STATE OF KERALA REPRESENTED BY SECRETARY (TAXES DEPARTMENT) Vs. CHEMPLAST SANMAR LIMITED, REPRESENTED BY ITS GENERAL MANAGER

JUDGEMENT

(1.) Does the State of Kerala have authority to impose transit levy on vehicles transporting denatured spirit from the Port of Cochin to Tamilnadu, is the question that arises for determination in these appeals before us.

(2.) The facts in Writ Petition Nos.29716/2004 and 30239/2004 in brief are that the writ petitioners therein are public limited companies involved in the businesses of manufacture and sale of Polyvinyl Chloride Resins (PVC) and alcohol based chemicals, respectively. One of the raw material for their products is denatured spirit/industrial alcohol. Necessary licences have been obtained from the Tamilnadu State Government to possess, store, transport and consume the denatured spirit for that purpose.

(3.) Due to acute shortage of the denatured spirit in the internal market, the writ petitioners obtained permission from the Tamilnadu Government for importing denatured spirit, through the Port of Cochin. The writ petitioners' factories are situated in Mettur and Thiruchirappally, respectively, and the transportation of the spirit from the Port of Cochin to Mettur and Thiruchirappally has to be by road via. Walayar. Permission was sought to transport the spirit through the State of Kerala. The Deputy Commissioner of Excise, Central Zone, Ernakulam granted transit permission, subject to the condition that the petitioners remit a permit fee of Rs. 2,500.00 per transit and to produce challan evidencing remittance of the fee. The transit permits were issued by the Deputy Commissioner of Excise in each of the cases under the provisions of Rule 5(3) of the Kerala Liquor Transit Rules, 1975 ('Transit Rules', for short). The contention of the writ petitioners was that the only Rules available for transporting denatured spirit through the State of Kerala is the Cochin Denatured Spirit and Methyl Alcohol Rules, 1975 issued under the provisions of the Cochin Abkari Act. The Rules do not contemplate levy of any transit fee on the transportation and export of denatured spirit in the State. Hence, the decision of the Deputy Commissioner imposing a permit fee of Rs. 2,500.00 per transit was challenged in three Writ Petitions, which were allowed by the learned Single Judge directing refund of the transit fee collected by the State. Writ Appeals are filed challenging the judgment in two of the petitions.