S. Narayana Pillai and Another vs The State of Travancore-Cochin and Another

Sankaran, J.—The Petitioner in O.P. No. 44 is a wholesale licensee for the vend of foreign liquor (P.L. 1) in the Travancore area of the State, i. e., the territory of the erstwhile State of Travancore, and the Petitioner in O.P. No. 47 is a wholesale licensee for the vend of foreign liquor (F.L. 1) in the (Cochin area of the State, i. e. the territory of the (sic)stwhile State of Cochin. The Respondents are 1 The State of Travancore-Cochin and (2) secretary to Government, Revenue Department, (sic) both. The reliefs sought in the two petitions (sic)pe identical and they are (a) to call for the (sic)cords of the case and quash by a writ of certio-(sic)ri or other appropriate writ, order or direction (sic)e Revised Rules under the Travancore Abkari 4 of 1073 (in O.P. 44) and under the Cochin Abkari Act, 1 of 1077 (in O.P. 47) dated 17-1-1953 (sic)amed by the Government or such of the provisions thereof as are repugnant to the Travancore Abkari Act, 4 of 1073 in the one and the Cochin Abkari Act, 1 of 1077 in the other case, and the Constitution of India, (b) to issue a writ of mandamus or other appropriate writ, order or direction, granting such consequential relief and ''inter alia'' order refund of any amount by way of license fee, gallonage fee or deposit that may hereafter be collected from the Petitioner, pursuant to the rules, impugned and (c) to pass an order for costs and such other reliefs as the nature of the case requires.

The grounds on which the reliefs are sought are mentioned in the affidavits accompanying the petitions which are in the same terms and are contained in paragraphs 4, 5 and 6 which say:

As a result of the promulgation of these rules (which will come into force on 1-4-1953), the following material changes. have been brought about in the grant of wholesale licences in respect of foreign. liquor merchants:

(i) The licence fee has been increased from Rs. 2000 to Rs. 3000/-.

(ii) The gallonage fee has been increased by 400 per cent. (300 per cent, in O.P. 47) and.

(iii) The wholesale licensees have to sell liquor in quantities of not less than one gallon at a time.

The above impositions and restrictions have made it well-nigh impossible for the foreign liquor merchants trading under the wholesale licences to carry on their trade and if those impositions and restrictions are allowed to continue the trade will come to a standstill and the merchants concerned will be seriously prejudiced.

Though the Government has purported to act under the sections dealing with licence fee, the levy of the licence fee and gallonage fee has in effect become a tax or a duty and as such is ''ultra vires'' of the enactment under which it is levied.

The 6th paragraph in each contains a second sentence which reads:

The levy of such a tax or duty on foreign liquor is also ''ultra vires'' of the powers of the State-Legislature or Government, under the Constitution of India.

and which is capable of being construed as calling, in question the respective Act itself. But this averment is not followed up by any prayer in the petitions and learned Counsel for the Petitioners confined his arguments to the prayers made in the petitions and impugned only the rules and did not question the vires of the Acts either at their inception or after the Constitution.

Abkari legislation existed as a source of revenue and as a means of combating the evils of intoxication in both the States of Travancore and Cochin as elsewhere from very early times. Similar enactments were made in both the States from time to time generally following the legislation in the Madras State. Travancore Act 1 of 1054 amended by Act 1 of 1055 was a reproduction of Madras Act 3 of 1864. Amendments made in Madras from time to time were introduced in these States as well. The Madras Prohibition Act 10 of 1937 was followed, though a few years later, by the- Cochin Prohibition Act, 3 of 1123 and the Travancore Prohibition Act, 6 of 1123 with the following preamble:

Whereas it is expedient as early as possible to-bring about the prohibition, except for medicinal, scientific, industrial or such-like purposes of the production, manufacture, possession, export, import, transport, purchase, sale and consumption of intoxicating liquors and drugs (in Cochin State) (in Travancore)

And whereas it is desirable to give effect to the above-mentioned policy by introducing it in certain selected areas (in Cochin - in Travancore) and utilising the experience gained therein for extending it to the other areas thereof.

