TaxTMI 
TaxTMI 
1994 (10) TMI 269
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....ies to carry on trade or business in liquor and that the said Rules were violative of Articles 14, 19(1)(g), 47, 300-A, 301, and 304 of the Constitution of India. A Bench of three learned Judges of this Court which heard this group of matters has referred them to the Constitution Bench. 2. The second group consists of CA Nos. 6043-50, 6051 and 6052 of 1993. These appeals arise out of the decision of the Kerala High Court upholding the validity of the government order dated 9-12-1992 passed by the Government of Kerala deciding to cancel all foreign liquor licences issued under Rule 13(3) of the Kerala Foreign Liquor Rules, 1974 to Hotels, Restaurants and Tourist Homes. A Bench of two learned Judges has referred the said matters also to the Constitution Bench for decision on the question whether appellants have a fundamental right to carry on trade in liquor. 3. The third group consists of SLP (C) Nos. 13817-28, 16208, 16601-02, 17935, 17953 of 1993, 185, 2479, 2962-63, 5898 of 1994 and WP (C) Nos. 587, 591, 592, 608, 612 and 625 of 1993. These matters arise out of various decisions of the Andhra Pradesh High Court upholding the validity of the amendments to the Andhra Pradesh ....
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....which are generally used as beverages and produce intoxication but also all liquids containing alcohol. Liquor is classified broadly into three classes, viz., (i) potable liquor which is used as beverage, (ii) liquor used in medicinal and toilet preparations and (iii) industrial liquor used for industrial purpose. Two rival contentions of law are canvassed before us. One, that there is no fundamental right to trade or business in liquor and that the State has power to regulate the trade or business by placing restrictions on such trade or business in the interests of the general public even to the extent of prohibiting completely such business or trade. The incidental consequence which flows from this contention is that the State has the exclusive privilege to sell liquor and this privilege can be sold under the relevant law. The State can, therefore, have also a monopoly in manufacturing, possessing and distributing liquor. The other contention is that a citizen has a fundamental right to trade or business in liquor and the State can only place reasonable restrictions on the said right in the interests of general public by law made for the purpose under Article 19(6) of the Consti....
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....d they are being sold freely. A majority of the States did not introduce prohibition and some States which purported to do it, failed and reverted to the earlier pre-prohibition condition. On the other hand, the revenue from the auction of excise, vend fees, liquor and other levies forms a major source of the revenue of the State. Hence the trade in liquor cannot be looked upon as an obnoxious trade. Thirdly, the Union Government itself has recognised under its Industrial Policy Resolution as early as in 1956 that the production of potable alcohol as an industry has to be recognised though regulated and the licences have to be freely granted for the manufacture of potable liquor. During the last several years, a large number of distillery, brewery and winery licences have been granted all over the country. For all these reasons, it is submitted that there is no warrant for excluding liquor from the ambit of the words "any occupation, trade or business" under Article 19(1)(g) of the Constitution. 11. We will first refer to the relevant provisions of the Constitution which have a bearing on the subject. 12. Article 19(1)(g) provides that all citizens shall have the right to pra....
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....f nutrition and the standard of living and to improve public health.- The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health." This article enjoins upon and in turn enables the State to take measures to raise the level of nutrition and the standard of living of its people and to improve the public health. Towards this end, the State is required to bring about prohibition of the consumption of intoxicating drinks and drugs which are injurious to health. The prohibition may be complete or partial and it would also include regulation. It cannot be disputed that liquor is one such drink. 14. Article 298 of the Constitution provides as follows: "298. Power to carry on trade, etc.- The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpo....
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.... Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India: (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics; but not including medicinal and toilet preparations containing alcohol or any substance included in sub- paragraph (b) of this entry." Thus a State has legislative competence to make laws in respect of the above subjects. 19. The relevant entry in List I which has a bearing on the subject is Entry 52 which reads as follows: "52. Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest." Under this entry, Parliament has enacted the Industries (Development and Regulation) Act, 1951 (for short 'IDR Act') and Item 26 of Schedule I of that Act reads as "Fermentation Industries (1) Alcohol, (2) Other products of Fermentation and Distillery". Read with Section 2 of the IDR Act, the said entry would mean that the alcohol industry dealing in potable or nonpotable alcohol is a controlled industry within the meaning of th....
