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Gopi Parshad, v. The State Of Punjab, .

Punjab & Haryana High Court

Aug 9, 1956

Judgment

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Structured Summary of the Opinion

Factual and Procedural Background

The petition under Article 236 of the Constitution challenged the licensing regime created under the Punjab Tobacco Vend Pees Act, 1954 (the Act of 1954) and Rule 4 of the rules framed under the Tobacco Vend Fees Act, 1954. The petitioner is a dealer in cigarettes and bidis in Sonepat who was required to obtain a distributing agent's licence on payment of a licence fee of Rs. 500 per annum under Rule 4. He refused to take out the licence and contested the validity of the rule on several grounds, including that the State was imposing a tax in the guise of a licence fee, that the licence fee was discriminatory, and that it imposed an unreasonable restriction on trade and business. The opinion traces the statutory history: a licensing fee regime was first enacted by the Punjab Tobacco Vend Pees Act, 1934, with fees prescribed and later increased; the 1934 Act was repealed in 1952 and re-enacted in substantially the same form in 1954. Rule 4 prescribes four classes of licence with fees of Rs. 500, 240, 60 and 30 per annum respectively for different categories of manufacturers, distributing agents, dealers with assistants, dealers with one assistant, and dealers with no assistant. The Court was asked to decide whether the imposition constituted a tax or a licence fee and whether the Act or Rule 4 were invalid on grounds including discrimination and infringement of fundamental rights.

Legal Issues Presented

Whether the imposition authorised by the Punjab Tobacco Vend Pees Act, 1964 (as applied under the 1954 Act and Rule 4) constitutes a tax or a licence fee.
Whether the imposition (particularly the Rs. 500 licence fee for certain classes) is discriminatory and violative of Article 14 of the Constitution.
Whether the licensing requirement and fees amount to an unreasonable restriction on trade and business contrary to Article 19.
Whether licence fees collected under the statute can be regarded as fees (rather than taxes) when they are credited to the State Consolidated Fund and not earmarked for administration of the Act.

Arguments of the Parties

Petitioner's Arguments

The State government is imposing a tax in the garb of a licence fee; the licensing power cannot be used as a cloak to levy a tax.
The licence fee is discriminatory: it applies only to dealers within municipalities and notified areas and imposes different fees on different classes of dealers.
The licence fee amounts to an unreasonable restriction on trade and business under Article 19.
The extraordinary increase of the licence fee from Rs. 2 (in 1934) to Rs. 500 (in 1954) indicates the State's desire to augment revenue rather than regulate; this increase is said to be unreasonably disproportionate to the cost of regulation.
Because income from licences is paid into the State treasury and not earmarked, the imposition cannot be treated as a fee (relying on the proposition in AIR 1954 S.C. 388 that a payment is not a fee unless the amount collected is earmarked for the services rendered).