The provisions in the two Prohibition Acts differed in certain respects and after the integration of the two States as on 1-7-1949 and after the Constitution of India came into force the "Travancore-Cochin Prohibition ''Act, 13 of 1950, was enacted on 16-4-1950 to replace the two Prohibition Acts by a uniform law which can be made applicable to the whole of the State of Travancore-Cochin. The Abkari Acts in the two States which contain similar provisions continued and still continue in force in territories of the erstwhile States of Travancore and Cochin uncovered by the Prohibition Act. The rules framed by the respective States under the Abkari Acts were not, however, alike. Wholesale licensees of foreign liquor in the Travancore area had to pay besides licence fee 20 per cent, of the price of liquor sold to non-licensees in excess of a certain quantity called quota as commission to the State. In the Cochin area there having been no such limit fixed on the quantity saleable by a licensee there was no liability to pay such commission over and above, the licence fee.

To secure uniformity in this regard His Highness the Rajapramukh on 14-7-1950 ordered that

sanction is accorded for extra quota of foreign liquor being allowed to wholesale licensees in Cochin on payment by them of a commission at 20 per cent, of the price of liquor. The commission so realised from the wholesale licensees in the Cochin area will be credited to Government.

The enforcement of this order in Cochin led to an application for a writ of certiorari in this Court wherein it was held that the said impost of a commission cannot be authorised by an executive order and that there should have been and law to warrant it. u/s 17 of the Cochin Abkari Act, 1 of 1077, a duty could be levied on all liquor and intoxicating drugs...1(g) sold in any part of the Cochin State but that could be done only by framing a rule u/s 69 of the Act. Such a rule not having been made the levy of the said commission and the collection thereof after the application before Court were held not warranted by law and to be ''ultra vires''. The amount collected was under the circumstances directed to be refunded. This is the decision in - ''Joseph v. Asst., Excise Commissioner'' AIR 1953 KER 146(A) which was rendered on 24-10-1952.

We have set out the historical and legislative background in that judgment and do not repeat the same here. The revised rules dated 17-1-1953 impugned in these petitions were after and appear to be in the light or on account of the said judgment of this Court.

In tax legislation it is far from uncommon to find amendments introduced at the instance of the Revenue Department to obviate judicial decisions which the Department considers to be attended with undesirable results

said Lord Macmillan in - ''D.R. Fraser and Co. v. Minister of National Revenue'' AIR 1949 PC 120 at p. 123(B). Two sets of identical rules were framed and published, one under Travancore Act -4 of 1073 and the other under Cochin Act 1 of 1077 as the two Acts in so far as they were unaffected by the Trajancore-Cochin Prohibition Act 13 of 1950 operated, as already stated, in the respective areas of the two erstwhile States. Uniformity was thus achieved. There is now no limit to the quantity that a licensee can sell nor is there, therefore, the liability on the licensee to pay any commission on sales. The licence fee which was Rs. 2000 was increased to Rs. 3000. The gollonage fee, i. e., the amount leviable on sales by a wholesale licensee to a non-licensee, was enhanced and the minimum quantity so saleable at a time was also increased. These are the changes made by the revised rules and are the three points of objection taken by the Petitioners.

Before considering the questions that arise for decision it is necessary to mention that the objection taken to the rules in that they had not been thrice published as required by Section 69 ; of the Cochin Act and 65 of the Travancore Act was not pressed in view of the counter-affidavit presented On behalf of the Respondents stating that the rules had been published in three successive issues of the Gazette on the 17th, 20th and 27th January 1953, the first of which was a Gazette Extraordinary.

