TaxTMI 
TaxTMI 
2012 (9) TMI 1121
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....Nina Nariman and Ms. Geeta Shastri, Assistant Government Pleader for respondent-State in Original Side matters, Mr. D.J. Khambata, Advocate General with Mr. S.K. Shinde, Government Pleader, Mr. A.B. Vyagyani, Assistant Government Pleader and Mr. Prashant Darandale, Assistant Government Pleader for respondent-State in Appellate Side matters and Mr. Kevic Setalvad, Additional Solicitor General for Union of India ORDER M.S. Shah, C.J. 1. Rule, returnable in the first week of July 2013. Heard the learned counsel on the question of interim relief. The writ petitioners are companies engaged in the business of manufacture, supply and distribution of pan masala containing tobacco (known as gutka) and pan masala not containing tobacco. The petitioners claim to have licences and permissions under the Prevention of Food Adulteration Act, 1954 which is now replaced by the Food Safety and Standards Act, 2006 and the other legislations. According to the learned counsel for the petitioners in five petitions, the petitioners' factories are situate outside the State of Maharashtra. Statutory Regulations and Standing Order under challenge : The petitioners have challenged th....
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...., distribution or sale of Gutka or Pan Masala containing either tobacco and/or nicotine or Magnesium Carbonate as ingredients, by whatsoever name these are available in the market and any other products marketed separately to constitute as Gutka or Pan Masala etc. as final products in the State of Maharashtra, for a period one year from the date of publication of the order in the Maharashtra Government Gazette. The order was published in the Maharashtra Government Gazette on 20 July 2012. BROAD CHALLENGES 3. The above regulations and the impugned order are challenged broadly on the following grounds:- (i) The prohibition similar to one contained in the impugned order dated 19 July 2012 was struck down by the Supreme Court in Ghodawat Pan Masala Products I.P. Ltd. and another v. Union of India and others, (2004) 7 SCC 68 (the Ghodawat judgment). In the above judgment, the Supreme Court in terms held that the Cigarettes and other Tobacco Products (Prohibition of Advertisements) and Regulation of Trade & commerce, Production, Supply & Distribution Act, 2003 (the Cigarettes Act, COTPA Act or Act of 2003) is a "comprehensive law on tobacco". "Pan Masala or any ch....
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.... on gutka having tobacco or on pan masala having magnesium carbonate. (v) The impugned order is also violative of petitioners' fundamental rights under Articles 14 and 19(1)(g) and other rights under Article 300A of the Constitution. In Ghodawat, the Supreme Court had considered the stand of the State Government that Gutka and Pan Masala are injurious to health but the Supreme Court held the total ban on Gutka and Pan Masala as unreasonable and violative of petitioners' fundamental rights under Article 19(1)(g) of the Constitution because on the one hand, the State Government did not ban chewing tobacco which has cent percent tobacco, but banned gutka which has only 6 to 7% tobacco. The Supreme Court also held that since the petitioners were granted licences under the PFA Act, the Act did not contemplate any total ban but on the contrary, permitted the petitioners to manufacture, distribute and supply gutka and pan masala. Similarly, Section 31 of the Food Safety Act, 2006 provides for granting licences and the petitioners who have such licences are entitled to carry on the business of manufacture, distribution and sale of pan masala and gutka. (v....
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....e submitted by the National Institute of Health and Family Welfare pursuant to the Supreme Court order dated 7 December 2010 in SLP No. 16308 of 2007 (Ankur gutka v. Indian Asthma Care Society & ors.) 6. Initially, the petitions were to be listed for final hearing on 12 September 2012. However, as the final hearing of the writ petitions was likely to take considerable time, the learned counsel for the petitioners prayed for hearing on interim relief. Accordingly, the learned counsel for the parties as well as the learned counsel for the intervenor have been heard at length on the question of interim relief. Contentions (i) to (iii) - Does Cigarettes Act of 2003 occupy the entire field OR the Food Safety Act of 2006 is the comprehensive law on the subject? 7. The first contention of the learned counsel for the petitioners is that in the Ghodawat Judgment, the Supreme Court has in terms held that the Act of 2003 is comprehensive law on tobacco. The preamble to the said Act as well as the Statement of Objects and Reasons indicate that tobacco products are injurious to health and there is need to discourage the use of tobacco and tobacco products. However, the Act only regulat....
