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2011 (9) TMI 769 - HC - VAT and Sales TaxDemand - Rule 14A of the Consolidated Rules - Mr. Khaitan, the learned Senior Advocate appearing on behalf of the writ- petitioner, has, at the first instance, contended before us that the Rule impugned is ultra vires the Constitution of India in view of legislative incompetency of the State Legislature - learned Advocate appearing on behalf of the State, has, on the other hand, opposed the aforesaid contention of Mr. Khaitan and by placing strong reliance upon the decision of the Supreme Court in the case of Bihar Distillery and Anr. vs. Union of India and Ors.,1997 (1) TMI 519 - SUPREME COURT OF INDIA, has contended that the rectified spirit is the source of manufacture of all types of potable intoxicants and thus, the State has full authority to take regulatory measure for wastage of such article - it is clear that the legislature has not given authority to the State Government to levy any duty for violation of any of the measures provided in the Rules in exercise of power conferred under clauses (1), (2) and (9) of Section 86 of the Act except imposition of fine not exceeding ₹ 5000 - Held that: clause 12 has nothing to do with the regulatory power of the State to prevent misuse of materials in the process of distillation the learned Senior Advocate appearing on behalf of the writ-petitioners, did not dispute the existence of the police power of the State to impose restriction for prevention of the wastage of the materials leading to the ultimate manufacture of the potable intoxicants - Held that: sub-rule (4) of Rule 14A framed in exercise of the police power of the State conferred under clauses (1), (2) and (9) Section 86 of the Act authorizing imposition of duty on wastage in the process of distillation at par with the highest rate of duty payable on IMFL is ultra vires the said Statute itself and thus, is liable to be struck down on that ground alone - Decided in favor of the petitioner
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