J&K CIGARETTES CO LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) PETITIONER No. 1 is a company incorporated under the Companies Act, 1956. The company has setup a factory at Bari Brahmana, Jammu, and at the relevant time was engaged in manufacturing cigarettes. Since, the event attracting the levy of excise duty in respect of exciseable goods, is their manufacture, the petitioner -company was subjected to the levy of excise duty on the cigarettes manufactured by it under the Central Excise and Salt Act, 1944 and the rules framed thereunder.

(2.) THE challenge raised in the writ petition is to the validity of the application of the Taxation laws (Application to Jammu and Kashmir) Act, 1954, in general and of the Central Excise and Salt Act, 1944 (hereinafter called as the 1944 Act) to the State of Jammu and Kashmir in particular and consequently to the levy and collection of excise duty from the petitioner company.

(3.) THE respondents, union of India and the State of Jammu and Kashmir (which was impleaded as party -respondent by an order of the Court dated 21 -11 -1985) besides controverting the challenge to the applicability of the 1944 Act to the State have also averred -in the counter -affidavit that the petitioners started manufacturing cigarettes after obtaining licence under the Act of 1944 and could not, therefore, after having taken the benefit under the Act be permitted to question its application and that there was no justification for allowing the petitioner to retain the excise duty collected by them from purchasers/consignees of cigarettes.