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2023 (1) TMI 635 - HC - VAT and Sales TaxRefund of Tax paid on beer - unsold stock due to Covid Pandemic - Constitutional Validity of retention by the respondents, of the amount paid as import and countervailing duties on the stock whose shelf life has expired and which is not to undergo removal for retail-sale - vires of Articles 14, 19 (1)(g), 265 and 300A of the Constitution of India - refund of the amount paid as import and countervailing duties on the stock - HELD THAT:- The undisputed facts from the pleadings on record reveal that the petitioner supplied beer in the State of Jharkhand kept in the warehouse of the Respondent No. 3 from its factories situated outside the State. Substantial quantity of which said to be 1,84,725 cases of beer valued at Rs. 14.00 crores could not be removed for sale from warehouses due to restriction on sale imposed by the Government during the lockdown which started due to Covid in March 2020. The prescribed shelf life of beer of six months expired in the meantime. Petitioner claimed refund of excise duty paid by it on the stock of beer which could not be removed for sale. The sheet anchor of the petitioner is that the excise duty / countervailing duty (CVD) under the Jharkhand Excise Act, 1915 was paid in advance as no liquor can be brought into the State of Jharkhand without payment of duties as per the restrictions imposed under the provisions of Chapter III of the Act. In view of proviso to Section 28(1) of the Act, duty is levied only on issuance of the goods from the warehouse and as such, payment made prior to the date of issuance is only an advance liable to be refunded, if no duty is leviable at all due to non-removal of beer from the warehouse for sale - According to the petitioner, the amount collected from the Respondent No. 3 was only an advance paid, which is subject to the final determination of duties on the date of removal of the goods from the warehouse. Charging provision cannot be effectuated at all before the event of removal takes place. Therefore, State cannot unjustly enrich itself by claiming duties on products which are destroyed on account of their action. It is the case of the petitioner that since retention of the said amount by the State was in contravention of Article 265 of the Constitution of India, it is liable to refund the amount paid when there was no liability. Therefore, writ petition is also maintainable. There is no uncertainty or vagueness in defining the taxable event. Proviso to Section 28(1) only indicates the rate of tax which is to be levied at the time of removal for sale from the warehouse - The decision in the case of Sree Balaji Enterprises, Bangalore [2007 (1) TMI 645 - KARNATAKA HIGH COURT] does not fit into the case of the petitioner as the dispute was whether excise duty i.e. goods manufactured inside the State could be levied when the goods were destroyed. In the present case, as per the provisions of the Act, CVD is levied at the time of import itself and only a facility for postponement of collection is provided - it is apparent that a licence for distributorship in Form 19C can be issued only if the licence holder undertakes to make payment of countervailing duty in advance. Further, condition-8 of the said licence stipulate that such distributor, for import from outside the State shall also obtain an import permit for payment of countervailing duty and import fee. In Rule 8-A, liquor can only be imported by way of an import pass granted by the Collector on prepayment of duty as well as any import pass fee into the Treasury of the importing district. Under licence as also under Rule 7(3), import can be done only on payment of countervailing duty and on obtaining an import permit. As such, the plea of the petitioner that non-removal of beer from the warehouse during the period of its shelf life on account of Covid lockdown would not make it liable for payment of countervailing duty in terms of proviso to section 28(1) of the Act, does not hold good in the eye of law since the taxable event occurs on the import of liquor into the territory of the State, as per the provisions of Section 27 (1) (a) of the Act. The principles applicable on levy of countervailing duty upon import of liquor in the State under the Bihar and Orissa Excise Act, 1915 and the decisions on the point, the plea of the petitioner for refund of the amount to the tune of Rs. 1,53,68,480/- paid as import and countervailing duty on the stock, is not tenable in law and on facts - petition dismissed.
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