SABU GEORGE Vs. STATE OF KERALA

JUDGEMENT

(1.) PETITIONERS are the licencees under S. 18a of the Kerala abkari Act. PETITIONERS get their licences in every year in accordance with the conditions applicable to the respective period. Ss. 17 and 18 deals with levy of excise duty. S. 18 deals with rate of duty. The maximum rate fixed as Rs. 20/-per proof litre was changed to Rs. 200/ - per proof litre or an amount equal to 200 per cent of the value of the liquor by Ext. P1 order dated 14. 2. 1996. The government of Kerala by an Ordinance No. 2/96 namely the Abkari (Amendment) Ordinance 1996 amended S. 18 of the Abkari Act and thereby inserted the following: "3. Amendment of S. 18 - In sub-s. (3) of S. 18 of the principal Act (1) In clause (1) under the heading 'maximum Rates' against item (i),for the words and figures Rs. 20 per proof litre of Rs. 90. 92 per proof gallon" the following words and figures shall be substituted namely: "rs. 200 per proof litre or an amount equal to 200 per cent of the value of the liquor". (2 In the proviso for the words "country liquor" the words "indian made foreign liquor" shall be substituted. (3) After the proviso the following explanation shall be added, namely: "explanation - Where any liquor is chargeable with duty at a rate depending on the value of the liquor, such value shall be the value at which the Kerala State Beverages Corporation purchases such liquor from suppliers". " According to the said amendment the rate of duty payable on liquor has been increased to 200 per cent of the value of the liquor. The increase in duty was brought into force from 1. 4. 1996 onwards. The increased rate of duty of excise was sought to be imposed on the stock of liquor as on 1. 4. 1996 with the petitioners licencees. This demand of increased rate of duty from 1. 4. 1996 on the stock of duty paid liquor with the licencees which was purchased before 31. 3. 1996 is challenged in these Original Petitions.

(2.) THE Government justified the above levy on the basis of the proviso to S. 18 which reads as follows: "provided that where there is a difference of duty of excise or luxury tax as between two licence periods, such difference may be collected in respect of all stocks of country liquor or intoxicating drugs held by licencees at the close of the former period. " According to the petitioners, the above proviso is not applicable in the instant case and if it is applicable that proviso is ultravires of the Constitution and charging section and is liable to be set aside.

(3.) IN Premier Breweries Ltd. v. State of Kerala & ors. (1980 KLT 547) this court held that duty has to be levied according to s. 17 read with S. 18. Clauses (a) to (g) under S. 17 are alternative and mutually exclusive modes of levying. Government are empowered to adopt any one of these methods but Government cannot make a demand otherwise than under the same method. This Court held as follows: "duty has to be levied in terms of S. 17 read with s. 18. Clauses (d) and (f) of S. 17 provide for alternative modes of levy which are mutually exclusive. These modes are restated in S. 18. The Government are empowered under the Act to adopt any one of these methods. By Ext. P1 the method under clause (f) was adopted by the Government, and it was acted upon by the petitioner. Having adopted the mode under clause (f) in preference to clause (d) - these two provisions being, in my view, mutually exclusive and alternative methods - the petitioner's counsel is perfectly justified in contending that the Government are precluded from making a demand otherwise than under clause (f) for the period prior to the order No. XA5-3349/ 72 dated 9. 10. 1975 under which the new mode of levy was prescribed. (As regards election and waiver, see the principles discussed by the House of Lords in China Trade corporation, v. Evlogia Co. (1979) 1wlr1018,1024,1034,1035 ). "