TaxTMI 
TaxTMI 
1985 (2) TMI 249
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....Central Government under s. 5 to regulate the storage, transport, distribution, disposal, acquisition, use or consumption of an essential commodity, in relation to foodstuffs, carries with it the general powers of the Central Government under sub-s. (1) of s. 3 of the Act to regulate or prohibit the production, supply and distribution of essential commodities and trade and commerce therein. There is a conflict OF opinion on this question between different High Courts. Hence we thought it fit to grant special leave and heard the appeal on merits. After hearing the parties, we dismissed the appeal by an order dated December 5, 1983 for reasons to follow. The reasons therefore are set out below . Briefly stated, the facts are these. In the State of Tamil Nadu, there has been a system of imposing levy on purchase of paddy by traders in vogue since the year 1970. This was imposed by cl. 3 (5) (i) of the Tamil Nadu Paddy and Rice (Licensing, Regulation & Disposal of Stock) Order, 1968 issued by the State Government under s. 3 of the Act with the prior concurrence of the Government Of India. Cl. 3 (5) (i) empowered the State ....
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....iew to procure the maximum stock of paddy by banning the purchases by traders. In exercise of the powers conferred under s. 3 of the Essential Commodities Act, 1955 read with the Government of India, Ministry of Agriculture (Department of Food) Order, G. S. R. 800 dated June 9, 1978, with the prior concurrence of the Government of India, the State Government promulgated the Tamil Nadu Paddy (Restriction on Movement) Order, 1982 on October 22, 1982. Cl. 3 (1) of the Order provides: "No person shall transport, move or otherwise carry or prepare or attempt to transport, move or otherwise carry, or aid or abet in the transport, movement or otherwise carrying of paddy outside the State by road/rail or otherwise except under and in accordance with the conditions of a permit issued by an authorized officer." On January 22, 1983, the State Government Department issued G. O. MS. No. 42 for purchase of the entire marketable surplus of paddy in Thanjavur District by the Government through the Tamil Nadu Civil Supplies Corporation as an agent of the Government. On February , 1982, the State Government in the Food & Co-operation Department issued another G. O. Ms. No. 84 extending the pro....
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....t to the conditions- (1) that such powers shall be exercised by a State Government subject to such directions, if any, as may be issued by the Central Government in this behalf; (2) that before making an order relating to any matter specified in the said cls. (a), (c) or (f) or in regard to distribution or disposal of foodstuffs to places outside the State or in regard to regulations or transport of any foodstuffs, under the said cl (d), the State Government shall also obtain the prior concurrence of the Central Government and (3) that in making an order relating to any of the matter specified in the said cl. (i) the State Government shall authorize only an officer of Government. Sd/- K. Balakrishnan, Dy. Secretary to the Government of India (No. 3 (Genl) (1)/78-D&R (1) 59)." The appellant and various other agriculturists of Thanjavur district and the aforesaid traditionally rice growing areas of South Arcot and Thiruchirapalli districts challenge the constitutional validity of cl. 3 (1A) of the Order placing a complete ban on the transport, movement or otherwise carrying of paddy outside Thanjavur district and the aforementioned taluks of South Arcot and Thiru....
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.... sub- s. (2) of s. 3 of the Act does not take in 'prohibiting' for the words 'regulating' and 'prohibiting' denote two distinct and separate attributes of power and they are mutually exclusive Otherwise according to learned counsel, there was no point in the Legislature using both the words 'regulating' and 'prohibiting' in sub-s. (1) of s. 3 of the Act and the words 'regulating' and 'prohibiting' differently in various clauses of sub-s. (2) thereof. It is urged that there cannot be a total prohibition on transport, movement or otherwise carrying of paddy out of the areas in question under cl. (d) of subs. (2) of s 3 but only regulation of such activities in the course of trade and commerce by grant of licences or permits The learned counsel is fortified in his submissions by the decisions of the Punjab, Allahabad and Orissa High Courts in Sujan Singh v State of Haryana,( AIR [1968] Pun. 363) State of Uttar Pradesh v. Suraj Bhan(AIR [.972] Al]. 401) and Bejoy Kumar Routrai v. State of Orissa (AIR [1976] Orr. 138) and he questions the correctness of the decision of the Gujarat High Court in Nanalal Navalnathji Yogi Collestor of Bulsar& Ors.( [1981] . 87) taking a view to the contrar....
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....According to its plain language, the aforesaid notification No. G. S. R. 800 provides that in exercise of the powers conferred by s. 5 of the Act, and in supersession of the earlier order of the Government of India in the Ministry of Agriculture, Department of Food, No. G. S R 316 dated June 20, 1972, the Central Government directs that 'the powers conferred on it by sub-s. (1) of s. 3 of the Act' to make orders to provide for matters specified in clauses (a), (b), (c), (d), (e), (f), (h), (i), (ii) and (j) of sub-s. (2) thereof shall, in relation to foodstuffs, 'be exercisable also by a State Government subject to the conditions set out therein'. There must be some meaningful effect given to the words 'the Central Government hereby directs that the powers conferred on it by sub-s. (1) of s. 3 of the Act to make orders etc.. shall be exercisable also by a State Government subject to the conditions set out therein'. On a plain construction, the first part of the aforesaid notification in specific terms provides for the delegation by the Central Government under s. 5 of the Act of the powers conferred on it by sub-s. (1) of s. 3 of the Act. That power is general in its terms and auth....
