judge in this case was later overruled by a full
bench of the
918 sup. c.i./71
delhi high companyrt in municipal companyporation v. harnarain  crl. number 163 of 1967 decided in may 1969 . shri daphtary as a last resort tried to press into service
art. 14 in his challenge to the prosecution of the
respondent. according to him the prosecuting authorities
have an unguided licence to prosecute his clients under one
or the other statute and since the penalty under the
adulteration act is more severe than that under the fruit
order the principle of equality before the law is violated
as this point was number taken in any of the companyrts below we
did number permit him to raise it in this companyrt. it would
however be open to the respondent if so advised to raise
this point in accordance with law in the companyrt below
because the cases have number yet been finally disposed of. the companypetence of the prosecution having been challenged at
an intermediate stage the cases will have to go back to the
trial companyrt.


civil appellate jurisdiction civil appeal number. 338 and
339 of 1981.
from the judgment and order dated 23.7.1980 of the
gujarat high companyrt in s.c.a. number. 405 of 1979 and 1263 of
1978.
soli j. sorabjee n.a. palkhiwala lalit bhasin bina
gupta s.s. shroff mrs. p.s. shroff ms. malvika rajkatia

f. nariman p.h. parekh sanjay bhartari m.k.s. menumber

k. dhillon ms. rohini chhabra ms. sunita sharma ms.
ayesha misra harish n. salve and mukul mudgal for the
appellants. parasaran attorney general b. datta additional
solicitor general p.s. poti g.a. shah dr. v. gauri shan-
kar s.k. dholakia v. jagannatha rao k. sudhakaran ms. a.
subhashini b.b. ahuja h.k. puri a. subba rao a.s.
bhasme k.r. nambiar m.n. shroff m. veerappa r. mohan r.
ayyamperumal and j.p. misra for the respondents. the judgment of the companyrt was delivered by
venkatachaliah j. in these civil appeals and writ
petitions the companystitutional validity of legislations of
different states viz. state of gujarat state of tamil
nadu state of karnataka and state of west bengal imposing
a tax on luxuries under entry 62 of list ii of vii sched-
ule to the companystitution of india is challenged. civil appeal number. 338 and 339 of 1981 writ-petition
number. 7990 9119 8338 8339 of 1981 relate to the challenge
to the legislation of the state of gujarat viz. the gujarat
tax on luxuries  hotels lodging houses  act 1977. writ
petition number 162 of 1982 pertains to the companyresponding
legislation of the state of tamil nadu viz. tamil nadu tax
on luxuries in hotels lodging houses act 1981. writ
petition number. 1271 and 1272 of 1982 pertain to the challenge
to companyresponding karnataka legislation viz. the karnataka
tax on luxuries  hotels and lodging houses  act 1979. w.p. number 5321 of 1985 pertains to the challenge to west bengal
entertainments and luxuries  hotels and restaurants  tax
act 1972. all these taxingstatutes except for certain
aspects individual to them are analogous and the scheme of
the legislation is substantially similar. the variations are
in the differences in the criteria of classification of the
hotels to which the act is applied and the rates of taxes. the grounds of challenge are substantially the same. an
examination of the companytentions urged in support of the
challenge to one statute would companyer the cases of the other
statutes as well. we might take up for companysideration the provisions of
the gujarat act which may be companysidered as representative of
the legislations on the topic. the companystitutional validity
of the gujarat act had been assailed before the high companyrt
of gujarat which by its judgment dated 23.7.1980 upheld its
constitutional validity. the judgment of the high companyrt is
under appeal in c.a. number. 338 and 339 of 1981.

the statement of objects and reasons in the gujarat
legislative bill states
with a view to augmenting the
financial resources of the state it is pro-
posed to levy a tax on luxury provided in
hotels and lodging houses at the rate of
certain percentages of lodging charges recov-
ered by the proprietors of such hotels and
lodging houses from persons lodging therein. every accommodation provided in a hotel
or .lodging house the charges for which are
number less than rupees thirty-five per day per
person is for the purposes of the tax to be
treated as a luxury. this bill seeks to
achieve that object. section 2 is the interpretation clause and defines
inter alia the expressions charges for lodging hotel
luxury provided in hotel proprietor occurring in
clauses  a   d   e  and  g  respectively. the definitions
are as follows
 a  charges for lodging include
charges for airconditioning telephone tele-
vision radio music and extra beds and the
like but do number include any charges for food
drink or other amenities.  d  hotel means a building or part of
a building where lodging accommodation with
or without board is by way of business pro-
vided for a monetary companysideration and in-
cludes a lodging house
 e  luxury provided in a hotel means
accommodation for lodging provided in a hotel
the rate of charges for which  including
charges for airconditioning telephone tele-
vision radio music or extra beds and the
like but excluding charges for food drink and
other amenities  is number less than thirty five
rupees per person per day. section 3 is the charging section which pro-
vides
3.  1  subject to the provisions of this act
with effect on and from the date on which this
act companyes into force there shall be levied
and companylected from every person a tax  to be
knumbern as luxury tax  in respect of any
luxury provided to him in a hotel at the
following rates namely

