RANJIT SOAP FACTORY Vs. INDUSTRIES COMMISSIONER AHMEDABAD

JUDGEMENT

(1.) Should the Court perpetuate the small monopolies created in recent past on account of an accident that due to religious beliefs and sentiments a large number of manufacturers of soap refrained themselves from using mutton-tallow as a raw material in the production of soap ? Should the Court be oblivious of the constitutional provision and direct the Government to continue the policy which works to the common detriment of numerous small scale manufacturing units of soap? These are some of the questions which await our answer.

(2.) The questions which require to be decided in this petition pertain to the distribution of palm fatty acid a raw material used in the manufacture of soap. What should be the basis of distribution of palm fatty acid which is an imported item and a substitute for mutton-tallow? Till June 1983 mutton-tallow was being imported and distributed amongst the manufacturers of soap. As a matter of policy the Government of India decided to ban the import of mutton-tallow and thereafter palm fatty acid which is a substitute for muttontallow is being imported. The palm fatty acid was being distributed amongst the manufacturers of soap in the State on the basis of their past consumption of muttons-tallow. Some of the manufactures of soap filed petition being Special Civil Application No. 3672 of 1984 in this High Court and contended that the basis of distribution of palm fatty acid should not be the past consumption of mutton-tallow. But it should be. either the entire production of soap by a particular unit or the consumption of other raw materials which go in the manufacture of soap. The appropriate authority of the State Government wrote a letter dated 24/09/1984 to the Government Solicitors and indicated that in future i.e. from next quarter July-September 1984 the distribution of palm fatty acid would be on the basis of certified consumption of various types of oils/fats used in the manufacture of soap instead of past consumption of mutton-tallow. This shift in the basis of distribution of palm fatty acid is challenged by the petitioners herein who are manufacturers of soap and who were receiving the palm fatty acid on the basis of their past consumption of mutton-tallow.

(3.) The aforesaid action of the State Government is challenged inter alia on the ground that the State Government has no power to change the basis of the distribution of palm fatty acid. The contention is raised on the basis of the legislative powers of the Central Government. Reliance is placed on Article 73 of the Constitution and upon Entry No. 41 in List I to Schedule VII of the Constitution. Article 73 deals with the extent of executive power of the Union Government. Entry 4t of List I to Schedule VII reads as follows;