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Policy decision :-

17. The power of judicial review over a policy decision in the field of revenue is quite settled.Such a decision is not required to be tested by a Court of law with suspicious and microscopiceye. The parameters for decision are ood faith and intention. ! Constitutional Court will have toloo" at the decision made by the #$ecutive or a %e islature by ta"in a practical view and itshould rather avoid an absolute and infle$ible concept. !n interpretation& which serves thele islative object and intent leadin to a purposive construction& is required to be made by theCourt. 'e do not wish to multiply the judicial precedents in this re ard e$cept quotin a decisionof the Supreme Court rendered in Census Commissioner (s. ).*rishnamurthy& ++, 1 / 0 %2 , 1+SC// , 1 3ndlaw SC 745 . ! fruitful recapitulation of the followin para raphs of the said

jud ment would suffice:

"22. At this juncture, we may refer to certain authorities about the justification in interferencewith the policy framed by the Government. It needs no special emphasis to state thatinterference with the policy, though is permissible in law, yet the policy has to be scrutinizedwith ample circumspection. In .!. ayal and Another v. #nion of India and others, AI$ 2%%& '(

)*+ -2%%& / '(( 0*0 1 I ! 2%%0 '( + , 5 3ndlaw SC 7, the (ourt has observedthat in the matters of policy, when the Government ta3es a decision hearing in mind severalaspects, the (ourt should not interfere with the same.

20. In armada 4achao Andolan v. #nion of India, AI$ 2%%% '( 0+5 -2%%% % '(( **& 1 I ! 2%%% '( 0* , 3ndlaw SC 5460 it has been held thus6

"It is now well7settled that the courts, in the e8ercise of their jurisdiction, will not transgress intothe field of policy decision . 9hether to have an infrastructural project or not and what is thetype of project to be underta3en and how it has to be e8ecuted, are part of policy ma3ing

process and the (ourts are ill e:uipped to adjudicate on a policy decision so underta3en. ;he(ourt, no doubt, has a duty to see that in the underta3ing of a decision, no law is violated and

people<s fundamental rights are not transgressed upon e8cept to the e8tent permissible underthe Constitution ."

2&. In this conte8t, it is fruitful to refer to the authority in $usom (avasiee (ooper v. #nion ofIndia, - /+% '(( 2&) 1 7 3ndlaw SC 676 wherein it has been e8pressed thus6

"It is again not for this (ourt to consider the relative merits of the different political theories oreconomic policies.

..... ;his (ourt has the power to stri3e down a law on the ground of want of authority, but the(ourt will not sit in appeal over the policy of the =arliament in enacting a law."

25. In =remium Granites v. 'tate of ;amil adu, AI$ //& '( 2200 - //& 2 '(( */ 1 I ! //& '( 2 / - //& 2 >1 55 -'( 1 3ndlaw SC 1 65 while dealing with the

power of the courts in interfering with the policy decision , the (ourt has held that it is not thedomain of the court to embar3 upon unchartered ocean of public policy in an e8ercise to consider as to whether a particular public policy is wise or a better public policy could be evolved. 'uche8ercise must be left to the discretion of the e8ecutive and legislative authorities as the casemay be. ;he court is called upon to consider the validity of a public policy only when a challengeis ma3e that such policy decision infringes fundamental rights guaranteed by the Constitution of 3ndia or any other statutory right.

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2*. In >.=.?il @8traction and Another s. 'tate of >.=. and ?thers, AI$ //) '( &5 - //+ + '(( 5/2 1 I ! //+ '( /%/ 1 7 3ndlaw SC ,1 0 , a two7 udge 4ench opined that67

";he e8ecutive authority of the 'tate must be held to be within its competence to frame policyfor the administration of the 'tate. #nless the policy framed is absolutely capricious and, notbeing informed by any reason whatsoever, can be clearly held to be arbitrary and founded onmere ipse di8it of the e8ecutive functionaries thereby offending Art. & of the Constitution orsuch policy offends other constitutional provisions or comes in conflict with any statutory

provision, the court cannot and should not outstep its limit and tin3er withthe policy decision of the e8ecutive functionary of the 'tate."

