TMI Blog2021 (10) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... day to dispute or deliberate as to the true character or identity or contents of ENA. The Supreme Court in the case of State of Jharkhand Others Vs. Ajanta Bottlers and Blenders Private Ltd. [ 2019 (7) TMI 316 - SUPREME COURT ] had clearly opined - industrial alcohol is broadly categorised into three categories. The first being Isopropyl alcohol (or IPA or Isopropanol). It is a compound with chemical formula CH3CHOHCH3, linked to a hydroxyl group. It is the simplest example of a secondary alcohol where alcohol carbon is attached to two other carbon atoms. If consumed, Isopropanol is converted into acetone in the liver, making it extremely toxic. The second category of industrial alcohol is Methyl Alcohol or Methanol with chemical formula CH3OH. Its consumption leads to blindness and death. The third category of industrial alcohol is Ethyl Alcohol also known as Ethanol having chemical formula C2H6O which may also be written as C2H5OH or CH3CH2OH. Whether IMFL or country liquor or any other liquor that may qualify as alcoholic liquor for human consumption , it uses ENA as a raw material. ENA, in turn, is derived from Rectified Spirit. At the same time, alcoholic liquor f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, and upon considering Section 174(1)(i) of UPGST Act, 2017, the impugned Notification dated 17.12.2019, insofar as it seeks to impose UPVAT on ENA, Rectified Spirit and SDS, is ultra vires, both on account of lack of (i) legislative competence and (ii) valid delegation. It is therefore quashed. Petition allowed. - WRIT TAX No. - 378 of 2021, WRIT TAX No. - 369 of 2021 and WRIT TAX No. - 370 of 2021, WRIT TAX No. - 383 of 2021, WRIT TAX No. - 371 of 2021, WRIT TAX No. - 364 of 2021, WRIT TAX No. - 451 of 2021, WRIT TAX No. - 355 of 2020, 385 of 2021 - - - Dated:- 28-9-2021 - HON'BLE NAHEED ARA MOONIS, AND HON'BLE SAUMITRA DAYAL SINGH Counsel for Petitioner :- Nishant Mishra, Tanmay Sadh, Yashonidhi Shukla, Suresh Kumar Maurya, Pawan Shri Agarwal, Rahul Agarwal, Priya Agrawal Counsel for Respondent :- C.S.C.,A.S.G.I. Counsel for Respondent :- C.S.C.,A.S.G.I., Dhananjay Awasthi, Satendra Kumar Upadhyay C.S.C.,A.S.G.I., Anupama Parashar, Dhananjay Awasthi C.S.C.,A.S.G.I., Krishna Agarawal, Ravi Prakash Singh With, C.S.C.,A.S.G.I., Ashok Singh, Gopal Verma 1. Heard Shri Navin Sinha, learned Senior Advocate, assisted by Shri Nishant Mishra, learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised to the legislative competence and the Notification dated 17.12.2019 (as above), challenge has also been raised to the assessment notice dated 08.06.2021, issued against that petitioner, for A.Y. 2019-20, as also Circular/letters dated 10.06.2021 and 11.06.2021 (as above). 4. Similarly, in Writ Tax No 370 of 2021, besides the challenge raised to the legislative competence (as above), challenge has been raised to the assessment notice dated 15.06.2021 issued to that petitioner, for A.Y. 201718 (01.07.2017 to 31.03.2018); the assessment order dated 30.06.2021 passed under Section 29 of the UPVAT Act, for A.Y. 2017-18 (01.07.2017 to 31.03.2018) and; the Circular/letters dated 10.06.2021 and 11.06.2021 (as above). 5. In Writ Tax No. 383 of 2021, besides the challenge raised to the legislative competence (as above) and the Notification dated 17.12.2019, challenge has also been raised to the assessment notice dated 21.06.2021 issued under Section 28 of UPVAT Act, for A.Y. 2018-19 (U.P.) and, the Circular/letters dated 10.06.2021 and 11.06.2021 (as above). 6. In Writ Tax No. 371 of 2021, besides the challenge raised to the legislative competence and Notification dated 17.12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent (above 95 percent), both ENA and SDS are unfit for human consumption. Prior to the 101st Constitution amendment and, in light of Article 246 of the Constitution read with Entry 54 of List II (as those provisions then existed), the State legislature had the legislative competence to enact laws to impose tax on sale or purchase of any goods other than newspapers, subject however, to the provisions of Entry 92A of List I. Also, in view of Article 246 of the Constitution read with Entry 51 of List II of the Seventh Schedule, the State Government had the legislative competence to enact laws to impose duties of excise on goods manufactured or produced in the State, being (i) alcoholic liquors for human consumption and (ii) opium, Indian hemp etc. 13. On the other hand, in view of Article 246 read with Entry 92, the Parliament had the legislative competence to enact laws, to impose tax on sale or purchase of newspapers and on advertisements published therein. Similarly, by virtue of Article 246 read with Entry 84 of List I of the Seventh Schedule, the Parliament had the legislative competence to enact laws to impose duties of excise on tobacco and other goods manufactured or produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercise of the powers under clause (c) of Section 7 read with Section 74 of the Uttar Pradesh Value Added Tax Ordinance, 2007 [U.P. Ordinance no. 37 of 2007], the Governor is pleased to direct, that