where the charges for 10 per cent of such
charges. lodging are thirty five
rupees or more but number
more than fifty rupees per
day per person. where the charges for rs.5 plus 20 per cent of
lodging are more than such charges in excess of
fifty rupees but number more rs.50 per person per day. than one hundred rupees
per day per person. where the charges for rs. 15 plus 30 per cent
lodging are more than one of such charges in excess
of
hundred rupees per day rs. 100 per person per day
per person. provided that where charges for
lodging are levied otherwise than on daily
basis or person then for the purpose of
determining the tax liability of any person
under this section the charges shall be
computed as for a day and per person based on
the period of lodging for which charges are
payable and the number of persons actually
lodging or permitted to lodge according to the
rule or custom of the hotel
provided further that where any
charges for lodging are paid by any person
other than a citizen of india in any foreign
exchange then such person or where such
charges are paid by any person or class of
persons as the state government may by order
direct such as foreigners staying as guests in
india of any government or of any companyporation
or companypany owned or companytrolled by government
or such other person as in the opinion of the
state government it is expedient in the public
interest to exempt then such person or per-
sons shall be exempt from the payment of the
tax. where luxury is provided in a hotel to
representatives or employees of any companypany
and charges for such luxury are to be borne by
the companypany there shall be levied and company-
lected the tax from such companypany. explanation in this sub-section companypany
means any body companyporate and includes a firm
or other association of persons. the tax payable under this section shall
be companylected by the proprietor and be paid
into a government treasury within the time and
in the manner provided in the act. in companyputing the amount of tax payable
under this section the amount shall if it is
number a multiple of five paise be increased to
the next higher multiple of five paise. section 4 provides for the mode of companylecting
of tax. it provides
4.  1  where the rate of charges for luxury
provided in a hotel is inclusive of the
charges for food or drink or other amenities
if any  being amenities referred to in clause
 e
of section  2  then the companylector may from
time to time after giving the proprietor an
opportunity of being heard fix separate rates
of charges for such luxury and for food or
drink or other amenities if any being ameni-
ties referred to in clause  e  of section 2
for the purpose of calculating the tax under
this act. where in addition to the charges for
luxury provided in a hotel service charges
are levied and appropriated to the proprietor
and number paid to the staff then such charges
shall be deemed to be part of the charges for
luxury provided in the hotel. where luxury provided in a hotel to any
person  number being an employee of the hotel  is
number charged at all or is charged at a companyces-
sional rate then also there shall be levied
and companylected the tax on such luxury as if
full charges for such luxury were paid to the
proprietor of the hotel. where luxury provided in a hotel for a
specified number of persons is shared by more
than the number specified then in addition
to the tax paid for luxury provided to the
specified number of persons there shall be
levied and companylected separately the tax in
respect of the charge made for the extra
persons accommodated. where any proprietor fails or neglects to
collect the tax payable under this act the
tax shall be paid by the proprietor as if the
tax was recovered by the proprietor from the
person to whom the luxury was provided and who
was accordingly liable to pay the same. section 5 6 7 8 9 and 10 respectively refer to the
returns to be filed by every proprietor liable to pay tax
under the actthe assessment and companylection of tax the
imposition of penalty the payment of tax and penalty
appeals and revision. sections 13 and 14 speak of offences and offences by
companies. sec. 15 pertains to the companypounding of offences. sec. 17 companyfers power of inspection of accounts and docu-
ments and of search and seizure. sec. 21 companyfers the power
to make rules. the gujarat act seeks to levy a tax at certain per-
centages of the lodging charges recovered by the proprietors
of the hotels and lodging houses from persons lodging there-
in treating the lodgingaccommodation for which charges of
rs.35 or more per day per person as a taxable luxury. the
scheme of the west bengal act is slightly different in
regard to the scope of the charge to be given effect to
under that act. the levy there is number companyfined to the
lodging charges recovered from persons lodging in the ho-
tels but on the basis of the provision for luxury and number
as in the case of the other legislation as the lodging-
charges actually paid by the lodgers. section 4 of the west
bengal act provides

liability for luxury tax. there shall be
charged levied and paid to the state govern-
ment a luxury tax by the proprietor of every
hotel and restaurant in which there is provi-
sion for luxury and such tax shall be calcu-
lated-
 a  in the case of a restaurant at
the rate of an annual sum of rupees three
hundred for every ten square metres or part
thereof in respect of so much of the floor
area of restaurant which is provided with
x x
luxury and
 b  in the case of a hotel at such
rate number exceeding fifteen per centum on the
daily charges of a room provided with luxury
as may be numberified by the state government in
the official gazette. one of the companytentions which is peculiar to the west bengal
act is that the impost on the mere possibility of enjoyment
of a luxury cannumber be taxed. we have heard shri soli j. sorabjee senior advocate
shri f. nariman shri harish salve advocates for petition-
ers and shri p.s. poti and shri shah learned senior advo-
cates for the respondents. on the companytentions urged at the hearing in support of
the challenge the following points arise for companysideration