2+. In 'tate of >=. v. armada 4achao Andolan and Another, AI$ 2% '( /)/ -2% + '(( *0/ 1 I ! 2% '( 5 ) , 11 3ndlaw SC 55, , after referring to the 'tate of =unjab v. $am1ubhaya 4agga, AI$ //) '( +%0 - //) & '(( + 1 I ! //) '( 2&5 1 0 3ndlaw SC16 6 the (ourt ruled thus6

";he (ourt cannot stri3e down a policy decision ta3en by the Government merely because itfeels that another decision would have been fairer or more scientific or logical or wiser. ;he

wisdom and advisability of the policies are ordinarily not amenable to judicial review unless the policies are contrary to statutory or constitutional provision or abitrary or irrational or an abuseof power. -'ee $am 'ingh ijay =al 'ingh v. 'tate of #.=., --2%%+ * '(( && , 7 3ndlaw SC

7, , illianur Iyar33ai =adu3appu >aiyam v. #nion of India, --2%%/ + '(( 5* , 3ndlaw SC1 7 and 'tate of Berala v. =eoples #nion for (ivil 1iberties --2%%/ ) '(( &* , 3ndlaw SC

,1 .

2). Crom the aforesaid pronouncement of law, it is clear as noon day that it is not within thedomain of the courts to embar3 upon an en:uiry as to whether a particular public policy is wiseand acceptable or whether a better policy could be evolved. ;he court can only interfere if the

policy framed is absolutely capricious or not informed by reasons or totally arbitrary and founded ipse di8it offending the basic re:uirement of Art. & of the Constitution . In certain matters, as

often said, there can be opinions and opinions but the (ourt is not e8pected to sit as anappellate authority as an opinion."

2udicial )eview:-

10. There is always a presumption in favour of the Constitutionality of an enactment with theonus to prove it otherwise on the person who laid a challen e. There can only be two challen esto the Constitutionality. 8ne is qua the le islative competence and another bein contrary to 9art333 of the Constitution . The settled position has once a ain been reiterated in the followinmanner in the decision of ivision ;ench of this Court in !nti Corruption ovement (s. The Chief Secretary to <overnment of Tamil =adu& +, 16-,-%.'. 7/& in which one of us +Sanjay *ishan*aul& Chief 2ustice/ is a party:

"0). In the catena of judgments referred to by the learned senior counsel appearing for privaterespondents 5 to /, the discussion proceeds on the basis that the compensation in India :uachallenge to the (onstitutional validity of a provision of an enactment is similar to the #nited'tates of America, and apart from the two aspects referred to aforesaid, there is no third ground available. It is in this conte8t, it has been observed that no enactment can be struc3 down by

just saying that it is arbitrary or unreasonable, and the endeavour should not be to somehow orthe other find a constitutional infirmity to invalidate on it. In fact, an enactment cannot be struc3 down on the ground that (ourt thin3s it unjustified. ;he =arliament and the 1egislatures, being

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the representatives of the people, are supposed to 3now and be aware of the needs of the people and what is good and bad for them. ;he (ourt is not supposed to sit in judgment overtheir wisdom" 7 vide 'tate of A.= s. >c!owell<s case -- //* 0 '(( +%/ 1 4 3ndlaw SC 44 .;hose views have been approved by the Constitution 4ench of the 'upreme (ourt in $.Gandhi,=resident, >adras 4ar Association --2% % '(( , 1 3ndlaw SC 6 .

0/. ;he presumption in favour of constitutionality and the burden being on the person whoattac3s it to show that there has been transgression of the (onstitutional principles is thusfounded on the number of judicial pronouncements discussed above as well as in Greater4ombay (oop. 4an3 1td. (ase --2%%+ * '(( 20* , 7 3ndlaw SC , 6 as the (ourts would be

justified in giving a liberal interpretation in order to avoid constitutional invalidity. @ven if verywide and e8pansive powers are given to an authority, they can be in conformity with legislativeintent of e8ercise of power within the (onstitutional limitations. It is also the view in 'tate of4ihar vs. 4ihar !istillery 1td. (ase -- //+ 2 '(( &50 1 4 3ndlaw SC 14 and 'tate of>adhya =radesh s. $a3esh Bohli --2% 2 * '(( 0 2 , 1, 3ndlaw SC 154 , the beginning of the

principle of legislative competence being traced out in 'ubramanyan (hettiar vs. >uttuswamyGoundan case -AI$ /& C.(. &+ .

