DHARIWAL INDUSTRIES LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) ON 23-7-2002 the Commissioner, Food and Drug Administration and Food (Health) Authority for the State of Maharashtra issued an order prohibiting for a period of 5 years with effect from 1-8-2002 the sale of Gutka and Pan Masala containing tobacco or not containing tobacco by whatever name called, in the State of Maharashtra and, accordingly, directed that no person shall himself or any person on his behalf, shall manufacture for sale, or store, sell or distribute Gutka or Pan Masala containing tobacco or not containing tobacco. The order was issued by Food (Health) Authority for the State of Maharashtra in the exercise of powers conferred by Clause (iv) of section 7 of the Prevention of Food Adulteration Act, 1954. The order dated 23rd July 2002 reads thus:

(2.) THE aforesaid order dated 23rd July, 2002 is under challenge in this group of five writ petitions. The petitioners in Writ Petition No. 2001/2002, 2002/2002, 2024/2002 and 2251/2002 are manufacturers of Gutka or Pan Masala by different names and the petitioner in Writ Petition No. 1982/2002 is a trader who deals with the trade is Pan Masala and Gutka.

(3.) FOR the sake of brevity and convenience, we shall refer to the pleadings in Writ Petition No. 2001/2002. The first petitioner in this writ petition is engaged in the manufacture of Gutka and Pan Masala which are sold under the brand name "manikchand". The second petitioner is managing director of first petitioner company. They are in the business of manufacture of Gutka and Pan Masala since 1990. They commenced business after obtaining requisite licences under various Acts including under the Prevention of Food and Adulteration Act, 1954 (for short, "act of 1954") for manufacture, sale, storage and distribution of Pan Masala, Mukhwas and Gutka. The first petitioner has also obtained registration under Factories Act, followed by registration under Central and State Sales Tax as also under the Central Excise Act. In the writ petition, the petitioners have set out the information about the ingredients of Pan Masala. Accordingly Pan Masala manufactured by the first petitioner contain supari (82. 67%); kattha (catechu) (8. 72%); lime (3. 25%), cardamom (elaichi) (3. 41%); permitted flavours (1. 05%) and menthol (. 89% ). The Pan Masala manufactured by the first petitioner does not contain any tobacco nor does it contain any prohibited ingredients. The petitioners have averred that all the ingredients contained in the pan masala are permitted to be sold individually and do not react chemically with each other when mixed. Gutka manufactured by the first petitioner consist of the ingredients viz; supari (77. 05%), chewing tobacco (5. 90%), kattha (9. 11%), lime (2. 14%), cardamom (Elaichi) (2. 81%), quiwam (tobacco extract) (0. 93%), saffron (0. 026%), menthol (0. 63%), permitted spices (. 134%) and flavours (1. 256% ). It is submitted by the petitioners that all the ingredients in Gutka manufactured by the petitioners do not react chemically with each other when mixed. The first petitioner has three plants located at Ghodnadi (near Pune, (Maharashtra), Baroda (Gujarat) and Hyderabad (Andhra Pradesh) for manufacture of Pan Masala and Gutka. According to the petitioners, the total investment in plant and machinery in these three plants is around Rs. 40 crores and the first petitioner employs a total of 900 persons. The annual turnover of the business of the first petitioner as on 31-3-2002 is Rs. 344 crores. The first petitioner is said to have a network of about 300 wholesale and retail dealers and consignee agents throughout the country and the products manufactured by the first petitioner are sold throughout the country by lacs of small retailers. The first petitioner claims to have paid for the financial year ending 31-3-2002 a sum of Rs. 119 crores towards Central Excise; Rs. 7 crores towards Income tax; Rs. 2. 80 crores towards octroi and for the year 2001-2002 the first petitioner claims to have earned foreign exchange around Rs. 40 crores from exports of Gutka. It is averred that first petitioner spends around Rs. 1 crore for buying tobacco from farmers from Gujarat; Rs. 42 crores for buying supari from farmers from Karnataka and Assam; Rs. 20 crores for purchase of kattha from farmers from Himachal Pradesh and Uttar Pradesh; Rs. 8 crores for purchase of cardamom from farmers in Tamil Nadu; Rs. 1. 36 crores for purchase of menthol from farmers in Uttar Pradesh; Rs. 4 crores for purchase of saffron from farmers in Jammu and Kashmir and Rs. 31 crores for purchase of permitted flavours from Uttar Pradesh and Orissa. The petitioners say that the tobacco used for making Gutka is different from the tobacco used in the manufacture of cigarettes and cigars and such tobacco cannot be used to make smoking tobacco. Challenge to the order dated 23-7-2002 issued by the State (Health) Authority for the State of Maharashtra in exercise of the powers under section 7 (iv) of the Act of 1954 is on diverse grounds which we shall deal with little later after we complete the pleadings.