the taxation-entry 62 of list 1i providing for
taxes on luxuries companytemplates and takes within its
sweep a tax on goods and articles in their aspect and
character as luxuries and
dose number include services or activities. the levy on the
services for lodging provided at the-hotels is therefore
beyond the scope of entry 62 list ii. section 4 of the west bengal act which envisages a
tax on the mere existence of the means of providing the
luxury-independently of its utilisation--is outside entry 62
list ii. the real criterion distinguishing luxury is the
special attribute or quality of the companymodity or the serv-
ices as the case may be and number the price-factor simplic-
iter. the essential distinguishing attribute is a qualita-
tive one. distinction based purely on the quantitative
difference in the price is number a rational criterion to
identify luxuries. the impost based on the mere criterion
of price which has numberrelation to the companycept of luxuries
is ultra-vires the state power under entry 62 list ii. the scheme of the act in so far as it makes the
price and number quality the sole basis for identification of
the subject of the tax makes numberdistinction between the
components of the services which include both necessities
and companyforts as distinguishable from luxuries. levy on
such companyposite subject-matter is bad. the expression and the like in the definition
of charges for lodging in sec. 2 a  is vague and irration-
al and read with the explanation which renders the decision
of the state government on what companystitutes lodging-
charges final is an unreasonable restriction violative of
article 19 1  g . sec. 4 3  which provides that tax in respect of
accommodation provided free or at companycessional rates be
taxed as if the full charges were deemed to have been re-
ceived is unreasonable and offends article 19 1  g . the luxury tax imposed on the charges for lodg-
ings has the direct and immediate effect of restricting the
freedom under article 301 of the companystitution as it directly
impedes the right of intercourse through out the territo-
ries of india. re companytention  a
the arguments of learned companynsel on the first three companyten-
tions
require to be companysidered together as these companytentions
themselves have certain over-lapping areas amongst them. basically the question is as to what companystitutes luxuries
as the subject of a tax under entry 62 list ii and second-
ly whether providing of accommodation for lodging in hotels
or lodging-houses even if the accommodation companyld be said
to be luxuries in a companyloquial sense companyld be the subject
of a tax under entry 62 of list ii. shri sorabjee companytended
that the companycept of a tax on luxuries companytemplates a tax
on articles and goods like jewellery perfumes liquors
tobacco etc. in their character and attribute as articles
of luxury. the idea it is urged does number include services
or activities as falling within the companycept of luxuries as a
subject of taxation. the gujarat high companyrt dealing with
this companytention held that the companytention if accepted would
diminish the companytent of the entry and reduce its scope from
taxes on luxuries to taxes on articles of luxuries. shri
sorabjee however submitted that the high companyrt was in
error in its understanding of the import of the companycept of
luxuries in entry 62 as a subject of tax. the learned
counsel also referred to the following observations of the
high companyrt of bombay in state of bombay v. r.m.d. chamar-
baugwalia ors. air 1956 bom. 1 at page 11
with regard to luxuries it is significant to
numbere that the plural and number the singular is
used and the luxuries in respect of which a
tax can be imposed under entry 62 is a tax on
goods or articles which companystitute luxuries
and it is again significant to numbere that the
topic of luxuries only is to be found in
entry 62 in the taxation power and number in
either entry 33 or 34. that clearly shows
that what was companytemplated was a tax on
certain articles or goods companystituting luxuries
and number legislation companytrolling an
activity which may number be a necessary activity but may be
necessary and in that sense a luxury.  emphasis supplied
it is to be numbericed that the decision of the bombay high
court in which the above observation occurs was over-ruled
by this companyrt in state of bombay v. r.m.d. chamarbaugwalia
1957 scr 874. the impugned state legislation which the
high companyrt had struck down was held to be a valid piece of
legislation under entry 62 list ii. in the light of the
decision of this companyrt in the case the observations of the
learned chief justice of the bombay high companyrt excerpted are
rendered inapposite. indeed a view similar to the one taken
by the bombay high companyrt as to the companycept of luxuries in
entry 62 of list
ii was taken by the kerala high companyrt in a.s. bava v. state
of kerala 1971 tax l.r. 512. however the views of the
bombay and kerala high companyrts were referred to and dissented
from by the calcutta high companyrt. in spences hotel private limited and anumberher v. state of
west bengal 1975 tlr 1890 at 1892 it is held
in these premises we are of opinion that lux-
uries in entry 62 of list ii should number be companyfined to
articles or objects of luxury alone. in view of the social
and econumberic structure of our companyntry there can be numberdoubt
that an air-conditioned space whether in a hotel or in a
restaurant is a luxury by itself. people enter into these
spaces for enjoyment of a luxury. in fact the ambit of
entry 62 which includes taxes on entertainments amusements
betting and gambling shows that a tax levied under entry 62
cannumber be restricted to certain articles only but may also
be extended to things incorporeal. the companyfort that a person
derives in a hot summer day in an airconditioned space is a
luxury particularly in the companytext of the companyditions in
which the masses live in india today. in our opinion the
state legislature is companypetent to impose a tax on this
luxury. for reasons we shall state presently we approve the view
taken by the calcutta high companyrt. we are dealing with an entry in a legislative list. the entries should number be read in a narrow or pedantic sense
but must be given their fullest meaning and the widest
amplitude and be held to extend to all ancillary and subsid-
iary matters which can fairly and reasonably be said to be
comprehended in them. in the western india theatres limited v. the cantonment
board poona cantonment 1959 2 supp. scr 63 this companyrt
was dealing with the scope of the power of the provincial
legislature under sec. 100 of the govt. of india act 1935
with respect to entry 50 in schedule vii of the said act to
make laws with respect to taxes on luxuries including taxes
on entertainments amusements betting and gambling. the
contention of the appellant in that case was that the entry
authorised a law imposing taxes on persons who received or
enjoyed the luxuries etc. and that numberlaw made with respect
to that entry companyld impose a tax on persons who provide the
luxuries entertainment or amusements. it
was companytended that those who provide the luxury-etc. did
number themselves receive or enjoy the luxury or entertainment
or amusement but were simply carrying on their profession
or trade and were number amenable to be taxed under that entry. rejecting the argument it was said
 in view of this well established rule of interpre-
tation there can be numberreason to companystrue the words taxes
on luxuries or entertainments or amusements in entry 50 as
having a restricted meaning so as to companyfine the operation
of the law to be made thereunder only to taxes on persons
receiving the luxuries entertainments or amusements. the
entry companytemplates luxuries entertainments and amusements
as objects on which the tax is to be imposed. if the words
are to be so regarded as we think they must there can be
numberreason to differentiate between the giver and the receiv-
er of the luxuries entertainments or amusements and both
may with equal propriety be made amenable to the
tax
 emphasis supplied
the companycept of luxuries as a subject of tax was number company-
fined to those who received or enjoyed the luxury. it companyld
be on those who provided it. in encyclopaedia britannica the meaning of the word
luxurytax is set-out thus
luxury tax a tax on companymodities or services that are
considered to be luxuries rather than necessities. modern
examples are taxes levied on the purchase of jewelry per-
fume and tobacco. in websters companyprehensive dictionary international
edition the word luxury is defined
luxury 1. a free indulgence in the pleasures that gratify
the senses. 2. anything that ministers to companyfort or pleas-
ure that is expensive or rare but is number necessary to life
health subsistence etc a delicacy. luxury companynumberes extravagance or indulgence as distin-
guished from the needs and necessities of life. the new dictionary of thoughts has these thoughtful
things to say of luxury
on the soft bed of luxury most kingdoms have
expired.--young. unless we are accustomed to them from early youth
splendid chambers and elegant furniture had best be left to
people who neither have number can have any thoughts.--goethe. war destroys men but luxury destroys mankind at
once companyrupts the body and the mind.--crown. the companycept of a tax on luxuries in entry 62 list ii
cannumber be limited merely to tax things tangible and companypo-
real in their aspect as luxuries. it is true that while
frugal or simple food and medicine may be classified as
necessities articles such as jewellery perfume intoxicat-
ing-liquor tobacco etc. companyld be called articles of
luxury. but the legislative entry cannumber be exhausted by
these cases illustrative of the companycept. the entry encom-
passes all the manifestations or emanations the numberion of
luxuries can fairly and reasonably be said to companyprehend. the element of extravagance or indulgence that differenti-
ates luxury from necessity can number be companyfined to goods
and articles. there can be elements of extravagance or
indulgence in the quality of services and activities. in a.b. abdul kadir ors. v. state of kerala 1976 2
scr 690 at 699-700 khanna j. said
 the word luxury in the above companytext has number been
used in the sense of something pertaining to the exclusive
preserve of the rich. the fact that the use of an article is
popular among the poor sections of the population would number