no tax shall be payable under the said Ordinance with effect from January 01, 2008, on the sale or purchase of country liquor and spirit and spirituous liquors of all kinds including methyl alcohol in Uttar Pradesh by manufacturer or importer dealer subject to the condition that a certificate prescribed by the Commissioner of Commercial Taxes, Uttar Pradesh is submitted by the concerned dealer with the return of the tax period before the assessing authority to the effect that consideration fee or excise duty payable under the United Provinces Excise Act, 1910 or the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939, as the case may be, has been paid. 17. Thus, UPVAT did not apply to the goods specified in Entry No.1 to Schedule IV of the UPVAT Act, if the Manufacturer or the Importer dealer had paid excise duty under the United Provinces Act and, he had been issued the prescribed certificate, by the Commissioner of Commercial Tax, Uttar Pradesh, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufactured or produced in India except (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of this entry. 84. Duties of excise on the following goods manufactured or produced in India, namely: (a) petroleum crude; (b) high speed diesel; (c) motor spirit (commonly known as petrol); (d) natural gas; (e) aviation turbine fuel; and (f) tobacco and tobacco products. 92. Taxes on the sale or purchase of newspapers and on advertisements published therein. Omitted 92A. Did not exist 92A. Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce. (Inserted) 19. Also, by the 101st Constitution amendment, Article 246A was first enacted, as below: 246A. Special provision with respect to goods and services tax. (1) Notwithstanding anyt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , dated 17 December, 2019; NOTIFICATION No.-KA.NI-2-1793/XI-29(134)/17-U.P.Act-5-2008-Order-(80)-2019 Lucknow : Dated : 17 December, 2019 WHEREAS the State Government is satisfied that it is expedient so to do in public interest; NOW, THEREFORE, In exercise of the powers under sub-section (4) of section 4 read with section 74 of the Uttar Pradesh Value Added Tax Act, 2008 (U.P. Act no.5 of 2008), the Governor is pleased to make with effect from 09. December, 2019, the following amendment in Schedule-IV to the said Act:- Amendment In the aforesaid Schedule, after serial no.1 the following serial and entries relating there to shall column-wise be inserted, namely:- S.No. Name and Description of goods Point of Tax Rate of Tax % 1 2 3 4 1-A Any non GST alcohol, when sold for use in the process of manufacture of alcoholic liquor for human consumption against a certificate issued by the Commissioner of State Excise, Uttar Pradesh or by the officer a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of powers in a federal polity must be understood in a broad commonsense point of view as understood by common people for whom the Constitution is made. In terminology, as understood by the framers of the Constitution, and also as viewed at the relevant time of its interpretation, it is not possible to proceed otherwise; alcoholic or intoxicating liquors must be understood as these are, not what these are capable of or able to become. It is also not possible to accept the submission that vend fee in U.P. is a pre-Constitution imposition and would not be subject to Article 245 of the Constitution. The present extent of imposition of vend fee is not a pre-Constitution imposition, as we noticed from the change of rate from time to time. 86. The position with regard to the control of alcohol industry has undergone material and significant change after the amendment of 1956 to the IDR Act. After the amendment, the State is left with only the following powers to legislate in respect of alcohol: (a) It may pass any legislation in the nature of prohibition of potable liquor referable to Entry 6 of List II and regulating powers. (b) It may lay down regulations to ensure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coholic liquor for human consumption but the raw material or input still in process of being rendered fit for consumption by human beings. The State is not empowered to levy excise duty on the raw material or input that is in the process of being made into alcoholic liquor for human consumption. 25. Yet, a contrary view was taken by a two-Judge bench decision of the Supreme Court in Bihar Distillery Anr. Vs. Union of India Ors., (1997) 2 SCC 727, upon a different reading of the aforesaid Constitution bench decision of the Supreme Court in Synthetics and Chemicals Ltd. Ors. Vs. State of U.P. Ors. (supra). It was observed as below: 10. A reading of the above entries would immediately disclose that Entry 51 in List II and Entry 84 in List I compliment each other. Both provide for duties of excise but while the States are empowered to levy duties of excise on (a) alcoholic liquors for human consumption and (b) opium, Indian hemp and narcotics manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India [but excluding medicinal and toilet preparation containing alcohol or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try 24 in List II isin the nature of