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.... is no discussion with reference to the said provision. 21. In TB. Ibrahim v. Regional Transport Authority 1953 SCR 290: AIR 1953 SC 79 what fell for consideration was the validity of the amendment in 1950 to Rule 268 of the Madras Motor Vehicles Rules, 1940 to empower the Transport Authority to alter from time to time the starting place and termini for motor vehicles. The appellant was the owner of a bus-stand in the municipal limits which was being used for several years as a starting place and terminus for buses plying to and from the said limits. The Transport Authority passed a resolution changing the starting place and terminus for convenience of the public. The appellant challenged the said resolution and consequently the amendment to Rule 268, among others, as repugnant to Article 19(1)(g) of the Constitution. A Constitution Bench of five learned Judges dealing with this contention held that the restrictions placed upon the use of the bus-stand for the purpose of picking up or setting down passengers cannot be considered to be unreasonable. It may be that the appellant by reason of the shifting of the bus- stand has been deprived of the income he used to enjoy when the b....
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....ial qualification in the parties permitted to use them, manufacture or sell them. The Court in this connection referred to the observations of Field, J. in P. Crowley v. Henry Christensen 34 L Ed 620: 137 US 86 (1890) a part of which is as follows: "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. ... Their sale in that form may be absolutely prohibited. It is a question of public expediency and public morality and not of federal law. The police power of the State is fully competent to regulate the business to mitigate its evils or to suppress it entirely. There is no inherent right in a citizen to thus sell intoxicating liquors by retail; it is not a privilege of a citizen of the State or of a citizen of the United States. As it is a business attended with danger to the community, it may, as already said, be entirely prohibited, or be permitted under such conditions as will limit to the utmost its evils. ... It is a matter of legislative will only." (b) The elimination and exclusion from business is inherent in the nature of liquor business and it will hardly be p....
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....h is also a decision of a Constitution Bench of five learned Judges, the challenge was to the Bombay Lotteries and Prize Competition Control and Tax Act, 1948 as amended by the Bombay Lotteries and Prize Competition Control and Tax (Amendment) Act, 1952. After referring to the observations made in the American decision in Phalen v. Virginia 12 L Ed 1030: 49 US 163 (1850) the Court held as follows: (SCR p. 925) "It will be abundantly clear from the foregoing observations that the activities which have been condemned in this country from ancient times appear to have been equally discouraged and looked upon with disfavour in England, Scotland, the United States of America and in Australia in the cases referred to above. We find it difficult to accept the contention that those activities which encourage a spirit of reckless propensity for making easy gain by lot or chance, which lead to the loss of the hard earned money of the undiscerning and improvident common man and thereby lower his standard of living and drive him into a chronic state of indebtedness and eventually disrupt the peace and happiness of his humble home could possibly have been intended by our Constitution makers t....
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....pon those attributes. The freedom secured by the two articles implies that no unreasonable restraint or burden shall be placed upon the act falling under that description because it is trade or commerce or intercourse. The Court, then held that the Act impugned there did not purport directly to interfere with trade, commerce or intercourse as such, for the criterion of its application was the specific gambling nature of the transaction which it restricted. The purpose of the Act was not to restrict anything which brought the transactions under the description of trade, commerce or intercourse. The Act was in pith and substance, an Act with respect to betting and gambling and to control and restrict betting and gambling was not to interfere with trade, commerce or intercourse as such but to keep their flow free and unpolluted and to save them from antisocial activities. Hence the validity of that Act had not to be decided by the yardstick of reasonableness and public interest laid down in Articles 19(6) and 304. The appeal against the stringency and harshness, if any, of the law does not lie to court of law. In that view of the matter, the Court felt that it was not necessary to con....