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....utka has not been defined as food. 2. The query raised is a clarification and not pertains to RTI, the copy of the Food Safety and standards act is present on the website www.fssal.gov.in. 9. The learned counsel for the petitioners have also placed strong reliance on the report of the expert group which was appointed to examine the draft notification dated 25 November 2005 for amendment of the Prevention of Food Adulteration Act. The expert group had at its meeting held on 22 and 24 March 2006 under the Chairmanship of Dr. Shiv Lal, Additional Director General made, interalia, the following recommendations:- The Group noted that "there is no proposal to ban the manufacture and sale of tobacco, gutka or any tobacco product, but there is a proposal to exclude these products from the purview of the PFA Act 1954 because a separate specific legislation has been enacted by the Central Government to deal with tobacco products including Gutka under the name of "The Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution Act 2003". The Group referred to and extracted the....
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....sly repeals, the presumption against implied repeal of other laws is further strengthened. (iv) The new law will be construed as impliedly repealing an existing law only if there is no other alternative construction which allows both laws to operate and if the two are so repugnant or inconsistent that the two cannot stand together. (2003) 7 SCC 389, (2002) 5 SCC 285 and (2001) 8 SCC 257 11. The learned counsel for the petitioners also sought to rely upon the position prior to the order dated 19 July 2012 in support of their contentions that there was no total ban prior to the impugned order. 12. On the other hand, Mr. Darius Khambata, learned Advocate General for the State of Maharashtra and the Food Safety Commissioner, Maharashtra State as well as Mr. Kevic Setalvad, learned Additional Solicitor General for the Central Government have opposed the above submissions. It is submitted by the learned counsel for the respondents that Ghodawat judgment based on the provisions of the PFA Act, 1954 and the Cigarettes Act, 2003 does not continue to govern the field when there is a subsequent legislation made by Parliament itself being Food Safety and Standards....
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....in any view of the matter, even if the Food Safety Act is considered to be a general Act, having regard to the fact that the Food Safety Act, 2006 is a later Act and contains the non-obstante clause in Section 89 thereof, the later Act will prevail over the earlier special Act. 15. The learned counsel for the respondents submitted that Parliament must be deemed to be aware of the existence of the Cigarettes Act, 2003 as well as the Supreme Court judgment in Ghodawat case in 2004 holding pan masala and gutka to be food. The fact that tobacco and tobacco products are not excluded from the purview of Food Safety Act, 2006 clearly indicates that Parliament did not intend to exclude tobacco or tobacco products being used or being intended for human consumption from the purview of Food Safety Act, 2006. Moreover, the 2011 Regulations including the impugned regulations 2.3.4 and 3.1.7 were laid before each House of Parliament under section 93 of the Food Safety Act. The Parliament did not modify or nullify any of those Regulations and, therefore also the Regulations under the Food Safety Act must prevail. 16. Reliance is placed by learned counsel for the respondents on decisions of ....
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.... the market for human consumption, plants prior to harvesting, drugs and medicinal products, cosmetics, narcotic or psychotropic substances. Provided that the Central Government may declare, by notification in the Official Gazette, any other article as food for the purposes of this Act having regards to its use, nature, substance or quality. (Emphasis supplied) 18. While the definition in the 1954 Act excluded drugs and water, the definition in the Food Safety Act, 2006 excludes animal feed, live animals, plants prior to harvesting, drugs and medicinal products, cosmetic, narcotic and psychotropic substance. Obviously, gutka and pan masala do not fall in any of these excluded categories. The expression "any substance which is intended for human consumption" in FSS Act 2006 is also wider than the expression "any article used as food or drink for human consumption" in PFA Act, 1954. It is also pertinent to note that the definition of food in the Act of 2006 specifically includes "chewing gum" and any substance used into the food during its manufacture, preparation or treatment. Hence, even if gutka or pan masala were not to be ingested inside the digestive system, a....
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....d Industry had appointed a Subject Group on Food and Agro Industries which had recommended for one comprehensive legislation on food with a Food Regulation Authority. The committee expressed its concern on public health and food safety in India and the Standing Committee of Parliament also desired that the much needed legislation on Integrated Food Law should be expedited. The Law Commission of India had also suggested to make a comprehensive review of Food Laws of various developing and development countries and other relevant international agreements and instruments on the subject and after making an indepth survey of the International scenario it was suggested that all acts and orders relating to food be subsumed within the proposed Integrated Food Law. The statement of objects and reasons also provides that the main object is to bring out a single statute relating to food. It is proposed to establish the Food Safety and Standards Authority of India which will fix food standards and regulate/monitor the manufacturing import, processing, distribution and sale of food, so as to ensure safe and wholesome food for the people. The Bill also makes single window to guide and regulate p....
