9911796707
TMI Blog2021 (10) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... a, learned Senior Advocate, assisted by Shri Nishant Mishra, learned counsel for the petitioner in Writ Tax Nos. 378 of 2021 and 383 of 2021; Shri Nishant Mishra in Writ Tax Nos. 369 of 2021, 370 of 2021, 371 of 2021 and 385 of 2021; Shri Rahul Agarwal, learned counsel for the petitioner in Writ Tax No. 355 of 2020; Shri Pawan Shri Agarwal, learned counsel for the petitioner in Writ Tax Nos. 364 of 2021 and 451 of 2021; Shri Manish Goel, learned Additional Advocate General assisted by Shri Apurva Hajela and Shri A.C. Tripathi, learned Standing Counsel, for the State. 2. In Writ Tax No. 378 of 2021, the petitioner has sought relief in the nature of a declaration that the State legislature (of Uttar Pradesh) lost its legislative competence to impose or levy tax on sale of Extra Neutral Alcohol (in short, 'ENA'), after enactment of the 101st Constitution Amendment, with effect from 01.07.2017 - as a direct consequence of the enactment of Article 246A read with Article 366 (12-A) of the Constitution of India, read with the substituted Entry 54 of List II of the Seventh Schedule, to the Constitution of India. Further relief has been sought, to seek quashing of the Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised to the legislative competence and Notification dated 17.12.2019 (as above), challenge has also been raised to the assessment notice dated 08.06.2021 issued under Section 28 of the UPVAT Act, for A.Y. 2019-20 and the Circular/letters dated 10.06.2021 and 11.06.2021 (as above). 7. In Writ Tax No. 364 of 2021, besides the challenge to the legislative competence (as above), challenge has also been raised to two assessment notices, both dated 11.06.2021, issued under Section 29 of the UPVAT Act and the Central Sales Tax Act, seeking to impose tax under the UPVAT Act as also the Central Sales Tax Act, for A.Y. 2017-18 (01.07.2017 to 31.03.2018) (UP & Central). 8. In Writ Tax No. 451 of 2021, besides the challenge to the legislative competence and the Notification dated 17.12.2019 (as above), challenge has also been raised to two assessment notices, both dated 07.07.2021, one issued under Section 28 of the UPVAT Act and the other under Section 9 (2) Central Sales Tax Act, for A.Y. 2019-2020. 9. Writ Tax No. 355 of 2020 has been filed by the U.P. Sugar Mills Association seeking to challenge the legislative competence of the State to levy UPVAT on sales of ENA and Rectified Spirit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se on tobacco and other goods manufactured or produced in India, except (i) alcoholic liquors for human consumption and (ii) opium, Indian hemp etc. 14. It is an admitted case between the parties, prior to the introduction of 101st Constitution Amendment, various State legislatures had made laws to impose tax on sale and to levy duties of excise on "alcoholic liquors for human consumption". Insofar as the Parliament is concerned, prior to the aforesaid amendment, it had enacted laws imposing duties of excise on manufacture of alcohol - not for human consumption, including ENA and SDS. 15. In the State of Uttar Pradesh, there pre-existed, the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939 (hereinafter referred to as the 'United Provinces Act'). Under Section 2 (aaaa) of that Act, the term 'alcohol' was defined as Ethyl Alcohol not being "alcoholic liquor for human consumption". It included, Rectified Spirit, Denatured Spirit and Absolute Alcohol. Under Section 3(c) of the said Act, there existed a provision to levy tax, at the point of first purchase of 'alcohol', at the prescribed rate. 16. With time, under Section 4(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding methyl alcohol' were substituted with the words 'excluding methyl Alcohol'. Also, the words 'manufacture or importer dealer' were substituted with the word 'dealer'. The words 'consideration fee or excise duty' were replaced by- 'consideration fee, excise duty, fees or purchase tax'. 18. It would be fruitful for our discussion to extract the unamended and amended taxation Entries of List I and List II (as amended by the 101st Constitution Amendment), as have also been extensively referred to by the learned counsel for the parties. A comparative chart showing relevant Entries before and after that amendment read as under: List II, Seventh Schedule, Constitution of India Unamended Entries of List II (State List) Entries as Amended 8. Intoxicating liquors, that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors. Same as before 51. Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India;- (a) alcoholic liquors for human consumption; (b) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect from the date recommended by the Goods and Services Tax Council. " 20. Further, Article 366 (12A) introduced simultaneously, reads thus: "366. Definitions - In this Constitution, unless the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say- (12A). "goods and services tax" means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption." 