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Gopilal Agarwal, Par... v. State Of Orissa Thro...
Structured Summary of the Opinion
Factual and Procedural Background
The petitioner is a partner in a registered partnership firm (Golabrai Madumal) which owned and operated the Bharat Mata Gudakhu Factory in Cuttack, manufacturing a local tobacco product called "Gudakhu" (also referred to as "Dantaghasa Gudakha" or "Dantaghasa Gudakhu"). Gudakhu is described as a preparation containing tobacco powder, molasses, lime and red ochre (Geru Mati) intended to be either chewed or rubbed against the teeth for a narcotic effect; quantities of constituents are set out in the rejoinder.
The Drugs Controller and Director of Health and Family Planning Services, Orissa, issued a letter (Annexure 1) dated 31 August 1971 to the President of the Orissa Gudakhu Manufacturers' Association declaring Dantaghasa Gudakha to be a "cosmetic" under the Drugs & Cosmetics Act and requesting manufacturers to apply for licences. A press note (Annexure 2) communicated the same position and warned of prosecution for manufacture without licence.
The petitioner filed a writ application seeking quashing of Annexures 1 and 2 and an injunction restraining enforcement of the Drugs and Cosmetics Act, 1940, as amended, in respect of Gudakhu. The opposite parties filed a counter-affidavit asserting that Gudakhu is a processed product that falls within the ambit of "cosmetics." The matter was heard, counsel for the petitioner advanced two principal contentions, and judgment was delivered dismissing the writ application (without costs).
Legal Issues Presented
- Whether Dantaghasa Gudakhu falls within the statutory definition of "cosmetic" in Section 3(aaa) of the Drugs and Cosmetics Act.
- Even if Gudakhu is a "cosmetic," whether the Act (including the requirement to obtain a manufacturing licence) is enforceable against the petitioner where standards of quality for Gudakhu have not been prescribed as required by Section 16(1)(b) and the rules (i.e., whether lack of prescribed standard quality prevents imposition of licensing obligations or penalties).
Arguments of the Parties
Petitioner's Arguments
- Gudakhu does not fall within the statutory definition of "cosmetic" contained in Section 3(aaa) of the Drugs and Cosmetics Act.
- Alternatively, if Gudakhu is held to be a cosmetic, the Drugs and Cosmetics Act cannot be enforced in relation to Gudakhu because the opposite parties have not prescribed standards of quality as required by Section 16(1)(b); therefore the petitioner cannot be compelled to obtain a licence for manufacture.
Opposite Parties' Arguments
- The opposite parties asserted in their counter-affidavit that Dantaghasa Gudakhu is a processed product containing tobacco powder, lime, molasses and (initially said) brick powder flavoured with essence, and that it comes within the ambit of "cosmetics."
- The opposite parties accepted the rejoinder's averment that one constituent is Geru Mati (red ochre) rather than brick powder.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Plastic Products Ltd. v. Commissioner of Sales Tax, V.P. Lucknow. 19 S.T.C 480 Allahabad | Classification of toothpaste/tooth powder/toiletries under sales tax statutes (decisions treating some products as "toilets" rather than "cosmetics"). | The court noted these Sales Tax decisions but held they do not assist in construing the statutory definition of "cosmetic" under the Drugs and Cosmetics Act because those Sales Tax statutes lacked a statutory definition and courts there relied on common parlance. |
| Commissioner of Sales Tax v. Vicco Laboratories. 22 S.T.C 169 Bombay | Same subject: classification under Sales Tax Acts (toilet vs cosmetic) in the absence of statutory definitions. | Cited as one of several Sales Tax decisions; the court stated such decisions are not determinative here where a statutory definition exists. |
| Prakash Trading Co. v. State of Gujrat. 24 S.T.C 106 Gujarat | Classification issues under State Sales Tax law regarding tooth preparations. | Referred to as part of the body of Sales Tax decisions whose reasoning is based on common parlance; court found them inapplicable to statutory construction here. |
| Commissioner, Sales Tax v. Pradeep Products. 26 S.T.C 74 Allahabad | Classification of dental/toilet preparations under Sales Tax law. | Cited among decisions that relied on ordinary meaning; court declined to rely on them for construing a statutory definition provided by Parliament. |
