KRISHNA KUMAR UJJAIN Vs. STATE OF CHHATTISGARH

JUDGEMENT

(1.) THESE petitions are being disposed of by this common order as the petitioners herein have prayed for quashing of demand notices issued to them to deposit the balance of licence fee for liquor shop/ group given to them on licence for the year 2002-03. The State Government in exercise of powers conferred under the Excise Act, 1915 (for brevity "the Act) made Chhattisgarh Excise Settlement of licence for Retail Sale of Country/Foreign Liquor Rules, 2002 (in Short "the Rules, 2002") vide notification dated 15th March, 2002 Applications for grant of licence to operate country/foreign liquor shops were invited as per Excise policy of the State Government for the year 2002-03 through Collectors (Excise) of the respective districts, after dividing the entire State in several groups (Excise) of the respective districts, after dividing the entire State in several groups (about 268 groups). However, at the end of March, 2002, it was discovered that applications covering all groups and each shop have not been received and on account of failure on the part of the applicants in depositing the amount as per rules, some shops could not be disposed of, and, therefore the Collectors were directed to dispose of the remaining groups/ shops by inviting tenders. The petitioners in the batch of petitions were granted licence, either on the basis of their applications or through tenders.

(2.) BASICALLY, grievance of the petitioners in these petitions is that as per conditions of the licence, they were required to lift Minimum Guaranteed Quota (in short "MGQ") every month after paying duty towards the quantity lifted by them. They have lifted more than MGQ after paying specified duty However, they were served with show cause notice and called upon to pay additional amount towards duty tan the amount, which they had already paid against MGQ. Contention of the petitioners is that the conditions of licence, the Act, and the Rules made thereunder, only speak about MGQ and penalty at the rate of Rs. 48 per proof liter for country liquor, Rs.84 per proof liter for foreign liquor and Rs.10 for per bottle of malt in case of failure in lifting the MGQ, and there is no mention in the licence about any mandatory requirement of any duty in terms of rupees payable to the State Government. However, the respondent authorities, without considering the reply of the petitioners to the show cause notices, have ordered the petitioners to compulsorily deposit the loss of excise duty within 10 days form issue of the impugned orders.

(3.) RELYING upon the decisions of the Hon'ble Supreme Court and the High Court of M.P., it was argued that the power to impose excise duty under Section 25 of the Act can be exercised only by the order of the State Government made in the name of Governor and authenticated in accordance with the rules of business as provided by Article 166(2) of the Constitution. The duty is sought to be imposed on the basis of Excise Policy issued by the Excise Commissioner and letter issued by the Excise Commissioner in this regard. However, from perusal of both these documents, it would be evident that the same have not been expressed in the name of Governor and as such, not an order of the State Government. Lastly, it was argued that it is settled law that the State cannot levy excise duty on undrawn liquor. Reliance is placed on the judgments in the matters of State of Madhya Pradesh Vs. Firm Cappulal : AIR 1976 SC 633; Bimal Chandra Banerjee Vs. State of Madhya Pradesh : AIR 1971 SC 517; and Panna Lal and others Vs. State of Rajasthan and others AIR 1975 SC 2008.