COMMNR OF INCOME TAX Vs. DISTILLERS CO LTD

JUDGEMENT

(1.) Leave granted.

(2.) Respondent carries on business of arrack bottling, manufacture of industrial alcohol and their marketing. He obtained a licence from the State of Karnataka for the aforementioned purposes in terms of the provisions of Karnataka Excise Act, 1965. Indisputably, the matter relating to manufacture and bottling of arrack is governed by the said Act and the rules framed thereunder by the State of Karnataka known as Karnataka Excise (Manufacturing and Bottling of Arrack) Rules, 1987 (for short "the Rules"). Rule with which we are concerned herein is sub-Rule (3) of Rule 14 which reads as under:-

(3.) The Commissioner of Excise, however, issued a circular stating: