Transit-note controls for excisable goods were upheld as a reasonable trade restriction to prevent duty evasion.

A transit-note requirement for movement of unlabelled biris was treated as a regulatory control under the excise scheme, supported by the Central Excises and Salt Act, 1944, the rules framed under it, and supplementary instructions to prevent duty evasion. The challenged direction was not inconsistent with the cited licence formalities, and the control was linked to gate-pass requirements for excisable goods. The measure was also regarded as a reasonable restriction on trade because it served revenue protection, imposed only a light burden on licence-holders, and did not prohibit business.

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Issues: (i) whether the impugned transit-note requirement was without authority of law or inconsistent with the Central Excise Rules, 1944; and (ii) whether the requirement imposed an unreasonable restriction on the right to carry on trade under Article 19 of the Constitution of India.

Issue (i): whether the impugned transit-note requirement was without authority of law or inconsistent with the Central Excise Rules, 1944.

Analysis: The relevant control measures were held to arise under the Central Excises and Salt Act, 1944 and the rules framed thereunder. The provisions relied upon by the petitioner relating to licence formalities did not govern the impugned direction, which concerned movement of unlabelled biris and the prevention of duty evasion. The statutory scheme, including the power to issue supplementary instructions and the requirement of gate passes for excisable goods, supported the departmental direction.

Conclusion: The challenge on the ground of lack of authority and inconsistency with the cited rules failed.

Issue (ii): whether the requirement imposed an unreasonable restriction on the right to carry on trade under Article 19 of the Constitution of India.

Analysis: The transit-note requirement was treated as a regulatory measure intended to prevent evasion of central excise duty by merchants dealing in labelled biris. The burden placed on the licence-holders was considered light, since the notes were to be issued by them and the measure did not prohibit their business. A restriction adopted to secure revenue and prevent evasion was held to be in public interest and comparable to earlier upheld permit-control measures.

Conclusion: The restriction was held to be reasonable and not violative of Article 19 of the Constitution of India.

Final Conclusion: The writ petition was unsuccessful, and the impugned transit-note direction was sustained.

Ratio Decidendi: A regulatory requirement imposed to prevent evasion of excise duty and to control movement of excisable goods is a reasonable restriction on trade when it is connected with the statutory excise scheme and does not amount to a prohibition of business.

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