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....importers at Bombay and Calcutta, but before they could take delivery from the importers, the Government of India in exercise of its powers under Section 3 of the Essential Commodities Act, 1955, issued on 2-4-1958 Non-ferrous Metal Control Order, 1958. Clause (3) of the Order provided that no person shall sell or purchase any non-ferrous metal at a price which exceeded the amount represented by an addition of 3.5 per cent to its landed cost, while clause (4) prohibited any person from acquiring any non-ferrous metal except under and in accordance with the permit issued in that behalf by the Controller in accordance with such principles as the Central Government may from time to time specify. No such principles were, however, published in the Gazette nor laid before the Houses of Parliament. The Court held that the word 'restriction' in Article 19(5) and (6) of the Constitution includes cases of prohibition also. Where the restriction reaches the stage of total restraint of rights, special care has to be taken by the courts to see that the test of reasonableness is satisfied by considering the question in the background of the facts and circumstances under which the Order was made,....
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.... is in these words: All laws in force in the territory of India immediately before the commencement of this Constitution, insofar as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency be void; (2 The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void As it was to remedy the harm that would otherwise be caused by the provisions of Article 13, that these saving provisions were made, it is proper to remember the words of Article 13 in interpreting the words ` reasonable restrictions' on the exercise of the right as used in clause (2). It is reasonable to think that the makers of the Constitution considered the word 'restriction' to be sufficiently wide to save laws 'Inconsistent' with Article 19(1), or 'taking away the rights' conferred by the article, provided this inconsistency or taking away was reasonable in the interests of the different matters mentioned in the clause. There can be no doubt therefore that they intended the word 'restriction' to include cases of 'prohibition' also. The conte....
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....e said right in the interests of the general public. It is, therefore, obvious that unless dealing in liquor is not trade or business, a citizen has a fundamental right to deal in that commodity. The learned Advocate General contended that dealing in liquor was not business or trade, as the dealing in noxious and dangerous goods like liquor was dangerous to the community and subversive of its morals. The acceptance of this broad argument involves the position that the meaning of the expression 'trade or business' depends upon and varies with the general acceptance of the standards of morality obtaining at a particular point of time in our country. Such an approach leads to incoherence in thought and expression. Standards of morality can afford a guidance to impose restrictions, but cannot limit the scope of the right. So too, a legislature can impose restrictions on, or even prohibit the carrying on of a particular trade or business and the Court, having regard to the circumstances obtaining at a particular time or place may hold the restrictions or prohibition reasonable. The question, therefore, is, what is trade or business? Though the word 'business' is ordinarily more comprehe....
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....rt there with the said observations, the Court observed that the said passage from the judgment of Field, J. had nothing to do with the construction of Article 19(1)(g) of the Constitution. According to the Court, there the learned Judge was considering the scope of the "police power" and the said observations were made in that context and those observations were applied by this Court in Cooverjee case 1954 SCR 873 : AIR 1954 SC 220 in considering the reasonableness of the restrictions imposed upon the fundamental rights. According to the Court, the perusal of the entire judgment shows that the Court had indeed conceded the fundamental right but held that the said regulation operated as reasonable restriction on the said rights. 33.Similarly, according to the Court the following observations of this Court in A.N. Kidwai case 1957 SCR 295 : AIR 1957 SC 414 had no relevance to the inquiry, viz., whether there was a fundamental right to carry on business in liquor. The said observations are as follows: (SCR p. 30 1) "A perusal of the Act and rules will make it clear that no person has any absolute right to sell liquor and that the purpose of the Act and the rules is to control a....
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....y considering the provisions of the various Acts which conferred a restricted right to business. None of the decisions held that a right to do business in liquor was not a fundamental right. The Court, therefore, held that dealing in liquor was business and a citizen has a right to do business in that commodity; but a State can make a law imposing reasonable restrictions on the said right in public interest. We will have an occasion to deal with the Court's observations and conclusions in this case at the appropriate stage hereinafter. 36. To proceed further with the decisions of this Court in chronological order, we may now refer to the next decision, viz., State of Orissa v. Harinarayan Jaiswal (1972) 2 SCC 36: (1972) 3 SCR 784 595 which is a decision of two learned Judges. The facts were that the first respondent was carrying on business of country liquor in exercise of the powers conferred by Section 29(2) of the Bihar and Orissa Excise Act, 1915. The appellant State issued an order and in pursuance of that order a date was notified for selling by public auction the exclusive privilege of selling by retail, country liquor in eight shops. The respondent was the highest bidder....
