Section 1
see now S. o. No. 187 dated 1.4.1991.
1. see now S. o. No. 187 dated 1.4.1991.
that the word 'business' connotes some real, substantial and systematic or organized course of activity with a set purpose, if the activity of a dealer, say, in ghee is business; then how does it cease to be business if it is in liquor ? Liquor can be manufactured, brought or sold like any other commodity. It is consumed throughout the world, though some countries restrict or prohibit the same on economic or moral grounds. The morality or otherwise of a deal does not affect the quality of the activity though it may be a ground for imposing a restriction on the said activity. The illegality of an activity does not affect the character of the activity but operates as a restriction on it. If a law prohibits dealing in liquor, the dealing does not cease to be business, but the said law imposes a restriction on the said dealing. The dealing in liquor is business and a citizen has a right to do business in that commodity; but the State can make a law imposing reasonable restriction on the said right, in public interest. Krishan kumar narula vs. State of Jammu and Kashmir, r, AIR 1967 SC 1368.
The Legislature of a State is fully competent to regulate the business of vending intoxicating liquor, to mitigate its evils or suppress it entirely. There is no inherent right in a citizen to sell intoxicating liquors by retail; it is not a privilege of a citizen. As it is a business attended with danger to the community, it may be entirely prohibited, or be permitted under such conditions as will limit to the utmost its evils. The manner and extent of regulation rest in the discretion of the governing authority. That authority may vest in such officers as it may deem proper the power of passing upon applications for permission to carry it on, and to issue licenses for that purpose. Hence, the provisions of the (Ajmer) Excise Regulation (I of 1915) purporting to Regulate trade in liquor in all its different spheres are valid. Cooverjee B. Bharucha vs. Excise Commissioner , A AIR 1954 SC 220.
There can be a monopoly only when a trade which can be carried on by all persons is entrusted by law to one or more persons to the exclusion of the general public. But when a contract is thrown open to public-auction. It cannot be said that there is exclusion of competition and thereby a monopoly is created. Further, in certain circumstances exclusion or competition so as to create a monopoly either in a State in some other body may be justified. Every case must be judged on its own facts and in is own setting of time. ibid.
To regulate the sale of medical or toilet preparations containing alcohol and/ or intoxicating drugs, is consistent with the scheme and provisions of the Tamil Nadu Prohibition Act i.e. Prohibition of the manufacture, sale and consumption of intoxicating liquors and drugs in the State. The restriction of obtaining license under R. 11 of the Tamil Nadu Spirituous (Preparation) Control Rules (1984) and other restrictions imposed by the said Rules (1984) are consistent with the provisions of the Tamil Nadu Prohibition Act (1937) and the State Govt. had authority to frame such Rules under S. 54(2) (m) of the said Act (1937). Kanya Kumari District Sidha and Ayurveda Vaidgar Sangam vs. Government of Tamil Nadu , A AIR 1996 SC 1314.
Therefore, the provisions of the T.N. Act, except for the provision as to installments in Section 11, are not violative of Article 14. It is therefore, unnecessary to consider whether or not the Act has the protection of Article 31-C of the Constitution.
The T.N. Act being valid legislation, its provisions preclude the State from acquiring land for the purpose of a Harijan Welfare scheme under the Land Acquisition Act. State of Tamil Nadu vs . A Ananthi Ammal, (1995) 1 SCC 519.
The provisions of Chapter VI of the T.N. Slum Areas (Improvement and Clearance) Act, 1971, which deal with the acquisition of land for the purposes of
Slum clearance, are substantially similar to the provisions of the T.N. Acquisition of Land for Harijan Welfare Schemes Act, 1978. The 1978 Act has already been held to be intra vires the Constitution except in regard to the provision for payment of the compensation amount in installments. The Slum Clearance Act does not provide for payment of the compensation amount in installments. That no solatium is payable under the Slum Clearance Act does not make any substantial difference. It is not uncereasonable that the State should not have to pay solatium in consideration of the compulsory nature of the acquisition of land that is slum land. ibid.
The A.P. Act prohibiting the production and manufacturing of all intoxicating liquors while exempting toddy from the said prohibition is not discriminatory. Today is a class apart. It is drawn from tree. The Excise Act and Rules make a clear distinction between toddy on one hand and other intoxicating liquors on the other, though it may be that toddy is also included within the meaning of intoxicating liquors. In the circumstances, it cannot be said that it is not a case of reasonable classification having regard to the object of legislation. Moreover, it is always open to the State to introduce prohibition in stages. It is not necessary that the prohibition should be total and absolute whenever it is imposed. State of A.P. vs . Mc. Dowell and Co ., AIR 1996 SC 1627.
