TaxTMI 
TaxTMI 
1986 (5) TMI 271
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.... petition No. 254/85). A circular is said to have been issued to the petitioners by respondent No. 3 on 22-2-1985 whereby they are directed not to manufacture the utensils, mentioned in the said order by machine, and in the event of any violation of the said order, they are told that their registration shall be liable to be cancelled. Director Industries and Commerce has by his letter dated 7-2-1985 asked the General Manager, District Industries Centre Srinagar to issue the follow up orders, which the respondent No. 3, General Manager District Industries Centre, Srinagar has issued. This letter and order seems to be based on some report which was prepared in respect of the complaint against Copper utensils Manufacturing units. 3. Petitioner's case is that the restriction on their right to conduct trade is violative of their fundamental rights as guaranteed to them under Article 19(g) of the Constitution of India. It is stated that respondents 2 & 3 have no right, authority or competence to impose restriction on the fundamental rights of the petitioners in respect of their trade which they are lawfully conducting. The said order is challenged on the anvil of guarantees contai....
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..... Utensils manufactured by hand are manufactured by skilled artisans and they are very costly as compared to the utensils manufactured by the machine. Therefore, it is likely that in the process as a result of competition between the two, handmade utensils may get extinct, thereby the art and craft will be lost forever as it would be replaced by machine made utensils which cannot represent that art and craft which the artisans have inherited through rich heritage. Petitioners are said not to be authorised to manufacture the copper utensils by mechanical process. It is said that the Govt. never intended and has not in fact granted permission to the petitioners to manufacture copper utensils by mechanical process. The petitioners are also accused of having committed some pilferage in the Sales-tax which has necessitated the issuance of the circular. The restrictions which are placed on the right of the petitioners are saved by Article 19(6) of the Constitution of India. Promissory estoppel set up by the petitioners is also denied. 6. Notification dated 22-8-1983 and SRO 436 is relied upon and it is submitted that on the basis of that SRO respondents have the effective control over....
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.... iii. It is the State Govt. alone which can under its plenary executive powers issue executive orders in respect of regulation of trade. Director of Industries or any authority under him cannot be termed as State Govt. having the executive powers. Therefore any order issued by them which has the effect of restricting the trade is violative of petitioners fundamental rights. iv. The State even under the Directive Principle of State policy has to develop the modern technique side by side and it cannot place absolute restriction on the use of machinery in regard to the manufacture of utensils; v. It is the preservation of KANDKARI art and not the manufacture of utensils which is sought to be preserved. The machines do not deal with KANDKARI art. That can be preserved without placing restriction on the machinery; vi. The restriction is said to be unguided and arbitrary and offends the guarantees under Article 14 of the Constitution. 9. It may be stated that under its executive powers State has competence to issue instructions in respect of the matters for which the legislature of the State has power to make the law. Therefore, if executive instructions i....
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....rticle 19(g) of the Constitution of India. The State's power in this regard is beyond challenge if it satisfied the requirements of Article 19(6) of the Constitution of India regard being had to the nature of the trade and nature of restrictions placed on it. 12. The State cannot exercise its inherent power arbitrarily and in such a manner which would be unjust discriminatory and unfair. Even acting under its plenary powers State is to be fair and fairness in action cannot be dispensed with by the State also. That would mean, it has to act without bias and arbitrariness and without discrimination. If any action even if taken in the interests of trade is unfair, biased, mala fide or unreasonable, same shall have to be struck down for it would be violative of guarantees contained in Article 14 of the Constitution which seeks for every citizen equality of law and equal protection of law. The concept is based on rule of law which ensures fairness in action and said action being free from arbitrariness. These are the broad guidelines as to how the State can issue instructions regulating or restricting any practice or profession or trade. 13. The impugned regulation is not issu....
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....posed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict. In evaluating such elusive factors and forming their own conception of what is reasonable, in all the circumstances of a given case, scales of values as also philosophy of Judges would play an important role. In this authority, the Govt. order had declared an association which was known as People's Education Society as unlawful within the meaning of Indian Criminal Law Amendment Act of 1908. The society was held to have interfered with the administration of the law and the maintenance of law, therefore the said order was passed. The order was held to be violative of Article 19 and declared ultra vires by the Madras High Court which was upheld by the Supreme Court. 16. In Naraindas Indurkya v. State of Madhya Pradesh, AIR 1974 SC 1232 the State had prescribed text book for schools under its executive powers which power was challenged, but the Supreme Court held that power was vested in the State to regulate the school education and the said power of issuing executive instructions was no....
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.... (Control) Order of 1966 regulating storage of sugar was held valid and it was held to come within the purview of Article 19(6) of the Constitution of India. As it had imposed reasonable restriction. Reasonable restriction was held to impose on a person in enjoyment of that right, a restriction which was in the interests of public. Freedom of trade or profession was permitted to be controlled by, in given cases, by Article 19(6) which in the opinion of the Supreme Court would be a social control. With a view to prevent hoarding and black marketing in Sugar, State Govt. had issued instructions to dealers restricting their right to keep sugar in excess of the quantity specified in the order. It was held to be regulatory and not prohibitory because the State would not permit the traders to indulge in blackmarketing and hoarding of sugar. 21. Pathumma v. State of Kerala, MANU/SC/0315/1978. In this authority the awareness of the growing requirements of society, the increasing needs of the nation, the burning problems of the day and the complex issues facing the people, which the legislature through beneficial legislation, seeks to solve was commented and the Courts in its attempt to ....
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....public interest or does not mention as to why a prohibition is placed on the rights of the petitioners to conduct business. That is sought to be proved by the affidavit of the Secretary/Commissioner Industries. The order and letter on which the said order is based do not suggest even remotely that public interest was taken into consideration by respondents 2 & 3 while imposing the restrictions. The restrictions are placed because it appears some complaints were received against the Copper utensil manufacturing units. As to who were the complainants, what was the nature of the complaint and why such complaints were taken into consideration without hearing the petitioners is not spelled out. However, even without receiving complaints as indicated, respondents 2 & 3 could regulate the trade but under the power to regulate the trade, they could not issue an order of banning the petitioners from manufacturing copper utensils on machine and in the event of their failure to follow the instructions, threaten them of cancelling their registration. 24. In the counter it has been stated that in order to preserve KANDKARI carving on the copper utensils, it was necessary to impose the ban on....
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....right could be restricted or prohibited if the respondents had shown that the restriction was imposed under Article 19(6) of the Constitution. That would be that it was in the interests of general public. No material is placed on the record by the respondents to indicate that what public interest would be served by imposing the prohibition. Merely stating in the affidavit that there are number of artisans who are likely to be affected by machine made tools, is not enough, unless data in detail is given indicating the number of artisans engaged in the handmade utensils, the number of artisans not engaged in manufacturing of machine made utensils and all other relevant conditions. Nothing has been placed before this Court by the respondents in the counter. If the respondents want to justify the circular on the anvil of Article 19(6) of the Constitution of India, they were bound to disclose the material to this Court justifying their action. It was all the more necessary because the impugned circular does not give any reasons for imposing prohibition on the petitioners in respect of manufacturing of utensils on machine. The restriction which is imposed by the respondents 2 & 3 by the ....