JAGANNATH AND OTHERS versus UNION OF INDIA

jurisdiction to try the offence of criminal conspiracy can also try offences committed in pursuance of that L. N. Muklt1rjr• •• conspiracy even if those offences were committed out • St till of M odrtis side the jurisdiction of th st Court, ss the provisions of s. 239, Criminal Procedure Code, sre not controlled by Raghuba" the provisions of s. 177, Criminal Procedure Code, which Doyol j. do not crestP a.n absolute prohibition against the trial of offences by s Court other than the one within whose jurisdiction the offence is committed. On s parity of reasoning, the Court having jurisdiction to try the offences committ~d in pursuance of the conspiracy, ca.n try the offence of conspiracy even if it we.a com-mitted outside its jurisdiction. We therefore hold that the ordn under appeal is correct snd, according-ly, dismiss this sppesl.

Appeal dismissed.

April ao.

JAGANNATH AND OTHERS v. UNION OF INDIA

(P. n. GAJENDRAGADKAR, A. K. SARKAR, K. N. WANOJIOO, ICC. DAS GUP'l'A, snd N. RAJAOOPALA AYYANGAR JJ.)

Excise Duty-Tobacco-Diffrrenl rates for 111llole leaf and broken leaf-If discriminatory-Central Excises and Salt Act, 1944 (/ of z944), First Schedule Entry 4(I) Items 5 and 6-COll· stitution of India, Art. 14.

Item 5 of entry 4(1) of the First Schedule to the Central Ex-cise and Salt Act, 1944, itnposes an excise duty of I{s. I-Io nP. per kilogram on tobacco other than flue cured and not actually used for the manufacture of cigarettes, smoking mixtures for pipes and cigarettrs or biris in the whole leaf form. Item 6 imposes duty of Rs. 2-20 nP. per kilogram on tobacco in the broken leaf form. The petitioners who dealt in tobacco in the broken leaf form contended that their tobacco could not be distinguish-ed on any rational basis from the whole leaf form in Item 5 and the imposition of double tariff on their !obacco was invalid as it was based on unconstitutional discrimination, the tariff being on the basis of use to which the tobacco was put.

2 S.C.R. SUPREME COURT REPORTS

Held, that there was no.unconstitutional discrimination in !96< the imposition of the excise duty on tobacco in the broken leaf form. Tobacco in the broken leaf form was capable of being ]agannath used in the manufacture of biris while tobacco in the whole v. leaf form could not be so used economically. The two forms of Union of India tobacco were different by the test of capability of user. The tariff was not based either wholly or even primarily by reference to the use of tobacco. There was clear and unambiguous dis-tinction between tobacco in the whole leaf form covered by item 5 and tobacco in the broken leaf form covered by item 6 which had reasonable relation to the object intended by the imposition of the tariff.

Kunmathat Thathunni Moopil Nair v. The State of Kerala, [1961] 3 S.C.R. 77, referred to.

ORIGINAL JURISDICTION: Writ Petition No. 84 of 1958.

Petition under Art. 32 of the Constitution of India for enforcement of Fundamental Rights.

G. G. Mathur, for the petitioners.

G. K. Daphtary, Solicitor-General of India, B. Sen,

R. H. Dhebar and T. M. Sen, for the respondent~

1961. April 20. The Judgment of the Court was

delivered by

GAJENDRAGADKAR, J.-This is petition filed underGajend1agadka1 J.

Art. 32 of the Constitution challenging the validity of the excise tariff imposed by cl. (6) in entry 4(1) in the First Schedule to the Central Excises and Salt Act, 1944 (I of 1944). Petitioners Nos. 1 to 17 are tobacco cultivators and they carry on the trade and business of growing tobacco and of selling it in Kaimganj Tahsil in the District of Farrukhabad in Uttar Pra-desh. Petitioners 18 to 30 are partners or proprietors or agents of firms which are private bonded werehouse licencees and they carry on trade and business of pur-' chasing tobacco from the cultivators and of selling the same to dealers or to other private warehouse licencees. By their petition the petitioners have asked for writ, direction or order in the nature of mandamus to be issued to the respondent, the Union of India, restrain-ing it from levyir.g excise duty on hooka and chewing tobacco under the impugned item and any other writ, direction or order which may be found suitable to

