NEW SWADESHI DISTILLERY Vs. STATE OF BIHAR

JUDGEMENT

(1.) This writ petition has been preferred with the prayer to set aside various orders of the respondent authorities whereby the petitioner has been called upon to purchase and furnish the requisite promissory bond of the value of Rs. 10 lacs in order to replace the earlier promissory bond of the value of Rs. 53,000/- submitted by them, in terms of various provisions of the Excise Laws of Bihar. The respondents have placed on record their counter affidavit and have supported the impugned action.

(2.) A brief statement of facts essential for the disposal of this writ petition may be indicated. The petitioner is engaged in the manufacture and safe of non- potable spirit and denatured spirit, having its manufacturing unit at Narkatiaganj, District-West Champaran. The petitioner has taken licence to manufacture these items which are unfit for human consumption and are normally used as raw materials for manufacture of liquor, medicines, or the like which are potable and fit for human consumption. It is clearly stated in the pleadings of the petitioner that they do not manufacture potable liquor fit for human consumption. The petitioner had obtained licence in Form Nos. 25 and 28A under the provisions of the Bihar Excise Act, 1915 (hereinafter referred to as 'the Act'), way back in 1962, and had furnished promissory bond of the value of Rs. 53,000/-. Respondent No. 3 issued his communication dated 13.12.82 (Annexure-7), to respondent no. 4, that Narkatiaganj factory, i.e. the petitioner herein, should either pledge the immoveable properties of the factory premises or replace the existing promissory bond by upgrading it to the value of Rs. 10 lacs, and impugned herein. This was followed by consequential direction bearing memo no. 89, dated 17.1.83 (Annexure-8), from respondent no. 4 to the petitioner to furnish security bonds of the value of Rs. 10 lacs, and impugned herein. Aggrieved by the two communications, the petitioner submitted its representation dated 15.2.83, to respondent no. 3, that the petitioner may not be required to purchase and furnish promissory bonds of the value of Rs. 10 lacs. The petitioner submitted a fresh application dated 18.2.93 (Annexure-9), before respondent no. 3, requesting for interim stay of the communications dated 13.2.82 and 17.1.83. This was followed by the communicated 15.4.94 (Annexure-10), from respondent no. 5 to the petitioner, enclosing thereto a copy of the audit report in justification of the impugned orders, calling upon the petitioner to upgrade their promissory bond. The petitioner's representations suffered inaction. Respondent No. 3 ultimately disposed of the same by order dated 9.4.96 (Annexure-16), whereby he passed on the representations to the State Government for final orders, and impugned herein. This was followed by the communication dated 2.8.96 (Annexure-17), from respondent no. 5 to the petitioner, to comply with the directions of the State Government, leading to the present writ petition. By order dated 19.2.97, the present writ petition was admitted, and operation of the orders marked Annexures-7 and 17 were stayed. Further interim order was passed that the petitioner shall not part with the possession of its property or otherwise create any charge thereon except in normal course.

(3.) While assailing the validity of the impugned action, learned counsel for the petitioner submits that, in view of the provisions of the Constitution with particular reference to the various entries in the three lists to Schedule-VII of the Constitution, the State Legislature cannot legislate with respect non-potable items, not fit for human consumption, which can be used as raw materials to produce items fit for human consumption. In view of the position that the petitioner's licence is to manufacture non-potable item(s), the State Government cannot pass orders controlling their industry under the Excise Laws of Bihar. It is entirely a central subject and can be governed by an Act of the Parliament. He relies on the judgment of the Supreme Court in State of Bihar V/s. New Swadeshi Sugar Mills Ltd, 2003 11 SCC 478. He also relies on the judgment of a Division Bench of this Court which had the occasion to discuss the issues in the case of Shivashankar Chemical Industries (Bihar) Ltd. V/s. State of Bihar, 2010 3 PLJR 973. He submits that the Excise Laws have become completely out-dated, wholly inconsistent with the provisions of the Constitution and, therefore, fit to be ignored. He relies on the Division Bench judgment of this Court in .Industrial Corporation Pvt. Ltd. V/s. State of Bihar, 1997 1 PLJR 77, wherein, in his submission, it has been laid down that a licence under the Excise Laws of Bihar for manufacture of non-potable items is ornamental and has no warrant in law. He next submits that Rule 14 travels beyond the power and authority conferred by Section 90 of the Act and is, therefore, ultra vires. He submits that Rule 14 applies to new distilleries and not to the existing distilleries. He further submits that Form no. 159 is under paragraphs 228 and 489. In his submission, paragraph 228 applies to a contractor, and not to manufacturer of non-potable spirit and denatured spirit. He lastly submits that the petitioner will suffer serious prejudice, inasmuch as he is now required to spend a sum of Rs. 10 lacs to carry out the impugned directions.