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....) merely provides illustration for the general powers conferred by sub-s. (l). Sub-s. (2) of s. 3 of the Act commences with the words 'Without prejudice to the generality of the powers conferred by sub-s. (1)'. It is manifest that sub-s. (2) of s 3 of the Act confers no fresh powers but is merely illustrative of the general powers conferred by sub-s. (1) of s. 3 without exhausting the subjects in relation to which such powers can be exercised. The matter is no longer res integra. The question directly arose for consideration by this Court in Santosh Kumar Jain v. The State ([1951] S.C.R. 303). There, the Court was considering the validity of the Sugar and sugar Products Control Order, 1947 issued by the then Provincial Government of Bihar in exercise of the powers conferred on it by s. 3 of the Essential Supplies (Temporary Powers) Act, 1946 by virtue of the delegation of powers by the Central Government to make orders in relation to foodstuffs under cl. (j) of sub-s. (2) of s. 3 of that Act. Patanjali Shastri, J., speaking for the Court explaining the relevant functions of sub-ss. (1) and (2) of s. 3 of the Act, said: &n....
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.... authorized inter alia the promulgation of any order providing for regulating or prohibiting the production, supply and distribution of, and trade and commerce in, any essential commodity, insofar as it appears necessary or expedient to the State Government for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices. The learned Judge after referring to the Privy Council decision in Sibnath Banerjee's case and that of this Court in Santosh Kumar Jain's case, observed : "Sub-s. (2) of s. 3, commences with the words "without prejudice to the generality of the powers conferred by sub-s. (1)....etc." This shows that sub-s. (2) confers no fresh powers but provides illustrations of the general powers conferred by sub-s. (1)......" The learned Judge went on to observe: "This is undoubtedly very incompetent drafting. But I think that the meaning is reasonably clear. The 'Matters Specified' in sub-s. (2), being "without prejudice" to the generality of the powers conferred by sub-s (1) must be held to include such powers. ....
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.... 3, he has referred to us the different clauses of that sub-section. A perusal of the various clauses (a) to (j) indicates that while cls. (a), (d) and (g) speak of the power to prohibit, and the remaining cls. (b), (c), (f), (h), (i), (ii) and (j) though they do not mention that they are illustrative of the power to regulate impliedly partake of the character of that power. If the contention of the learned counsel were to be accepted, it would imply that the Central Government derives its power under sub-s. (1) of s. 3 of the Act as the power to promulgate any order providing for regulating or prohibiting the production, supply and distribution of, and trade and commerce in, any essential commodity insofar as it appears necessary or expedient so to do, for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices. If the Central Government were to make an order under sub-s. (1) in respect of the matters specified in cl. (d), it may not only regulate or control the storage, transport, distribution etc. Of an essential commodity including the movement of such foodstuffs by grant of licenses, permits or otherwise, but also place a....
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....he Central Government under sub-s. (1) of s. 3 to regulate or prohibit such production, supply and distribution of, and trade and commerce in, essential commodities. Learned counsel for the appellant placed reliance on the decision of the Allahabad High Court in Suraj Bhan's case which proceeds Upon a decision of this Court in State of Mysore v. Sanjeeviah([1967] 2 S.C.R. 361) holding that power to regulate does not include power to prohibit or restrict. In Sanjeeviah's case, the question arose whether two provisos framed by the State Government under s. 37 of the Mysore Forest Act, 1900 which empowered the making of rules to regulate the transit of forest produce which placed absolute prohibition against transportation of forest produce between sunset and sunrise and a qualified prohibition in certain circumstances, was beyond the rule-making power of the State Government. The contention on behalf of the State was. that the two provisos were regulatory and prohibitory- In repelling the contention, the Court observed: "The power which the State Government may exercise is the power to regulate transport of forest produce, and not the power to prohibit or restrict transport. Prima....
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....er certain circumstances, as where the best or only efficacious regulation consists of suppression It would therefore appear that the word 'regulation' cannot have any inflexible meaning as to exclude 'prohibition'. let has different shades of meaning and must take its colour from the context in which it is used having regard to the purpose and object of the legislation, and the Court must necessarily keep in view the mischief which the legislature seeks to remedy. The question essentially is one of degree and it is impossible to fix any definite point at which 'regulation' ends and 'prohibition' begins. We may illustrate how different minds have differently reacted as to the meaning of the word 'regulate' depending on the context in which it is used and the purpose and object of the legislation 1047 In Slattery v. Naylor,(LR [1888] AC 446) the question arose before the Judicial Committee of the Privy Council whether a bye-law by reason of its prohibition internment altogether in a particular cemetry, was ultra vires because the Municipal Council had only power of regulating internments whereas the bye-law totally prohibited them in the cemetry in question, and it was said by....
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....ing a ban on inter Slate or inter-State movement of foodstuffs to ensure that the excess stock of foodstuffs held by a wholesale dealer, commission agent or retailer is not transported to places outside the State or from one district to another with a view to maximize the procurement of such foodstuffs from the growers in the surplus areas for their equitable distribution at fair prices in the deficit areas. The placing of such ban on export of foodstuffs across the State or from one part of the State to another with a view to prevent outflow of foodstuffs from a State which is a surplus State prevents the spiral in prices of such foodstuffs by artificial creation of shortage by unscrupulous traders. But such control can be exercised in a variety of ways otherwise than by placing compulsory levy on the producers, for example, by fixing a controlled price for foodstuffs, by placing a limit on the stock of foodstuffs to be held by a wholesale dealer, commission agent, or retailer, by prohibiting sales except in certain specified manner, etc. These are nothing but regulatory measures. We find no lawful justification for giving a restricted meaning to the word 'regulating' in cl. (d....