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....ower upon the Food Authority to specify the standards and guidelines in relation to articles of food and the limits for use of food additives. Chapter III of the Act contains general principles of food safety and requires the Central Government, the State Government, the Food Authority and other agencies implementing the provisions of the Act to be guided by the principles laid down in Chapter III. These provisions require all the above authorities which include the other agencies implementing the provisions of the Act to identify the possibility of harmful effects on health on the basis of assessment of available information. If the possibility of harmful effects on health is identified but scientific uncertainty persists, provisional risk management measures necessary to ensure appropriate level of health may be adopted. In cases where there are reasonable grounds to suspect that a food may present a risk for human health, the Food Authority and the Commissioner of Food Supply shall inform the general public about the food, risk to health and measures being taken to prevent or eliminate that risk. Section 18(2)(a) also requires that the Food Authority shall, while framing regulat....
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....n any food except where the use of anticaking agents is specifically permitted: (a) carbonates of calcium and magnesium; (b) to (d) ... 2.11.5.: Pan Masala Pan Masala means the food generally taken as such or in conjunction with Pan, it may contain:- Betelnut, lime, coconut, catechu, saffron, cardamom, dry fruits, mulethi, sabnermusa, other aromatic herbs and spices, sugar, glycerine, glucose, permitted natural colours, menthol and non prohibited flavours. It shall be free from added coaltar colouring matter and any other ingredient injurious to health. It shall also conform to the following standards namely:- Total Ash .... Ash insoluble in dilute.... HCL acid .... (Emphasis supplied) 25. Since we have already held that the definition of "food" in the Food Safety Act is wide enough to include gutka and pan masala, it is obvious that the above regulations also apply to gutka and pan masala, Apart from, and even before, conferring powers of enforcement on the authorities under the Act in Chapter VII, Parliament has in Chapter VI ....
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....take a comprehensive analysis and study of the contents of gutka, tobacco, pan masala and similar articles manufactured in the country, and harmful effects of consumption of such articles." The Report of National Institute of Health and Family Welfare submitted, pursuant to the above analysis and study, reveals that more than one-third of adults in India use tobacco in some or other form, more than 16 crore people are users of only smokeless tobacco and 4 crore people are users of both smoking and smokeless tobacco. Several studies in India have reported a strong association between smokeless tobacco use and oral pre-malignant/ pre-cancerous lasions. The risk increases with the duration and frequency of smokeless tobacco use. There are consistent results of an increased risk of oral cancer with the use of different forms of smokeless tobacco used in the country. There is also strong association between smokeless tobacco and pancreatic cancer, throat cancer, oesophagal cancer, renal cancer and higher mortality rate. The use of smokeless tobacco also causes non-cancerous diseases/ conditions including nervous system diseases, metabolic abnormalities, reproductive complications and ot....
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.... obligation of the Food business operator to provide safe food. Secondly, in Ghodawat case, the Supreme Court noticed that the power to prohibit a food article as injurious to health was conferred by section 23(2A)(f) only on the Central Government without conferring similar power on the State Government. Therefore, now in section 30(2)(a), Parliament has expressly conferred power on the Food Safety Commissioner of the State, subject to the only limitation of one year period at a time. 29. As already noticed above, 2011 Regulations have come on the statute book long after the Supreme Court judgment in Ghodawat case. The 2011 Regulations have been made by the Food Authority of India in exercise of the powers under sections 16 and 92 of the Act after previous consultation with the Central Government and have been placed before each House of Parliament without any modifications having been made by Parliament. Section 30(2)(a) confers independent power on the Food Safety Commissioner in the State. As already noticed by us, Section 26 of the Food Safety Act directs that every food business operator shall not manufacture or distribute any article of food which is unsafe and that it....
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.... of 2004. (b) The allegation of inaction on the part of the authorities has been denied by the learned Advocate General. Our attention is invited to a number of prosecutions launched for breach of the statutory Regulations which came into force on 5 August 2011 including Regulations 3.1.7 and 2.3.4 (Annexure "C" to reply affidavit dated 31 August 2012). In any view of the matter, the interpretation of statutory Regulations of 2011 leaves no room for doubt, as discussed above. The said Regulations take complete care of conclusions 4 and 5 laid down by the Supreme Court in Ghodawat judgment. Contention (v): Is there any violation of Article 19(1)(g) read with Article 19(6) 31. The petitioners' contention is that the harmful effects of gutka and pan masala were brought to the notice of the Supreme Court in the Ghodawat case but, according to the petitioners, the Supreme Court did not consider them to be relevant for the purpose of deciding the legal question which had arisen before the Supreme Court. It is vehemently submitted by the learned counsel for the petitioners that in para 48 of the judgment, the Supreme Court had noticed that strangely, the States did not ban ch....