general entry. It speaks of industries but is made expressly subject to Entries 7 and 52 of List I. By making a declaration in terms of Entry 52 in List I in Section 2 of the IDR Act, Parliament has taken control of the several industries mentioned in the Schedule to the Act. The States have been denuded of their power to legislate with respect to those industries on that account. It has, however, been held by a three-Judge Bench of this Court in State of A.P. v.McDowell Co. [(1996) 3 SCC 709] that Entry 52 overrides only Entry 24 in List II and no other Entry in List II. It has been held that Entry 8 is not overridden or overborne in any manner by Entry 52 - which means that so far as intoxicating liquors are concerned, they are within the exclusive sphere of the States. We may pause at this stage and append a clarification which has become necessary in the light of certain words occurring in para 85 of the judgment of Sabyasachi Mukharji, J. in Synthetics [ Whenever we refer to Synthetics hereafter, it would mean the judgment of the seven-Judge Constitution Bench reported in (1990) 1 SCC 109.]. At the inception of para 85 of the said j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ynthetic and Chemicals Limited (supra), as followed by a three-Judge bench decision in State of U.P. Vs. Modi Distillery, (1995) 5 SCC 753. Thus, it was held : 2. It is settled by the decision of this Court in Synthetics and Chemicals Ltd. v. State of U.P., (1990) 1 SCC 109 that the State Legislature has no jurisdiction to levy any excise duty on rectified spirit. The State can levy excise duty only on potable liquor fit for human consumption and as rectified spirit does not fall under that category the State Legislature cannot impose any excise duty. The decision in Synthetics and Chemicals Ltd. v. State of U.P. has been followed in State of U.P. v. Modi Distillery, (1995) 5 SCC 753 where certain wastage of ethyl alcohol was sought to be taxed. This Court following the decision in Synthetics and Chemicals Ltd. came to the conclusion that this cannot be done. 27. That confirmed position in law, was reiterated by a two- Judge bench decision of the Supreme Court in State of U.P. Ors. Vs. VAM Organic Chemicals Ltd. Ors., (2004) 1 SCC 225 . Therein, it was opined as below: 22. Article 246 gives to Parliament exclusive power to make laws with respect to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28. Thus, though denuded of any power to enact a law to levy a duty of excise on alcohol-not for human consumption, the State legislatures were conceded the legislative competence to enact regulatory laws, to prevent diversion of industrial alcohol, to manufacture alcohol for human consumption. 29. Reliance has also been placed on another decision of the Supreme Court in State of Jharkhand Ors. Vs. Ajanta Bottlers and Blenders Private Ltd., (2019) 7 SCC 545 to emphasize - the levy or impost of duties of excise may fructify only upon completion of the distillation process and not earlier. Hence ENA, prior to its transformation into alcoholic liquor for human consumption , could not be subjected to a duty of excise by the State legislature. Once transformed, there exists no ENA. Relevant to our discussion, the contents of para 11 of that report read as below: - 11. We have adverted to the abovementioned process, noted in the written submissions filed by the appellant, so as to give proper interpretation to the impugned notification and the subject rules, in particular Rule 106(Tha). English version of the said rule noted in the notification (as translated by the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ckground law above noted, relying on the pleadings made in the writ petition and the reply furnished in the counter affidavit, it has been submitted, undoubtedly, ENA is not an alcoholic liquor for human consumption . Second, there is no denial that GST was paid on ENA, with effect from 01.07.2017. Read in conjunction to the first submission advanced by learned Senior Counsel for the petitioners (as to lack of legislative competence of the State legislature to impose UPVAT on ENA), its delegate, the State Government could not have issued the impugned Notification dated 17.12.2019 and thus colourably or artificially created a commodity by describing it non-GST alcohol . Merely because ENA may be used to manufacture another commodity namely, alcoholic liquor for human consumption , no new commodity can come into existence, either on a notional or deemed basis nor, it (ENA) can ever be described as a non-GST alcohol, only to impose tax thereon. 32. In any case, GST being levied under authority of law, and therefore paid on ENA, the levy of UPVAT on ENA, created by the impugned Notification is invalid and wholly unenforceable. Sale of ENA may not be made taxable under the UPVAT A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsumption, from the ambit of taxation of 'goods' under that Act. For the self-same reason, the Parliament has substituted Entry 84 of List I of the Seventh Schedule, to the Constitution of India, to save to itself, the legislative competence to levy duties of excise only on the same commodities finding mention in Entry 54 of List II of the Seventh Schedule, to the Constitution of India, besides tobacco tobacco products but except, alcoholic liquor for human consumption . Therefore, the impugned Notification dated 17.12.2019 is beyond the legislative competence of the State Legislature, besides being otherwise invalid, as noted above. 