State / Respondent's Arguments

The State denied that receipts from the Act are greatly in excess of the expenditure incurred in regulation and produced a written statement estimating annual income under the Act for 1955–56 at Rs. 5,00,000 while total administrative cost of the Department was about Rs. 35,00,000.
The staff administering the licence regime is composite and also administers allied enactments (Punjab Excise Act, Punjab Sales Tax Act), hence costs are not limited to the Tobacco Vend Fees Act alone.
Article 266 of the Constitution requires that all revenues be credited to the Consolidated Fund of the State, so sums cannot practically be earmarked; this does not prevent a charge from being a licence fee.
The classification of dealers (into four classes according to size/importance/number of assistants) is a reasonable basis for differential fees; sub-classification is permissible.
The licensing requirement and fees are reasonable restrictions in the public interest and therefore permissible under Article 19.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Retilal Panachand v. State of Bombay, AIR 1954 SC 388	Distinction between licence fee (to reimburse State for services) and tax (to provide revenue for governmental duties); also cited for the proposition on earmarking (payment cannot be regarded as a fee unless the amount is earmarked to meet expenses of rendering certain services).	The Court relied on this authority to define the conceptual difference between a fee and a tax and to consider the petitioner's contention that licence income not being earmarked prevents classification as a fee; the Court noted the principle but also applied constitutional provisions (Article 266) limiting earmarking.
Pittsburgh Rly. Co. v. City of Pittsburgh, 60 A 1077	Licence is a price paid for a privilege; a tax is an enforced contribution for governmental needs.	Used to support the characterization of a licence fee as a payment for a privilege contrasted with taxation.
Flint v. Stone Tracy Co., (1911) 220 US 107	The label given by the legislature to a charge is not conclusive in determining whether it is a tax or a licence fee.	The Court cited this to emphasize that statutory designation alone does not determine the nature of the imposition; operational effect must be examined.
Camas Stage Co. v. Kozer, (1922) 25 Am LR 27	Similar principle that the name of the charge is not decisive.	Referred to alongside Flint as support for examining substance over form in classifying the charge.
Tarver v. Albany, 127 Se A 58	If the amount is exacted solely for revenue and payment alone confers the right to carry on the business, the charge is a tax.	Adopted as a test: whether payment alone confers right without further conditions, indicating a tax rather than a regulatory licence fee.
United Artists Corporation v. James, 23 P Supp 353	If charge is levied to regulate and statute requires compliance with conditions in addition to payment, it is a licence proper.	Applied as the converse test to Tarver: presence of regulatory conditions besides payment supports classification as licence fee.
Youngblood v. Sexton, (1875) 20 Am. Rep. 654	Fees yielding revenue in excess of that required for regulation do not necessarily become taxes if the object is regulatory.	Relied upon to hold that surplus revenue from fees does not automatically convert them into taxes when regulatory purpose predominates.
Varadachari v. State of Madras, AIR 1952 Mad. 764	The licence fee may include reasonable costs of supervision, inspection and regulation beyond mere cost of issuing the licence.	The Court cited this to justify that licence fees need not be confined to mere issuance costs but may cover reasonable regulatory supervision expenses.
City of Tucson v. Stewart, 45 Ariz 36	What is a reasonable licence fee depends on legislative discretion; courts presume reasonableness unless disproved; wholly disproportionate fees may be declared taxes.	The Court used this to explain judicial deference to legislative discretion on licence fees and the high threshold for invalidation unless fee is wholly out of proportion to regulatory expense.
Lyons v. Cooper, (1888) 39 Kan. 324	Courts are reluctant to declare licence fees unreasonable unless a flagrant, oppressive abuse of power is shown.	Relied upon to underscore the reluctance to invalidate licence fees absent clear, flagrant evidence of abuse.
North Western Laundry v. Des Moines, (1916) 239 US 486	A statute is not void merely because it includes certain areas while omitting others; classification by territory is permissible.	Used to support the proposition that territorial limitations of a statute do not, per se, violate equal protection.
Hadacheck v. Sebastian, (1916) 239 U.S. 394	Legislation imposing restrictions on businesses in designated localities is permissible.	Applied to reject the petitioner's contention that limiting the Act's application to municipalities and notified areas was discriminatory.
Bowman v. Lewis, (1880) 101 U.S. 22	Different systems of law in different parts of a state's territory do not necessarily violate equal protection.	Referred to in support of the proposition that territorial differentiation is constitutionally permissible.
Danville v. Quakermaid, 43 Am. L. Rule 590	A licence tax must be uniform and reasonable as to the class singled out, but persons in the class may be sub-classified on a natural and reasonable basis.	Used to justify sub-classification among tobacco dealers for different fees based on reasonable bases (e.g., size of establishment).
Hodge v. Muscatine County, (1905) 196 U.S. 276	It is permissible to sub-class businesses (e.g., wholesale vs retail) for the purposes of licensing or taxation.	Relied on to show that legislative sub-classification of dealers (wholesale/retail or by volume) is acceptable.

Court's Reasoning and Analysis

The Court followed a multi-step analytical approach, applying established tests drawn from case law and the statutory context to determine whether the imposition was a tax or a licence fee and whether the Act and Rule 4 were constitutionally invalid.

