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TMI Blog2011 (3) TMI 1732X X X X Extracts X X X X X X X X Extracts X X X X ..... that the respondents be directed to refund the permit fees with interest already collected on denatured spirit pursuant to the aforementioned impugned Rule 22 of the Rules and impugned notification dated 29.3.2004 (P-1). FACTS: 2. The petitioner is a public limited Company incorporated under the Companies Act, 1956. At the time of filing of writ petition, the name of the petitioner-company was 'M/s Industrial Organics Limited', however, during the pendency of the present proceedings it has been re-christened as 'IOL Chemicals and Pharmaceuticals Limited', with effect from 5.12.2006. The petitioner-company is engaged in manufacture of organic chemicals like acetic acid, ethyl acetate and acetic anhydride, which are used in pharmaceutical industry and also in manufacture of basic chemicals. In the manufacturing process of various chemicals including industrial alcohol 'denatured spirit' is used as raw material. As per its requirements, the petitioner-company procures denatured spirit from within the country and also imports the same. For procuring, possession and storage of denatured spirit either from within the country or through imports, a permit in Form L-42A under Rule 22 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise duty" and "countervailing duty" means any such excise duty or countervailing duty as the case may be as mentioned in entry 51 of list II in the Seventh Schedule to the Constitution." Section 31 of the Excise Act "31. Duty on excisable articles.- An excise duty or a countervailing duty as the case may be at such rate or rates as the State Government shall direct, may be imposed either generally or for any specified local area, on any excisable article. (a) imported, exported or transported in accordance with the provisions of Section 16; or (b) manufactured or cultivated under any licence granted under Section 20; or (c) manufactured in any distillery established or any distillery or brewery licensed under Section 21; Provided as follows:- (i) duty shall not to be so imposed or any article which has been imported into India and was liable on importation to duty under the Indian Tariff Act, 1894, or the Sea Customs Act, 1878; (ii) Explanation.- Duty may be imposed under this section at different rates according to the places to which any excisable article is to be removed for consumption, or according to the varying strength and quality of such article." 6. A b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so directs, at the rate of duty which was in force at the date of import of that article, or (b) in the absence of such direction by the State Government, at the rate of duty which is in force on that article on the date when it is issued from the warehouse." 8. Under the Excise Act, the Rules were notified vide Notification No. 6000-E&S, dated 12.11.1932. The State of Punjab levied permit fees on denatured spirit under Rule 22 of the Rules, which reads as under:- "22. The Excise Commissioner is pleased to prescribe the following forms and conditions for the exemption permits referred to in order 18 of the Punjab Liquor Import, Export, Transport and Possession Orders:- (a) and (b) Deleted. (c) A permit for the possession of ordinary country spirit for private use granted to any person for use on any special occasion shall be granted by the Collector in Form L. 43 and shall cover the transport of such spirit. (d) A permit for the possession of denatured spirit granted to educational institutions, hospitals, dispensaries, research institutions or to any chemist, varnish maker or other person engaged in any business who requires large quantities of denatured spirit for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um Scharide per 100 litres of Ethanol shall be recovered at the time of issue of permit. (h) Deleted." 9. A bare perusal of Rule 22 of the Rules shows that different forms have been prescribed for issuance of permits and possession of ordinary country spirit, denatured spirit, rectified spirit, specially denatured spirit and Ethanol etc. to be used for different purposes. A permit for possession of denatured spirit required by a person engaged in any business requiring large quantities of denatured spirit for his business is to be granted by the Collector in Form L.42-A. As per first proviso of sub-clause (d) of Rule 22 of the Rules, in respect of denatured spirit consumed by the industries which are declared by the Excise Commissioner to be alcohol based industries, a fee at the rate of thirty paise per bulk litre is to be assessed. Similarly, second proviso of sub-clause (d) further prescribes that in case a permit holder is allowed to import denatured spirit from outside the State of Punjab, he would be required to pay reduced fee at the rate of thirty paise per bulk litre. Third proviso of sub-clause (d), however, stipulates that no fee shall be charged on the quantity of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany is also estopped from filing the writ petition in view of the fact that on the same cause of action earlier also a writ petition was filed by the petitioner-company which was subsequently withdrawn on 21.4.1995. It has further been claimed that the petitioner-company is confusing the terms 'Industrial Alcohol' and 'denatured spirit'. It has, thus, been explained that Industrial Alcohol is 'Ethyl Alcohol' or could be termed as 'rectified spirit', which could even be utilized for potable purposes also, with small processing, whereas 'Denatured Spirit' comes into existence after addition of various denaturants to 'Industrial Alcohol'. After referring Rule 22 of the Rules it has been submitted that permit in Form L-42A is meant for the purchase, possession and storage of denatured spirit and it is issued for a year or a part of it. Thus, the contention of the petitioner has been denied that it is to be obtained each and every time the consignment is to be obtained. 13. In para 5 of the said reply on merit, it has been stated that various services are rendered by the State in the production, storage and regulation of the supply of spirit, which is denatured with the addition of va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . v. State of U.P., (1999) 1 SCC 81; Avinash Nagra v. Navodaya Vidyalaya Samiti, (1997) 2 SCC 534; State of Haryana v. State of Punjab, (2004) 12 SCC 673; and H.P.S.E.B. v. K.R. Gulati, (1998) 2 SCC 624, learned State counsel has sought to raise a question that if a writ petition filed under Article 226 of the Constitution has been withdrawn without permission to institute a fresh petition, can the writ petitioner file such a petition on the same cause of action or there is a bar on the ground of public policy to do so. The answer to the question has been given in the negative. Learned State counsel banking upon the observations made in the judgments has argued that the public policy requires that once the petitioner had earlier filed CWP No. 9184 of 1991 and had got the same dismissed as withdrawn without permission then the instant petition filed in 2004 would not be maintainable, inasmuch as, the Constitutional validity of Rule 22 of the Rules has been challenged once again. 