| B. Shah & Co. Surat v. State of Gujarat. 28 S.T.C 5 Gujarat | Similar Sales Tax classification matters. | Cited but treated as not directly helpful because of the absence of statutory definitions in those Sales Tax enactments. |
| J.V. Seshaiah and Sons v. The State of Andhra Pradesh. 28 S.T.C 614 A.P. | Sales Tax classification precedents concerning toiletries/cosmetics. | Cited among comparative Sales Tax authorities; court emphasized that where a statutory definition exists (as here) those authorities have limited relevance. |
| Sarin Chemical Laboratory v. Commissioner of Sales Tax, U.P. 1970 2 SCC 403 | Supreme Court principle: where statutory definitions are absent, names of articles in a statute should be construed in common parlance; but crucially, indicates that if a statutory definition exists, elements of that definition must be followed. | The court treated this Supreme Court decision as the concluding authority on the Sales Tax point and as a guiding principle: it confirmed that where a statutory definition has been given, the elements of that definition must be kept in view in classification. The court said Sarin is of limited help except for this guiding proposition and therefore relied on the statutory definition here. |
| Somasundar Mudalier v. State of Madras. 14 S.T.C 943 Madras | Earlier Sales Tax jurisprudence on classification of tooth preparations. | Referenced as one of the authorities with which the Supreme Court in Sarin had concurred; the present court treated it as part of the Sales Tax jurisprudence that is not dispositive for construing a statutory definition. |
Court's Reasoning and Analysis
The court's reasoning proceeded in two steps corresponding to the two principal contentions advanced by the petitioner.
Step 1 — Construction of "cosmetic" in Section 3(aaa):
- The court quoted the statutory definition of "cosmetic" from Section 3(aaa): any article intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part thereof for "cleansing, beautifying, promoting attractiveness, or altering the appearance," and includes components of cosmetics (excluding soap).
- It was undisputed that Gudakhu is intended to be rubbed against human teeth. The petitioner argued Gudakhu is used for its narcotic effect, not for cleansing teeth, and that "cleansing" should be read ejusdem generis with the succeeding expressions (beautifying, promoting attractiveness, altering appearance).
- The court rejected that ejusdem generis argument: it observed that different expressions in the definition were used to convey different meanings and that "cleansing" need not carry the same meaning as the succeeding expressions. Even if Gudakhu does not whiten teeth like toothpaste, it still cleanses the teeth by the court's view of the ordinary statutory meaning.
- The court emphasized that where the Legislature has provided a statutory definition, it is the "true depository of legislative intent" and must be given plain meaning; common parlance or dictionary meanings used in other contexts (e.g., Sales Tax cases) cannot override an explicit statutory definition.
- Consequently the court held that all elements of the statutory definition were fulfilled and Gudakhu fell within the definition of "cosmetic." The petitioner’s first contention was therefore rejected.
Step 2 — Licence requirement and standards of quality:
- The court examined Section 18(c) (in Chapter IV) which prohibits manufacture for sale of any drug or cosmetic except under and in accordance with a licence issued under that Chapter. The court concluded that Section 18(c) plainly requires a licence for manufacturing cosmetics and thus the petitioner is bound to obtain a licence to manufacture Gudakhu.
- The petitioner contended that absence of prescribed "standard quality" for Gudakhu under Section 16(1)(b) prevented enforcement of the Act. The court analyzed Section 16(1)(b), noting that "standard quality" in relation to a cosmetic means compliance with such standards as may be prescribed.
- The court referred to rule 150-A and Schedule 8 of the Drugs and Cosmetics Rules, 1945, under which standards for cosmetics may be prescribed. It observed that Schedule 8 contained a standard only for "Eau-de-Cologne" and that no standard for Gudakhu had been prescribed.