(i) Licence Fee. - The question as regards licence fee is whether the impugned rules are ''ultra vires'' the Act under which they are framed. The ground on which it is contended that they are ''ultra vires'' of the Act is that the Act authorises the Government only to levy a licence fee whereas what the rules do is in effect to impose "a tax or a duty" because the amount of the impost is far in excess of what would be required to meet, or in other words, is not commensurate with, the expenditure necessary for the administration of the provisions of the Act relating to licences. If the Act authorises the impost of a duty or tax in connection with the issue of licences and if the power to make rules conferred by the Act includes a power to frame rules in that regard, then the rules are ''intra vires''. They would also be ''intra vires'' if the amounts of impost do not go beyond a fee so as to develop into a tax or duty.

Section 15 of the Travancore Act which is the first section in Chapter v. headed "duties" enacts that:

''A duty shall'' if our Government so directs ''be levied on all liquor'' and intoxicating drugs

X X X X (f) ''sold'' in any part of Travancore of such amount as our Government may from time to time prescribe.

The words in brackets are not in the corresponding section of the Cochin Act but the absence is immaterial. The next section provides that:

Such duty may be levied in one or more of the following ways

X X X X X

(d) ''by fees on licenses'' for manufacture or sate" Chapter VI relates to licenses and the first section thereof i. e., the 20th reads:

Every licence or permit granted under this regulation shall be granted

(a) on payment of such fees, if any,

(b) for such period,

(c) subject to such restrictions and on such conditions, and

(d) shall be in such form and contain such particulars as Our Government may direct either generally or in a particular instance in this behalf.

Chapter VII relates to general provisions and the last section thereof is 26 which confers on the Government power to frame rules, "(o) Generally to carry out the provisions of this Regulation." Similar provisions exist in Sections 17(g), 18(d), 24 and 29 of the Cochin Act, l of 1077.

The combined effect of the said sections is that a duty may be levied by fees on licences for sale, and the issue of the licences is to be on payment of such fees and subject to such conditions and restrictions as may be imposed. There are provisions of the Act to carry out which rules could be framed by Government under Clause (o) of Section 26. One of the sections quoted in the impugned rules whereunder they are framed is 26. The other two sections, 0 and 20, mentioned in the rules need not be discussed in this context. Section 29 in the Cochin Act corresponds to Section 26 in the Travancore Act and it is one of the sections quoted in the rules framed thereunder as authorising their promulgation. The other two sections, 10 and 24, do not call for discussion.

It is thus clear that even if the imposts levied by the rules constitute a duty or tax the rules are ''intra vires'' of the powers in that behalf conferred by the Act.

Taxes may assume the form of duties, imposts and excises, and those collected by the National Government are very largely of this character. They may also assume the form of licence fees for permission to carry on particular occupations or to enjoy special franchise" says Cooley. (Cooley''s Constitutional Limitations, 8th Edn., Vol. II, Page 1044).

In ''George Valkem v. L.M.D.P. Board'' AIR 1939 PC 36 (C), a case under the British North America Act, 1897, Lord Atkin delivering the judgment of the Privy Council in support of a similar legislation even without relying upon the power of direct taxation said:

If regulation of trade within the province has to be held valid the ordinary method of regulating trade, i.e. by a system of licenses, must also be admissible. A licence itself merely involves a permission to trade subject to compliance with specified conditions. A licence fee, though usual, does not appear to be essential. But if licences are granted ''it appears to be no objection that fees should be charged in order either to defray the costs of administering the local regulation or to increase the general funds of the province or for both purposes''. The object would appear to be in such a case to raise a revenue for either local or provincial purposes. On this part of the case their Lordships, with great respect, think that the present Chief Justice, then Duff J., took a somewhat narrow view of the provincial powers u/s 92(9) in - ''Lawson v. Interior Tree Fruit and Vegetable Committee'' 1931 SCR 357 at p. 363(D), where he says:

On the other hand, the last mentioned head ''authorises licences for the purpose of raising revenue and does not, I think, contemplate licences which in their primary function are instrumentalities for the control of trade, even local or provincial trade.

It cannot, as their Lordships think, be an objection to a licence plus a fee that it is directed both to the regulation of trade and to the provision of revenue.