The provision under Section 11 in regard to payment of the compensation amount by installments in the manner stated therein is wholly unreasonable. The owner of the land or another person interested therein would require compensation in lieu of the land forthwith to re-establish himself, whether in a new residence or on another piece of agricultural land or otherwise. The provisions of the section in this behalf are clearly severable. The T.N. Act can stand even when the provisions in regard to the payment of the compensations amount by installments are excised. To the extent that section 11 provides for payment of compensation it is ultra vires Article 14. The provisions of Section 11 (1) subsequent to the words "in a lump sum" must, therefore, be struck down. State of Tamil Nadu vs. Ananthi Ammal (1995) 1 SCC 519.
There is no unreasonableness in Section 22 which makes the provisions of the T.N. Act applicable also to cases in which proceedings have been started before the commencement of the T. N. Act under the Land acquisition Act for the purposes of Harijan Welfare Schemes, particularly having regard to the terms of Section 20. However, the judgment under appeal striking down the T. N. Act was delivered as far back as September 1981, and no stay thereof was obtained from the Supreme Court. It is likely, therefore, that in cases where proceedings under the Land Acquisition Act had already been started to acquire lands for Harijan Welfare Schemes, they might have been revived and completed in the interregnum. It is, therefore, made clear that the provisions of Section 22 shall have no effect in such cases where awards have been made. ibid.
When the liquors are taken in excess the injuries are confined to the party offending is a fact which does not exist. The injury, it is true, first falls upon him in his health, which the habit undermines; in his morals, which it weakens; and in the self- abasement which it creates. But as it leads to neglect of business and waste of property and general demoralization, it affects those who are immediately connected with and dependent upon him. By the general concurrence of opinion of every civilized community, there are few sources of crime and misery to society equal to
that dram shop, where intoxicating liquors, in small quantities, to be drunk at the time, are sold indiscriminately to all parties applying. The sale of such liquors in this way has therefore, been, at all times, by the courts of every State, considered as the proper subject of legislative regulation. Coover Jee B. Bharucha vs. Excise Commissioner, AIR 1954 SC 220.
Countervailing Duty.- The countervailing duty is attracted at the point of import i.e. physical of the goods into the taxing territory) and only the payment of duty is deferred, in case the goods imported are removed to a bonded warehouse, to a later point of time, for purpose of convenience of collection. It will not be appropriate to construe the provisions in such a manner as imposing a liability on some persons (who have no bonded warehouse) at one point of time and on others, at a different point of time. Also if the liability to pay the duty itself were referable to a later point of time, the insistence on a bond in the terms prescribed would appear to be redundant. The provision that, where the facility is availed of, the assesse would pay duty at the rate prevalent at the later point of time (often higher than at the point of import but not necessarily so) is not consistent with the above concept but is rather a logical consequence of the privilege of deferment given to the assessee. Shraff & Co. vs. Municipal Corporation, 1989 (Supp) SCC 347 .
Prohibition to manufacture of Liquor – The enactment of any law providing for introduction of prohibition is within the legislative competence of a State Legislature Entry 8 of List II of the Seventh Schedule to the Constitution speaks of production, manufacture, possession, transport etc, of intoxicating liquors. It means that the power to make a law with respect to the said matters rests with the State Legislature what is significant is that Entry 8 of List II speaks expressly of production and manufacture of intoxicating liquors as well. It is clear that the industries engaged in production and manufacture of intoxicating liquors do not fall within Entry 24 of List II but do fall within Entry 8 of List II of the Seventh Schedule. The Parliament, therefore, cannot take over the control of industries engaged in the production and manufacture of intoxicating liquors by making a declaration under entry 52 of List I of the Seventh Schedule, since Entry 52 of List I governs only Entry 24 of the List II but not Entry 8 of List II State of Andhra Pradesh vs. Mc. Dowell and Co., AIR 1996 SC 1627.
Prohibition – The U.P. Excise (Amendment) Act, 1972 has introduced "prohibition" with effect from 22.1.1972 in the State of Uttar Pradesh. By the enactment of U.P. Excise (Second Amendment) Act, 1978 which substituted a new section 37 A and cured the defects which in section 37A which had led a full Bench of the Allahabad High Court to declare if violative of Article 14 of the Constitution and void ab initio. The new provision will be operative from 1.5.1972 and was declared to be valid law. State of U.P. vs. Garib Dass, (1977) 1 SCC 171.].
Whereas it is expedient as early as possible to bring about the prohibition, except for medicinal, scientific, industrial or such like purposes, of the production, manufacture, possession, export, import, transport, purchase, sale and consumption of liquor, tari and intoxicating drugs in the Province of Bihar.
And where as it is desirable to give effect to the above mentioned policy by introducing it in certain selected areas in the said Province and utilizing the experience gained therein for extending it to the other areas thereof;
It is hereby enacted as follows:-
Short title, extent and commencement. – (1) This Act may be called the Bihar Prohibition Act, 1938.