- The court held that because no standard quality for Gudakhu has been prescribed, provisions of the Act and rules imposing penalties for infringement of standard quality cannot be enforced against the petitioner until such standards are prescribed. However, the court explicitly stated that taking a licence is independent of the fixation of standard quality; absence of a prescribed standard does not relieve a manufacturer of the duty to obtain a licence.
The court then summarized its conclusions in three crystallized points: (i) Gudakhu is a cosmetic within section 3(aaa); (ii) the petitioner cannot manufacture for sale or sell Gudakhu without obtaining a licence as required under the Act and rules; (iii) the Act's provisions and rules prescribing penalties for infringement of standard quality cannot be enforced until standard quality for Gudakhu is prescribed.
Holding and Implications
Holding: The writ application is dismissed (dismissed without costs).
Immediate implications for the parties:
- The petitioner is legally obliged to obtain a licence under Chapter IV (Section 18(c)) of the Drugs and Cosmetics Act before manufacturing Gudakhu for sale.
- Because no standard quality for Gudakhu has been prescribed under the Rules (Schedule 8), the statutory provisions and rules that impose penalties for infringement of prescribed standard quality cannot, at present, be enforced against the petitioner in relation to Gudakhu.
- The writ was dismissed subject to the specific observation that penalties relating to standard quality enforcement are inapplicable until standards are prescribed; the court therefore left the licensing requirement intact while limiting enforcement of standard-quality-related penalties.
Note: The opinion does not state that it is laying down a new, broader precedent beyond the statutory interpretation applied to the facts; its conclusions follow from applying the statutory definition and existing rules to Gudakhu.
G.K Misra, C.J:— The petitioner's case may be stated is short. The petitioner is a partner of Messrs. Golabrai Madumal, a partnership firm registered under the Indian Partnership Act, 1932, which owns Gudakhu factory known as Bharat Mata Gudakhu Factory, having its place of business in Choudhury Bazar in the city of Cuttack, which manufactures and sells a particular kind of tobacco locally known as Gudakha. The Gudakha manufactured by the petitioner-firm is either chewed or rubbed against the teeth, for its narcotic effect. It is a tobacco product) containing tobacco powder, lime, molasses and red ochre (Gera Mati). In the rejoinder the proportion of the various constituents of Gudakhu is given as 1 kg. of tobacco power, 2 kg of molasses, 150 grains of lime and 50 grams of red ochre. A letter (Annexure 1) dated 31st of August 1971 was addressed by the Drugs Controller and Director of Health and Family planning Services, Orissa, to the President, Orissa Gudakhu Manufacturers' Association. Its contents are as follows:
“Dear Sir,
2. I am to inform you that the Government after due examination of the issue whether Dantaghasa Gudakha comes under the definition of a Cosmetic as per the Drugs and Cosmetics Act, 1910, have declared it as a Cosmetic. It is therefore now decided that the provisions of the Drugs & Cosmetics Act and Rules there-under should be made applicable to the manufacture of Dantaghasa Gudakhu.
3. You are, therefore, requested to kindly advise your constituent members to make necessary applications for licences as required under the provisions of the Drugs & Cosmetics Act and Rules made thereunder. They may also be advised appropriately to abide by all the provisions of the above Act, and rules applicable to Cosmetic manufacturers. Manufacturers are being addressed individually to apply for licences. A Press Note in the daily newspapers of the State is also being issued for information of all concerned.
Receipt of this letter may please be acknowledged.”
4. A press Note (Annexure 2) was issued to the same effect.
5. The press Note runs thus:
“Manufacturer for sale of “Dantagbasa Gudakhu” which is a Cosmetic item for the purpose of the Drugs & Cosmetics Act, 1940 and rules thereunder is required to be covered under a licence issued for the purpose under the said Rules.
6. Manufacture of Cosmetics without a valid license is an offence punishable with imprisonment for a term which mayextend to one year or with fine which may extend to five hundred rupees or with both.
7. All manufacturers of Dantaghasa Gudakhu in the State are advised to take out requisite licenses within three months from the date of issue of this Press Note, failing which action as provided under the law will be taken against them. For clarifications, if any, the Joint Drugs Controller, Orissa or any of the Drugs Inspectors of the State may be contacted,
Druge Controller and Director of Health & Family planning Service, Orissa.”