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....as to be had to the nature of trade or business, the conditions prevailing in such trade or business, the nature of the infringement alleged, and the underlying purpose of the restriction, the imposition of which is alleged to constitute an infringement." 38. The Court then referred to the contention on behalf of the appellant that the provisions of Section 43 of the Bengal Excise Act, 1909 which empowered the licensing authority to withdraw the licence for any reason whatsoever not falling under Section 42 of that Act, were unreasonable and violative of the appellant's fundamental right under Article 19, and held as follows:- (SCC pp. 449- 50, para 15) .lm15 "It is no doubt true that in Section 43, there is no express mention of the precise grounds on which the licence can be withdrawn. But in our opinion keeping in view the nature of the trade or business for which the grant of licence under the Act is provided the cause contemplated by Section 43 must be such as may have reasonable nexus with the object of regulating this trade or business in the general interest of the public. In the determination of reasonableness of restrictions on trade or business regard must be....
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....ticles 14 and 19 in Balsara case1951 SCR 682 : AIR 1951 SC 318 : 52 Cri LJ 1361. This Court held that absolute prohibition of manufacture or sale of liquor is permissible and the only exception can be for medicinal preparations. The concept of inherent right of citizens to do business in liquor is antithetical to the power of the State to enforce prohibition laws in respect of liquor. Das, C.J. in State of Bombay v. R.M.D. Chamarbaugwala 1957 SCR 874: AIR 1957 SC 699 said that gambling could not be regarded as trade or business within the meaning of Article 19(1)(f) and (g) and Article 301. Inherently vicious activities cannot be treated as entitling citizens to do business or trade in such activities. No one can deal in counterfeit coins or currency notes. Das, C.J. held that activities which are criminal, or dealing in articles or goods which are res extra commercium could not have been intended to be permitted by Article 19(1)(f) and (g) relating to fundamental rights to trade or business." 40. Referring to K.K. Narula case (1967) 3 SCR 50 : AIR 1967 SC 1368 the Court held that it was not correct to read the said decision to mean that there was a fundamental right to do busin....
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.... the earlier decisions including the decision in K.K. Narula case (1967) 3 SCR 50 : AIR 1967 SC 1368, the Court held as follows: (SCC pp. 755-56, paras 47-48) "These unanimous decisions of five Constitution Benches uniformly emphasised after a careful consideration of the problem involved that the State has the power to prohibit trades which are injurious to the health and welfare of the public, that elimination and exclusion from the business is inherent in the nature of liquor business, that no person has an absolute right to deal in liquor and that all forms of dealings in liquor have, from their inherent nature, been treated as a class by themselves by all civilised communities. The contention that the citizen had either a natural or a fundamental right to carry on trade or business in liquor thus stood rejected. But, in spite of the weight of this authority, a Constitution Bench struck a different note in Krishna Kumar Narula v. State of J & K (1967) 3 SCR 50 : AIR 1967 SC 1368.... It would, however, appear that the learned Judges of the High Court had differed on the question whether the appellant had a fundamental right to do business in liquor and this Court desired 'to ....
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....ower of control is an incident of the society's right to self protection and it rests upon the right of the State to care for the health, morals and welfare of the people. Liquor traffic is a source of pauperism and crime (pp. 5 39, 540, 54 1). It was unnecessary in Krishna Kumar Narula case (1967) 3 SCR 50 : AIR 1967 SC 1368 to examine the question from this broader point of view, as the only contention bearing on the constitutional validity of the provision impugned therein was not permitted to be raised as it was not argued in the High Court. The discussion of the question whether a citizen has a fundamental right to do trade or business in liquor proceeded in that case, avowedly, from a desire to clear the confusion arising from the 'different views' expressed by the two Judges of the High Court. This may explain why the Court restricted its final conclusion to holding that dealing in liquor is business and the citizen has a right to do business in that commodity. The Court did not say, though such an implication may arise from its conclusion, that the citizen has a fundamental right to do trade or business in liquor. If we may repeat, Subba Rao, C.J. said: We, therefore,....