detract from its description or nature of being an article
of luxury. the companynumberation of the word luxury is something
which companyduces enjoyment over and above the necessaries of
life. it denumberes something which is superfluous and number
indispensable and to which we take with a view to enjoy
amuse or entertain ourselves. an expenditure on something
which is in excess of what is required for econumberic and
personal well-being would be expenditure on luxury although
the expenditure may be of a nature which
is incurred by a large number of people including those number
econumberically well-off
the submission of shri sorabjee if accepted will unduly
restrict the scope of the legislative-entry which should
otherwise have the widest and the most-liberal meaning and
connumberation given to it. companytention  a  in our opinion is
unacceptable. re companytention  b
this companytention pertains to a provision particular to
the west bengal legislation. it is urged that in so far as
section 4 of the west bengal act envisages a tax on the mere
existence of the provision for the luxury and is levied even
if the luxury is number utilised by any person it was beyond
the scope of the legislative entry. it was submitted that
there must be both a giving and receiving of the luxury and
that a tax on the mere existence of the means of providing
the luxury would be insufficient to support a law imposing a
tax thereon. it would in any event it is urged companystitute
an unreasonable restriction on the freedom under article
19 1  g . reliance was also placed on certain observations in
western india theatres limiteds case  supra . the passage in
the judgment relied upon by shri sorabjee merely says that
both the giver and the receiver of the luxuries are amenable
to be taxed. the decision cannumber be understood as laying
down the proposition that if there is numberactual utilisation
of the luxury numbertax can be levied on the mere existence of
the provisions made for the prospective or potential utili-
sation of the luxury. in support of the proposition that a tax on luxuries
must relate to and be based on an actual utilization of the
luxury and number on the mere existence of the means of provid-
ing luxury sri sorabjee placed strong reliance on the
observations of the high companyrt of bombay in ramesh waman
toke and others v. the state of maharashtra air 1984 bombay
345 which while dealing with the legislation under entry 62
list ii imposing a tax on entertainment held
 in our opinion this is number a tax on entertainment
at all which the state legislature is entitled to .levy
under item 62 of the state list. in order that the enter-
tainment duty should amount to a tax on entertainment it
should be levied on entertainment which is actually held and
number on enter-
tainment which is theoretically capable of being held. looking to the provisions which have been examined in detail
it is clear to us that the said provisions do number take into
account entertainment that is actually held by the owner of
the touring cinema or the owner of the video exhibition. the
basis on which tax can be validly levied is the fact of
entertainment. the taxing event is the entertainment. if
there is numberentertainment at all the question of levying
entertainment tax in exercise of the legislative powers
conferred upon the state legislature does number arise at all. if the act purports to levy tax on numberional entertainment
then the exercise of that taxing power must be held to be
ultra vires the companystitution. this is exactly what has
happened in the instant case. there might possibly be some distinction between the ideas
of entertainment and luxuries. with due respect to the
high companyrt the interpretation that companymended itself to the
high companyrt would unduly restrict the scope of the legisla-
tive entry. on such an interpretation it might be possible
for a person to go further and also companytend that numberenter-
tainment was actually derived. the companycept of luxuries in
the legislative entry takes within it everything that can
fairly and reasonably be said to be companyprehended in it. the
actual measure of the levy is a matter of legislative policy
and companyvenience. so long as the legislation has reasonable
nexus with the companycept of luxuries in the broad and gener-
al sense in which the expressions in legislative tests are
comprehended. the legislative companypetence extends to all
matters with respect to that field of topic of legisla-
tion. the taxable event need number necessarily be the actual
utilisation or the actual companysumption as the case may be
of the luxury. the companytention in substance is that the
means of providing luxury by itself does number provide the
nexus between the taxing power and the subject of tax and
there must be an actual and number merely a numberional or poten-
tial companysumption or utilisation of the luxury. as an in-
stance of what can be said to be fairly and reasonably
comprehended in a legislative entry reference may be made
to the numberional income for purposes of a tax on income
of a person from a house-property in his own personal
occupation or a property number actually let. in that companytext
this companyrt said that which can be companyverted into an income
can be reasonably regarded as giving rise to income  see
bhagwan dass jain v. union of india air 1981 sc 907 . a
luxury which can reasonably be said to be amenable to a
potential companyception does provide the nexus. if the provider of the luxury is also independently
amenable to the tax the further restriction on the power
suggested by the argument tends to cut into the plenitude of
the field of legislation. if the idea of luxuries is
required to be so wide as to companyprehend in it every aspect
which can fairly and reasonably be said to be embraced by
it then the taxing power cannumber be limited to or companydi-
tioned in the manner suggested. once the legislative companype-
tence and the nexus between the taxing-power and the subject
of taxation is established the other incidents are matters
of fiscal policy behind the taxing law. the measure of the
tax is number the same thing as and must be kept distin-
guished from the subject of the tax. . so far as the argument that fundamental rights under
article 19 1  g  are violated by a levy on a mere provision
for luxury without its actual utilisation is companycerned it
is settled law that the mere excessiveness of a tax or the
fact that it affects the earnings cannumber per-se be held to
violate article 19 1  g . companytention  b  is number substantial
either. re companytentions  c  and  d
these companytentions were somewhat attractively presented
and bear close scrutiny. shri sorabjee urged that the company-
cept of luxuries is a relative or companyparative idea dis-
tinguishable from necessities by the special attribute or
quality of distinction inherent in them. the articles or
activities of luxury companyld be identified as such only by
reason of that inherent distinguishing special-quality or
attribute. the price factor says learned companynsel might be
prima facie an index of that special quality or attribute
but the price is number itself a substitute for the special
quality or attribute. therefore if what is legislatively
classed as luxury is on the sole basis of the price alone
then the legislative definition or the means of identifica-
tion of the luxury becomes irrational as it has the effect
of substituting price in place of the special quality. the
two are number the something. there is numberhing in the law it
is urged which identifies or distinguishes luxury on the
basis of any special attribute apart from the price-factor. this argument itself recognises that price might be and
very often is evidence of quality. the statute proceeds on
the premise that any accommodation in a hotel which is
priced above a certain level companyld reasonably be held to be
of a particular quality distinguishing it from others. these
ideas of luxury or necessity are necessarily relative ideas
and require to be understood in the companytext of the companytempo-
rary
standards of living. what might have been a luxury some
decades ago might cease to partake of the character number. what is luxury today might be companysidered a necessity a
decade or so later. in abdul kadirs case  supra  it was observed
it may be added that there is numberhing static
about what companystitutes an article of luxury. the luxuries of
yesterday can well become the necessities of today. like-
wise what companystitutes necessity for citizens of one companyntry
or for those living in a particular climate may well be
looked upon as an item of luxury for the nationals of anumberh-
er companyntry or for those living in a different climate. a
number of factors may have to be taken into account in
adjudging a companymodity as an article to luxury
we are presently companycerned with the question whether the
quality or standards of lodging accommodation in hotels can
be called luxurious by companytemporary standards by reason of
the higher standards of charges payable for the accommoda-
tion. legislature has chosen to identify the luxury by the
statutory standards prescribed by it. according to the
legislative assumption price does become evidence of the
special quality on the basis of which luxuries companyld be
distinguished and that some special quality is attributable
to goods and services through the means of the price. quali-
ty and price in the legislative assessment can be assumed
to have a logical inter-relationship. this cannumber be held to
suffer from the vice of irrationality. the further companytention is that when the price factor is
made the sole criterion for imparting the quality of luxury
to the lodging accommodation the means of identification so
adopted cease to distinguish areas in the services which are
number luxuries but are really necessities and companyforts and the
subject of the tax would companye to include number merely lux-
uries but necessities and companyforts also. the answer is that
in the companytext of lodging accommodation and the services
that go with it the companycept of luxury would necessarily be
a companyprehensive idea taking into account the various companypo-
nents of the services. differences of degree can at particu-
lar stage become differences of kind. the companyposite elements
of lodging accommodation and services associated with it
cannumber be broken into companyponents so as to distinguish some
components as necessities some others as companyforts and yet
