The State Of Jharkhand And Ors. vs M/S Ajanta Bottlers And Blenders Pvt ...

2. This appeal takes exception to the impugned judgment and order of the High Court of Jharkhand at Ranchi in Writ Petition (T) No.7499 of 2012 dated 25th July, 2013, whereby the writ petition filed by the respondent to assail the notification dated 6th November, 2012, as published in the official gazette on 10th November, 2012, issued by the Board of Revenue, Jharkhand in exercise of powers conferred under Section 90 of the Jharkhand 2 Excise Act, 1915 came to be allowed on the ground that the State had no legislative competence to levy tax/fee on the import of rectified spirit, as it is a non-potable liquor i.e. alcohol not fit for human consumption. Additionally, the High Court opined that the appellant-State had failed to justify the impugned levy on rectified spirit on the basis of services provided by the State in lieu thereof or being in the nature of quid pro quo. The original notification is in Hindi, the same reads thus:

Rule 106 (Tha): Foreign Liquor under sub-head (d) of head 'Foreign Liquor' in Para-3 of Notification No. 470 F. dated 15 January 1919, which manufacturing shall be done in accordance with section-2 (15)(iii) of Excise Act, for its manufacturing, the imported spirit/ rectified spirit, which shall be first used for manufacturing of E.N.A. through repeated distillation, for foreign liquor beverage (at the time of conversion), but before bottling of liquor, for this purpose Import fee shall be deposited at the rate of Rs. 6/- per L.P. liter on the total quantity of imported spirit/rectified spirit.” This notification shall come into force on the date of its publication in the official gazette.

18. In view of the aforesaid reasons and discussions and in view of the settled law laid down by the judgments of the Hon'ble Supreme Court referred to herein above, the notification dated 10th November 2012 issued by the Board of Revenue, Jharkhand in exercise of powers conferred under section 90 of the Jharkhand Excise Act, 1915, cannot be sustained in law and it is accordingly quashed. Consequentially, the demand raised vide notice dated 24th November 2012 (Annexure-4) for deposit of import fees on rectified spirit, is also quashed. Petitioner shall be entitled to refund of any such import fees deposited under the impugned notification.

17. In view of the above, we do not intend to dilate on other arguments and reported decisions pressed into service by the respective parties. Suffice it to observe that the challenge to the amended Rule 106 (Tha), in our opinion, is unfounded and is based on erroneous assumption that it purports to authorise the 17 (1990) 1 SCC 109 28 State to levy charges on the imported rectified spirit as such. However, upon proper interpretation of the said rule we hold that it purports to empower the State to levy charges on the final processed product being foreign liquor (IMFL) manufactured by use of imported rectified spirit. This appeal, therefore, ought to succeed.

18. Accordingly, we allow this appeal and quash and set aside the impugned judgment and order of the High Court dated 25th July, 2013 passed in WP(T) No.7499 of 2012. The said writ petition stands dismissed. All pending interim applications are disposed of. No order as to costs.

……………………………..J (A.M. Khanwilkar) ……………………………..J (Ajay Rastogi) New Delhi;

July 02, 2019.