IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN WEDNESDAY, THE 6TH APRIL 2011 / 16TH CHAITHRA 1933 WP(C).No. 25535 of 2007(M) --------------------------------------- PETITIONER(S): ------------------------- SDF IINDUSTRIES LTD, (FORMERLY SUPER STAR DISTILLERIES AND FOODS LTD SDF HOUSE, N.H.BYE PASS ROAD, CHANDRANAGAR, PALAKKAD REPRESENTED BY SRI. SUNNY MATHEW, SENIOR LIAISON ASSISTANT. BY ADV. SMT.PRABHA R.MENON SRI.M.KRISHNA KUMAR RESPONDENT(S): --------------------------- 1. THE CIRCLE INSPECTOR OF EXCISE SDF INDUSTRIES LTD, PAMPADY, THIRUVILVAMALA, TRICHUR DISTRICT. 2. DEPUTY COMMISSIONER OF EXCISE CENTRAL ZONE, PALARIVATTOM, KOCHI. 3. THE COMMISSIONER OF EXCISE, GOVT. OF KERALA, TRIVANDRUM. R1 TO R3 BY GOVERNMENT PLEADER SRI.VINOD CHANDRAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 06/04/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: sts WP(C)NO.25535/2007 APPENDIX PETITIONER'S EXHIBITS: P1 COPY OF THE DEMAND NOTICE DATED 4/2/1997. P2 COPY OF THE JUDGMENT DATED 9/1/2006 IN O.P.3140/1998. P3 COPY OF THE ORDER DATED 2/8/2007. RESPONDENT'S EXHIBITS: NIL /TRUE COPY/ P.A.TO.JUDGE sts S. SIRI JAGAN, J. - - - - - - - - - - - - - - - - - - - - - - - W.P.(C)No. 25535 of 2007 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 6th day of April, 2011 J U D G M E N T The petitioner is a company registered under the Companies Act, 1956 engaged in the business of manufacturing, warehousing, blending and bottling of Indian made foreign liquor, for which they have a license. For the purpose of preparing Indian made foreign liquor the petitioner purchases and stores rectified spirit (ethyl alcohol) in its factory. On account of a fire in the factory considerable quantities of ethyl alcohol was destroyed. The respondents demanded excise duty for the ethyl alcohol which was destroyed in the fire. The petitioner is challenging the same on the ground that it is settled law that the State Government has no legislative competence to legislate and demand excise duty on ethyl alcohol which is nothing but rectified spirit. From Ext.P1 demand from the 1st respondent itself it is clear that the demand is in respect W.P.(C)No. 25535 of 2007 -2- of rectified spirit lost due to fire. The petitioner seeks the following reliefs: “1) Issue a writ of certiorari or any other appropriate writ, order or direction to quash Exhibit-P3 order of the 3rd respondent. 2) issue a writ of certiorari or any other appropriate writ, order or direction to quash Exhibit-P1 demand notice.” 2. A counter affidavit has been filed by the 1st respondent supporting the demand for excise duty. 3. I have considered the rival contentions in detail. 4. In Several decisions of Hon'ble Supreme Court namely, Synthetics and Chemicals Ltd. v. State of U.P. (1990) 1 SCC 109, State of U.P. v. Mody Distillery (1995) 5 SCC 753 and Deccan Sugar & Abkari Co. Ltd v. Commissioner of Excise, A.P. (2004) 1 SCC 243, it has been categorically held that manufactured rectified spirit, although capable of being used for producing portable liquor, is beyond the State's power to levy excise duty. In fact following some of those decisions, this court has also held in favour of similarly placed petitioners in several writ petitions. Ext.P2 judgment is one such. In the above W.P.(C)No. 25535 of 2007 -3- circumstances, it is settled law that the State has no legislative competence to legislate on rectified spirit to levy excise duty of the same. Consequently the demand for excise duty on the petitioner for the rectified spirit lost due to fire is clearly unsustainable. Accordingly Ext.P1 demand notice and Ext.P3 order of the 3rd respondent confirming the demand for excise duty is hereby quashed. The writ petition is allowed as above. Sd/- S. SIRI JAGAN JUDGE //True copy// P.A. TO JUDGE shg/