&%. ;he challenge laid by the petitioner based on the plea of arbitrariness and unreasonablenesson the touchstone of Arts. & and / of the Constitution of 3ndia , on the first blush, appeared tobe attractive over the possibilities of how the provision may be used, but once the touchstone ofconstitutional validity in terms of the aforesaid principle is applied, it is difficult to accept thecontention of the learned counsel for the petitioner.

& . ;he legislative wisdom cannot be gone into or sat in judgment over and thus, even what is perceived to be an erroneous legislation cannot be :uashed unless it fails to satisfy the dual testof intelligible classification and rationality."

!rticle 1 :-

1 . 'hen a challen e is made to an enactment on the round of !rt. 1 bein violated& it mustbe demonstrated that there is an element of ne ation of equality. ! mere discrimination per secannot be termed as arbitrary& as a classification is meant for providin benefits to a roup ofpersons. ! differentiation must distin uish a roup of persons or thin s identified as such fromthe thin s left out. 'hile dealin with the classification& an accurate one is not possible. )evenueand economic considerations in ta$in statute are permissible classifications. !n objective mustbe a just one. 3t is a sine qua non for classification. ! valid classification is a valid discrimination.! classification without reference to the object sou ht to be achieved would be hit by !rt. 1 .Such a classification should not be arbitrary& artificial or evasive. 3n other words& it must confineto rationality.

, . 'hile dealin with the classification qua the Constitutional validity of a statute& a Court of law

is required to deal with the facts which made the le islation in classifyin a roup. >owever&when the object of the classification itself is discriminatory& then there is no need to o into theclassification. Courts are required to afford lar er latitude to the le islature in its e$ercise ofclassification. 3n other words& what is reasonable is a question of practical approach. 'hiletestin the policy underlyin the statute& the intended object is to be ascertained.

,1. ! le islation can be challen ed on the round of le islative arbitrariness. Such anarbitrariness as found by the Court should be palpable and apparent. 3t should rather be seen onthe face of it. 3t cannot be done on the basis of hardship caused to a party& but on a total

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unreasonableness. The Court must satisfy that the statute contains substantiveunreasonableness. The conclusion arrived by us is fortified by the decisions rendered by theSupreme Court in Transport and oc" 'or"ers ?nion and others (s. umbai 9ort Trust andanother& ++, 11/ , SCC 676/ , 1 3ndlaw SC 0 & Catholic Syrian ;an" %imited (s.Commissioner of 3ncome Ta$& Thrissur& ++, 1,/ 5 SCC 70 / , 1, 3ndlaw SC 64 & 2o inder alis2indi (s. State of >aryana& ++, 0/ +1 / SCC 150/ , 0 3ndlaw SC ,46 & ;harat 9etroleum

Corporation %imited vs. Sunil ;ansal ++, / 1 SCC 4/ , 3ndlaw SC 1166 andSubramanian Swamy (s. C.;.3. ++, 1 / 0 SCC 40,/ , 1 3ndlaw SC 55, .

,,. 'e would deem it appropriate to recapitulate the followin passa es of a decision of theSupreme Court in State of Tamil =adu and others (s. *.Shyam Sunder and others& ++, 11/ 0SCC 757/ , 11 3ndlaw SC 5 :

"5%. In Ajay Dasia v. Bhalid >ujib 'ehravardi, -- /) '(( +22 1 0 3ndlaw SC , , this(ourt held that Art. & stri3es at arbitrariness because an action that is arbitrary, mustnecessarily involve negation of e:uality. 9henever therefore, there is arbitrariness in stateaction, whether it be of the legislature or of the e8ecutive, Art. & immediately springs intoaction and stri3es down such 'tate action. -'ee also @.=.$oyappa v. 'tate of ;. . -- /+& & '((

0 1 75 3ndlaw SC 44 and >ane3a Gandhi v. #nion of India, -- /+) '(( 2&) 1 70 3ndlaw SC,1, .

5 . In 'harma ;ransport v. Govt. of A.=. --2%%2 2 '(( )) , 1 3ndlaw SC 1 17 , this (ourtdefined arbitrariness observing that a party has to satisfy that the Action was not reasonable and was manifestly arbitrary. ;he e8pression "arbitrarily" means, act done in an unreasonablemanner, as fi8ed or done capriciously or at pleasure without ade:uate determining principle, notfounded in the nature of things, non7rational, not done or acting according to reason or

judgment, depending on the will alone.

