1978 (8) TMI 223 - SC - Central Excise

Court upholds Punjab Excise Act provisions regulating alcohol sales, emphasizing public health and welfare concerns

The court upheld the constitutionality of Section 59(f)(v) of the Punjab Excise Act, ruling that it contained inherent limitations and guidelines to ... Whether the power under S. 59(f)(v) unguided and the rule framed there under is bad as arbitrary? Held that:- The provision [Section 59(f)(v)] is valid on a consideration of the criteria controlling the wide words used therein there is a minor matter remaining to be disposed of. The extract from the Section, as will be noticed, contains a clause which runs: 'and the closure of such premises on special occasions'. Thus, rules may be made by the Financial Commissioner for fixing the closure of licensed premises on ’special occasion’. It is thus a blanket power which is an unreasonable restriction on the licensee’s trade. Certainly if ’special occasions’ means any occasion which appeals to the mood of the Financial Commissioner or has other casual fascination for him the rule may suffer from arbitrary and unreasonable features. Gandhiji’s birthday and also Vinobaji’s birthday have been included in the licence itself. ’Special occasions’ contemplated by Sec. 59(f) (v) are not stricken by such a vice for the obvious reasons we have elaborately given in the earlier part of our argument. The occasion must be special from the point of view of the bread considerations of national solemnity. public order, homage to national figures, the likelihood of eruption of inebriate violence On certain days on account of meals, festivals or frenzied situations or periods of tension. Bapuji’s birthday, election day, hours of procession by rival communities when tensions prevail or festivals where colossal numbers of people gather and outbreak of violence is on the agenda, are clear illustrations. ’Special occasions’ cannot be equated with fanciful occasions but such as promote the policy of the statute as expounded by us earlier. There is no merit in this argument either and we reject it. Appeal dismissed. Issues Involved:1. Constitutionality of Section 59(f)(v) of the Punjab Excise Act.2. Constitutionality of Rule 37 of the Punjab Excise Act and Liquor Licence (Second Amendment) Rules.3. Alleged violation of Articles 14 and 19 of the Constitution.4. Reasonableness and arbitrariness of the regulatory provisions.5. Discrimination between private and state-run liquor institutions.Detailed Analysis:1. Constitutionality of Section 59(f)(v) of the Punjab Excise Act:The court examined whether Section 59(f)(v), which empowers the Financial Commissioner to fix the days and hours during which licensed premises may or may not be kept open, was constitutionally valid. The contention was that this section provided unguided, uncanalised, and arbitrary power, thus violating Articles 14 and 19 of the Constitution. The court held that the statutory scheme is not merely fiscal but also designed to regulate and reduce the alcoholic habit. The very subject matter of the statute-intoxicants-impresses the Act with a clear purpose, social orientation, and statutory strategy. Therefore, the section was deemed valid as it contained inherent limitations and guidelines, particularly when viewed in conjunction with Article 47 of the Constitution, which mandates the State to endeavor to bring about prohibition of intoxicating drinks.2. Constitutionality of Rule 37 of the Punjab Excise Act and Liquor Licence (Second Amendment) Rules:Rule 37 was amended to prohibit liquor vending on Tuesdays and Fridays, replacing the previous rule which prohibited sales on Tuesdays up to 2 p.m. and on the seventh day of every month. The petitioners argued that this amendment was arbitrary and unreasonable. The court held that the regulation of the number of days and the duration of hours when the supply of alcohol by licensees shall be stopped is reasonable, whether it be two days in a week or even more. The court emphasized that the goal is to promote temperance and social welfare, and such regulatory measures are within the constitutional framework.3. Alleged Violation of Articles 14 and 19 of the Constitution:The petitioners argued that the amended rule violated their fundamental rights under Articles 14 and 19. They claimed that the power vested in the Financial Commissioner was arbitrary and could lead to discriminatory practices. The court dismissed these arguments, stating that the regulation of the liquor trade is inherently different from other trades due to its potential harm to public health and order. The court reiterated that the guidelines for exercising this power are implicit in the very nature of the subject matter and the statutory scheme. The court also recorded an undertaking by the Punjab Government to apply the same restrictions to state-run institutions, thereby eliminating any potential discrimination.4. Reasonableness and Arbitrariness of the Regulatory Provisions:The court addressed the argument that the power to fix days and hours for liquor sales was too broad and could lead to unreasonable restrictions. The court held that the statutory scheme and the purpose of the Act provide sufficient guidelines to prevent arbitrary exercise of power. The regulation aims to balance temperance with tax revenue, and the restrictions are designed to mitigate the harmful effects of alcohol consumption. The court concluded that the provisions are reasonable and not arbitrary, as they are aimed at promoting public welfare and reducing alcohol-related harm.5. Discrimination Between Private and State-Run Liquor Institutions:The petitioners highlighted a note in the amended rule that exempted tourist bungalows and resorts run by the Tourism Department of the State Government from the Tuesday-Friday ban. The court initially found this discriminatory but accepted an undertaking from the Additional Solicitor General that the state would observe the same regulatory provisions for its institutions. The court recorded this undertaking and treated it as part of the proceedings, thereby eliminating the discrimination.Conclusion:The court upheld the constitutionality of Section 59(f)(v) and Rule 37 of the Punjab Excise Act and Liquor Licence (Second Amendment) Rules. It found the regulatory provisions reasonable and within the constitutional framework, aimed at promoting temperance and social welfare. The court dismissed the writ petitions, emphasizing the need for the state to adhere to the constitutional mandate of promoting prohibition as outlined in Article 47.