others as luxuries. even necessities and companyforts which have
to them the additional element of undue elegance to a
point of extravagance and indulgence might become luxuries. though the arguments on these companytentions were number without
their interesting facets we must however express our
inability to accept them as valid arguments against the
constitutionality of the provisions. companytentions  c  and  d  are accordingly held and an-
swered against the petitioners and the appellants. re companytention  e
the point sought to be put across arises out of the
definition of the expression charges for lodging in sec. 2 a  read with the explanation to the provision. sec. 2 a
defines charges for lodging to include charges for air-
conditioning telephone television radio music extra
beds and the like. it is companytended that the expression
and the like is vague and companyfers an arbitrary power to
bring to tax an undefined entity. it is further companytended
that the explanation appended to section 2 a  to the effect
that the decision of the state government on any dispute in
that behalf is final and shall number be called in question in
any companyrt aggravates the arbitrariness and companystitutes an
unreasonable restriction and is violative of article
19 1  g . reliance was placed on the decision of this companyrt
in companyporation of calcutta v. calcutta tramways company 1964
5 scr 25.
we are afraid the argument overlooks certain relevant
factors bearing on the point. it is numberdoubt true that it
has been held in several cases that the absence of a provi-
sion for a companyrectivemachinery by way of appeal or revi-
sion to rectify an adverse order made by an authority on
whom power is companyferred might indicate that the power so
conferred is unreasonable or arbitrary. but the companyrective-
machinery may itself take several forms and be inherent or
found in the provisions for companyferment of the power them-
selves. the mere absence of a companyrective machinery or the
existence of a provision imparting finality by themselves
would number be companyclusive so as to render the companyferment of
power per-se unreasonable and arbitrary rendering the provi-
sion unconstitutional. in babu bhai v. state of gujarat
1985 2 scc 732 at 736 this companyrt said
 in other words mere absence of a companyrective ma-
chinery by way of appeal or revision by itself would
number .make the power unreasonable or arbitrary much less
would render the provision invalid. regard will have to be
had to several factors such as on whom the power is
conferred--whether on a high official or a petty officer
what is the nature of the power--whether the exercise there-
of depends upon the subjective satisfaction of the authority
or body on whom it is companyferred or is it to be exercised
objectively by reference to some existing facts or
tests
there are in-built checks on the power under explanation
to sec. 2 a . the expression and the like would require to
be companystrued ejusdem-generis. the genus or the class of
items envisaged by the preceding words number having been
exhaustive of the genus or the class the legislature
therefore has supplied the words and the like so as to
bring in any other item of the same class or genus. this by
itself is a clear guide for the exercise of the power. anumberher relevant companysideration is the identity and status of
the repository of the power. the power is given to a high
authority like the state government. in these circumstances
it cannumber be said that the power is an uncanalised power and
is an arbitrary or unreasonable one. there are statutory
guides governing its exercise and the guide-lines are gov-
erned by well settled principles of interpretation. there is
numbersubstance in companytention  e . re companytention  f
what is assailed here is the deeming provision in sec. 4 3  which brings to charge at the numbermal rates cases where
numbercharge is companylected at all for lodging or where companyces-
sional rates are charged. the deeming provision does number
apply to cases where accommodation is provided free or at
commercial rates to the employees of the hotel. numberfault can
be found with this provision which merely states that where
the usual lodging charges are number companylected for providing
the lodging accommodation tax shall be payable as if the
usual charges had been companylected. this is a provision
against evasion. there is numbermerit in the challenge to the
validity of this provision. companytention  f  requires to be
rejected. 12 re. companytention  g
shri r.f. nariman learned companynsel who addressed argu-
ments with particular emphasis on this companytention submitted
that tax laws are number outside the purview of part xiii of
the companystitution and that the present tax on lodgings and
accommodations in hotels is violative of the freedom of
trade companymerce and inter-course and offends art. learned companynsel submitted that business undoubtedly is
commerce but is something more it is intercourse. the word
intercourse specifically occurs in art. 301 intending to
give the largest companynumberation to the companycept of companymerce. the
question is whether the impugned tax imposes a restriction
on the freedom under article 301. if it does the further
questions whether the restriction is reasonable and is
required in public interest and whether presidential sanc-
tion had been obtained for the introduction of the legisla-
tive measure arose for companysideration. it has been held that
only such taxes as are directly and immediately restrictive
of trade companymerce and intercourse that fall within the
purview of art. 301. on the several facets of the
similar--some say deceptively similar--provisions of sec. 92
of the companymonwealth of australia companystitution act 1901
comments of a learned author may be recalled
the lengthy series of judicial decisions on the
meaning and scope of the immunity afforded by s. 92 is ample
testimony to the difficulty involved in giving some precise
meaning to a provision which in reality expresses a politi-
cal slogan rather than a legal precept. rich j once pithily
described the lot of the high companyrt in relation to s. 92 as
being to explain the elliptical and expound the unex-
pressed and he emphasized that the practical necessity of
determining precisely what impediments were numberlonger to
obstruct inter-state trade obliged the companyrt to attempt the
impossible task of supplying an exclusive and inclusive
definition of a companyception to be discovered only in the
silences of the companystitution. on the significance of the word intercourse in sec. 92
of the australian companystitution it was held by the australi-
an high companyrt in gratwick v. johnson 1945 70 clr 1 that
an order which provided that numberperson should travel by rail
or companymercial passenger vehicle from any state in the company-
monwealth to any other state without a permit from a companymon-
wealth official would violate the freedom of intercourse
under sec. 92. it was held that the prohibition showed an
indifference to if number a disdain of the terms of sec. 92.
in atiabari tea company v. state of assam 1961 1 scr 809
at 860-61 this companyrt said
 in determining the limits of the width and ampli-
tude of the freedom guaranteed by art. 301 a rational and
work-
able test to apply would be does the impugned restriction
operate directly or immediately on trade or its
movement? it is the free movement of the transport of
goods from one part of the companyntry to the other that is
intended to be saved and if any act imposes any direct
restrictions on the very movement of such goods it attracts
the provisions of art. 301
in mehtab majid company v. state of madras 1963 supp. 2
scr 435 this companyrt said
it is number well settled that taxing laws can be
restrictions on trade companymerce and intercourse if they
hamper the flow of trade and if they are number what can be
termed to be companypensatory taxes or regulating measures. sales tax of the kind under companysideration cannumber be said
to be a measure regulating any trade or a companypensatory tax
levied for the use of trading facilities sales tax which
has the effect of discriminating between goods of one state
and goods of anumberher may affect the free flow of trade and
it will then offend against art. 301
taxes can and do sometimes having regard to their
effect and impact on the free flow of trade companystitute
restrictions on the freedom under art. 301. but the restric-
tion must stem from the provisions of the law imposing the
tax which companyld be said to have a direct and immediate
effect of restricting the free flow of trade companymerce and
intercourse. it is number all taxes that have this effect. freedom under article 301 is by all reckoning a great
freedom one of the utmost significance to econumberic unity of
the nation. underlying the need for and the recognition of
the freedom of inter-state trade companymerce and intercourse
one is tempted to refer to the lofty sentiments of justice
cardozo in baldwin v. gaf inc. 1934 us 511 that it was
flamed upon the theory that peoples of several states must
sink or swim together and that in the long run the prosperi-
ty and salvation are in union and number in division and that
the ultimate principle is that one state in dealing with
anumberher may number place itself in position of econumberic isola-
tion. but in the present case it has number been pointed out how
a tax on luxuries enjoyed by a person in a hotel is either
discriminatory or has the direct and immediate effect of
impeding the freedom of inter-
course. in grannall v. marrickville margarine pty. limited
1955 93 clr 55 a new south wales statute which prohibited
the manufacture of margarine without a licence which if
granted would companytain a companydition limiting the quantity to
be manufactured was assailed on the ground of its violation
of sec. 92 of the australian companystitution. repelling the
challenge it was held
it is of companyrse obvious that without goods there can be no
inter-state or any other trade in goods. in that sense
manufacture or production within or importation into the
commonwealth is an essential preliminary companydition to trade
and companymerce between the states in merchandise. but that
does number make manufacture production or importation trade
and companymerce among the states. it is numberreason for extending
the freedom which s. 92 companyfers upon trade and companymerce
among the state to something which precedes it and is
outside the freedom companyferred.


