TMI Blog2004 (10) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... and show cause notice dated 4.9.2004 issued to the petitioner sugar mills by the Respondent No. 3 i.e. (Annexure Nos. 18, 21 and 26 to this writ petition respectively). (c) issue a writ, order or direction in the nature of Mandamus staying the operation of the impugned show cause notice dated 4.9.2004 and the respondents may be restrained from taking any punitive/coercive action against all factories/units of the petitioner company and the respondents may further be restrained from initiating the action Under Section 11 12 of the U.P. Sheera Niyantran Adhiniyam, 1964. (d) issue a writ, order or direction in the nature of Mandamus directing the State Government not to allot the Molasses from the petitioner Sugar Mills for the purpose of manufacturing the country liquor to the other factories. (e) issue a writ, order or direction in the nature of which this Hon ble Court may deem fit and proper in the circumstances of the case. And (f) Award the costs to the writ petition. 2. Briefly stated, the facts giving rise to the present petition are as follows:- The petitioner, M/s Dhampur Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would be from 20% stock of molasses available with the sugar mills as on 15.4.2004. 3. In order to ensure that the allottees were getting the requisite quantity of molasses from the sugar mills, the Controller of Molasses, U.P., Allahabad issued a general direction on 26.7.2004, 3.8.2004 and 2.9.2004 for ensuring that requisite information be collected and submitted to him as to whether the sugar mills are selling their molasses to the distilleries for manufacture of country liquor as per allotment or not. The petitioner, vide letter dated 11.8.2004, requested the Deputy Excise Inspector, posted at the sugar mills, that as it has its own distillery and is facing shortage of molasses and being on the verge of closure, permission be granted to utilise the molasses available with their sugar mills. The Deputy Excise Inspector, vide letter dated 12.8.2004 asked for certain clarifications. The clarifications was given vide letter dated 6/7.9.2004 and it was stated therein that 20% reservation of available stock of molasses as on 15.4.2004 in their case is not applicable as it already has a captive distillery. The petitioner also made a representation on 7.9.2004 before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Controller can make any order regarding sale or supply of molasses, the estimated availability of molasses has also to be placed before the Advisory Committee constituted under Section 3 of the Act. According to him, as the Advisory Committee has not been constituted, the Controller of Molasses could not have made any allotment whatsoever. He further submitted that there was no material before the State Government regarding production and availability of molasses so as to enable it or the Controller of Molasses to make any allotment orders. 7. He also submitted that the allotment of molasses for distillery manufacturing country liquor is against the public policy and is contrary to the Directive Principle of the State policy as provided under Article 47 of the Constitution of India which stipulates that the State shall endeavour to bring about prohibition of the consumption of intoxicating drinks which are injurious to health. In the alternative, he submitted that under the Government Order dated 9.6.2004, as amended by the Government Orders dated 15.6.2004 and 26.6.2004, if a sugar mill has its own distillery then 20% of the available stock has to be recko ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the allotment orders, it may be mentioned here that the Court has entertained the writ petition as the petitioner has challenged the validity of the various Government Orders issued by the State Government providing for reservation of molasses to distillery manufacturing country liquor as being arbitrary and violative of Article 14 of the Constitution of India, which plea could not have been raised by the petitioner before the State Government in the appeal, if any, as it is well settled that an authority constituted under the Act cannot go into the validity of the provisions of statute or the Government Orders issued under the Act or the Rules framed thereunder. The Hon ble Supreme Court in the case of K.S. Venkataraman and Co. (P) Ltd. v. State of Madras, (1966) 17 STC 418, has held that an authority created by a statute cannot question the vires of that statute or any of the provisions thereof whereunder it functions. It must act under the Act and not outside it. If is acts on the basis of a provision of the statute, which is ultra vires, to that extent it would be acting outside the Act. The Hon ble Supreme Court in the case of Alpha Chem and Anr. v. State of U.P. and Ors., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India v. Ahmedabad Electric Co. Ltd., and Ors. 2003ECR274(SC) has held that a circular issued by Central Board of Excise Customs could not have been challenged before the departmental authorities as they would have felt bound by it. Repelling the plea of alternative remedy in such a case the Apex Court has held as follows: The objection is that the a High Court should not have entertained a petition under Article 226 of the Constitution of India in the facts and circumstances of the case. At the outset, we may note that we have only one civil appeal in the case of Ahmedabad Electricity Co. (CAs Nos. 2168-69 of 2001) which is arising from proceedings before the High Court under Article 226. The remaining matters in the bunch are statutory appeals under Section 35L of the Central Excise Act. Therefore, this Court has to go into the matter on merits. Moreover, in Ahmedabad Electricity Co. case challenge by way of a writ petition under Article 226 was to a circular dated 7.4.1998 issued by the Central Board of Excise and Customs and the consequential Trade Notice No. 36 of 1998 dated 22.5.1998 issued by the Office of the Commissioner of Central Excise and Customs, Ah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. As regards the plea of learned counsel for the petitioner that there was no material before the State Government regarding production, availability, consumption, utilisation of molasses by various sugar factories and, therefore, reservation of 20% of existing stock of molasses with the sugar mills as on 15.4.2004 in favour of the distilleries manufacturing country liquor, could not have been made is concerned, it may be mentioned here that on a query being made by us as to whether the petitioner has made any averment to this effect or not, learned counsel for the petitioner referred to paragraphs 28, 33 and 54 of the writ petition. Paragraphs 28, 33 and 54 of the writ petition are reproduced below:-- 28. That the respondent State had decontrolled the molasses with a view to ensure that the same could be readily used for production of Industrial Alcohol a raw material for Chemical Industry as also production of Power Alcohol and Rectified Spirit, bearing in mind the economic requirement of the State as also of National and also with a view to decrease in expenditure in the import of petrol after mixing power Alcohol in petrol for making more ecofri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumption and also because of the directive principle contained in Article 47, except when it is used and consumed for medicinal purposes. (e) For the same reason, the State can create a monopoly either in itself or in the agency created by it for the manufacture, possession, sale and distribution of the liquor as a beverage and also sell the licences to the citizens for the said purpose by charging fees. This can be done under Article 19(6) or even otherwise. (i) The State can carry on trade or business in potable liquor notwithstanding that it is an intoxicating drink and Article 47 enjoins it to prohibit its consumption. When the State carries on such business, it does so to restrict and regulate production, supply and consumption of liquor which is also an aspect of reasonable restriction in the interest of general public. The State cannot on that account be said to be carrying on an illegitimate business. 18. The plea that the sugar mills having their own distilleries referred to in clause 3 of the Government Order dated 9.6.2004, as amended on 15.6.2004 and 26.6.2004, does not confine to the distilleries manufacturing country ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