The following extracts also elucidate the matter. (sic) Findley Shirras ''Science of Public Finance'', Vol. (sic) Edn. 1936, the distinction between fees and taxes stated in the following words:

Taxes are compulsory contribution to public authorities to meet the general expenses of Government which have been incurred for the public good and without reference to special benefits. Fees are payments primarily in the public interest for special services which people must accept whether willingly or not....

Fees are for Governmental services, while prices are for services of a business character. They differ also from taxes in that they are payments for special benefits enjoyed by the payer, while taxes are for general benefits, expenses which are laid, as Adam Smith says, ''for the benefit of the whole society''. The absence of a tax is the absence of ''quid pro quo'' between the tax payer and the public authority. Fees in Adam Smith''s words are particular contributions (as opposed to general contributions) by persons who give occasion to this expense....

Fees are undoubtedly co-ordinate with taxes, and are sometimes grouped under the main head tax revenue, just as fees are grouped under non-tax revenue. It is indeed sometimes difficult to draw a clear line of distinction between taxes and fees." (Vide - ''Emperor v. Munnalal'', AIR 1942 All 150, at p. 166-67 (E).

The Legislature of a State, having unlimited control over the liquor traffic, may, if it chooses to license the business, fix the amount of the license fee at any sum in its absolute discretion, and no one can complain that the amount so fixed is excessive or prohibitive: and the same rule applies in the case of a Municipal corporation, which, by its character or a general statute, possessed full control over the traffic. But if a municipality is given authority only to license the business, not to prohibit or suppress it altogether, its discretion as to the amount of the fee to be charged is limited, and an ordinance fixing such a fee as would be unreasonably great or practically prohibitory would be invalid." 23 Cyc. American Cyclopaedia of Law and Procedure, Popular Edition, pp. 148-5-2 (b)

The principle of law contended for by learned Counsel for the Petitioners based upon the decisions in - The Corporation of Madras Vs. Spencer and Co., Ltd., ; - The Municipal Council, Kumbakonam Vs. Ralli Brothers, ; - Sri Lakshmindra Theertha Swamiar of Sri Shirur Mutt and Another Vs. The Commissioner, Hindu Religious Endowments, Madras and Others, and - Ratilal Panachand Gandhi Vs. State of Bombay, that a fee for a licence must be commensurate with the expenditure necessary for the administration of the licensing department and that tax cannot be imposed in the guise of a licence fee is, if properly understood and applied, unexceptionable. A few points of distinction, caution and clarification should, however, be mentioned. A Legislature entitled to impose a tax either directly or by delegated legislation may impose it, by whatever name it may be called. The circumstances that a particular impost is called a licence fee will not conclude the matter. If the impost is authorised the nomenclature given to it as a licence fee will not affect its validity. In the case of a Municipality or a corporation whose powers are limited to the charter of its creation the question as to the impost made being in excess of its powers under the charter may arise unlike in the case of a Legislature, with unrestricted power of taxation.

The application of the principle laid down in the said cases is limited to fee levied as compensation for services rendered or to be rendered - and to the competency of the authority imposing it. Those decisions have no application to the facts of the present case.

In this view it is unnecessary to consider whether the imposts made by the revised rules would amount to a tax and exceed the limits of a fee as contended by the Petitioners because they are lawful even as tax or duty. We may, however, state that no exception is taken to a licence fee or gallonage fee being imposed at all. The objection relates merely to the enhancement of the amounts in the said two respects or in other words'' the objection is to the excessive character of the imposts which it is urged has taken them out of the realms of fee on to those of tax or duty. This is clear from paragraph 4 of the Petitioners'' affidavit which was read. The question then arises whether the enhanced imposts introduced by the impugned rules would bring in much more than the amount of the prior imposts.

One item of liability that existed in the Travancore area and was supposed to exist in the Cochin area, namely, a commission of 20 per cent, of the proceeds of sales exceeding the quota does not obtain under the new rules. The sales under the (sic) rules to non-licensees at the time could be of a quantity less than what is permitted under the existing rules. This change is admitted by the Petitioners - indeed it is a point of their complaint- in that it tends to reduce their turnover and, therefore, jeopardises their interests. Gallonage fee is on sale and therefore, its realisation would be reduced in proportion to the fall in the sale.