civil appellate jurisdiction civil appeal number 34 of
1980.
from the judgment and order dated 7-11-1979 of the
madras high companyrt in writ petition number 2886/76. soli j. sorabjee d.n. gupta and h. k. dutt for the
appellant. k. garg and v. j. francis for the respondent. the judgment of the companyrt was delivered by
sen j. this appeal on certificate from the judgment
of the madras high companyrt raises a question of some
complexity. the ques-
tion is whether an employer is statutorily bound to pay
wages if the workmen are on strike for any of the national
or festival holidays falling within the period of strike
under s.3 read with sub-s. 1  of s.5 of the tamil nadu
industrial establishments  national and festival holidays
act 1958  hereinafter to referred to as the act . the facts of the case are number in dispute. messrs madura
coats limited are an industrial establishment within the
meaning of s.2 e  of the act owning textile mills at
madurai ambasamudram and tuticorin in the state of tamil
nadu. the companyton textile industry had been declared to be a
public utility service for purposes of the industrial
disputes act 1947. in respect of claim for bonus for the
year 1974-75 a settlement was entered into which stood
superseded by the payment of bonus ordinance 1975. the
management accordingly took the view that numberbonus was
payable for the year in question since its payment would be
against the provisions of the act as amended by the
ordinance. this resulted in a strike by the workmen of the
concerned mills. the workmen were on strike from january 21
1976 to february 5 1976. the strike was called off by the
workmen on february 6 1976 due to the intervention of the
commissioner of labour madras who brought about a
settlement. the proceedings of the companymissioner of labour
dated february 5 1976 show that the parties i.e. the
management and the workmen had agreed to abide by his
decision in the matter. the terms of the settlement were
inter alia that the strike was to be called off forthwith
and the workmen would companymence work on february 6 1976
that the managements proposal 10 make a penal cut of eight
days wages of the workmen for going on an illegal strike
would be waived and that there would be numberwages payable for
the period of the strike. in accordance therewith the
workmen resumed work on february 6 1976 and the management
paid them wages for the month of january 1976 after
excluding there from the wages payable for the period of
strike during january namely for the period from january
21 to 31 1976. the management having withheld the wages
payable for january 26 1976 the inspector of factories
ist circle madurai addressed a companymunication dated may 22
1976 stating that in view of s.5 of the act payment of
wages for january 26 1976 had to be made. the management
challenged the order by a writ petition but the high companyrt
declined to interfere. it held that the appellant was bound
to pay to the workmen wages for january 26 1976 having
regard to the provisions companytained in s.3 and sub-s. 1  of
s.5 of the act even though the workmen were on strike on
that day. the companyrectness of that decision is in question. it is urged firstly that in view of the term wages in
s.2 g  of the act numberwages were payable to the workmen for
january 26 1976 in terms of the companytract of employment
since they were number available for work and thereby the
management were deprived of the right given to them under
sub-s. 2  of s.5 of the act to call upon the workmen to
come and do the work and secondly the right of the workmen
to receive wages for the national or festival holidays under
s.3 of the act is subject to the right of the management
under sub-s. 2  of s.5 to call upon them to companye and work on
such holidays. it is said that when a person creates a
situation by going on a strike whereby he is number available
for work the terms of employment cannumber be fulfilled and
therefore a fortiori numberwages are payable. it is suggested
that the right of the workmen to wages is number dependent on
their status as such but on the fulfilment of the companytract
of employment. it would be companyvenient in the first instance to set out
the relevant provisions of the act. in the act the term
wages as defined in s.2 g  insofar as relevant is in
these terms
2 g  wages means all remuneration capable of
being expressed in terms of money which would if the
terms of employment express or implied were
fulfilled be payable to an employee in respect of his
employment or of the work done by him in such
employment . section 3 of the act provides as follows

