Judgment

GROVER, J.: This is an appeal by special leave from a judgment of the Punjab High Court holding that medicinal or toilet preparations containing alcohol were exempt from the payment of tax under the East Punjab General Sales Tax Act, hereinafter called "the Act".

2. The respondent is running a factory for manufacturing spirituous and medicinal preparations containing alcohol at Jind in the district of Sangrur. Before the coming into force of the Constitution of India on January 26, 1950, "medicinal or toilet preparations" fell within the definition of "excisable articles" on which the excise duty was payable under S. 3 (6) (c) of the Punjab Excise Act, 1914. The Act came into force in 1948. Under its provisions tax was levied on the sale of goods with the exception of articles exempted under S. 6 of the Act. These articles were given in Schedule B wherein Entry 37 was in these terms:

"All goods on which duty is or may be levied under the Punjab Excise Act, 1914."

After the enforcement of the Constitution alcoholic preparations which under the Government of India Act, 1935, was a provincial subject came to be dealt with in the Union List. Section 3 (6) (c) of the Punjab Excise