8. The petitioner'r case is that Dantaghaea Gudakhu does not come within the definition of ‘cosmetic’. He accordingly prays that Annexures 1 and 2 may be quashed and an injunction may be issued against opposite parties restraining them from enforcing the provisions of the Druga and Cosmetics Act, 1940, as amended from time to time, (hereinafter to be referred to as the Act).
9. In the counter affidavit filed by the opposite parties it was asserted that Dantaghasa Gudakhu is a processed product containing tobacco power, lime, molasses and brick powder flavoured with some essence and it comes within the ambit of cosmetics.
10. A number of points had been taken in the writ) application; but in course of hearing Mr. Acharya advanced two contentions:
(i) Dantaghasa Gudakhu manufactured by the petitioner does not come within the ambit of the definition ‘cosmetic’ in seotion 3(aaa) of the Act.
(ii) Even if Dantaghasa Gudakhu is held to be a cosmetic, still the Act is not enforceable as the opposite parties have not fixed it? standard quality by prescribing rules as enjoined upon in Section 16(1)(b) and as such the petitioner cannot be called upon to take a licence for the manufacture of Gudakhu.
11. Though in the counter affidavit the opposite parties had taken a stand that brick powder is one of the constituents of Gudakhu, they accepted the averment in the rejoinder that one of the constituents is Gerumati and not brick powder.
12. The first question for consideration is whether Danta ghasa Gudakhu (hereinafter to be referred to as Gudakhu) is a cosmetic which has been defined in Section 3(aaa) of the Act as follows:
““Cosmetic” means any article intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part thereof for cleansing, beautifying, promoting attractivaness, or altering the appearance, and includes any article intended for use as a component of cosmetic, but does not include soap.”
13. It is not dissputed that Gudakhu is an Article intended to be rubbed against human teeth. It is contended that it is not used for cleansing teeth but is used for its narcotic effect. The undisputed fact that it has narcotic effect does not detract from its being used for cleansing teeth. It is further contended that the word “cleansing” shall be construed ejusdem generis with the words succeeding such as beautifying, promoting attractiveness or altering the appearance.
14. Different expressions have been used to convey different meanings. Gudakhu is used for cleansing teeth and the word ‘cleansing’ need not carry the same meaning as the succeeding expressions. It may not whiten the teeth to the same extent as tooth paste and tooth powder do but all the same it, cleanses the teeth. All the elements of the definition are thus fulfilled. The language used by the Legislature is the true depository of the legislative intent. The plain meaning cannot be whittled down by taking into consideration the meaning of cosmetic as used in common parlance. If there had been no statutory definition the position might have been otherwise.
15. A number of decisions have been brought to our notice to show that under the Sales Tax Acts of different States tooth paste and tooth powder have been treated as toilets and not as cosmetics. Those decisions do not render any help in construing the meaning of ‘cosmetic’ in section 3(aaa) of the Act where a statutory definition has been furnished. In those Sales Tax Acts there is no statutory definition and the Courts had to depend upon the meaning of the expression as used in common parlance or dictionary and came to varying conclusions. The decisions cited are Plastic Products Ltd. v. Commissioner of Sales Tax, V.P Lucknow . 19 S.T.C 480 Allahabad; Commissioner Of Sales Tax v. Vicco Laboratories . 22 S.T.C 169 Bombay.; Prakash Trading Co. v. State of Gujrat . 24 S.T.C 106 Gujrat.; Commissioner, Sales Tax v. Pradeep Products . 26 S.T.C 74 Allahabad.; B. Shah & Co. Surat v. State of Gujarat . 28 S.T.C 5 Gujrat.; and J.V Seshaiah and Sons v. The State of Andhra Pradesh . 28 S.T.C 614 A.P.. It is not necessary to refer to any of these decisions as the position with regard to the Sales Tax Act is concluded by Sarin Chemical Laboratory v. Commissioner Of Sales Tax, U.P . . 1970 2 SCC 403. In that case the question was whether the tooth powder is a toilet. Neither the expression ‘cosmetic’ nor ‘toilet requisite’ had been defined in those Sales Tax Acts. Their Lordships said that the names of articles, the sales and purchases of which are liable to be taxed given in a statute, unless defined in the statute, must be construed not in a technical sense but as understood in common parlance. In common parlance tooth powder is considered as a toilet. That meaning also accords with the dictionary meaning. They concurred with the view expressed in Somasundar Mudalier v. State of Madras . 14 S.T.C 943 Madras.; Commissioner Of Sales Tax v. Vicco Laboratories and Plastic Products Ltd. v. Commissioner of Sales Tax, U.P Lucknow. The Supreme Court decision is not of much help so far as the present case is concenred except indicating the guiding principle that where a statutory, definition has been given the elements of the definition must be kept in view to see whether the impugned article comes within the definition.