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....g Administration, Government of Maharashtra as well as in the reports placed by the intervenor on the record of these petitions. It is not only tobacco and nicotine which cause carcinogenic effect but also magnesium carbonate which is generally used for manufacture of gutka as well as pan masala to sweeten the pieces of supari and other ingredients. 34. It is an admitted position that pan masalas being manufactured by the petitioners contain magnesium carbonate. It is specifically urged in paras 2.3.2 and 2.3.3 of the petitions (W.P. No. 1631 to 1635 of 2012) that magnesium carbonates occurs naturally in tobacco, lime, arecanut and cardamom and that therefore, pan masala necessarily contains magnesium carbonate. 35. Dealing with the above submission of the petitioners, the Joint Food Commissioner has pointed out in his affidavit dated 14 August 2012 that "lime does not contain magnesium carbonate and that the magnesium carbonate in betel nut and lime is in miniscule scale. Betel nut does not contain carbonate but it only contains inherent and natural magnesium which is 2.8 nanogram per gram dry weight. The exact percentage of magnesium in betel nut/areca nut and slaked lime a....
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....e ban on sale of gutka which contains about 6% of tobacco, is violative of Article 14 and is an unreasonable restriction on the petitioners' fundamental right to carry on business under Article 19(1)(g), and (b) even after finding that smoking is injurious to health, in the Cigarettes Act, 2003 the Parliament has not imposed a total ban on smoking cigarettes and has rested content with merely prohibiting advertisements of cigarettes and other tobacco products and prohibiting sale of cigarettes and other tobacco products to persons below the age of 18 years. Similar restrictive measures can be taken for gutka and pan masala. Hence, the State Government is not justified in imposing total ban on manufacture and sale of gutka and pan masala; instead of taking less drastic measures would suffice. The ban is, however, an unreasonable restriction on the fundamental rights under Article 19(1)(g). 38. We are unable to appreciate the above contentions because the Supreme Court had no occasion to consider the provisions of the Food Safety Act, 2006 and the Regulations subsequently made by the Food Authority of India in the year 2011 in exercise of the powers under sectio....
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.... consumption of tobacco with cent percent tobacco is not banned. 41. We also find considerable substance in the submission of the learned Advocate General that the State has the power to prohibit trades which are injurious to health and welfare of the public. A reasonable restriction as contemplated under Article 19(1)(g) read with clause (6) may require prohibition if it is in the public interest. In Cooverjee B. Bharucha v. Exercise Commissioner and the Chief Commissioner, Ajmer and others, AIR 1954 SC 220 (Para 7), the Supreme Court made the following observations:- (7) Article 19(1)(g) of the Constitution guarantees that all citizens have the right to practise any profession or to carry on any occupation or trade or business, and Cl.(6) of the article authorises legislation which imposes reasonable restrictions on this right in the interests of the general public. It was not disputed that in order to determine the reasonableness of the restriction regard must be had to the nature of the business and the conditions prevailing in that trade. It is obvious that these factors must differ from trade to trade and no hard and fast rules concerning all trades can be l....
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....n 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 licences for that purpose. It is a matter of legislative will only. These observations have our entire concurrence and they completely negative the contention raised on behalf of the petitioner. 42. We find considerable substance in the submission of the learned Advocate General as well as the learned Additional Solicitor General that the width of prohibition depends on the facts and circumstances of the trade. Complete prohibition is justified because less drastic course is not practical. When 98% of the samples of gutka and pan masala were found having injurious ingredients, it is not possible for the State Government to post inspectors outside each school to prevent sale of pan masala and gutka to school children or to inspect and test each batch of pan masala to find out whether it forms part of 98% or the remaining 2%. 43. In a catena of decisions, the Supreme Court has held that the Court should take into account not only the material on record but should also take judicial....