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....ors. 45. In State of M.R v. Nandlal Jaiswal (1986) 4 SCC 566 the Bench of two learned Judges reiterated that it is well settled by several decisions of this Court including the decision in Har Shankar case (1975) 1 SCC 737 : (1975) 3 SCR 254 that there is no fundamental right in a citizen to carry on trade or business in liquor. The State under its regulatory power has the power to prohibit absolutely every form of activity in relation to intoxicants and its manufacture, storage, export, import, sale and possession. No one can claim as against the State the right to carry on trade or business in liquor and the State cannot be compelled to part with its exclusive right or privilege of manufacturing and selling liquor. 46. In Doongaji & Co. 1951 SCR 682 : AIR 1951 SC 318 : 52 Cri LJ 1361 v. State of M.p27 a Bench of two learned Judges while dealing with the question whether, after the expiration of the licence given to the appellant, fixation of the prices of the plant and machinery of the distillery and the attached warehouses and stock-in-trade and payment thereof to the appellant, was a condition precedent to taking possession thereof and giving delivery to the new licensee ....
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....tionship is essentially a question of fact. On the facts of that case, the Court found that the only service rendered by the Government to the appellant and to other similar licensees was that the Excise Department had to maintain an elaborate staff not only for the purposes of ensuring that denaturing is done properly by the manufacturer but also to see that the subsequent possession of denatured spirit in the hands either of a wholesale dealer or retail seller or any other licensee or permit- holder was not misused by converting the denatured spirit into alcohol fit for human consumption. Since the State in that case, had not chosen to place before the Court the material in its possession from which the correlationship between the levy and the services rendered could be established at least in a general way, the Court held that the levy under the impugned rule could not be justified. 49. In State of U.P v. Synthetics and Chemicals Ltd. (1980) 2 SCC 441 which is a decision of two learned Judges of this Court, the facts were that the State legislature had enacted the U.P Excise (Amendment, Act 1972 (30 of 1972). Under notification dated 3-11-1972, the Government was authorised t....
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....nd ordinary denatured spirits are classified according to the use and the denaturants used. Hence the definition of 'alcohol' in the rules in question included both ordinary as well as specially denatured spirit. 50. The Court further held that although it was true that the stand taken by the State Government in the earlier proceedings in the High Court was that the levy was in the nature of excise duty or a fee and the present stand was that it was neither a duty nor a fee but only a levy for the conferment of the exclusive privilege, that would not make any difference so long as the Government has the right to impose the levy. The levy was imposed for permission granted in favour of the licensees and allotment orders of denatured spirits issued to them from the various distilleries. The parties having paid the fee, had taken possession of denatured spirit from the distilleries and the re-enacted legislation, viz., Act 5 of 1976 had only restored the status quo enabling the State to collect the levy validly made under the earlier Act 30 of 1972 which was found to be illegal by the High Court. 51. Since the State had exclusive right of manufacturing and selling of intoxicatin....
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....and substance of the impugned legislation, the Court held that the levies in question could not be treated as part of regulatory measures. The Court further held that the State had power to regulate though not as emanation of police power but as an expression of the sovereign power of the State. But that power has its limitations. The Court then observed that only in two cases the question of industrial alcohol had come up for consideration before this Court. One in Synthetics and Chemicals Ltd. Case (1980) 2 SCC 441 and the other in Indian Mica and Micanite Industries (1971) 2 SCC 236. The latter cases starting with EN. Balsara case1951 SCR 682 : AIR 1951 SC 318 : 52 Cri LJ 1361 are of potable liquor. The Court then referred to K.K. Narula case (1967) 3 SCR 50 : AIR 1967 SC 1368 and observed as follows: (SCC pp. 155-56, para 76) "... there was no right to do business even in potable liquor. It is not necessary to say whether it is a good law or not. But this must be held that the reasoning therein would apply with greater force to industrial alcohol. " The Court then observed in paragraphs 77, and 80 to 85 as under: (SCC pp. 156-158) "77. Article 47 of the Constitution im....
