STATE OF ANDHRA PRADESH Vs. Y PRABHAKARA REDDY:SUPERINTENDENT OF EXCISE:SUPERINTENDENT OF EXCISE:D BUCHANNA

JUDGEMENT

(1.) THE primary question involved in those appeals and petitions is whether under the Excise Law prevailing in the State of Andhra Pradesh. the Government is entitled to claim from the Excise Contractors who have failed to lift the 'Minimum Guaranteed Quantity of liquor the amount said to represent the excise duty component' in the issue price of liquor relating to such unlifted quantity of liquor. A Full Bench of three judges of the High Court of Andhra Pradesh, in V. Narasimha Rao v. Superintendent of Excise AIR 1974 Andh Pra 157, held that the Government could but this view was overruled by a Full Bench of Five Judges of the same High Court in Atluri Brahmanandam v. Tahsildar of Gannavaram AIR 1977 Andh Pra 196 where it was held that the Government could not. It is the judgment of the Full Bench of Five Judges which is in question in the appeals and petitions filed by the Government. With a view to cure the defects pointed out by the Full Bench of Five Judges and to validate the demands raised by the Government, the Andhra Pradesh Legislature enacted the Andhra Pradesh Excise Amendment Act X of 1984. Demands raised pursuant to the Amending Act were upheld by the High Court by a latter judgment. The aggrieved Excise Contractors have filed appeals and they are also before us. In some cases the contractors who had originally succeeded because of the decision of the Five Judge Full Bench were again called upon to make good the deficit after the Amending Act was passed. They questioned the fresh demands but failed in the High Court. Their petitions for Special Leave to Appeal are also before us.

(2.) ENTRY 51 of List II of the seventh schedule to the Constitution empowers the State to levy duties of excise on 'alcoholic liquors for human consumption (not including medicinal and toilet preparations containing alcohol) manufactured or produced in the State' and countervailing duties on such alcoholic liquors manufactured or produced elsewhere in India. An excise duty levied by the State on alcoholic liquors is, therefore, primarily a duty on the manufacture or production of such alcoholic liquors. Section 2(10). Andhra Pradesh Excise Act, 1968 defines "Excise Duty" or "Countervailing duty" to mean "the duty of excise or countervailing duty, as the case may be mentioned in entry 51 in List II of the Seventh Schedule to the Constitution." 'Excise -Revenue' is defined by S. 2(12) to mean Revenue derived or derivable from any duty, fee, tax, rent, fine, penalty or confiscation levied, imposed or ordered under the provisions of this Act or other law for time being in force relating to intoxicating drugs'. Section 17 of the Act, before and after the amendment was and is as follows: <FRM>JUDGEMENT_136_2_1987Html1.htm</FRM>

(3.) THE Andhra Pradesh Excise (Lease of Right to Sell Liquor in Retail) Rules, 1969, are another set of rules made under the various provisions of Andhra Pradesh Excise Act. Rule 2(ix) defines "rental" to mean 'the rent payable in respect of a shop or group of shops in consideration of the grant of lease for sale of liquor'. Rule 3 provides for the lease of the right to sell liquor in retail. Clause 1 of Rule 3 may be usefully extracted here and it is as follows :