Case: The State Of Bombay Vs. M/S. S. S. Miranda Limited

even though these sales resulted in transport except where the Explanation to S. 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 three is increase in the rate, (except of course where the Explanation to S. 19 applies). We see nothing in S. 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 S. 10 prohibits is the transport of excisable article unless the duty has been paid thereon. Once the duty has been paid the prohibition under S. 10 no longer applies, unless the case is covered by the Explanation to S. 19.However wide may be the definition of "transport", what has to be seen is whether the prohibition under S. 10 is to apply even to those excisable articles on which duty has been paid. On a plain reading of S. 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 S. 10. This brings us back to S.10 and the question again is whether the prohibition having been removed by payment of duty once, there is anything in S. 10 which requires that the duty should be paid again for transporting the goods on which duty has been paid. As we read S. 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 S. 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 S. 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 S. 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.12. 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 S. 19. All that S. 19 empowers the State Government to do is to fix the rate of duty on transport in accordance with S. 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 S. 19 has been paid the prohibition contained in S. 10 must disappear, (subject always to the Explanation to S. 19), and that there is nothing in S. 19 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 S. 19 does not apply.13. Turning now to the first proviso to S. 19-A, it may be noticed 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 S. 19-A and would more properly be a proviso to S. 19. It has nothing to do with the manner of payment but it 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 S. 19 and cannot be increased thereafter.Reference in this connection was made to S. 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 S. 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 S. 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 S.19 has admittedly no application here.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]11. 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 S. 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 S. 19 and that there is nothing in these sections which in any way limits the 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 wholesalers premises to the retailers 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 retailers place to the consumers 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 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 to 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 change 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 partice 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 S. 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 three is increase in the rate, (except of course where the Explanation to S. 19 applies). We see nothing in S. 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 S. 10 prohibits is the transport of excisable article unless the duty has been paid thereon. Once the duty has been paid the prohibition under S. 10 no longer applies, unless the case is covered by the Explanation to S. 19.However wide may be the definition of "transport", what has to be seen is whether the prohibition under S. 10 is to apply even to those excisable articles on which duty has been paid. On a plain reading of S. 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 S.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 S. 19. All that S. 19 empowers the State Government to do is to fix the rate of duty on transport in accordance with S.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 S. 19 has been paid the prohibition contained in S. 10 must disappear, (subject always to the Explanation to S. 19), and that there is nothing in S. 19 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 S. 19 does not apply.