C I INDIA LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) What will be the effect of an upward revision of excise duty on the consolidated price (of which excise duty is admittedly a fraction) at which the suppliers are required to sell country liquor to the retail licencees under a four-year contract granted to them by the Government. This is the common question which arises for consideration in the six writ-petitions in this batch, hence, these cases have been heard together and are being disposed of by this judgment.

(2.) The material facts are brief and without much controversy. A notice dated 3.6.1995 was published in the Bihar Gazette (extra-ordinary) of the same date inviting tenders for the grant of exclusive privilege for the wholesale supply of country spirit in sachets/bottles for the period from July 1, 1995 to March 31, 1999. The tenderers were required to submit before the authorities of the Excise Department a project report in which, among other details, the price at which the tenderer was prepared to make the supply of country spirit to the retail licensees was also to be indicated. The quoted price was further to be reduced into its various elements, such as, sacheting/bottling expenses, cost of the sachet film, cost of spirit and the tax leviable thereon etc. The petitioners and several others submitted their tenders along with the required project report stating the rates at which they were willing to make the supplies to the different area mentioned in the tender notice. The Member, Board of Revenue invited the tendereres for negotiations for fixing the rates at which country spirit would be supplied in sachets/bottles to the retail licences from the warehouses. Following detailed negotiations between tenderers on the one hand and the authorities of the Excise Department on the other, it was agreed that the wholesale supply of country spirit will be made to the retail licensees at the following unified rates: <FRM>JUDGEMENT_423_BLJ1_1997Html1.htm</FRM> It is an admitted position that the aforesaid prices were inclusive of (i) Excise duty, (ii) Licence fee, (iii) all kinds of shortages/wastages and (iv) cost of spirit, etc. It is also admitted that at the time the aforesaid prices were determined, the excise duty leviable on country spirit was Rs. 26/- per L.P. litre.

(3.) Following the finalisation of the price on the basis of the negotiations between the parties, 15 persons, including the writ petitioners received the grant of exclusive privilege for the wholesale supply of country liquor in terms of Section 22 of the Excise Act. The grant was for a period from July 1, 1995 to March 31 1999 and was communicated to the grantees under letter Nos. 2379, 2387 all dated 23.6.1995 issued to the 15 tenderers. All the letters contained identical terms and conditions and clause 5 contained therein stipulated that the supply of country spirit would be made to the retail licen- cees at the rates mentioned here-in- above. Following the grant of exclusive privilege, licencees in form 27 were also issued in favour of the grantees are required under Section 22 (2) of the Excise Act.