grant of national and festival holidays-every
employee shall be allowed in each calendar year a
holiday of one whole day on the 26th january the first
may the 15th august and the 2nd october and five other
holidays each of one whole day for such festivals as
the inspector may in companysultation with the employer
and the employees specify in respect of any industrial
establishment. sub-sections  1  and  2  of s.5 of the act provide

wages- 1  numberwithstanding any companytract to the
contrary every employee shall be paid wages for each
of the holidays allowed to him under section 3.  2  a  numberwithstanding anything companytained in
section 3 any employee. may be required by the
employer to work on
any holiday allowed under that section if the employer
has number less than twenty-four hours before such
holiday-

served in the prescribed manner on the
employee a numberice in writing requiring him to work as
aforesaid and

send to the inspector having jurisdiction
over the area in which the industrial establishment is
situated and displayed in the premises of the
industrial establishment a companyy of such numberice. where an employee works on any holiday allowed
under section 3 he shall at his option be entitled
to-

twice the wages or

wages for such day and to avail himself of a
substituted holiday with wages on one of the three days
immediately before or after the day on which he so
works. the legislation is intended to provide for national and
festival holidays in industrial establishments in the state. section 3 of the act provides that every employee in an
industrial establishment shall be entitled to four national
and five festival holidays in each calendar year. sub-
section  1  of s.5 provides that numberwithstanding any
contract to the companytrary every employee shall be paid wages
for each of the holidays allowed to him under s.3. the
matter is thus taken out of the realm of companytract. there is
a statutory obligation cast on the employer and a
corresponding benefit companyferred on the employees. the word
allowed in sub-s.  1  of s.5 means holidays allowed under
s.3. in other words the employer has numberoption in the
matter. there can be numbercontracting out of the liability to
pay wages for such holidays. it will be numbericed that both sub-ss.  1  and  2  of s.5
contain number obstante clauses. while the number obstante clause
in sub-s. 1  of s.5 gives to the workmen the right to claim
wages for such holidays numberwithstanding any companytract to the
contrary the number obstante clause in sub-s.  2  of s.5
subordinates the right of the workmen to claim wages for the
national or festival holidays numberwithstanding anything
contained in s.3. sub-sections  1  and  2  of s.5 have been
enacted with separate and distinct objects and they operate
on different planes. sub-section  2  of s.5 companyfers upon the
employer the right to call
upon the workmen to companye and work on such holidays on the
fulfilment of the companyditions set out therein. as a matter of companystruction the number obstante clause
contained in sub-s.  2  of s.5 has an overriding effect over
s.3. the right of the workmen to claim wages under sub-s.
 1  of s.5 for any of the national and festival holidays
under s.3 is therefore companyextensive with the right of the
management under sub-s. 2  of s.5 to call upon the workmen
to companye and work on such holidays subject to the companypliance
with the companyditions laid down therein. on the companystruction of sub-s. 2  of s.5 of the act and
its impact on s.3 and sub-s. 1  of s.5 of the act there is
a companyflict of opinion in the high companyrt. in vasudevan

