CIVIL WRIT JURISDICTION CASE No.2604 of 2003 (In the matter of an application under Article 226 of the Constitution of India) Mc Dowell & Co.Limited, Hathidah, PS Hathidah, District Patna, having its registered office at Mc Dowell House, 3-Second line Beach, Madras -600001 through its General Manager N Murlidharan Nair son of Shri P Narayanan residing at the Campus of Mc Dowell & Co. Limited, Hathidah, District Patna .... .... Petitioner Versus 1. The State Of Bihar through the Secretary to the Government of Bihar-cum-Commissioner, Bihar, Patna 2. The Member, Board of Revenue, Bihar, Patna 3. The Commissioner of Excise, Bihar, Patna 4. The Collector, Patna 5. The Superintendent of Excise, Mc Dowell & Co. Ltd. Hathidah District Patna .... .... Respondent/s ******** For the Petitioner :Mr. Satyabir Bharti, Advocate For the Respondents : Mr. Piyush Lal Assistant Counsel to AAG I ********* P R E S E N T HON’BLE MR. JUSTICE SUDHIR KUMAR KATRIAR and HON’BLE MR. JUSTICE VIKASH JAIN S K Katriar, J. This writ petition has been preferred with the prayer to quash the order dated 29.7.2002 (Annexure 4), issued by respondent no.5, calling upon the petitioner to make payment of the establishment charges for the year 2001-2002, and make adjustment of the excess deposits made by the petitioner. 2. A brief statement of facts essential for the disposal of this writ petition may be indicated. The petitioner is a Public Limited Company within the meaning of the Companies Act 1956. It manufactures potable liquor for human consumption as well as denatured and non-potable spirit for industrial purposes which are unfit for human consumption. It has set up a factory at Hathidah, 2 district Patna, to manufacture potable liquor as well as non-potable spirit, and is holder of five licences. Its four licences in Forms – 19, 19B, 19C, and 20 are with respect to manufacture of potable liquor. It holds licence in Form 28A for manufacture of non-potable spirit. Both the items are manufactured in the same precincts at Hathidah. The respondent authorities issued notice dated 29.7.2002 (Annexure-4), calling upon the petitioner to deposit a total sum of Rs.8,78,041/- by way of establishment charge within the meaning of rule 36A of the Bihar Excise Rules 1915, and impugned herein. 3. Learned counsel for the petitioner submits that, in view of the scheme of the Constitution of India with particular reference to Schedule VII, the State Government has no legislative competence to legislate with respect to non-potable spirit, which is vested in the Parliament. Conversely, the power to legislate with respect to potable liquor is with the State Legislature. This has been the subject matter of a large number of authoritative pronouncements of the Supreme Court and followed by various decisions of this Court. It is settled law that the respondent authorities cannot call upon the petitioner to make payment of the establishment costs in so far as the licence in Form - 28A is concerned, i.e. non-potable spirit. He relies on a Division Bench order of this Court and also that of Excise Commissioner, Bihar, Patna. 4. Learned Government Counsel has made appropriate submissions in support of the stand taken in the counter affidavit. 5. We have perused the materials on record and considered the submissions of the learned counsel for the parties. Law is well 3 settled that the State Legislature has no legislative competence to enact laws with respect to non-potable spirit, and the legislative competence is with the Parliament. It has further been held in those judgments that the Bihar Excise Act 1915 has become archaic, which was obviously much before the promulgation of our Constitution. The same has been declared ultra vires the constitution, null and void and inapplicable to the activities relating to manufacture, marketing and distribution of non-potable spirit. 6. Before we proceed further, we would like to notice rules 9 and 36A of the Rules which are reproduced hereinbelow:- “9. The Commissioner shall appoint such officers and establishment as he thinks fit to the charge of a distillery. In the case of a distillery licenced solely for the purpose of the manufacture of denatured spirit or any other commercial spirit the distiller shall bear the whole cost including leave and pension contributions and cost of uniform of such excise staff and establishment as may be considered necessary by the Excise Commissioner for proper supervision.” The activities covering Compounding and Blending of Potable Foreign Liquor and Bottling the same for the purpose of sale ................. ................. ................. “36A. The Excise Commissioner shall decide as to whether a wholetime or a part time excise staff is necessary for the proper supervision of such operations in any such premises. The licensee shall pay to the Provincial Government such fees as may be determined from time to time by the Excise Commissioner as the actual cost of the excise staff, employed for the purpose of this rule. The fees shall be payable by the licensee at the end of each calendar month in case of a part-time excise staff and by the 7th of each calendar month in advance in case of a whole-time excise staff. These fees, shall be in addition to any other fees payable under the Bihar and Orissa Excise Act.” It is evident on a plain reading of these provisions that the second part 4 of rule 9 is obviously covered by the aforesaid judgment of this Court and, therefore, the State Government cannot collect establishment cost from the manufacturers of non-potable spirit. 7. We are, therefore, left to apply the first half of rule 9 and rule 36A to the present case. The effect of these two provisions were considered by a Division Bench of this Court inter-parties in its judgment dated 12.3.2004, passed in CWJC No.5945 of 1990 and the analogous writ petitions, reported in 2004(3) PLJR 777 (McDowell & Co. Ltd. v. State of Bihar), wherein it has been held that the Excise Commissioner can realize establishment cost only from manufacturers dealing in potable liquor. Obviously, the Excise Commissioner cannot realize establishment cost from manufacturers dealing in non-potable spirit. The law relating to composite license need not detain us because the same is not relevant in the present context. In that view of the matter, the Division Bench had quashed an identical order with respect to the same petitioner and had directed the Excise Commissioner to pass a fresh order. Another Division Bench of this Court passed identical order dated 22.11.2006, with respect to two writ petitions preferred by the same petitioner, bearing CWJC No.3811 of 2006, and CWJC No.5741 of 2006. In due observance and compliance of the two orders of the Division Bench of this Court, the Excise Commissioner, Bihar, Patna, has considered the entire matter and has passed a general order on 31.10.2006, where he has come to conclusion that establishment cost of only one Excise Sub-Inspector should be realized from the present petitioner. Realization of the establishment cost with effect from 18.10.2005 under the amended 5 rule 9 does not arise for consideration in the present case and need not detain us. The relevant portion of the order of the Excise Commissioner, Bihar, is reproduced hereinbelow:- “Since in similar operations of compounding and blending conducted at various units like Chitwan Blenders & Bottlers, Salson Liquors, Millennium Blenders & Bottellers, Calona Blenders & Bottllers etc. who are also holding the license in Form 19, 20 of Excise Act, only Sub- Inspector of Excise has been posted and establishment charges to that effect are realized from these units, the same principle will have to apply in the present case as well. I hereby direct that prior to 17th October 2005, establishment cost of one Excise Sub-Inspector should only be realized from present petitioner. From 18th October 2005, the establishment cost will be realized as per amendment Rule 9.” It is evident on a perusal of the order of the Excise Commissioner that it is intended to be of general application. In that view of the matter, we set aside the impugned order dated 29.7.2002 (Annexure 4). The following portion of the aforesaid order of the Excise Commissioner shall govern the present case for the period in question:- “I hereby direct that prior to 17th October 2005, establishment cost of one Excise Sub-Inspector should only be realized from present petitioner.......” 8. In the result, the writ petition is allowed. In the facts and circumstances of the case, there shall be no order as to costs. ( S K Katriar, J.) Vikash Jain, J. I agree. ( Vikash Jain, J.) Patna High Court, Patna The 19th of July, 2011 NAFR/mrl 6