On behalf of the State it is contended that no appreciable increase in collection will result on account of the changes. The new rules came into force on 1-4-1953 and except on watching the working for a year which is yet to expire it will not be possible to say one way or the other, even if it would at all be possible to ascertain, the aliquot expenditure upon the part of the administration appertaining to wholesale licenses of foreign liquor. The State as required by the Court produced an account of the collections made as licence fees and gallonage fee for the past months of the year (from 1-4-1953) but no definite or dependable standard or measure was gatherable therefrom to compare with the figures of the previous year. The Abkari and Excise Department is entire and comprises manifold sub-departments under the same administrative hierarchy and even in the case of foreign liquor there are wholesale as well as retail licensees with five varieties of whom this case concerns only the former.

''(ii) Gallonage fee''- The above considerations would apply to gallonage fee as well. Furthermore, the Petitioners have no ''locus standi'' to complain about this impost. It is a fee on sales like sales tax payable by the purchaser. The averment that the gallonage fee falls on the consumers in the third paragraph of the Respondents'' additional counter-affidavit not having been controverted in the Petitioners'' additional affidavit in reply to it must be taken as admitted. Rule 3 relating to gallonage fee contains a "Note" at the foot providing for credit to be given to the licensee for gallonage fee paid on unsold stock at the end of the year. This can refer only to voluntary payments against an optimistic clearance sale to obivate surrender of stock. The seller has only to collect and pay it over to the State at prescribed intervals. He is not even asked to pay anything in advance except a deposit as security for remittance of gallonage fee collected. No detriment of any kind, therefore, accrues to him. The real point of the Petitioners'' complaint in this matter would appear to be not of any pecuniary loss directly but on account of reduction of their business owing to that impost on the customers. Tins consequence is for the reasons to be mentioned nor after also not one that gives them a ground of complaint.

On the question whether the imposts complained of constitute tax or only a fee, paragraphs 7, 8 and 9 of the Petitioners'' affidavit set out their case:

That the Government imposed the licence fee with a view to add to the general revenues of the State is clear from the Finance Minister''s speech introducing the Budget for 1953-54 and the explanatory Memorandum on the Budget for 1953-54. The total estimated income from the State Excise Duty is Rs. 240.26 lakhs and the total estimated expenditure on the supervisory staff and District Executive establishment is only Rs. 13,29,200. The expenditure mentioned above is for the entire Excise Department and not merely for superintendence of foreign liquor licensees.

It is clear from the above that imposition of the licence fee is not merely intended to reimburse the Government in any amounts expended by them in respect of foreign liquor shops which are intended to be regulated, but is really a method of raising revenues for general purpose.

The licence fee orginally levied in the "Travancore State" in 1939 was about Rs. 360 and the present licence fee is nearly 10 times that amount. The later increase in the gallonage fee is, as stated above, 400 per cent, of the gallonage fee obtaining at present. It is inconceivable that the establishment expenses in the matter of regulation of the foreign liquor trade would have shot up to the extent mentioned above.

The answer is contained in paragraph 8 of the counter-affidavit:

The allegations in paragraphs 7, 8 and 9 are denied. The inferences on which the Petitioner relies are unsustainable. The basis for fixing the rates of the fees is not solely what the Petitioner envisages in these paragraphs. Other considerations economic and administrative impelled Government to adopt a basis which was reasonable in their view. This discretion is not, it is submitted, justiciable.

The contention is neither clear nor definite. Thus the sustainability of the impugned imposts both as tax and as fee fell to be considered though our view of their sustainability as tax rendered the second unnecessary which was under the circumstances and on the materials also impracticable.