Characterisation test: The Court began by recalling the legal distinction between a licence fee (a charge imposed to reimburse the State for services and regulatory supervision) and a tax (an enforced contribution for governmental revenue), relying on cited authorities to frame the inquiry.
Substance over form: The Court noted that the legislative label is not conclusive and that the operation, practical results, incidents, and substance of the statute must be examined to determine whether the charge is regulatory or revenue-producing.
Examination of statutory features: The Court reviewed the Act of 1954's provisions—licensing requirement, conditions attached to licences, powers of inspection, seizure, investigation and penal sanctions (fines up to Rs. 500)—and concluded prima facie that the Act was designed principally for regulation and restraint of tobacco sale rather than primarily for revenue-raising.
Consideration of amount and proportionality: The Court acknowledged that an imposition may be so heavy as to suggest a revenue purpose. It considered the petitioner's argument that the increase from Rs. 2 to Rs. 500 showed an intent to raise revenue, but found that the petitioner had not produced evidence to show aggregate receipts were disproportionately large compared to regulatory costs.
Respondent's evidence: The State produced a written statement estimating annual receipts under the Act (1955–56) at Rs. 5,00,000 and showing total departmental costs around Rs. 35,00,000. The Court relied on the absence of convincing evidence from the petitioner to infer that fees produced an unreasonable surplus.
Earmarking issue and Article 266: Confronting the proposition from AIR 1954 S.C. 388 that fees must be earmarked to be regarded as fees, the Court observed that Article 266 requires all State revenues to be credited to the Consolidated Fund, making earmarking practically impossible. The Court accepted the Advocate-General's submission that fees cannot be kept out of the general revenues under the Constitution.
Discrimination (Article 14): The Court addressed the charge of discrimination on two fronts—territorial application (limited to municipalities/notified areas) and differentiation among classes of dealers. The Court held that classification for legislative purposes is permissible provided it is reasonable and rests on a ground of difference bearing a proper relation to the classification. It found the four-tier classification based on size/importance of establishment reasonable.
Reasonable restrictions (Article 19): The Court concluded that the licensing requirement and associated fees were reasonable restrictions in the interest of public protection; the Constitution permits reasonable regulation of trade and business and does not give an unfettered right to engage in conduct that may injure the public.
Burden of proof and judicial restraint: The Court emphasised that the petitioner bore the burden of establishing that the fees were wholly out of proportion to regulatory expenses and that courts would be reluctant to declare fees unreasonable absent a clear, oppressive abuse of power.

Holding and Implications

Holding: The petition is dismissed with costs. The Court held that neither the Punjab Tobacco Vend Pees Act, 1954 nor Rule 4 of the rules framed thereunder is invalid on the grounds relied upon by the petitioner; the imposition is not struck down as a tax, nor found to be discriminatory or violative of Articles 14 or 19 on the material before the Court.

Implications:

The immediate practical effect is that the licensing requirement and the fee schedule under Rule 4 remain valid and enforceable against the petitioner and similarly situated dealers.
The Court applied established tests from precedents and emphasised deference to legislative classification and discretion in fixing licence fees, subject to judicial review only in cases of clear abuse or flagrant disproportionality.
The opinion recognises the constitutional constraint under Article 266 that State revenues form the Consolidated Fund, and therefore rejects the argument that inability to earmark receipts alone converts a fee into a tax; the Court did not hold that the inability to earmark is dispositive of the fee/tax distinction, but treated it as a constitutional reality relevant to the analysis.
The Court did not indicate that it was establishing any new legal principle beyond applying established tests; it resolved the challenge on the facts and evidence presented, dismissing the petition for want of proof of abuse or disproportion.

Judge: Bishan Narain, J. (with a concurrence: "I agree.")

Show all summary ...

1. This petition under Article 236 of the Constitution raises the question whether the imposition authorised by the Punjab Tobacco Vend Pees Act, 1964, constitutes a tax or a licence fee.

2. The petitioner, who is carrying on business as a dealer in cigarettes and bidis in Sonepat, has been required to take on a distributing agent's licence on payment of a licence fee of Rs. 500/-under Rule 4 of the rules framed under the Tobacco Vend Fees Act, 1954. He declines to take out the licence in question and challenges the validity of the rule on various grounds, among others, being that the State Government is imposing a tax in the garb of a licence fee, that the licence fee is discriminatory and that it amounts to unreasonable restriction on trade and business.

3. A licence fee on the sale of tobacco was imposed for the first time by the Punjab Tobacco Vend Pees Act, 1934, which was enacted with the object of regulating the sale of manufactured tobacco in municipal and certain other areas. Section 3 imposed a statutory obligation on all vendors of tobacco to take out a dealer's licence and Section 4 declared that every licence shall be granted on payment of such fees as may be prescribed by the State Government.

The State Government prescribed an annual licence fee at the rate of Rs. 2/- in the year 1935 but increased it to Rs. 3/- in 1939, Rs. 5/- in 1941 and Rs. 20/- in 1950/ The Act of 1934 was repealed in the year 1952 but was re-enacted in substantially the same form in the year 1954. Rule 4 of the rules framed under the new Act authorises the issue of the following kinds of licences on the fees mentioned against each, namely-

(1) Manufacturer's or distributing agent's licence ..............

Rs. 500/- per annum (2) Licence for a dealer who Has more than one assistant or employee ..............