protect the fundamental rights of the petitioners .to carry on their trade and business of dealing in hooka jugt1nnatli v. and chewing tobacco. The atlack against _the validity union uf_I,,di.i of the impugned tariff item is based substantially on two grounds. It is urged that the rates imposed by Gaj,ndrngadka' J. the impugned item are excessive and they virtually destroy the petitioners' trade and it is argued that the impugned item is based on unconstitutional discrimi-nation. Mr. Mathur, for the petitioners, fairly conce-ded that he would noL be able to substantiate the first ground of challenge, and indeed it is obvious that challenge to tax law qn t1'e mere' ground that the tariff imposed by the tax law is heavy cannot be enter-tained. That leaves the question of discrimination alone to be considered iry. the present petition. For the purpose of th!s petition'. we will assume that if discrimi-nation in' respect of commodities taxed is proved it ultimately amount,s to discrimination against the persons taxed and t!illrefore Art. 14 can be invoked in such case. Mr. Mathur contends that that is the effect of tji.e decision of this Court in K unmathat Thathunni Moopil Nair, etc., v. The.State of Kerala ([1 ]) and as we have just observed wo will assume that such challenge can be made against the validity of taxing statute with provisions such as we have before us and deal with the petitioff on that basis.

The tariff entry in dispute as it now obtains under the taxing statute is entry 4 in the First Sch~dule. lt deals with tobacco. Under this entry "tobacco" means any form of tobacco, whether cured or uncured a11d whether manufactured or not, and includes the leaf, stalks and stems of the tobacco plant, but does not include any part of tobacco p~ant while still attached to the earth. Clause I in entry 4 deals with unmanu-factured tobacco, and prescribes tariff per kilogram in respect of the several items specified in it. Item (1) under this clause deals with five categories of tobacco which are flue cured and are used iu the manufacture of cigarettes as indicated in the said five sub.clauses. hem (2) deals with tubi;cco which .is fluo cured and used for the nrnnufacturti of smoking (1) [1961) 3 S.C.R. 77.

2 S.C.R. SUPREME COURT REPORTS

mixtures for pipes and cigarettes. Item (3) provides '9[6]' for flue cured tobacco which is not otherwise specified; Jagannath and item (4) is concerned with tobacco other than flue v. cured am! used for the manufacture of (a) cigarettes Union of Endia or (b) smoking mixtures for pipes and cigarettes. The , , --tariff varies from Rs. 16•15 nP. per kilogram to [1]'"J'ndragadkar J. Rs. 1·65 nP. per kilogram. That takes us to item (5). This item deals with tobacco other than flue cured and not actually used for the manufacture of (a) cigarettes or (b) smoking mixtures for pipes and ciga-rettes or ( c) biris. The fourth clause under this item is tobacco cur<'d in whole leaf form and packed or tied in bundles, hanks or bunches or in the form of twists or coils. For tobacco falling under the four clauses under item (5) the tariff is Rs. l·lOnP. per kilogram. Clause (6) in this item with which we are concerned in the present petition deals with tobacco other than flue cured and not otherwise specified. :P'or this residuary clause the tariff prescribed is Rs. 2·20 nP. per kilogram. This tariff is double the tariff prescribed for the classes in the preceding item. Mr. Mathur's grievance is that the tobacco with which the petitioners deal cannot be dist.inguished on any rational basis from the tobacco covered by it<>m (5), cl. ( 4), and so the imposition 'of double tariff on the tobacco in which the petitioners deal is invalid inasmuch as it is based on unconstitu-tional discrimination. The argument proceeds on the assumption that the tariff is prescribed by reference to the use to which tobacco is put and it is urged that tho tobacco with which the petitioners are concerned is not aetually used either for cigarettes or smoking mixtures or biris and the fact that it is broken and not whole leaf does not afford any rational basis for classification.

