M K PAPIAH AND SONS Vs. EXCISE COMMISSIONER

JUDGEMENT

(1.) The appellant was an excise contractor. He secured the privilege of vending arrack in retail in certain talukas in the State of Karnataka for a period of 18 months beginning from 28-12-1967 and ending on 30-6-1969 He purchased arrack from the Government at a price of 17 paise Per litre and the Government collected besides the sale price of arrack, excise duty, health cess and education cess. The Government also collected sales tax on the sale price of arrack on excise duty, on health cess and on education cess for the period from 28-12-1967 to 31-1-1968 and made similar demands for the month of February. 1968 also. The appellant and other excise contractors filed writ petitions in the High Court of Karnataka challenging the validity of the levy and collection of excise duty, education cess, health cess and sales tax. The High Court accepted some of the contentions of the appellant, granted him reliefs on that basis but rejected the other prayers. The appellant has filed these appeals on the basis of certificates granted by the High Court against the order.

(2.) The contentions raised by counsel for the appellant before this Court were:that no excise duty can be levied on a licensee in respect of the quantity of arrack purchased by him from Government depots, that the power to fix the rate of excise duty conferred under S. 22 of the Mysore Excise Act of 1965 on the Government was bad for the reason that it was an abdication by the State Legislature of its essential legislative function and that no sales tax could be levied on the price for sale of arrack since S. 19 of the Mysore Sales Tax Act, 1957 under which the tax was levied was beyond the legislative competence of the State legislature.

(3.) Section 22 of the Mysore Excise Act, 1965 (hereinafter referred to as 'the Act') provides for levy of excise duty at such rate or rates as the government may prescribe on excisable articles manufactured or produced in the State under any licence or permit granted under the Act. Section 23 of the Act deals with the method of levying excise duties.