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....ice of this country, we are of the opinion that the impost in question cannot be justified as State imposts as these have been done. We have examined the different provisions. These are not merely regulatory. These are much more than that. These seek to levy imposition in their pith and substance not as incidental or as merely disincentives but as attempts to raise revenue for States' purposes. There is no taxing provision permitting these in the lists in the field of industrial alcohol for the State to legislate. 84. Furthermore, in view of the occupation of the field by the IDR Act, it was not possible to levy this impost. 85. After the 1956 amendment to the IDR Act bringing alcohol industries (under fermentation industries) as Item 26 of the First Schedule to IDR Act the control of this industry has vested exclusively in the Union. Thereafter, licences to manufacture both potable and nonpotable alcohol is vested in the Central Government. Distilleries are manufacturing alcohol under the central licences under IDR Act. No privilege for manufacture even if one existed, has been transferred to the distilleries by the State. The State cannot itself manufacture industrial alcoh....
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....ng and publishing pornographic or obscene films and literature. The illustrations can be multiplied. This is so because there are certain activities which are inherently vicious and pernicious and are condemned by all civilised communities. So also, there are goods, articles and services which are obnoxious and injurious to the health, morals, safety and welfare of the general public. To contend that merely because some activities and trafficking in some goods can be organised as a trade or business, right to carry on trade or business in the same should be considered a fundamental right is to beg the question. The correct interpretation to be placed on the expression "the right to practise any profession, or to carry on any occupation, trade or business" is to interpret it to mean the right to practise any profession or to carry on any occupation, trade or business which can be legitimately pursued in a civilised society being not abhorrent to the generally accepted standards of its morality. Human perversity knows no limits and it is not possible to enumerate all professions, occupations, trades and businesses which may be obnoxious to decency, morals, health, safety and welfare ....
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.... no fundamental right to carry on trade or business in potable liquor, the State is also injucted from carrying on such trade, particularly in view of the provisions of Article 47, though apparently attractive, is fallacious. The State's power to regulate and to restrict the business in potable liquor impliedly includes the power to carry on such trade to the exclusion of others. Prohibition is not the only way to restrict and regulate the consumption of intoxicating liquor. The abuse of drinking intoxicants can be prevented also by limiting and controlling its production, supply and consumption. The State can do so also by creating in itself the monopoly of the production and supply of the liquor. When the state does so, it does not carry on business in illegal products. It carries on business in products which are not declared illegal by completely prohibiting heir production but in products the manufacture, possession and supply of which is regulated in the interests of the health, morals and welfare of the people. It does so also in the interests of the general public under Article 19(6) of the Constitution. 56. The contention further that till prohibition is introduced, a c....
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....fect of tobacco on individual's health. The society may, in course of time, think of prohibiting its production and consumption as in the case of alcohol. There may be more such dangerous products, the harmful effects of which are today unknown. But merely because their production and consumption is not today banned, does not mean that products like alcohol which are proved harmful, should not be banned. 59. The 1956 Resolution of Industrial Policy adopted by the Central Government also does not help the petitioners/appellants in their contention that the production of industrial alcohol as an industry has to be recognised and all that can be done is to regulate the said production but not to prohibit it. Apart from the fact that the said resolution has no legal efficacy, and cannot have the effect of limiting the powers of the State to prohibit or restrict the production of potable alcohol, the resolution itself nowhere speaks against such prohibition or limitation. The licences granted to the distilleries, breweries and wineries of potable liquor are valid only so long as their production, possession, transport, sale, consumption etc. are not completely prohibited in the State....