It extends to the whole of the province of Bihar.
This section and sections 3 and 9 shall come into force in the whole of the Province of Bihar at once.
The remaining provisions of this Act, or any of them, shall come into force in any local area in the Province of Bihar on such date as the Governor may, by notification, and different dates, may be appointed for different provisions.
Repeals.–From the date on which any of the provision of this Act mentioned in the first
column of the Schedule came into force in any local area, the enactments mentioned opposite such provision in the second column of the Schedule shall cease to be in force in such area to the extent specified in the third Column of the Schedule.
Provided that the Governor may, by notification, declare that any of the provisions of this Act mentioned in the first column of the Schedule shall cease to be in force in any local area on such date as may be specified in the notification and thereupon the portions mentioned in the third column of the Schedule of the enactments mentioned opposite any such provision in the second column of the Schedule with any subsequent statutory modifications thereof shall revive and came into force in such area on and with effect from such date.
Definitions. – In this Act. Unless there is something repugnant in the subject or context,-
(I) Bottle – "Bottle' means to transfer liquor from a cask or other vessel to a bottle, jar, flask or pot or similar receptacle for the purpose of sale, whether any process of manufacture be employed or not, and includes rebottling;
Buy or Buying – “Buy” or “Buying” includes any receipt including gift;
Collector – 'Collector" means a Collector of land-revenue or a Deputy Commissioner or any person appointed under sub-section (1) of section 5 to exercise all or any of the powers or to perform all or any of the duties of a Collector under this Act;
Cultivation – "Cultivation" includes the tending or protecting of a plant during growth and does no necessarily imply raising it from seed;
Export – “Export” means –
(a) to take out of any local area in which this Act is in force to any other local area in the province of Bihar in which this Act is not in force, or
(b) to take out of the Province of Bihar;
Import – “Import”’ means-
(a) to bring into any local area in which this Act is in force from any other local area in the Province of Bihar in which this Act is not in force, or
(b) to bring into the Province of Bihar;
Institution – " Institution" includes clubs, restaurants, hotels and shops where liquor, intoxicating drug or article containing liquor or drug is sold under license;
Intoxicating drug. – “Intoxicating drug” means –
(i) the leaves small, stalks and flowering of fruiting tops of the Indian hemp plant (Cannabis sativa L.) including all forms known as bhang. siddhi or ganga;
(ii) charas, that is, therein obtained from the Indian hemp plant, which has not been submitted to any manipulations other than those necessary for packing and transport;
(iii) any mixture, with or without neutral materials, of any of the above forms of intoxicating drug, or any drink prepared there from; and
(iv) any other intoxicating or narcotic substance which the Governor may, by notification declare to be an intoxicating drug, such substance not being opium, coca leaf, or a manufactured drug, as defined in section 2 of the Dangerous Drugs Act, 1930 (II of 1930);
Liquor- "Liquor" includes spirit of wine, mentholated spirits, spirits, wine, beer and all liquids consisting of or containing alcohol but does not include tari or talras;
Local body- "Local body" means a District or Local Board constituted under the Bihar and Orissa Local Self Government Act, 1885 (Ben. Act III of 1885) or a District Committee constituted under the Cess Act, 1880,(Ben. Act IV of 1880), or a Municipality or Notified Area Committee constituted or appointed under the Bihar and Orissa Municipal Act, 1922, (B & O. Act, VI of 1922) or the Jharia Mines Board of Health;
Manufacture- "Manufacture" includes every process, whether natural or artificial, by which any fermented spirituous, or intoxicating liquor or intoxicating drug is produced, prepared or blended, and also re-distillation and every process for the rectification of liquor;
Officer in charge of a police station- "Officer in charge of a police station" has the same meaning as in the Code of Criminal Procedure, 1898, (V of 1898)] 1 and includes any person invested with the powers of an officer in charge of a police- station under section 38;
Place- "Place" includes also a house, shed, enclosure, building, shop, tent and vessel;
Police-Station- "Police-station" has the same meaning as in the code of Criminal procedure, 1898 (V of 1898)] 1 ;
Prohibition authority-"Prohibition authority" means the Prohibition Commissioner, a collector, a Prohibition Superintendent or a Prohibition Officer;
Prohibition Commissioner-"Prohibition Commissioner" means the officer appointed to be the Prohibition Commissioner under sub-section (1) of section 5;
Prohibition Officer-"Prohibition Officer" means a person appointed to be a Prohibition Officer under sub-section (1) of section 5;
Prohibition Superintendent-"Prohibition Superintendent" means a person appointed to be a Prohibition Superintendent under sub-section (1) of section 5;
Rectification-"Rectification' includes every process whereby spirit are purified or are colored or flavored by mixing any material therewith;
Roop's Law Assist