Judgment:
ORDER
1. The petitioner is accused in C.C. No. 3918 of 1988 on the file of the XI Metropolitan Magistrate, Saidapet, Madras.
2. He is a retail dealer in cosmetics and other allied provisions having his shop at No. 70, Santhome High Road, Madras-28. On 23-12-1987 at about 1.30 p.m., the Deputy Inspector of Labour, Squad-I, Madras - the respondent herein inspected the shop. During the course of inspection, it was found out that he was dealing in Rexona Soap, a packed commodity indicating the sale price in the outer carton by the manufacturer Hindustan Lever Ltd., Bombay. Rexona Soap had been sold to a retail dealer 'Amma Nana' at Rs. 53/- per dozen under bill No. 70519 dated 15-12-1987, thereby indicating the retail sale price they have sold at Rs. 4.42. But the maximum price per piece had been indicated by the manufacturer in the carton at 'Rs. 4.35 - local taxes extra'. The bill did not disclose any levy of any tax whatever. Since each piece had been sold at Rs. 4.42 i.e., 7 paise more than the maximum price fixed by the manufacturer, the respondent, after complying with other formalities, launched a prosecution against the accused for refraction or violation of Rs. 23(2) punishable under R. 39(2) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 (for short 'the Rules'), which had been taken on file in the aforesaid Calendar Case.
3. On receipt of process, the petitioner - accused has come forward with the present action invoking the inherent jurisdiction of this Court to quash the criminal proceedings initiated against him.
4. Learned Senior Counsel Mr. C. Natarajan appearing for the petitioner would submit with all vehemence and force that the averments in the complaint, if scanned with a little bit of care, caution and circumspection, would point out no refraction or violation whatever having been made by the accused in effecting the sale of Rexona Soap, a commodity sold in a packaged form.
5. Learned Government Advocate would however repel such a submission.
6. In order to appreciate the submission of learned counsel for the petitioner, it is but necessary to understand the implications of the provisions adumbrated under the Rules, which had been framed with an ultimate object of protecting the interests of the consumer by the issuance of certain mandates 'DOS' and 'DON'TS' to the manufacturer, wholesalers as well as retailers, in case of commodities, the sale of which is effected in a packaged form.
7. Under R. 6(1)(f), a mandate is cast upon the manufacturer to indicate the sale price of the package. 'Sale price' is defined under clause(s) of R. 2. The definition therein is only a means definition, according to which 'sale price' means in the light of the following prices, namely,
(i) Price inclusive of freight but exclusive of local taxes, and where such price is mentioned on the package, there shall be printed on the package the words 'Max. price ......... local taxes extra';
(ii) retail sale price, where such price is mentioned on the packages, there shall be printed on the packages the words 'max. retail price'.
Two examinations are added to the sub-clauses. Explanation I prescribes that each of the prices specified in this clauses shall be inclusive of all other taxes other than those specified in sub-clauses (i) and (ii) and shall also be inclusive of commissions payable to wholesale dealer and retail dealer and all other charges including advertisement, delivery, package, forwarding and the like. Explanation II mentions that for the purposes of sub-clause (i) 'local taxes' include : (i) Sales Tax, (ii) Octroi, and (iii) Central Sales Tax, where leviable and actually paid by the retail dealer under any law in force in a particular area. It is thus clear that under sub-clause (i) the ultimate price to the consumer is to be decided by adding 'local taxes' to the maximum price indicated in the carton whereas under sub-clause (ii), the ultimate price is fixed by the manufacturer himself indicating in the carton as 'maximum retail price' to which nothing is capable of being added.
8. Under sub-clause (ii), the expression 'retail sale price' is referred to and the meaning of such expression has to be understood in the context of the definition of 'retail sale' and 'retail sale price' as adumbrated under Clauses (q) and (r) of R. 2 respectively. According to clause (1), 'retail sale' in relation to a commodity, means the sale, distribution or delivery of such commodity through retail sales agencies or other instrumentalities for consumption by an individual or group of individuals or any other consumer. The meaning of the expression 'retail sale' is also sought to be given by adding an Explanation to sub-rule (2) of R. 23 of the Rules and the Explanation runs as hereunder :-
'For the removal of doubts, it is hereby declared that a sale, distribution or delivery by a wholesale dealer to a retail dealer or other person is a 'retail sale' within the meaning of this sub-rule.'
According to clause (r), 'retail sale price' means the maximum price at which the commodity in packaged form may be sold to the ultimate consumer inclusive of all taxes, transport charges and other dues.
9. From an analogy of the definition of various expressions as referred to above, it is clear that a sale by a wholesaler to a retail dealer is also a retail sale and the price fixation scheme under the Rules is having an aim to fix at the price at which the commodity in a packaged form may be sold to the ultimate consumer.
10. In the backdrop of the provisions as referred to above, let me embark upon a discussion as to whether the allegations in the complaint do prima facie make out a refraction or violation of R. 23(2) punishable under R. 39(2) of the Rules. There is no manner of doubt that the commodity sold by the accused, a retailer by way of second sales to another retailer, is in a packaged form and the price in the carton had been indicated by the manufacturer Hindustan Lever Ltd., i.e. 'Max. price Rs. 35 local taxes extra.'. The accused is legitimately entitled to add to the maximum price indicated in the carton, any local taxes extra, which may take the shape of Sales Tax, Octroi and Central Sales Tax. The accused does not appear to have collected any local taxes by making an indication in the bill or invoice printed for effectuation of the sales and this aspect of the matter is specifically mentioned in the complainant. It is to be noted here that if the accused had effected the sale per piece at Rs. 4.42, i.e., 7 paise more than the maximum price indicated by the manufacturer, then in the absence of collection of any local tax, he cannot be expected to sell per piece at a price higher than Rs. 4.35. If the does effect such sale, it is prima facie refraction or violation of R. 23(2), whereby no retail dealer or other person shall make any retail sale of any commodity in packaged form at a price exceeding the retail sale price thereof. If he is having any sort of explanation as to how such increase in price had been made by him, it is a matter falling within the special knowledge requiring him to explain and no such explanation is given and even if given, such an explanation can be considered only at the stage of trial and not at this stage in this quash proceedings. In such circumstances, there is no other go for the accused - Petitioner except to undergo the ordeal of trial.
11. The petition, as such, deserves to be dismissed and is therefore dismissed.
12. Petition dismissed.