''(iii) Limit of quantity saleable at a time to nonlicensees.''- This is one of the conditions subject to which a licence may be granted under the Act. Paragraph 11 of the Petitioners'' affidavit relates to this matter which is the third point of the Petitioners'' grievance and reads as follows:

The restriction relating to sales of liquor in quantities of not less than one gallon at a time is also an unreasonable restriction and will make trading in liquor practically impossible. That restriction offends the provisions relating to the freedom of trade or business under the Constitution of India and is really ''ultra vires'' of the Travancore Abkari Act, 4 of 1073, under which the rules containing the restrictions are purported to be promulgated.

The answer is contained in paragraph 10 of the counter-affidavit which repudiates the averment in a general way. Paragraph 12 of the additional, counter-affidavit is a further answer with particulars which reads:

Reliance on fundamental right to trade is wrong in law. Liquor is a monopoly of the State and the citizen or trader has no right of property in the same independent of a grant made by the State from time to time at its discretion.

The claim for a monopoly made by the State cannot be accepted. The Constitution (First Amendment) Act, 1951, which was relied upon, provides that:

Nothing in the said sub-clause shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to

X X X X X (ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.

It is only if a law existed before the Constitution or one is enacted subsequent thereto that the State can exclude wholly or in part a citizen from carrying on any particular trade or business, etc., in competition with the State. That is to say, there should be a law to sustain a claim for monopoly by the State. No such law was brought to our notice and in its absence the claim for monopoly cannot be sustained. Whether in view of Article 47, State legislation to nationalise business in intoxicating liquor would be constitutional will be a question but it does not fall to be decided in this case.

The next point for consideration is whether the Petitioners have a fundamental right to trade in foreign liquor.

The traffic in intoxicating liquors is not "malum in se''. The sale of such products is not an offence at common law, but, in the absence of a prohibitive or restrictive statute is lawful and free to all persons. Hence punitive or restrictive measures against any individual engaging in the traffic can only be based upon the terms '' of some valid and operative law or ordinance" . (23 American Cyclopaedia of Law and Proce-dure, p. 161-163).

The sale of intoxicating liquors, although perfectly lawful at common law is subject to certain statutory restrictions, and a licence from the excise authorities is necessary before any person may manufacture, deal in, or sell by retail any intoxicating liquor." (Halsbury''s Laws of England, Hailsham Edition, . Vol. 19, page 9).

The above extracts indicate the position in America and England. In India Article 47 of the constitution provides as one of the directive principles of the State policy that:

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.

The view taken in - Mahboob Khan Vs. Deputy Commissioner and Others, that "to hold (sic)licence or to trade under a licence is (sic) not a fundamental right nor is it one of the several freedoms enjoined under the Indian constitution.

(sic)as placed by the learned Advocate General for (sic)r acceptance. We do not propose to pronounce on the soundness or otherwise of- that view as we consider that even assuming that the freedom to practice any profession or to carry on any occupation, trade or business that the Petitioners have under Clause (1) (g) of Article 19 extends to traffic in intoxicating liquors, the impugned rules are reasonable restrictions which could be imposed upon that freedom under Cl. (6) of that article which provides that:

Nothing in Sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevents the State from making any law imposing in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular, nothing in the said sub-clause snail affect the operation of any existing law in so far as it prescribes or empowers any authority to prescribe, or prevent the State from making any law prescribing or empowering any authority to prescribe, the professional or technical qualifications necessary for practicing any profession or carrying on any occupation, trade or business.

In considering the reasonableness of the restrictions imposed regard must be had to the fact that prohibition has been accepted as a directive principle of State policy by the Constitution. In - ''State of Bombay v. F.N. Balsara'' AIR 1951 SC 318 (K) where the Bombay Prohibition Act (1949) was impugned as ''ultra vires'' the Constitution in that the Act ''inter alia'' by Sections 12 and 13 provided:

No person shall-

(a) manufacture liquor;

(b) construct or work any distillery or brewery;

(c) import, export, transport or possess liquor; or

(d) sell or buy liquor.

No person shall-

(a) bottle any liquor for sale;

(b) consume or use liquor; or

(c) use, keep or have in his possession any materials; still, utensils, implements or apparatus whatsoever for the manufacture of any liquor.