In dealing with this argument it would be relevant very briefly to refer to the report of the Tobacco Ex-pert Committee whose recommendations have fur-nished the main basis for the present revised tariff in respect of tobacco. In substance this rnport shows that the present tariff cannot be said to have been prescribed either wholly or even primarily by refe-rence actually to the use of tobacco. Tobacco, as the

122 80PREME COURT R~PORTS [1962]

1 96 1 Committee's report points out, is a. rich man's solace a.nd poor man's comfort. Since it is used by all )AganY1ath I v. classes of peop in various forms it is necessary to u.;.,. of India frame th<:> ta.riff in such way that tlw incidence of tax shall fa.11 equitably on all classes of people using Gojud••gadka. J. it. The report then points out that the Intention Ta.riff based on the principle of intention was found to he ineffecti\'e because the assessec's declaration of intended 11-ie left large room for evasion of tax. That is why th<' l ntention Tariff was substituted by a. fiat ra.to of duty. By experience it was found that even this method was not very effective or equitable and then was adopted the capability ta.riff. Cnder this test the criterion of assessment was to be whether or not a. particular specimen of tobacco was capable of use in biri manufacturing. If so capable it was assessable on a. higher rate, if not so capable then at lower rate. The report has examined the advantages of the capa-bility tariff and has quoted the opinion of the Taxa-tion Enquiry Committee which ma.de its rnport in 1953. Tlw report considered the volume of e\'idence adduced before it and took into account a.II the sugges-tions ma.de. "In view of the practical difficulties brought before us", says tho report, "we consider that, within tlw present tariff, the only workable and satis-factory method of classifying tobacco will be to prt·s-cribe standard~ readily ident ilia.hie either visually or by other 'imple tests and manipulations with view to d<:>termine empirically what is capable and what is incapable of use in biris. The position is complicated bp,cause tl1e same tobacco is used for different purposes in different. parts of the country according to the pre-valent consumption habits of different typea of to-bacco"; and the Committee realised that any system of classific11.tiou on uniform basis for the whole of the Indian I.Jn ion is bound to involve greater imposts on consumer' of those areas w l.J.ore the prevalent custom is to con,umc variety for chewing, snuff, hooka., cigar purposes while the same varieties are used in other a.re<>s for biris. The conclus;on of the Com-mittee, therefore, was that the only criterion which is sa.fe to adopt is the one relating to the physical form

2 S.C.R. SUPREME COURT REPORTS

of tobacco as affecting its suitability for biri making. '9[6]' The Committee realised that it was very difficult to Jagannath classify specified varieties as solely chewing tobacco v, because many of these varieties are also used for mak-Union of India ing snuff and for hooka purposes. Normally, however, . --most chewing varieties are in whole leaf form and are Ga;endragadkar J. cured by addition of moisture. Tobacco cured in whole leaf form cannot be converted into flakes as readily as tobac11.o cured by dry curing methods, and in the opinion of'the Committee, although it is possi-ble to prepare flakes out of tobacco cured in whole leaf form the process of conversion into flakes causes much higher proportions to crumble into dust, rawa and other unsaleable forms. The Committee was con-scious that the whole leaf varieties after suitable manipulation can be utilised for biri manufacturing purposes but it thought that this could be done only after converting them into graded flakes, and even thereafter only by admixture with other tobacco on small localised scale. In regard to the broken leaf grades which the Committee recommended should be liable to assessment at the higher rate relief was recommended by permitting any owner to convert his broken leaf tobacco into fine rawa or dust in which form it will become physically unusable for biris. According to the Committee, after such manipulation of physical form, the resultant, if it fulfils the specifi-cations for rawa and dust, may be allowed assessment at the lower rate.