16. In this case a statutory definition has been given and the word ‘Gudakhu’, satisfies all the elements of the definition and as such comes within the meaning of ‘cosmetic’. We accordingly reject the first contention.
17. The second contention is that as the standard quality of Gudakhu has not been prescribed the petitioner cannot be called upon to take a licence for manufacture of Gudakhu. Section 18(c) of the Act prohibits manufacture of Gudakhu without a licence. Chapter IV deals with manufacture, sale and distribution of drugs and cosmetics. Section 18 occurs in Chapter IV. Section 18(o), so far as relevant, runs thus:
“18. From such date as may be fixed by the State Government by notification in the official gazette in this behalf, no person shall himself or by any other person on his behalf—
(c) manufacture for sale, or sell, or stock or exhibit for sale, or distribute any drug or cosmetic, except under, and in accordance with the conditions of, a licence issued for such purpose under this Chapter.”
18. Thus, the petitioner is bound to take a licence to manufacture Gudakhu. Taking of a licence has nothing to do with fixation of standards of quality.
19. In Section 16(1)(b) standards of quality of cosmetic have been dealt with. It says that for the purposes of Chapter IV the expression “standard quality” means (b) in relation to a cosmetic, that the cosmetic complies with such standard as may be prescribed.
20. Standard quality is prescribed under rule 150-A. It lays down that subject to the provisions of the Drugs and Cosmetics Rules, 1945 the standards for cosmetics shall be such as may be prescribed in Schedule 8.
21. In Schedule S the only cosmetic for which standard quality has been prescribed is Eau-de-Cologne’, The standard-as prescribed for it is extracted hereunder:
“1. Alcoholic Fragrance solutions, such as Eau-de-Cologne’ (by whatever name called) which are intended for sale, shall be solution in alcohol of perfumed oils and made according to the formulas of individual manufacturers. The alcohol used in the manufacture of such solutions shall contain one percent of Diethyl phthalate as a denaturrant and the contents of Diethyl phthalate in each millilitre of the solution shall be shown on the label.
22. The label of the container of any such Alcoholic Fragrance solution and the other covering, if any, in which the container is packed, shall bear the following words, which shall be either printed or written in indelible ink in a conspicuous manner, namely:—
“Harmful If Taken Internally”.”
23. Till now no standard quality has been prescribed for Gudakhu. Consequently those provisions of the Act and the rules which impose penalty for infringement of standard quality cannot be enforced against the petitioner till the same is prescribed. Non-fixation of standard quality of Gudakha has however, nothing to do with the taking of licence.
24. We would sum up our conclusions thus:
(i) Gudakhu is a cosmetic within a meaning of section 3(aaa) of the Act.
(ii) The petitioner cannot manufacture for sale or sell Gudakhu without taking a licence as required under the Act and the rules.
(iii) The provisions of the Act and the rules prescribing penalty for infringement of standard quality of Gudakhu cannot be enforced against the petitioner until standard quality is prescribed.
25. On the aforesaid analysis, subject to our observations that the provisions of the Act and the rules regarding infringement of standard quality cannot be enforced against tbe petitioner until such quality is prescribed, the writ application has no merit. It is accordingly dismissed; but in the circumstances, without costs.
B.K Ray, J.:— I agree.
26. Writ application dismissed.
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