His Lordship Fazl Ali J. who delivered the unanimous judgment of the Constitution Bench said:

I have already held that under entry 51, (Section 31) of List II, the Bombay Legislature was quite competent to make a law with respect to ''liquor'' even as broadly defined. It is however contended that the power of making laws has to be exercised subject to the other provisions of the Constitution and in particular to those relating to the fundamental rights guaranteed under Part III of the Constitution. The provisions to which I have referred have been assailed on the ground that they are in conflict with Article 19 (1) (f) of the Constitution which guarantees that all the citizens shall have the right to "acquire, hold and dispose of property.

This clause is wide enough to include movable as well as immovable property. The provisions in question undoubtedly prevent a citizen from possessing, selling, buying, consuming or using ''liquor'' as defined, and therefore, they ''prima facie'' infringe the fundamental right of the Indian citizens to acquire, hold and dispose of a kind of property, namely, liquor as defined in Section 2(24) of the Act, and as such would be void, under Article 13. The question to be considered is whether they can be saved by CI. (5) of Article 19, which runs as follows:

Nothing in Sub-clauses (d), (e) and (f) of the said clause shall affect the operation) of any existing law in so far as it imposes, or prevent the State from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub-clauses either in the interests of the general public or for the protection of the interests of any scheduled tribe.

The question boils down to ascertaining whether the restrictions imposed by the provisions to which reference has been made are reasonable. In judging the reasonableness of the restrictions imposed by the Act, one has to bear in the mind the directive principles of State policy as set forth in Article 47 of the Constitution. "The State is charged with the duty of bringing about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health. That the restrictions imposed by the sections -on the rights of a citizen to possess, or sell or buy or consume or use spirits of wine, methylated spirits, wine, beer, toddy are in view of the aforesaid directive principles of State policy quite reasonable, has not been disputed before us." (p. 328).

His Lordship continued and observed:

There can be no doubt whatever that the earlier categories of liquor namely, spirits of wine, methylated spirit, wine, beer, toddy are distinctly separable items which are easily severable from the last category, namely, all liquids consisting of or containing alcohol. These items being thus treated separately by the Legislature itself and being severable, and it is not being contended, in view of the directive principles of State Policy regarding prohibition, that the restrictions imposed upon the right to possess or the restrictions imposed upon the right to possess or sell or buy or consume or use those categories of properties are unreasonable the impugned sections must be held valid so far as these categories are concerned.

The above decision of the Supreme Court applies to this case and in our judgment concludes the matter against the Petitioners.

The fact that the reasonableness of the restrictions was not canvassed, will not detract from the force of the decision of their Lordships as the concession served only to obviate discussion. The fundamental right claimed there related to the right to acquire, hold and dispose of property under Clause (1) (f) of Article 19. Here the fundamental right claimed is similar and relates to the freedom under Clause (1) (g) of that Article to practice any profession or carry on any occupation, trade or business. This makes no difference and if it does, the present would be an ''a fortiori'' case because the existence and exercise of the freedom per Clause (1) (g) is more harmful than the existence and exercise of the freedom per Clause (1) (f) so far as intoxicating liquors and drugs are concerned and the need to prohibit varies with the evil. The restrictions imposed by the impugned rules in the matter of the quantity saleable at a time to a non-licensee as also of the imposition of a gallon-age fee on sale and fee for licence are all reasonable restrictions which can be made under Clause (6) of Article 19. The traffic in foreign liquor as held by the Supreme Court in the said case which upheld the Bombay Prohibition Act to that extent, is one that can be prohibited by law under the Constitution.

There the business licensed is not one of common right but one which may be entirely prohibited, there is no limit to licence fee which may be imposed." (II Cooley''s C.L.P. 1046) (footnote).