We have referred to these observations made by the Committee in its report because they clearly and emphatically bring out the distinction between "to-bacco other than flue cured and not otherwise sp!lcified" which is the subject-matter of the residuary clause and "tobacco other than flue cured and not actually used for the manufacture of cigarettes or smoking mix-tures for pipefl. or cigarettes or biris" covered by cl. (5). By the test of physical form the two articles are diffe-rent. By the test of capability of user they are different and in sense according to the Committee's recommendations they partake of the character of different commodities. In this connection it may be

124 SUPRE:\iE COURT REPORTS

pointed out tha.t though the ta.riff impost on the toha.cco falling under 1l1e impugned cl. (6) is much }aga111talls v. higher, biris in the manufacture of which no process Union 01 fnd•n ha8 been conducted with the aid of ma.chines operated with or without the a.id of power a.re not subject t-0 G•J•"d••c"dk•• J. any ta.riff, whereas cigars, chewing, cigarettes and biris in the manufacture of which any process ha.s been conducted with the aid of machines operated wit.h or without the aid of power arc subject to ta.riff. The problem which the Committee ha'd to face was to classify tobacco other than flue cured which would be used for the manufacture of biris, and with that object cl. (5) and cl. (6) have been devised. Therefore, in our opinion, the distinction between tobacco falling under cl. (5) a.nd cl. (6), according to the report of tho Com-mittee, is so clear and unambiguous and its relation to the object intended by the imposition of ta.riff is so clearly reasonable that the attack against its validity on the ground of unconstitutional discrimination cannot be upheld.

There is one more point to which Mr. :\fathur refer-

red and which may be incidentally considered. Mr. Mathur contended that Nicotia.na. Rustica with which tho petitioners deal is used exclusively for hooka and chewing in Utta.r Pradesh. The petition avers that the variety of Nicotiana Hustica which is used in biris is not grown in l' ttar Pra.desh and that all the toba.o-co which is grown in Kaimganj is Xicotiana. Rustica. which is either pit cured or ground cured. It is used exclusively for hooka and chewing and is unfit for use in biris and cigarettes and is never so used. The argument, therefore, is that this tobacco cannot be legitimately taxed under tho impugned clause. Apa.rt from the fact that the question as to w hcther the parti-cular tobacco in which tho petitioners deal falls under tho impugned clause or not cannot be legitimately raised in petition under Art. 32, the answer to tho plea. is furnished by the count~r-a.ffidavit and the report of the Committee. In the counter-affidavit the allegations made in regard to the exclusive user of :\ icotiana Rustics are generally denied, and what is more the report of the Committee specifically point.a

'9[[6]]' Jagan•ath v.

out that though Rustica varieties of tobacco are gene-'9[[6]]' rally not known to be used for biris, when they are Jagan•ath cured in broken leaf grades they cau be used with v. admixture with biri tobacco like Pandharpuri tobacco Union of llldia for imparting strength to biri mixtures, and so accord-. ---ing to the Committee no generalisation in this matter Ga;endrngadkar J. is possible and it cannot be asserted that. all forms of this variety are incapable of use in biris. Besides, it would be quite possible for dealers in the said varie-ties of tobacco to send them to other parts of the country where they are used for the purpose of manu-facturing biris. Therefore, the grievance made by the petitioners that the tobacco in which they deal can never be used for biris i8 obviously nut well founded.

In the result the petition fails and is di,,missed with costs.

Petition dismissed.

JYOTI PERSHAD

v. ADMINISTRATOR FOR TERH.ITORY OF DELHI

THE ADMINISTRATOR FOR THE UNION

(AND CONNECTED PETITIONS)

(B. P. SINHA, 0 .• J., s. K. DAS, A. K. SARKAR,

N. H.AJAGOPALA AYYANGAR and

J. R. MUDHOLKAR, JJ.)

Slu1n Areas-J.mprovement and clearance of-Validity of enact-ment-Co,.stit,.tionality-Rent Control-Operation of Rent Con-trol Act in areas governed by Slmn Areas Act-Delhi 6- Ajmer Rent Control Act, I952 (38 of I952)-Slum Areas (Improvement and Clearance) Act, Ig56 (96 of Ig56), s. r9-Constitutian of lndid, Arts. I4, r9(r)(j).

The petitioner after prolonged litigation and having fu]. filled all the conditions of the Delhi Rent Control Act, obtained decrees of ejectment against the tenants,

April 2I.