MASCHEMEIJER AROMATICS (INDIA) PRIVATE LIMITED Vs. THE STATE OF TAMIL NADU REPRESENTED BY THE SECRETARY, EXCISE AND PROHIBITION AND ANR.

JUDGEMENT

(1.) The Petitioner in both the writ petitions is the same. The Petitioner -company is a manufacturer of aromatic chemicals, synthetic musks and industrial perfume compounds having foreign collaboration with Messrs. Meschemeijer Aromatic, Amsterdam, Holland. For their manufacturing purpose, the company needs special denatured spirit which is classified as industrial alcohol. The special denatured spirit is prepared by adding C.P. Menthol, a very highly poisonous chemical to the spirit to take special denatured spirit which is unfit for human consumption. As a matter of fact, special denatured spirit which is used for the Petitioner's manufacturing purposes is highly poisonous and if consumed, it will prove instantaneously fatal.

(2.) In exercise of the powers conferred by Ss. 4, 16, 17, 18, 13(a), 21 and 34 of the Madras Prohibition Act, the State Government had issued the Madras Denatured Spirit, Methyl Alcohol and Varnish (French Polish) Rules, 1959. Under the said rules persons desiring to have possession and use of denatured spirit, methylated spirit or methyl alcohol to manufacture specified commodities had to obtain a D.L.2 licence from the Collector. Initially no licence fee was chargeable for such a licence. However, from April, 1964, the Government, introduced a licence fee of Rs. 15 per year. This continued upto 31st March, 1969. In March, 1970, the Government amended the aforesaid rules by providing for a higher licence fee of Rs. 20 from 1st April, 1969. This was subsequently increased to Rs. 100 from 1st April 1970 which continued upto 31st March, 1973. By G.O. Ms. No. 59, Excise and Prohibition Department dated 24th February 1973, the Government introduced a slab rate of licence fee for form D.L. 2 licence. As per the said slab rate system, the rates areas follows. - -

(3.) Since the Petitioner came under the category of industries using between 40,000 to 80,000 litres, the licence fee payable by it came to Rs. 3,000. The Petitioner paid the said licence fee under protest as they had to obtain renewal of licence for carrying on their manufacture. It had, however, challenged the said levy of licence fee as being void and illegal on the following grounds: (i) that the Tamil Nadu Denatured Spirit, Methyl ,Alcohol and Varnish (French Polish) Rules, 1959, which were made under the Madras Prohibition Act ceased to be in force on the suspension of the Prohibition Act, 1937 and that, therefore no licence fee could be levied under the said rules unless the said rules had been reframed after the Prohibition Act was restored; (ii) that in any event, the State Legislature acting under Entry 8, of list II of Schedule VII of the Constitution had power to control only intoxicating liquors and not alcohol unfit for human consumption and, therefore, it had no legislative competence to demand a licence fee in respect of industrial alcohol which is not fit for human consumption (iii) that the definition liquor in Sec. 2(16) of the Tamil Nadu Excise Act, 1971 in so far as it includes alcohol not fit for human consumption h beyond the legislative competence of the State Legislature under Entry 51, of List II of Schedule VII: (iv) that the Tamil Nadu Excise Act, 1971 places unreasonable restriction on the Petitioner's trade by Insisting on a licence fee for possession and use of industrial alcohol which is not fit for human consumption, and (v) that in any event, the levy of licence fee at a slab rate unrelated to the services rendered by the Government is harsh and oppressive and cannot, in any event, be upheld by this Court.