The two vegetable vendors'' cases on which reliance was placed by learned Counsel for the Petitioners do not apply to the facts of this case because in the first, i.e., - ''Rashid Ahmed v. Municipal Board, Kairana'' AIR 1950 SO 163 (L) it was held that

the prohibition of bye-law 2 in the absence of any provision for issuing licence becomes absolute. Further, bye-law 4 contemplates the grant of a monopoly to a contractor to deal in wholesale transactions at the place fixed as a market. Acting upon that provision the Respondent Board has granted monopoly to Habib Ahmad and has put it out of its power to grant a licence to the Petitioner to carry on wholesale business in vegetable either at the fixed market place or at any other place within the municipal limits of Kairana. This certainly is much more than reasonable restrictions on the Petitioner as are contemplated by Clause (6) of Art 19." This being the position, the bye-laws would be void under Article 13 (1) of the Constitution.

In the second i.e., - Mohammad Yasin Vs. The Town Area Committee, Jalalabad and Another, it was held that the impugned bye-law in effect brought about a total prohibition of the wholesale dealers in a commercial sense and from a practical point of view. But the cases related to the trade in vegetables which could not be prohibited and the bye-laws impugned therein either directly by their own force or indirectly in their effect prohibited trade in vegetables. The Supreme Court held that such prohibition was illegal and the bye-laws could not, therefore, be supported as reasonable restrictions under the 6th clause of Article 19 which obviously they were not.

In the words of Subba Rao J. in - P. Narasimha Reddy Vs. District Magistrate, Cuddapah,

There cannot be a hard and fast rule on the question of what restrictions are reasonable. The reasonableness of a, restriction depends upon the nature of the right claimed, the object to be achieved, the means employed and the limitations imposed. They should be fair and commensurate with the purposes aimed at. Their validity should also be tested by Anr. yardstick, namely, whether they were conceived and enacted, in the interests of the general public. They could be made for purposes such as public security, public order, public health and public morality.

Applying this test all the elements mentioned herein alike operate to uphold the impugned rules as the purposes of public security, public order, public health and public morality which arc the ultimate objects to be achieved by prohibition and restrictions calculated to bring about a progressive reduction of the liquor traffic are steps in the right direction as they lead towards prohibition and are legitimate and necessary. If, therefore, the complaint of the Petitioners that if the imposts and restrictions now made are allowed to continue the trade will come to a standstill (paragraph 5) be true, it would rather be a ground for continuing the impugned imposts and restrictions rather than quashing the rules which introduced them. There are certain other points raised by the Respondents in answer to the petitions which need not be considered in the view we have taken.

The applications were filed when both the Petitioners were licensees under the pre-existing rules and before the coming into force of the new rules. Prayer (b) asks for consequential relief''s which have to be rejected in view of the rejection of the main relief in prayer (a). There is a further prayer for an order directing the Respondent to repay amounts by way of licence fee and gallonage fee or deposit which might be collected from the Petitioners should they happen to be licensees under the new rules and should such amounts happen to be collected from them. The only deposit contemplated by the rules is the one under the 8th rule which is to be invested in the name of the licensee in the State Savings Bank and pledged to the Assistant Excise Commissioner to ensure the licensee''s remittance of the gallonage fee in order that the fee that the licensee defaults to remit may be credited out of the deposit. The deposit is thus only a security and must be there so long as the right and duty of collecting gallonage fee is on the licensee and cannot be released so long as the licence or any liability of the licensee subsists. Gallonage fee is not imposed on or realised from the Petitioners and they cannot ask for a refund of it.

For the foregoing reasons we hold that the impugned Rules dated 17-1-1953 framed by His Highness the Rajpramukh under Travancore Act of 1073 and under Cochin Act 1 of 1077 are Intra vires the rule making power and have the force of law as if enacted in the respective Acts. The provisions of Article 265 of the Constitution that no tax shall be levied or collected except by authority of law are satisfied in this case as the rules dated 17-1-1953 constitute law within the meaning of that article unlike the executive order in ''Joseph''s case (A)''.

The Petitioners are not entitled to any relief. Both the petitions are, therefore, dismissed with costs and advocate''s fee Rs. 100/- for the Respondents in each case.