36. Last, it has been submitted, once the State had levied, charged and collected GST on ENA, at the rate of 9 percent, it cannot subject the same sale transaction (of that commodity), to further tax, on the basis of the aforesaid artificial distinction attempted to be made. In fact, if the contention of the State were to be accepted, it would make the State liable to refund the GST on ENA being excess tax suffered by that commodity, under the GST regime. 37. Shri Rahul Agarwal learned counsel for the petitioner in Writ Tax No. 355 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, toxic and fatal for human consumption, rendering its use only for industrial purposes. It is stated that isopropanol and methanol, because of their inherent chemical properties, cannot be purified and used for the production of intoxicating liquor or potable liquor by adopting physical means like decantation, filtration, redistillation, fractional distillation, etc. The third category, namely, Ethyl Alcohol or Ethanol (in India is usually produced from molasses derived from sugarcane) in its concentrated form and it is also known as rectified spirit and its strength measured in LPL signifies the strength of alcohol by volume, 13 parts of which weigh exactly equal to 12 parts of water at 51 degrees Fahrenheit. 10. Be that as it may, rectified spirit after it undergoes certain physical changes by adopting physical means like re-distillation, rectification (repeated or fractional distillation) to remove impurities, it becomes purer and is known as extra neutral alcohol (ENA). Thereafter, by addition and mixing of colouring and flavouring agents (compounding), as well as after dilution with water, ENA is left for maturation, to be bottled and used as intoxicating l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arent legislation, as may allow any delegated legislation to arise or exist, to tax sale of any other goods. 40. Then, he has further emphasized, the Constitution recognizes a clear distinction between the taxing entries and the general entries, each of which creates a field of legislation on which the respective legislative body may enact laws. A general legislative Entry such as Entry 8 of List II of the Seventh Schedule, to the Constitution of India may never come in aid of the State legislature, to enact a law imposing a tax. Reliance has been placed on a 3-Judge bench decision of the Supreme Court in Hoechst Pharmaceuticals Ltd. Ors. Vs. State of Bihar Ors., (1983) 4 SCC 45. To the same effect, reliance has been placed on another decision of the Supreme Court in Southern Pharmaceuticals and Chemicals, Trichur Ors. Vs. State of Kerala Ors., (1981) 4 SCC 391. 41. Raising challenge to the Notification dated 17.12.2019, it has been further submitted, the Schedule entry 1-A, thus introduced to Schedule IV of the UPVAT Act is with respect to non-GST alcohol only. That phrase or commodity has not been defined either under the UPVAT Act or under the Rules frame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssa Excise Act, 1915, to include therein - medicinal and toilet preparations containing alcohol, as defined under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. Referring its earlier decision in the case of Bihar Distillery Anr. Vs. Union of India Ors. (supra), it had been reasoned, Rectified Spirit is produced in a distillery licenced by the State Government. The cancellation of registration/licence had been resisted by that distillery. That dispute travelled to the High Court and then to the Supreme Court. While dealing with that issue, the Supreme Court observed as under: 22. In the case of Bihar Distillery v. Union of India [(1997) 2 SCC 727] a distillery was established. It sold rectified spirit produced by it. The distillery got its licence from the State Government up to the year 1991-92 under the Bihar Act. In 1992 the department proposed to cancel the licence. The distillery objected on the ground that it was manufacturing rectified spirit which came within the exclusive province of the Central Government. With this contention the distillery approached this Court. After noticing the relevant entries in the Seventh Schedule to the Constituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or restrict that legislative field to alcoholic liquor for human consumption alone. To do that, would be to read into the legislative field a restriction that plainly does not exist. In that regard, reliance has been placed on the decision of the Supreme Court in Bihar Distillery Anr. Vs. Union of India Ors. (supra), wherein the law laid down by the Constitution Bench of the Supreme Court, in the case of Synthetics and Chemicals Ltd. Ors. (supra) was considered and, in the submission of the learned AAG, an exception thereto had been carved out. Relevant to our discussions, paragraphs 10, 11 and 12 of the aforesaid report have been noted above. 