52. In 4ombay !yeing E >fg. (o. 1td., -0 v. 4ombay @nvironmental Action Group, --2%%* 0'(( &0& , 4 3ndlaw SC 1411 , this (ourt held that6

"2%5. Arbitrariness on the part of the legislature so as to ma3e the legislation violative of Art. &of the Constitution should ordinarily be manifest arbitrariness."

50. In 4idhannagar -'alt 1a3e 9elfare Assn. v. (entral aluation 4oard, --2%%+ * '((**) , 7 3ndlaw SC 4 1 and Grand Ba3atiya 'heraton Dotel and ;owers @mployees and9or3ers #nion v. 'rinivasa $esorts 1td. --2%%/ 5 '(( 0&2 , 3ndlaw SC 5,4 , this (ourtheld that a law cannot be declared ultra vires on the ground of hardship but can be done so onthe ground of total unreasonableness. ;he legislation can be :uestioned as arbitrary and ultravires under Art. &. Dowever, to declare an Act ultra vires under Article &, the (ourt must besatisfied in respect of substantive unreasonableness in the statute itself."

!rt. 19 +1 /+g /:

,5. ! ri ht under !rt. 19 +1 /+g / is subject to !rt. 1 +4/. 'hen it comes to tradin in liquor& sucha ri ht becomes a qualified one. 8nce it is "nown that liquor as a bevera e is dan erous andinjurious to health& the fundamental ri ht to trade therein evaporates. Such a ri ht can beenforced only to the e$tent of enforcin the equality clause provided a party satisfies the Courtthat a benefit iven to a similarly placed person is denied to him. 3n this connection& thefollowin passa e of the Supreme Court in *hoday istilleries %td. (s. State of *arnata"a&++1 6/ 1 SCC 67 / 1 3ndlaw SC 11,5 is apposite:

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"55. ;he contention that if a citizen has no fundamental right to carry on trade or business in potable li:uor, the 'tate is also injuncted from carrying on such trade, particularly in view of the provisions of Article &+, though apparently attractive, is fallacious. ;he 'tate<s power to regulateand to restrict the business in potable li:uor impliedly includes the power to carry on such tradeto the e8clusion of others. =rohibition is not the only way to restrict and regulate theconsumption of into8icating li:uor. ;he abuse of drin3ing into8icants can be prevented also by

limiting and controlling its production, supply and consumption. ;he 'tate can do so also bycreating in itself the monopoly of the production and supply of the li:uor. 9hen the 'tate doesso, it does not carry on business in illegal products. It carries on business in products which arenot declared illegal by completely prohibiting their production but in products the manufacture,

possession and supply of which is regulated in the interests of the health, morals and welfare ofthe people. It does so also in the interests of the general public under Art. /-* ofthe Constitution .

5*. ;he contention further that till prohibition is introduced, a citizen has a fundamental right tocarry on trade or business in potable li:uor has also no merit. All that the citizen can claim insuch a situation is an e:ual right to carry on trade or business in potable li:uor as against theother citizens. De cannot claim e:ual right to carry on the business against the 'tate when the

'tate reserves to itself the e8clusive right to carry on such trade or business. 9hen the 'tateneither prohibits nor monopolises the said business, the citizens cannot be discriminated againstwhile granting licences to carry on such business. 4ut the said e:ual right cannot be elevated tothe status of a fundamental right.

5+. It is no answer against complete or partial prohibition of the production, possession, sale and consumption etc. of potable li:uor to contend that the prohibition where it was introduced earlier and where it is in operation at present, has failed. ;he failure of measures permitted by law doesnot detract from the power of the 'tate to introduce such measures and implement them as best as they can.

*%. 9e may now summarise the law on the subject as culled from the aforesaid decisions.

-a ;he rights protected by Art. /- are not absolute but :ualified. ;he :ualifications are stated in cls. -2 to -* of Art. /. ;he fundamental rights guaranteed in Art. /- -a to -g are,therefore, to be read along with the said :ualifications. @ven the rights guaranteed underthe Constitution s of the other civilized countries are not absolute but are read subject to theimplied limitations on them. ;hose implied limitations are made e8plicit by cls. -2 to -* of Art.

/ of our (onstitution.

-b ;he right to practise any profession or to carry on any occupation, trade or business does not e8tend to practising a profession or carrying on an occupation, trade or business which isinherently vicious and pernicious, and is condemned by all civilised societies. It does not entitlecitizens to carry on trade or business in activities which are immoral and criminal and in articles

or goods which are obno8ious and injurious to health, safety and welfare of the general public,i.e., res e8tra commercium, -outside commerce . ;here cannot be business in crime.