Rs. 240/- per annum (3) Licence for a dealer who has only one assistant or employee ..............

"Rs. 60/- per annum (4) Licence for a dealer or hawker who has no assistant or employee ..............

Rs. 30/- per annum.

4. The Constitution confers ample power on a State Legislative to divide the various business vocations into classes for the purpose of levying taxes and fees and to levy varying amounts on different professions, trades, callings and employments. A licence is a privilege granted by the State to do something which without the grant would be illegal, and a licence fee is an imposition or exaction on the right to use or dispose of property, to pursue a business, occupation or calling or to exercise a privilege.

A licence fee is imposed primarily with the object of reimbursing the 'State for the services rendered by it, while a tax is exacted with the object or providing revenue for the State and enabling it to carry 011 the duties of Government -- Retilal Panachand v. State of Bombay', AIR 1954 SC 388 (A). A licence is a price paid for a privilege while a tax is an enforced contribution levied on persons, property or income for governmental needs 'Pittsburgh Rly. Co. v. City of Pittsburgh', 60 A 1077 at p. 1078 (B).

Charges may be levied either for purposes of regulation or for purposes of revenue or for both purposes. If the primary object of the charge is to regulate or restrain it is a licence fee; if on the other hand the primary object is to produce revenue it is a licence tax.

5. In order to determine whether licence legislation is a regulatory or a revenue measure, it is necessary to examine the operation, practical results and incidents and the substance and natural and legal effects of the language employed in the statute by which the charge has been imposed. Although the name by which the Legislature chooses to designate a particular charge is not conclusive, it is an important factor in determining whether the particular imposition is a tax or a. licence fee -- 'Flint v. Stone Tracy Co.' (1911) 220 US 107 (C),; -- 'Camas Stage Co. v. Kozer', (1922) 25 Am LR 27 (D).

It is necessary also to ascertain the power, whether regulatory or taxing, under which the amount is demanded and the purpose for which the demand is made. If the amount is exacted solely for revenue purposes and the payment thereof confers a right to carry on the business or occupation without the performance of any further conditions it is a tax -- 'Tarver v. Albany', 127 Se A 58 (E).

If, on the other hand, the charge is levied for the purpose of regulating a business or occupation and the statute requires compliance with certain conditions in addition to the payment of the prescribed sum, such a sum is a licence proper imposed by virtue of the power to regulate -- 'United Artists Corporation V. James', 23 P Supp 353 (F).

The amount of the imposition, or exaction must also be taken into consideration, for the amount of the charge may be so heavy or burdensome as to lead one irresistibly to the conclusion, considering the nature of the business or occupation to which it was applied, that although it was described as a fee it was in substance and effect, a tax.

If the amount exacted is required to cover the actual expenses of issuing the licence and inspecting and controlling the business or occupation it is a licence fee proper and not a tax. But the mere fact that these fees yield a revenue In excess of that required for the purpose of regulation will not convert the fees into a tax where the object of the imposition is not to raise revenue but to regulate or control the particular business. Young blood v. Sexton, (1875) 20 Am. Bep. 654 (G). It is absolutely impossible to fix a rate which will just suffice to regulate without yielding any revenue whatever.

6. But a question may well be asked what is the amount which may legitimately be charged on account of a licence which is issued for purposes of regulation only. It has been said that it is within the discretion of the legislative authority to impose such reasonable fee for a licence required for the purpose of regulation as it may think fit to impose; but the amount of fees must bear some reasonable relation to the extent and nature of the services rendered, AIR 1954 S.C. 388 (A).

The amount of licence fee need not be confined to the mere expenses of issuing the licence but may include any reasonably proper cost of supervision, inspection, examination and regulation of the business in respect of which the licence is issued. Varadachari v. State of Madras, AIR, 1952 Mad. 764 (H).

7. It is not possible to lay down any hard and fast rules for the purpose of determining whether a particular fee is reasonable or otherwise, for what is reasonable must necessarily depend upon the character of the business regulated and the extent of regulation undertaken. In City of Tucson v. Stewart, 45 Airz 36(I), the Court observed:

"What is a reasonable licence fee must depend upon the sound discretion of the legislative body Imposing it having reference to the circumstances and necessities of the case. It will be presumed the amount of the fee is reasonable unless it contrarily appears upon the face of the ordinance, bye-law or law itself, or is established by proper evidence.

