STATE OF KERALA Vs. UNITED SPIRITS LTD.

JUDGEMENT

(1.) The review petitions are filed by the State, against a common judgment passed in a batch of Writ Appeals. The specific ground raised is with respect to the amendment brought out to the Industries (Development and Regulation) Act , 1951 by Industries (Development and Regulation) Amendment Bill, 2015. Earlier the Industries (Development and Regulation) Act , 1951 included in the First Schedule 'Fermentation Industries', which has been amended by the Amendment Act of 2016 as 'Fermentation Industries (Other than Potable Alcohol)'. In such circumstances the levy ought to be upheld, is the submission of the learned Senior Government Pleader.

(2.) We notice that the challenge was against the levy of import fee made on special spirit brought into the State from outside for the purpose of manufacturing Indian Made Foreign Liquor ['IMFL' for brevity]. This was also on the basis of SRO.330/1996 dated 30.03.1996, wherein the levy was on IMFL at the rate of Rs.5/- on proof litre. We found that the levy though permitted on IMFL, was made on the imported special spirit; which by itself was not potable liquor nor IMFL. The item imported though is admittedly for manufacture of IMFL, was not potable liquor.

(3.) We also found that the levy cannot be upheld as a fee since there is no contention raised of any regulatory measure being employed. The Abkari Act, specifically Sections 6 , 7 , 17 and 18 , to which the levy was sought to be traced, in those provisions speak of 'liquor' and 'drug'. We also relied on State of Kerala v. Chemplast Sanmar Limited [2019 (1) KLT 123], in which a Division Bench found, looking at the definition of 'spirits', that earlier it included the words 'whether it is denatured or not', which was omitted by way of an amendment in 1996. The definition of 'liquor' also included 'methylated spirits', which also stood omitted by the very same Act 4 of 1996.