Appeal No 21 of 1956
Appeal from the judgment and decree dated August 121954 of the Bombay High Court in Appeal No 45 of 1954 arising out of the judgment and decree dated February 17 1954 of the said High Court in Suit No 246 of 1956
H J Umrigar N N Keswani and R H Dhebar for the appellant
M C Setalvad Attorney General of India section M Dubash and G Gopalakrishnan for the respondents
March 25
The Judgment of the Court was delivered by WANCHOO J
This is an appeal on a certificate granted by the Bombay High Court
The brief facts necessary for its disposal are these
Messrs section section Miranda Ltd hereinafter called the respondent is a company and was holding a trade and import licence of foreign liquor as well as a vendor s licence under the Bombay Abkari Act Bom
V of 1878 hereinafter 399 called the Act upto the end of March 1949
It used to keep the liquor in a bonded warehouse
On April 2 1948 the respondent was informed by the State of Bombay hereinafter called the appellant to remove S the liquor from the bonded warehouse after paying the necessary excise duty
In pursuance of this letter the respondent paid the duty and got transport permits from the appellant
It may be mentioned that the bonded warehouse was in the premises of the respondent itself and all that happened after the payment of the duty was that the liquor no longer remained in bond but came into possession of the respondent
The transport permits were issued on April 5 1948 and thereafter the respondent took over the liquor and some of it was sold
On December 16 1948 a notification was issued by the appellant hereinafter referred to as the Notification whereby the duty on foreign liquor was doubled
Thereupon the respondent was asked by the appellant to pay the additional duty upon the liquor which was still lying in its godown and was also told that it would not be permitted to deal with that liquor until the additional duty was paid
The respondent objected to this demand but paid the duty which came to over two lacs of rupees under protest
Thereafter a notice was given by the respondent under section 80 of the Code of Civil Procedure to the appellant and was followed by a suit on the original side of the Bombay High Court
The main contention of the respondent was that the Notification in so far as it imposed and levied additional duty on the stock of foreign liquor on which the duty had already been paid at the time of its issue  from the bonded warehouse was illegal invalid and ultra vires the Act and in particular beyond the scope of section 19 of the Act
The respondent therefore claimed refund of the duty which it had paid under protest and also interest at 6 per cent
per annum from the date of payment till the date of recovery
The suit was resisted by the appellant and its case was that the Notification was valid and that the respondent was bound to pay the duty prevailing on 400 the transport of the excisable articles at the time of transporting the same from its premises to another place within the State of Bombay
Thus the only question that fell for consideration was whether the additional duty imposed and levied under the Notification was legally levied
The learned judge who tried the suit was of the opinion that it was competent for the legislature to impose tax on excisable articles whenever they were transported from one place to another and that that power was delegated to the State Government which was thus competent to impose a duty on excisable articles not only once when they were transported in the beginning but also thereafter whenever they were transported from one place to another within the State before the goods passed into the hands of the consumer and dismissed the suit
The respondent went in appeal against the dismissal
The appeal was heard by a Division Bench and was allowed and the suit was decreed with interest at certain rates
The Division Bench was of the opinion that reading sections 10 and 19 together it was clear that when the duty mentioned in section 19 had been paid the prohibition contained in section 10 must disappear subject to the Explanation to section 19
It also held that the first proviso to section 19A of the Act was really a proviso to section 19 and determined the rate at which the duty was to be paid and that there could be no further imposition of duty against the terms of that proviso by the Notification
The main contention on behalf of the appellant before us is that it is open to the legislature to impose excise duty at more points than one and that that was what has been done by the legislature in this case and the Government when it made the Notification in December 1948 was carrying out the provisions of the Act
Reliance in this connection was placed on sections 310 10 and 19 of the Act and it is urged that reading these three sections together it will be clear that the Notification was valid and within the powers of the State Government
The relevant portion of the Notification is in these terms 401  In exercise of the powers conferred by section 19 of the Bombay Abkari Act 1878 Bombay V of 1878 and in partial supersession of all previous orders and notifications issued thereunder that is to say in so far as they relate to the imposition of excise and countervailing duties charged on the excisable articles specified in column 1 of Schedules A and B hereto annexed the Government of Bombay is pleased to direct that a excise or countervailing duty as the case may be shall be imposed on the excisable articles specified in column 1 of Schedule A at the rate specified in columns 2 and 3 thereof when such excisable articles are i imported into the Province in accordance with the provision of sub section 1 of section 9 of the said Act or ii issued from any brewery distillery or a warehouse established under the said Act in the Province or iii transported from the premises of persons holding a Trade and Import license under the said Act to any place within the Province Provided that no such duty shall be imposed on the excisable articles which have been imported into British India and were liable on such importation to duty under the Indian Tariff Act 1934 or the  Provided further that if excise or countervailing duty has already been paid on such excisable articles for their import issue or transport for consumption into to or within any place in the Province the amount of duty to be imposed shall be the difference between the amount of duty leviable at the rates specified in the said Schedule and that already paid on such articles and b       