45. Reliance has also been placed on another decision of the Supreme Court in VAM Organic Chemicals Ltd. Anr. Vs. State of U.P. Ors., (1997) 2 SCC 715, wherein the Supreme Court again had the occasion to consider the law laid down by its earlier seven-Judge Constitution Bench, in Synthetics and Chemicals Ltd. Ors. Vs. State of U.P. Ors. (supra). According to the learned AAG, the legislative competence of the State legislature to enact laws on 'intoxicating liquors' included laws on alcoholic liquor for hum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 7-A. One of the grounds of challenge was lack of legislative competence in view of Entry 26 in the First Schedule of the IDR Act which according to the writ petitioners, vested the control of alcohol industries exclusively in the Union and denuded the State Legislature of its power to licence or regulate the manufacture of liquor. This submission was based on the fact that fermentation industries were included in the Schedule of the IDR Act and hence the State was denuded of its power to licence and regulate manufacture of liquor. Entry 26 reads Fermentation Industries; (1) Alcohol, (2) other products of fermentation industries . It was argued that after the amendment the control and regulation of such industries and their product fell within the exclusive province of the Union and hence the State lost its competence to grant, refuse or renew the licences. After an analysis of all the relevant provisions of the law the Court concluded as under: (W)e must first carve out the respective fields of Entry 24 and Entry 8 in List II. Entry 24 is a general entry relating to industries whereas Entry 8 is a specific and special entry relating inter alia to industries engaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his point, it is necessary to consider what exactly is the denotation of the word income used in the relevant Entry. It is hardly necessary to emphasise that the entries in the Lists cannot be read in a narrow or restricted sense, and as observed by Gwyer, C.J. in United Provinces v. Atica Begum [(1940) FCR 110] each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it . What the entries in the List purport to do is to confer legislative powers on the respective Legislatures in respect of areas or fields covered by the said entries; and it is an elementary rule of construction that the widest possible construction must be put upon their words. This doctrine does not, however, mean that Parliament can choose to tax as income an item which in no rational sense can be regarded as a citizen's income. The item taxed should rationally be capable of being considered as the income of a citizen. But in considering the question as to whether a particular item in the hands of a citizen can be regarded as his income or not, it would be inappropriate to apply the tests traditionally prescribed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or , for human consumption. Only the third category of industrial alcohol namely, Ethyl Alcohol or Ethanol is capable of use to manufacture intoxicating liquor or potable liquor. 51. Also, as accepted in that decision, in its concentrated form, Ethanol is also known as Rectified Spirit. Such Rectified Spirit upon redistillation, fractional distillation etc., whereby impurities are removed, is rendered purer in content. It then, comes to be described as ENA. Insofar as intoxicating liquor is concerned, the Supreme Court clearly observed, it is only by addition and mixing of colouring and flavouring agents (compounding) as well as after dilution with water, ENA is left to mature and is bottled. Thereafter, the intoxicating liquor comes into existence whether known as Indian Made Foreign Liquor (IMFL) or country liquor, by whatever name called. 52. What emerges from the above is, whether IMFL or country liquor or any other liquor that may qualify as alcoholic liquor for human consumption , it uses ENA as a raw material. ENA, in turn, is derived from Rectified Spirit. At the same time, alcoholic liquor for human consumption would not arise either if ENA is left to mature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , under Entry 54 of List II of the Seventh Schedule, to the Constitution of India. There is absolutely no room or licence to give a different meaning to that phrase, as claimed by the learned AAG. 55. Rectified Spirit, Ethanol or Extra Neutral Alcohol (ENA) having been opined by the Constitution bench of the Supreme Court (followed, explained and applied in its later pronouncements), to be not alcoholic liquor for human consumption and, since there is no material whatsoever to take a contrary view on facts, it must be emphatically concluded, ENA continues to fall outside the phrase alcoholic liquor for human consumption , as it appears under Entry 54 of List II of the Seventh Schedule, to the Constitution of India. 