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....ower is not smeared by bad faith, influenced by extraneous considerations, uninformed by relevant factors, and is within the limits of reasonableness it becomes out of bounds for judicial re-evaluation. Where expertise of a complex nature is expected of the State in framing rules, the exercise of that power not demonstrated as arbitrary must be presumed to be valid as a reasonable restriction on the fundamental right of the citizen and judicial review must halt at the frontiers. The court cannot re-weigh and substitute its notion of expedient solution. Constitutionality not chemistry, abuse not error, is our concern and the executive has not transgressed limits at all here. Within the wide judge-proof areas of policy and judgment open to the government, if they make mistakes, correction is not in court but elsewhere. That is the comity of constitutional jurisdictions in our jurisprudence. We cannot evolve a judicial policy on medical issues or food additives and should refuse to invalidate Rules 44(g) and 47 on the mystic maybes and happy hopefuls held up before us by the appellant. (Emphasis supplied) 44. In Srinivas Enterprises v. Union of India (1980) 4 SCC 507, a Constitutio....
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....Food Safety Act of 2006 admittedly empowers the Food Authority of India to lay down the standards of food products. As already held earlier, the definition of food in Food Safety Act includes gutka and pan masala. When the Parliament has specifically conferred power on the Food Safety Commissioner of the State to prohibit in the interest of public health, the manufacture, storage, distribution or sale of any article of food in the interest of public health, the Parliament has done what Article 258(2) of the Constitution exactly permits, which Article reads as under: 258(2) A law made by Parliament which applies in any State may, notwithstanding that it relates to a matter with respect to which the Legislature of the State has no power to make laws, confer powers and impose duties, or authorise the conferring of powers and the imposition of duties, upon the State or officers and authorities thereof. The Food Safety Commissioner, Maharashtra State exercising his powers under section 30(2)(a), is thus a delegate of Parliament. Delegation of the legislative power by the Parliament to the officer of the State Government holding the rank equivalent to Secretary to the S....
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....does not mean that Parliament did not require the Food Safety Commissioner exercise any quasi legislative power. As already discussed earlier, the obligation of food business operator under section 26(2)(i) not to manufacture or sale any food which is unsafe, without any declaration by the Central Government, Food Authority or the State Government under section 26(2)(iv), would be meaningless, if the Food Safety Commissioner does not have any power to issue a quasi legislative order under section 30(2)(a) of the Food Safety Act, 2006. Hence, the question of the Food Safety Commissioner following the principles of natural justice before issuing such order under section 30(2)(a) does not arise. 49. Even otherwise, assuming that the statutory order dated 19 July 2012 were to be treated as an administrative order, all that it does is to prohibit the manufacture, storage, distribution, transportation and sale of gutka and pan masala having prohibited ingredients like tobacco, nicotine, magnesium carbonate and other ingredients injurious to health. These prohibitions are already contained in the statutory regulations made in August 2011. Hence, passing of the order by the Food Safety ....
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....he effect that before the Constitution was adopted nearly two-third of the territory of India was subject to British Rule, while the remaining part was governed by Indian Princes and it consisted of several Indian States. A large number of those States claimed sovereign rights and erected customs barriers. Prior to 1950, the flow of trade and commerce was impeded at several points which constituted the boundaries of Indian States. The historical process of merger and the integration of the several Indian States with the rest of the country was accomplished just before adoption of the Constitution. Hence, the main object of Article 301 was to allow free flow of trade, commerce and intercourse throughout the territory of India. The Supreme Court then referred to the following pertinent observations in Automobile Transport, AIR 1962 SC 1406 wherein Das, J. observed- Even textually, we must ascertain the true meaning of the word 'free' occurring in Art. 301. From what burdens or restrictions is the freedom assured? This is a question of vital importance even in the matter of construction... The conception of freedom of trade in a community regulated by law presuppos....
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....nt 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. (Emphasis supplied) 55. The voluminous reports and material placed by the respondents as well as the intervenor on record establish the dangerous effects of gutka, pan masala (having as their ingredients tobacco or nicotine or magnesium carbonate) on public health, which justify the complete prohibition on manufacture, storage, distribution and sale of gutka and pan masala. 56. We may, at this stage, also refer to the principle laid down by the Supreme court in The U.P. State Electricity Board and another v. Hari Shankar Jain and others, AIR 1979 SC 65:- The mandate of Art. 37 of the Constitution is that while the Directive Principles of State Policy shall not be enforceable by any Court, the principles are 'nevertheless fundamental in the governance of the country' and 'it shall be the duty of the State to apply these principles in making laws'. Addressed to Courts, what the injunction means is that while Cou....