-c =otable li:uor as a beverage is an into8icating and depressant drin3 which is dangerous andinjurious to health and is, therefore, an article which is res e8tra commercium being inherentlyharmful. A citizen has, therefore, no fundamental right to do trade or business in li:uor. Dencethe trade or business in li:uor can be completely prohibited.

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-d Art. &+ of the Constitution considers into8icating drin3s and drugs as injurious to health andimpeding the raising of level of nutrition and the standard of living of the people andimprovement of the public health. It, therefore, ordains the 'tate to bring about prohibition ofthe consumption of into8icating drin3s which obviously include li:uor, e8cept for medicinal

purposes. Art. &+ is one of the directive principles which is fundamental in the governance of thecountry. ;he 'tate has, therefore, the power to completely prohibit the manufacture, sale,

possession, distribution and consumption of potable li:uor as a beverage, both because it isinherently a dangerous article of consumption and also because of the directive principlecontained in Article &+, e8cept when it is used and consumed for medicinal purposes.

-e Cor the same reason, the 'tate can create a monopoly either in itself or in the agencycreated by it for the manufacture, possession, sale and distribution of the li:uor as a beverageand also sell the licences to the citizens for the said purpose by charging fees. ;his can be doneunder Art. /-* or even otherwise."

8n merits:-

, . !dmittedly& the T!S !C is the sole authority for sellin 3ndian made liquor to the petitioners.

3t is not a club or hotel havin @% , and @% 5 licence. 8n the contrary& the petitioners buy theliquor from the T!S !C. 3nsofar as sale of forei n liquor is concerned& it stands on a differentfootin in which 60A of ta$ is levied on sale. The illustration iven earlier would show that thepetitioners are the beneficiaries of the earlier sale. They cannot e$pect the said benefit to bee$tended to the third point as well. T!S !C has involved in only second sale as a ainst thepetitioners third sale. The petitioners made considerable profit by the escalation of sale price.The classification of the customers of T!S !C and the petitioners are different. The petitionersare ma"in considerable value additions to their sales in favour of their customers. The authorityof the T!S !C to deal with the liquor within the State is not in dispute. Therefore& havinpurchased liquor from the T!S !C& the petitioners cannot see" party. !dmittedly& T!S !C is aninstrumentality of the State. The profit earned by the T!S !C oes to the coffers of the Statemeant to be used for welfare measures. The fact that the petitioners are sellin at a hi her price

is not in dispute.

,6. The oods that are specified in the Second Schedule are not vatable. ! combined readin ofS. 5+6/ of the !ct and the Second Schedule would ma"e the said position very clear. S. 5+6/of the !ct has not been put into challen e. The impu ned #$planation 1 to the amended #ntry ,of the Second Schedule spea"s only about the turnover as such. The classification made isperfectly in order. The petitioners& who are clubs and hotels& cannot be compared with the retailoutlets of T!S !C. The customers of the T!S !C and the petitioners form two distinct anddifferent cate ories based upon their respective socioeconomic status. The petitioners are notprevented from doin their business. Therefore& there is no violation of !rt. 19 +1 /+g / involved.'hen the petitioners are sellin liquor at a hi her price than the T!S !C& they cannot see"parity. >avin availed a set-off on the second point of sale& the petitioners cannot compel the

respondents to e$tend the benefit at the third point of sale. 'ith no rievance a ainst the pointof levy& the petitioners cannot challen e the manner in which it is imposed. The inclusion ofcertain oods includin liquor in Second Schedule has not been put into challen e. Therefore& weare of the view that the petitioners cannot see" protection under !rt. 19 +1 /+g / ofthe Constitution of 3ndia.

,4. Certain incidental issues have also been raised by the petitioners. 'e do not find any ta$ onta$ bein imposed in view of S. 5+6/ read with the amended impu ned provision. The petitionersdo not have a case& particularly& when dealin with third sale with the value addition. Similarly&

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we do not find any repu nance between the provisions& as they operate in their own respectivefields.

,7. 3n the result& all the writ petitions stand dismissed. >owever& there is no order as to costs.Consequently& all the connected miscellaneous petitions stand dismissed.

9etitions dismissed