56. We may also recognize, at present the dispute has arisen, not in the context of pre-existing laws but in the context of change of laws arising from the 101st Constitution Amendment. In the first place, by virtue of Article 246A (1) introduced to the Constitution of India, the Parliament and then, subject to Clause (2), the State legislatures have the competence to make laws with respect to goods and service tax. By virtue of Article 366 (12A), the phrase ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o impose duties of excise and to tax sales of alcoholic liquors not-for human consumption, at the high altar of the 101st Constitution Amendment, enacted to consecrate the GST laws. The express intent of that Constitutional change appears to be one to tax all alcohols except alcoholic liquor for human consumption , under the GST regime, only. Thus, alcoholic liquor not for human consumption or industrial alcohol or non-potable alcohol, is subject to GST laws, only. That Constitutional intent was unequivocally recognized by the State legislature. It resonates in perfect harmony, through the instrument of incorporation of Section 174(1)(i) to the UPGST Act 2017. For ready reference, that provision of law reads as below: (1) Save as otherwise provided in this Act, on and from the date of Commencement of this Act. (i) The Uttar Pradesh Value Added Tax Act- 2008, except in respect of goods included in the Entry 54 of the State List of the Seventh Schedule to the Constitution. 61. Since the State legislature did not attempt to save the UPVAT Act - to tax alcoholic liquor not for human consumption, two direct consequences arise. First, a consequence arises of recognit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to use it a specified way), may never qualify as a tax on the sale of the goods. It may transform into another kind of tax. Third, in any case, the use to which ENA may be put may be relevant to the legislature to determine the measure or the rate of tax to be suffered by it, but not to the identity of the taxable commodity. That may be established based on its form, shape, and commercial identity, by the people who deal in it. Since ENA is not a 'non-GST' alcohol, the question of measure or rate of tax thereon (based on its use), is extraneous to the issue at hand. 64. What then survives for our consideration is, whether the State may ever be able to defend a taxation law or whether the State may ever be able to enact a taxation law, referable to Entry 8 of List II of the Seventh Schedule, to the Constitution of India, to impose tax on sale. The UPVAT Act, 2017 was not a law enacted with reference to Entry 8 of List II of the Seventh Schedule, to the Constitution of India rather, it was a law referable only to Entry 54 of List II of the Seventh Schedule, to the Constitution of India, as it then existed. 65. Even if, in the context of the challenge raised, the answer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the phrase that is to say suffixed to the words iron and steel in the then existing Clause (iv) of Section 14 of the Central Sales Tax Act, 1956, was interpreted as below: 7. What we have inferred above also appears to us to be the significance and effect of the use of words that is to say in accordance with their normal connotation and effect. Thus, in Stroud's Judicial Dictionary, 4th Edn. Vol. 5, at p. 2753, we find: That is to say.-(1) That is to say is the commencement of an ancillary clause which explains the meaning of the principal clause. It has the following properties: (1) it must not be contrary to the principal clause; (2) it must neither increase nor diminish it; (3) but where the principal clause is general in terms it may restrict it; see this explained with many examples, Stukeley v. Butler Hob, 1971. The quotation, given above, from Stroud's Judicial Dictionary shows that, ordinarily, the expression that is to say is employed to make clear and fix the meaning of what is to be explained or defined. Such words are not used, as a rule, to amplify a meaning while removing a possible doubt for which purpose the wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Distillery (supra) and Deccan Sugar Abkari Co. Ltd. (supra) and the other decisions of that Court. Therefore, the other decisions may be read, only in the context of the specific disputes involved therein. In Shree Baidyanath Ayurved Bhawan (P) Ltd. Ors. (supra), the dispute was with respect to licence, regulation, use and possession of alcoholic preparation. In Bihar Distilleries, the dispute was with respect to cancellation of licence. In VAM Organic (supra), what was saved was the power to enact regulatory laws. 70. Even otherwise, once the law stood clarified by the larger/3-judge Bench decision of the Supreme Court in State of U.P. Vs. Modi Distillery (supra), there survived no legislative competence to the State legislature to enact a law, referable to Entry 8 of List II of the Seventh Schedule, to the Constitution of India, to impose tax on any intoxicating liquors, with reference to Entry 8 of that List. Therefore, the submission advanced by the learned AAG to the contrary, cannot be accepted. That expansive reasoning is impermissible under the existing Constitutional scheme. 71. The Constitution bench decision of the Supreme Court in Navnit Lal C Javeri (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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