16. Mr. Amol Rattan Singh raised another preliminary objection that the levy under Rule 22 of the Rules is a preconstitutional levy because the Rules were enacted in the year 1932. According to the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of imposition of vend fee is not a pre-constitution imposition, as had been noticed from the change of rate from time to time. In the present case also, the admitted position is that the rates of levy have been changed from 0.30 paisa per bulk litre to 0.60 paisa per bulk litre and now to 0.45 paisa per bulk litre. Therefore, this preliminary objection is not sustainable as the matter falls within the purview laid by the judgment of 7-Judge Bench of Hon'ble the Supreme Court in the case of Synthetics and Chemicals Ltd. (supra). Mr. Anmol Rattan Singh has also drawn our attention to para 7 of the judgment rendered by a 5-Judge Bench of Hon'ble the Supreme Court in the case of State of Kerala v. M/s South India Corporation (P) Ltd., (1972) 4 SCC 106. However, it is not possible to accept the arguments of the learned State counsel because Rule 22 of the Rules was under consideration of their Lordships in the case of Synthetics and Chemicals Ltd. (supra) whereas in the case of M/s South India Corporation (P) Ltd. (supra) entirely different subject matter was dealt with. Therefore, we reject the aforesaid two preliminary objections. 19. Mr. Vikram Jain, learned counsel for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has finally placed reliance on the latest judgment of Hon'ble the Supreme Court rendered in the case of Mohan Meakin Limited v. State of Himachal Pradesh, (2009) 3 SCC 157, wherein entire case law has been discussed and the instant petition is fully covered by that judgment. 21. Mr. Amol Rattan Singh, learned Additional Advocate General, Punjab, has vehemently argued that the State could lay down regulations to ensure that non-potable alcohol is not diverted and misused as a substitute for potable alcohol. In that regard he has placed reliance on the observations made in para 86 of the Constitution Bench judgment of Hon'ble the Supreme Court rendered in the case of Synthetics and Chemicals Ltd. (supra). According to the learned State counsel the view expressed in para 43 of the judgment in the case of Vam Organic Chemicals Ltd. (supra) is contrary to the law laid down by the Constitution Bench in Synthetics and Chemicals Ltd. (supra). He has submitted that the State may charge a fee on the basis of quid pro quo. However, as the concept of regulatory fee has undergone a complete change, therefore, the State is empowered to regulate industrial alcohol and no quid pro quo is essent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r country liquor or both. A demand was made by the Excise and Taxation Officer towards permit fee on the spirit imported by the appellant during the year 1996-97. Another demand was made up to 6.2.1999 for making similar import. A representation was made by the appellant in respect of the said demands contending that the State of Himachal Pradesh had no jurisdiction to levy such fee and that no services having been rendered to the appellant, a quantum jump of the licence fee in the name of such permit fee was not justified. The said representation of the appellant was rejected. A writ petition filed by the appellant in the High Court was rejected. The appellant, thus, approached Hon'ble the Supreme Court. 24. After reading Entries 42, 52, 84 and 97 of List I, Entries 8, 51 and 66 of List II of the Seventh Schedule of the Constitution and various provisions of the Excise Act and the rules known as 'the Punjab Liquor Permit and Pass Rules, 1932' (as applicable in the State of Himachal Pradesh), which were framed by the Financial Commissioner, it has been held by Hon'ble the Supreme Court that the State possesses the right to have complete control over all aspects of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... human consumption. It is important to emphasise that the expression of a constitution must be understood in its common and normal sense. Industrial alcohol as it is, is incapable of being consumed by a normal human being. The expression 'consumption' must also be understood in the sense of direct physical intake by human beings in this context. It is true that utilisation in some form or the other is consumption for the benefit of human beings if industrial alcohol is utilised for production of rubber, tyres used. The utilisation of those tyres in the vehicle of man cannot in the context in which the expression has been used in the Constitution, be understood to mean that the alcohol has been for human consumption. 54. We have no doubt that the framers of the Constitution when they used the expression 'alcoholic liquor for human consumption' they meant at that time and still the expression means that liquor which as it is is consumable in the sense capable of being taken by human beings as such as beverage of drinks. Hence, the expression under Entry 84, List I must be understood in that light. We were taken through various dictionary and other meanings and also invit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. But this power stops with the denaturation of the industrial alcohol. Denatured spirit has been held in Vam Organics-I [Vam Organic Chemicals Ltd. v. State of U.P., (1997) 2 SCC 715] to be outside the seisin of the State Legislature. Assuming that denatured spirit may by whatever process be renatured (a proposition which is seriously disputed by the respondents) and then converted into potable liquor, this would not give the State the power to regulate it. Even according to the demarcation of the fields of legislative competence as envisaged in Bihar Distillery [Bihar Distillery v. Union of India, (1997) 2 SCC 727] industrial alcohol for industrial purposes falls within the exclusive control of the Union and according to Bihar Distillery 'denatured rectified spirit, of course, is wholly and exclusively industrial alcohol' (SCC p. 742, para 23)." 26. Eventually Hon'ble the Supreme Court found that the opinion as expressed by the High Court cannot be sustained and while setting aside the same, the matter was remitted to the High Court for consideration afresh. 27. From the above, the inference which could have been easily drawn is that the industrial alcohol can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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