In determining whether a fee required for a licence is excessive or not, the expenses or amount of regulatory provisions and the nature of the subject of regulation should be considered, and if the amount is wholly out of proportion to the expenses involved it will be declared a tax". It will be seen, therefore, that although the ultimate power of deciding whether a licence fee is reasonable or excessive vests in a Court of law, the Court will be most reluctant to declare a licence fee to be unjust or unreasonable unless the objector establishes a flagrant case and oppressive abuse of power by the authority imposing the fee Lyons v. Cooper, (1888) 39 Kan. 324 (J).

8. Judged in the light of the above tests it appears prima facie that the Act of 1954 is a regulatory measure. It was enacted with the object of licensing the possession and sale of tobacco and has been designated by the Legislature as the Punjab Tabacco Vend Pees Act, 1954. It prohibits the dealing in manufactured tobacco without licence and requires that in addition to taking out a dealer's licence on payment of such fee as may be prescribed by the State Government the dealer shall comply with the terms and conditions of the licence issued to him.

Officers have power to enter and inspect places in which manufactured tobacco is kept for sale, to examine and take into possession accounts maintained in such places, to investigate offences punishable under the Act and to grant ball to persons who are alleged to have contravened the provisions of the Act. A person who sells manufactured tobacco without a dealer's licence and a holder of a dealer's licence who commits a breach of the conditions subject to which the licence has been granted is punishable with a fine which may extend to Rs. 500/-.

These provisions appear to indicate that the Act of 1954 has been enacted principally with the object of regulating and restraining the sale of tobacco and not with the object of providing revenue for the State.

9. Mr. H. L. Sarin, who appears for the petitioner, contends that although the Act of 1954 confers full power on Government to grant licences for the privilege of carrying on the trade in tobacco and although the power to licence as a means of regulating carries with it the corresponding power to charge a fee sufficient to defray the expenses of issuing the licence, the power to licence and regulate could not give the right to use a licence as a means of revenue or confer any authority to impose a tax under the cloak of licence fee.

The State in the present case has been increasing the licence fee from time to time and has in fact Increased it from Rs. 2/- per annum in the year 1934 to Rs. 500/- per annum in the year 1954 with the object presumably of augmenting its revenue. This extraordinary and phenomenal increase, it is contended, must have resulted in a yield unreasonably disproportionate to the cost of regulation and must be attributed to a desire on the part, of Government to use the licence as a mode of taxation for revenue.

No facts have, however, been alleged on which to raise the conclusion that the aggregate income of the fees recovered from the licensees is greatly in excess of the cost of administration of the Act of 1954, excepting the circumstances that if the Act could be administered properly with a fee of Rs. 2/- per annum it must be assumed that the fee of Rs. 500/- which is now being charged covers much more than the cost of administration.

10. Government have made a categorical denial of the assertion that receipts from duties under the Act of 1954 are greatly in excess of the expenditure incurred by the State in the regulation of the business for which it is exacted. According to the written statement presented by Government, the annual income- from the Punjab Tobacco Vend Fees Act, 1954, during the year 1955-56 was estimated at Rs. 5,00,000/- while the total cost of administration of the Department is about Rs. 35,00,000/-.

The staff for the administration and supervision of the Act of 1954 is a composite one and administers not only the Tobacco Vend Fees Act, 1954, but also the Punjab Excise Act, the Punjab Sales Tax Act and certain other allied enactments. The petitioner had the burden of showing that the fee demanded of him was wholly out of proportion to the expenses incurred by the State in regulating the trade, but he has not been able to invite our attention to any piece of evidence which might impose the inference which his counsel wishes us to draw.

I am accordingly of the opinion that neither the Act of 19S4 nor the rules which have been framed in exercise of the powers conferred by the said Act can be invalidated on the ground only that the imposition yields a revenue in excess of that required for the purpose of regulation.

11. In AIR 1954 S.C. 388 at p. 395 (A), their Lordships of the Supreme Court expressed the View that a payment cannot be regarded as a fee unless the amount collected is earmarked to meet the expenses of rendering certain services and unless it is kept out of the general revenues of the State for being spent for general public purposes.

The learned counsel for the petitioner contends that as the income derived from the licences issued under the Act of 1954 is collected and received into the treasury of the State and is appropriated for the payment of the expenses of the State it cannot be earmarked for the administration of the Act and cannot therefore be deemed to be an imposition of the nature of a fee.

The learned Advocate-General points out, and in my opinion correctly, that it is not possible for any income from fees being kept out of the treasury and utilized for a particular purpose, for Article 266 of the Constitution declares that all revenues received by the Government of a State shall form one consolidated fund to be entitled "the Consolidated Fund of the State".

