MOHAN MEAKING BREWERIES LTD Vs. EXCISE INSPECTOR INCHARGE

JUDGEMENT

(1.) IDENTICAL questions are involved in these two writ petitions and as such they are being disposed of by a common judgment. Auc tions for whole sale vend of FL. 2 licenses for the area of Ghaziabad as also for Lucknow were held sometime in March, 1978. The petitioner no. 1 in Writ Petition No. 8450 of 1978 was the highest bidder in respect of the auction for Lucknow. Likewise petitioner no. 1 in Writ petition no. 8455 of 1978 was the highest bidder in respect of the auction for Ghaziabad. At the time when the auction was held and even during the period between 1st of April, 1978 and 16th of April, 1978, the rate of excise duty was fixed at Rs.40/- per litre of alcohol. In exercise of the powers under Sections 28 and 29 of the U. P. Excise Act, 1910, the State Government issued Notification No. 3514/E, XIII-331-78 dated April 17, 1978, whereby the rate of excise duty was enhanced from Rs.40/- to Rs.55/- per litre of alcohol. This notification was published in the U. P. Gazette Extraordinary dated 17th April, 1978. The petitioner no. 1 in each of these two writ peti tions had paid an advance Duty Account with the respondents. It appears that subsequently the respondents adjusted the excise duty from the Advance Duty Account of petitioner no. 1 for the period between 1st of April, 1978 and 16th of April, 1978, at the rate of Rs.55/- per litre of alcohol. It is this act of the respondent which has been challenged in these two writ petitions. The case set up by the petitioners in these writ petitions is that the excise duty could not be recovered by the respondent from the petitioner at the rate of Rs.55/- per litre of alcohol for the period between 1st April, 1978, and 16th April, 1978. It could be recovered only at the rate of Rs.40/- per litre of alcohol. Since the question raised in these writ petitions was purely of law it was thought expedient that in place of admitting them the Standing Counsel may be given time to obtain instructions and preferably file a counter-affidavit. As on 28th September, 1978, when the writ petitions were filed they were directed to be listed for admission on 6th October, 197o by which date the Standing Counsel was required to obtain instructions and preferably to file a counter-affidavit. In view of the fact stated above we are of opinion that these writ petitions deserve to be finally disposed of as contemplated by the second pro viso to Rule 291 of Chapter 22 of the Rules of Court. We accordingly proceed to dispose them of finally. Having heard counsel for the parties we are of opinion that these writ petitions deserve to be allowed. The only justification which was pointed out by the Standing Counsel for adjusting the excise duty for the period between 1st of April, 1978, and both of April, 1978, from the Advance Duty Account of the petitioner as aforesaid was that in the notice which was issued on 25th February, 1978, it was stated that the excise duty payable for the year 1978-79 shall be at the rate of Rs.55/-. In our opinion the mere fact that such an intimation was given in the notice dated 25th February, 1978, did not entitle the respondents to collect duty from the petitioner at the said rate. Article 263 of the Constitution contemplates that no tax shall be levied or collected except by authority of law. It is not disputed that excise duty is tax within the meaning of Article 265 of the Constitution. The rate of excise duty could be fixed only by a notification by the State Government under Sections 28 and 29 of the U. P. Excise Act. The rate of excise duty as fixed earlier was at the rate of Rs.40/- per litre of alcohol. It was raised to Rs.55/- for the first time by a notification dated 17th April, 1978, referred to above. It is, therefore, apparent that only with effect from 17th April, 1978, the excise duty at the rate of Rs.55/- per litre of alcohol in place of Rs.40/-could be recoverable. For the period between 1st April, 1978, and 16th April, 1978, the excise duty recoverable was only at the rate ofRs.40/-per litre of alcohol. In Excise Commissioner, U P. v. Ram Kumar A.I. R. 1976 SC 2237 a question arose about the recovery of compensation in pursuance of a condition incorporated in the licence of the respondents to the effect that they would lift the fixed minimum quantity of liquor and sell the same at their allotted shops and in case of their default or failure to do so, they would be liable to pay compensation equal to the amount of the excise duty leviable on the unlifted quantity. In paragraph 18 of the reports it was held:- "We have, therefore, not the slightest hesitation in holding that the demand made by the appellants though disguised as compensation, is in reality a demand for excise duty on the unlifted quantity of liquor which is not authorised by the provisions of the Act." The same principle will apply even in regard to the collection of excise duty at a rate which was increased subsequently. It was also urged by the Standing Counsel that in view of the notice dated 25th February, 1978, it is possible that petitioner no. 1 may have realised excise duty from the dealers at the rate of Rs.55/- even during the period of 1st April, 1978 to 16th of April, 1978. In our opinion even if that be so it cannot validate the collection of excise duty at the rate of Rs.55/- by the respondents from the petitioner. In Abdul Quader and Co. v. Sales Tax Officer A.I.R. 1964 S C 922 in paragraph 5 of the reports it was held :- "If a dealer has collected anything from a purchaser which is not authorised by the taxing law, that is a matter between him and the pur chaser, and the purchaser may be entitled to recover the amount from the dealer. But unless the money so collected is due as a tax, the State cannot by law make it recoverable simply because it has been wrongly collected by the dealer." It would be seen that the aforesaid observations were "made even in res pect of a law made for the purpose In the instant case the excise duty at the rate of Rs.55/- for the period between 1st April, 1978, and 16th April, 1978 H not sought to be recovered on the basis of any law but only on the basis of a notice. This apparently cannot be done in view of the decision in Abdul Quader's case (supra). In the result each of these two writ petitions succeeds and is allowed and the respondents are directed to adjust back the excess excise duty at the rate of Rs.15/-per litre of alcohol in the Advance Duty Account of petitioner no. 1 for the period between 1st April, 1978 and 16th April, 1978, and to make the entry in the said account that for this period the duty recoverable was at the rate of Rs.40/- per litre of alcohol only. This shall be done within a month from today's date. In the circumstances of the case there will be no order as to costs.