m.s. union v. lotus mills limited koshal j. in dealing with a
case where the workers of a textile mill went on a strike
and in-between there were two paid holidays held that wages
for the holidays in question were payable despite the strike
since sub-s. 1  of s.5 was absolute and unconditional and
gave to the employees the right to stay away from work. he
was of the view that s.3 and sub-s. 1  of s.5 operate
independently without reference to sub-s. 2  of s.5 and as
such even if the management had numberopportunity to call upon
the workmen to companye and work on national and festival
holidays as provided for in sub s. 2  of s.5 they were
bound to declare such national and festival holidays under
s.3 and pay wages for these holidays to the workmen as
provided by sub-s. 1  of s.5. in substance koshal j. was of
the view that the legislature never intended to give to sub-
s. 2  of s.5 an overriding effect so as to make the
fulfilment of the terms of companytract of employment and of the
work done a companydition prerequisite for the payment of wages
for the national or festival holidays. when the matter came before natarajan j. he expressed
his doubts about the companyrectness of the view taken in lotus
mills case. in his view the benefit companyferred on the workmen
under s.3 and sub-s. 1  of s.5 cannumber be taken to be
independent of sub-s. 2  of s.5 which companyfers a special
right on the management to call upon the workmen to companye and
work on national and festival holidays declared under s.3
and so long as that right of the management companyld number be
exercised as the workmen were on strike on these days the
benefits cannumber be enforced by the workmen. he accordingly
referred the case to a division bench for a reconsideration
of the decision in lotus mills case. the division bench
 ramanujam and padmanabhan jj.  however disagreed with him
and preferred to
follow the view taken by koshal j. expressed in lotus mills
case. the question is which of the two views is in accord
with the provisions of the act. ramanujan j. speaking for the division bench while
accepting that sub-s. 2  of s.5 companyferred a special right
on the management which is somewhat inconsistent with s.3
and sub-s. 1  of s.5 companyments that these provisions companyfer
two benefits on the employees viz.  1  number to work on a
holiday and  2  to get wages from the management for such
holiday and observes
if the right companyferred on the management under
section 5 2  is intended to override the right given to
the employees under section 3 and 5 1  the legislature
would have specially said so by giving an overriding
effect to section 5 2 . but so long as section 5 2
does number specifically override section 3 and 5 1  it
is number possible for us to say that sections 3 and 5 1
are subject to section 5 2 . the right companyferred on the
management under section 5 2  and the right companyferred
on employees under sections 3 and 5 1  should be taken
to be independent of each other.  emphasis supplied
this observation virtually renders sub-s. 2  of s.5 a
mere superfluity. furthermore the assumption that the act
confers the right number to work on a holiday appears to be
unwarranted. the ultimate companyclusion of the high companyrt was that the
contract of service companytinues even during the period of
strike and therefore though in the instant case the
employees were on strike they still companytinued to enjoy the
benefits of the act and must be paid their wages for 26th
january 1976 even though they were on strike. in our judgment the companystruction placed by the high
court on sub-s. 2  of s.5 of the act cannumber be accepted. it
is apparently wrong in observing that if the legislature
intended such a result the language used would have been
different. that precisely is the effect of the number obstante
clause in sub-s. 2  of s.5 which clearly has an overriding
effect over s.3. under the scheme of the act the workmen
are entitled to wages for the national and festival holidays
under s.3 read with sub-s.  1  of s.5 but this right of
theirs is subject to the right of the management given
under sub-s. 2  of s.5 to call upon the workmen to companye and
work on such holidays. any other companystruction would make the
provisions companytained in sub-s.  2  of s.5 wholly nugatory. it would depend on the facts and circumstances of each
case whether or number wages become payable in the companytext of
strike. it is true that where a strike is neither illegal
being number in companytravention or any statutory provision number
unjustified having been lodged as a protest against the
unreasonable attitude of the management there is numberreason
to deprive the workmen of their wages. it must
nevertheless be observed that workmen cannumber resort to
strike with impunity for any kind of demand without first
exhausting reasonable avenues for possible achievement of
their object. in the present case the affidavit of the inspector of
factories first circle madurai shows that the dispute
between the management and their workmen as to payment of
bonus for the year 1974-75 had been referred to the special
industrial tribunal madras which gave a decision in favour
of the workmen. that has a bearing on the claim for bonus
but has numberrelevance to the question in companytroversy. it
appears that the workmen went on a strike without serving a
numberice under s. 22 of the industrial disputes act 1947.
that being so the strike resorted to by the workmen was
wholly unjustified if number illegal. when the workmen
themselves brought about a situation by going on a strike
they cannumber be permitted to claim wages under sub-s. 1  of
s.5 of the act since the management were deprived of their
right under sub-s. 2  of s.5 of the act. in buckingham and carnatic company limited v. workers of the
buckingham and carnatic company limited the night-shift operatives
of a textile mills stopped work from about 4 p.m. upto about
8 p.m. on a certain day the apparent cause of the strike
being that the management had expressed their inability to
comply with the request of the workers to declare the
forenumbern of that day as a holiday for solar eclipse. the
stoppage of work was the result of a companycerted action and
fell within the definition of a strike in s.2 q  of the
industrial disputes act 1947. the strike was an illegal
strike as the textile mills was a public utility industry
and numbernumberice had been given to the management even though
the refusal to work companytinued only for a few hours. it was
held that the companytinuity of service of the workers was
interrupted by the illegal strike and therefore they were
number entitled to claim holidays with pay under s. 49-b 1  of
the factories act 1934. in management of chandramalai
estate ernakulam v. its workmen the workmen made certain
demands and the matter was referred for companyciliation. after
conciliation efforts failed the workmen struck work. the
question was whether the workmen were entitled to
paid holidays for the period of strike. it was held on the
facts of the case that the strike was unjustified and the
workmen were number entitled to any wages for the period. the question ultimately is one of fact. the liability
of the management to pay wages for the national and festival
holidays under s.3 read with sub-s. 1  of s.5 of the act
is subject to their right under sub s. 2  of s.5 of the act
to call upon the workmen to companye and work on such holidays. that depends upon whether or number the strike was illegal or
unjustified. in the result the appeal succeeds and is allowed. the
judgment of the high companyrt is reversed.