The expression "revenues" appearing in this Article has not been denned but there can be no manner of doubt that it means "the income of the nation derived from its taxes, duties or other sources, for the payment or the nation's expenses." It is a term generally "used In referring to income of a Government or governmental sub-division and as so used means all the public moneys which the State collects and receives from whatever source and in whatever manner."

If all the Income of the State, must, in view of the constitutional requirements, be credited to and form part of the Consolidated Fund of the State, it is obvious that the income derived by the State from the imposition of licence fees cannot be kept out of the general revenues or be earmarked for special purposes.

12. Again, it is contended that this imposition is discriminatory and violative of the provisions of Article 14 for two reasons: First, because it applies only to dealers in tobacco who carry on business within the limits of municipalities, notified areas etc., and not to manufacturers and dealers who carry on their business in other parts of the State; and secondly, because it discriminates between dealer and dealer requiring higher fees from some and lower fees from others.

13. Ever-since the dawn of civilization lay-makers in all countries have been continuously engaged in classifying persons and objects for the purpose of legislation and in passing laws applicable only to persons or objects within a particular class. The Constitution of India has fully preserved and safeguarded this power subject only to one limitation, namely that the classification should be reasonable and not arbitrary and must rest upon some ground of difference which bears a Just or proper relation to the attempted classification so that all persons similarly circumstanced shall be treated alike.

The essence of the constitutional right of equal protection of the laws is that every one is entitled to stand before the law on equal terms with, to enjoy the same rights and privileges as are

" enjoyed by, and to bear the same burden as are imposed upon, others in a like situation. It does not"

forbid discrimination with respect to things that are different or deprive the State of the power to resort to classification of subjects for legislative action or prohibit legislation which is limited to the territory within which it is to operate.

It is open to the Legislature to decide for itself whether certain laws shall extend to the whole State or to one or more parts of the State, for there is nothing in Article 14 which requires uniformity throughout the State. All that is necessary is that the laws shall operate with substantial equality and uniformity on all persons and classes similarly situated within the territory to when they apply.

A law is not void or inoperative because certain areas are included while others are omitted from the operation of the statute North Western Laundry v. Des Moines, (1916) 239 US 486 (K), or because it imposes restrictions on the conduct of certain businesses in designated localities, Hadacheck v. Sebastian, (1916) 239 U.S. 394 (L); and provisions and statutes establishing one system of laws in courts in one portion of the territory of the State different from that in the remaining portion is not in violation of the provision, relating to the equal protection of the law Bowman v. Lewis. (1880) 101 U.S. 22 (M).

14. Nor is there any substance in the objection that while prescribing licence fees under the Act of 1954 the State has discriminated between dealer and dealer by imposing 'different fees on different classes of dealers in tobacco. Licensed dealers in tabacco have been divided by the rules made under the Act of 1954 into four classes, the basis of the classification being the size and importance of the establishment in which they carry on their work.

This classification is neither arbitrary nor unreasonable, for substantial differences in the size and importance of the establishment in which the business, is conducted may be made the basis of classification. It is said that while a licence tax on a trade or business must be uniform and reasonable as to the class singled out, persons engaged in such trade or business may be sub-classified and a different licence tax' Imposed on each subdivision provided the. classification is made upon a natural and reasonable basis Danville v. Quakermaid, 43 Am. L. Rule 590 (N).

It is open to the Legislative power to sub-classify tobacco dealers according to whether theirs is a wholesale or retail business Hodge V. Muscatine County, (1905) 196 U. S. 276 (O), or according to the amount, quantity or number of sales.

15. The objection that the Act of 1954 is obnoxious to the provisions of Article 19 is equally futile, for although every citizen of India is at liberty to pursue a lawful calling of his own choosing, this right is subject to the paramount right of the State to impose such reasonable restrictions as the protection of the public may require.

The Constitution does not confer unfettered discretion on any person to conduct a business so as to injure the public at large or any substantial group thereof. The Legislature has decided that no person shall carry on any business in tobacco unless he has obtained a licence in this behalf and I am unable to hold that this requirement is either unreasonable or not in the public interest.

16. For these reasons I am of the opinion that neither the Act of 1954 nor Rule 4 of the rules framed thereunder can be regarded as invalid on any of the grounds relied upon by the petitioner. The petition must accordingly be dismissed with costs.

Bishan Narain, J.

17. I agree.