Then follow the Schedules Which it is unnecessary to set out
By the notification excise duty at the rates specified in the Schedules is imposed on excisable articles when they are transported from the premises of persons holding a trade and import licence under the said Act to any place within the State
The second 402 proviso however provides that where some excise duty has already been paid in connection with transport the amount of duty to be imposed under the Notification would be the difference between the duty leviable under the Notification and the duty already Paid
The narrow question therefore is whether this additional duty can be legally levied by the State of Bombay and the answer to it will depend on the three provisions of the Act relied upon by the appellant
310 defines to transport to mean to move to one place from another place within the State 
This definition is very wide and would cover any movement of excisable article at any stage from one place to another within the State
Then comes section 10 the relevant portion of which is in these terms  No intoxicant and no hemp shall be exported or transported unless a the duty if any payable under Chapter VI has been paid or a bond has been executed for the payment thereof
 This section thus forbids the transport of any excisable article unless the duty payable under Chapter VI which deals with the subject of duties has been paid
Lastly we come to section 19 which is the charging section and is in these terms  An excise duty or countervailing duty as the case may be at such rate or rates as the State Government shall direct may be imposed either generally or for any specified local area on any excisable article a imported in accordance with the provision of sub section 1 of section 9 or b exported or transported in accordance with the provisions of section 10 or c manufactured under a license granted in accordance with the provisions of section 14 or section 15 Provided that i duty shall not be so imposed on any article which has been imported into India and was liable on such importation to duty under the Indian Tariff Act 1894 or the  403 Explanation Duty may be imposed under this section at different rates according to the places to which any excisable article is to be removed for consumption or according to the varying strengths and quality of such article
 This section gives power to the State Government to fix the rate or rates on which the duty will be levied on transport of excisable articles
The Explanation to the section gives powers to the State Government to impose duties at different rates according to the places to which any excisable article is to be removed for consumption or according to the varying strengths and quality of such article
The argument on behalf of the appellant is that in view of the very wide definition of the word  transport  and the prohibition of transport contained in section 10 without payment of duty it is clear that every time there is transport the duty becomes payable at the rate fixed by the State Government under section 19 and that there is nothing in these sections which in any way limitsthe power to levy duty at every stage of transport
If this argument is accepted it will logically mean that every time there is transport of an excisable article duty will have to be paid till the excisable article has been actually consumed
In other words when for example the excisable article is transported from the bonded warehouse by a wholesaler he will have to pay duty on it when a wholesaler sells to a retailer there is bound to be transport from the wholesaler s premises to the retailer s premises and the duty will have to be paid again
Finally when the retailer sells it to a consumer there will again be transport from the retailer s place to the consumer s place and duty will have to be paid a third time
Further if the interpretation as urged on behalf of the appellant is accepted the duty will have to be paid again and again in the cases mentioned above even though the rate remains the same
The fact that in this particular case the rate was changed and that the State Government only demanded the extra duty will not affect the question of interpretation of the three provisions of the Act with which we are concerned
Was it then the intention of the legislature when it 404 made these provisions to levy duty irrespective of the fact whether the rate was changed or not again and again as an excisable article passed from the bonded warehouse to the wholesaler from the wholesaler to the retailer and from the retailer to the consumer  It is true that it was competent for the legislature to make such a provision but the question is whether the three provisions which we have set out above amount to making such a provision
Sri Umrigar for the appellant fairly admits that if the rate of duty had not been changed there would not have been any demand of any further duty on any sale by the respondent which might have resulted in transport and that the practice was not to charge the same duty over again on sale by the wholesaler to the retailer or by the retailer to the consumer even though these sales resulted in transport except where the Explanation to section 19 applies
If this practice is in accordance with law when there is no change in duty we cannot see how the excisable article which had been subjected to duty once will be liable to further duty equal to the difference when there is increase in the rate except of course where the Explanation to section 19 applies
We see nothing in section 10 which lays down that every time there is transport duty must be paid even though the duty has already been paid when the first transport of an excisable article takes place
What section 10 prohibits is the transport of excisable article unless the duty has been paid thereon
Once the duty has been paid the prohibition under section 10 no longer applies unless the case is covered by the Expla
nation to section 19