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.... (e) For the same reason, the State can create a monopoly either in itself or in the agency created by it for the manufacture, possession, sale and distribution of the liquor as a beverage and also sell the licences to the citizens for the said purpose by charging fees. This can be done under Article 19(6) or even otherwise. (f)For the same reason, again, the State can impose limitations and restrictions on the trade or business in potable liquor as a beverage which restrictions are in nature different from those imposed on the trade or business in legitimate activities and goods and articles which are res commercium. The restrictions and limitations on the trade or business in potable liquor can again be both. under Article 19(6) or otherwise. The restrictions and limitations can extend to the State carrying on the trade or business itself to the exclusion of and elimination of others and/or to preserving to itself the right to. sell licences to do trade or business in the same, to others. (g) When the State permits trade or business in the potable liquor with or without limitation, the citizen has the right to carry on trade or business subject to the limitations, if any, ....
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....7) 3 SCR 50 : AIR 1967 SC 1368 nor in the second Synthetics and Chemicals Ltd. Case (1990) 1 SCC 109 has held that the State cannot prohibit trade or business in potable liquor. The observations made in K.K. Narula case (1967) 3 SCR 50 : AIR 1967 SC 1368 that a citizen has a fundamental right to trade or business in liquor are to be understood, as explained above, to mean only that when the State does not prohibit the trade or business in liquor, a citizen has the right to do business in it subject to the restrictions and limitations placed upon it. Those observations cannot be read to mean that a citizen has an unqualified and an absolute right to trade or business in potable liquor. This position in law is explained by this Court also in Har Shankar case (1975) 1 SCC 737 : (1975) 3 SCR 254. The decision in the second Synthetics and Chemicals Ltd. Case (1990) 1 SCC 109 also cannot be read to mean that the Court in that case has taken the view that a citizen has a right to trade or business in potable liquor. That decision is confined to trade or business in industrial alcohol which is legitimately used for industrial purpose and not for consumption as an intoxicating drink. The Co....
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....egislature. Hence the restrictions in question can also be imposed by any subordinate legislation so long as such legislation Is not violative of any provisions of the Constitution. This is apart from the fact that the trade or business in potable liquor is a trade or business in res extra commercium and hence can be regulated and restricted even by executive order provided it is issued by the Governor of the State. We, therefore, answer the question accordingly. 65. In the view that we have taken, the appeals, special leave petitions and writ petitions will now be placed before an appropriate Bench for decision in accordance with the law laid down above. SLP Nos. 9422-24 of 1994 66. In these petitions, the contention raised is that the A.P. (Regulation of Wholesale Trade, Distribution and Retail Trade in Indian Liquor and Foreign Liquor, Wine and Beer) Act, 1993 (Act No. 15 of 1993) (hereinafter referred to as the 'Act') deals with taking over only of 'trade' and not 'business' in liquor and, therefore, the petitioners cannot be prevented from carrying on the 'business' of wholesale dealing in Indian Made Foreign Liquor (IMFL) during the period of the validity of their FL....
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....pon the context in which the words occur. In Words and Phrases Legally Defined, 3rd Edn., (Vol. 4; R-Z) by John B. Saunders, the word 'trade' is explained as: " 'Trade' in its primary meaning is the exchange of goods for goods or goods for money and in a secondary meaning it is any business carried on with a view to profit,, whether manual or mercantile, as distinguished from the liberal arts, or learned professions and from agriculture. However, the word is of very general application, and must always be considered in the context in which it is used. As used in various revenue Acts, 'trade' is not limited to buying and selling, but may include manufacture. In the expression 'restraint of trade' the word is used in its loosest sense to cover every kind of trade, business,profession or occupation.*" (emphasis supplied) * Halsbury's Laws of England, 4th Edn., Vol. 47, para 1 69. In Skinner v. Jack Breach Ltd. (1927) 2 KB 220, 225-227 : 96 LJKB 834: 136 LT 726, DC, Lord Hewart, C.J. has observed: "No doubt in a great many contexts the word 'trade' indicates a process of buying and selling, but that is by no means an exhaustive definition of its meaning. It may also mean a cal....