However wide may be the definition of  transport  what has to be seen is whether the prohibition under section 10 is to apply even to those excisable articles on which duty has been paid
On a plain reading of section 10 the prohibition under that section cannot apply to transport of excisable articles on which duty has been paid
Section 19 which is the charging section provides for levying of duty on transport in accordance with the provisions of section 10
This brings us back to section 10 and the question again is whether the prohibition having been removed by payment of duty once there is anything in section 10 which 405 requires that the duty should be paid again for transporting the goods on which duty has been paid
As we read section 10 we find nothing in it which requires that duty should be paid again for transport once the duty has been paid and the prohibition removed subject always to the Explanation to section 19
Under that Explanation if there are different duties in different regions and the excisable article which has paid duty of one region is removed to another region where the duty is different the excess will have to be paid in order that prohibition of transport in that region may be removed
But apart from the cases covered by the Explanation we can see no justification for reading section 10 as giving power to impose duty on the same excisable article again and again as it moves in the course of trade from say the bonded warehouse to the wholesaler and from the wholesaler to the retailer and from the retailer to the consumer
Plainly therefore once the duty has been paid and the prohibition under section 10 is removed the transport of the duty paid excisable article can take place free from any further imposition except where it is transported to a region where the duty is different from the region where the duty is paid
Nor do we find any power in the State Government to impose a duty at every movement during the course of trade in the words of section 19
All that section 19 empowers the State Government to do is to fix the rate of duty on transport in accordance with section 10
There is no delegation to the State Government anywhere in the Act of the power to impose duty from stage to stage during the movement of excisable articles in the course of trade
It is true that the legislature has the power if it so chooses to levy duty on every movement but as we read the three provisions on which reliance has been placed we do not find any exercise of that power by the legislature
Nor do we find any delegation by the legislature of any such power to the State Government
The view therefore taken by the Division Bench that once the duty mentioned in section 19 has been paid the prohibition con tained in section 10 must disappear subject always to the Explanation to s 19 and that there is nothing in 52 406 s19 delegating any power to the State Government of levying excise duty more than once and at more than one point during the progress of the excisable goods from the time they leave the bonded warehouse till the time they reach the consumer is in our opinion correct
It is not in dispute in this case that the Explanation to section 19 does not apply
Turning now to the first proviso to section 19 A it may be noticed that that section deals with the manner of levying duty
But the first proviso goes further and lays down that where the duty is levied on issue from a bonded warehouse it will be at the rate in force on the date of issue
We agree with the Division Bench that this proviso has no logical connection with section 19 A and would more properly be a proviso to section 19
It has nothing to do with the manner of payment but is concerned with the liability to pay at the rate prevalent on the date of issue from the bonded warehouse
If that is so the quantum of tax is once for all determined by this proviso subject always to the Explanation to section 19 and cannot be increased thereafter
Reference in this connection was made to section 15 A also
But that section seems to have been inserted as a measure of abundant caution and does not appear to go further than section 10
It seems to determine the time and manner of payment in cases where excisable articles are kept in a distillery or brewery or warehouse or other place of storage established or licensed under the Act where duty may not have been paid before such storage
It is not the charging section and cannot be read to go beyond section 19 which is the charging section
We are therefore of opinion that on this ground also no additional duty could be charged from the respondent in this case as the Explanation to section 19 has admittedly no application here
The appeal therefore fails and is hereby dismissed with costs
Appeal dismissed


Summary:
The appellant s manager was violently attacked by its workmen as a result of which he sustained serious injuries
The workers in the lower division also threatened the appellant s staff working in that division that they would murder them if they worked there
The appellant was therefore compelled to notify that the division would be closed until further notice
Subsequently as a result of conciliation before the labour officer the division was opened again
The workers made a claim for lay off compensation under section 25C of the  for the period during which the lower division was closed on the footing that the management for their own reasons did not choose to run the division during that period
The appellant s answer was inter alia that the closure of the division amounted to a lock out which under the circumstances was perfectly justified and as such the workers were not entitled to claim any lay off compensation Held  1 that the concept of a lock out is essentially different from that of a lay off and where the closure of business amounts to a lock out under section 21 of the  372 it would be impossible to bring it within the scope of a lay off under section 2 kkk of the Act
2that the expression  any other reason  in section 2 kkk means any reason which is allied or analogous to reasons already specified in that section
J K Hosiery Factory vs Labour Appellate Tribunal of India Anr AIR 1956 All 498 approved
3 that the lock out which was justified on the facts of the case was not a lay off and therefore the workmen were not entitled to claim any lay off compensation