21. Consequently, the Parliament also enacted the Central GST Act, 2017. The State legislature, on its part, enacted the UPGST Act, 2017. Also, by Act No.18 of 2017, the Parliament substituted Section 2(d) of the Central Sales Tax Act, 1956. The original and the substituted texts of Section 2(d) of that Act, read as below: Unamended Section 2(d) Section 2(d) as substituted (d) "goods" includes all materials, articles, commodities and all other kinds of movable property, but does not include newspapers, actionable claims, stocks, shares and securities; (d) "goods" means - (i) petroleum crude; (ii) high speed diesel; (iii) motor spirit (commonly known as petrol); (iv) natural gas; (v) aviation tu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (also known as Rectified Spirit) i.e. industrial alcohol, was opined to be not-fit for human consumption. The range of alcohol in potable alcohol i.e. "alcoholic liquors for human consumption" was also opined to be 19% - 43%. The conclusions reached in that decision as recorded in paras 54, 86 and 88 (majority view) and para 101 (concurring view) of the report, read as below: "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 invited to the process of manufacture of alcohol in order to induce us to accept the position that denatured spirit can also be by appropriate cultivation or application or admixture with water or with others, be transformed into 'alcoholic liquor for human consumption' and as such transformation would not entail any process of manufacture as such. There will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w so far as industrial alcohol is concerned. We make it clear that this will not affect any impost so far as potable alcohol as commonly understood is concerned. It will also not affect any imposition of levy on industrial alcohol fee where there are circumstances to establish that there was quid pro quo for the fee sought to be imposed. This will not affect any regulating measure as such. 101. Under these circumstances therefore it is clear that the State legislature had no authority to levy duty or tax on alcohol which is not for human consumption as that could only be levied by the Centre." 24. Then, in State of U.P. & Ors. Vs. Modi Distillery & Ors., (1995) 5 SCC 753, an issue had arisen as to competence of the State legislature to impose duties of excise on (i) wastage of IMFL, exported outside the State, (ii) wastage of high strength spirit, during transportation from the distillery to warehouse and (iii) obscuration. Upon consideration of the State's submission in that regard, it was held as below: "10. What the State seeks to levy excise duty upon in the Group 'B' cases is the wastage of liquor after distillation, but before dilution; and, in the Group 'D' cases, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icating" signifies "for human consumption". Entry 8, it is necessary to emphasize, places all aspects of intoxicating liquors within the State's sphere; production, manufacture, possession, transport, purchase and sale of intoxicating liquors is placed within the exclusive domain of the States. Entry 6, which inter alia speaks of "public health" is relevant only for the reason that it furnishes a ground for prohibiting consumption of intoxicating liquors. Coming to Entry 33 in List III, the language of clause (a) thereof is significant. Even though control of certain industries may have been taken over by the Union by virtue of a declaration made by Parliament in terms of Entry 52 in List I, yet the "trade, commerce in, and the production, supply and distribution of the products" of such industry is placed in the concurrent field, which in the present context means that though the control of alcohol industry is taken over by the Union, trade, commerce in and the production, supply and distribution of the products of alcohol industry can be regulated both by the Union and the States subject, of course, to Article 254. It also means, as will be explained later, that insofar as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in respect of the industries engaged in the manufacture or production of potable liquors, the control is vested in the Union by virtue of Item 26 of the First Schedule to the IDR Act. In view of the express language of Entry 8 - as has been clearly explained in McDowell [(1996) 3 SCC 709] - so far as potable liquors are concerned, their manufacture, production, possession, transport, purchase and sale is within the exclusive domain of the States and the Union of India has no say in the matter. For a similar clarification with respect to the power of the State to levy sales tax on industrial alcohol, reference may be had to State of U.P. v. Synthetics and Chemicals Ltd. [(1991) 4 SCC 139]." 26. That decision sought to recognize the competence of the State legislatures, to levy duties of excise on Rectified Spirit, if used to manufacture potable alcohol. Later, the correctness of that view was doubted by another two-Judge bench of the Supreme Court in Deccan Sugar & Abkari Co. Ltd. Vs. Commissioner of Excise, A.P., (1998) 3 SCC 272. Upon that reference made, a three-Judge bench of the Supreme Court, in Deccan Sugar & Abkari Co. Ltd. Vs. Commissioner of Excise, A.P., and connected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coming into force of the IDR Act on 8-5-1952 the State Legislatures are constitutionally incompetent to levy any tax on industrial alcohol. 23. The principle was succinctly reiterated in State of U.P. v. Modi Distillery[(1995) 5 SCC 753] where it was said that the State's power to levy excise duty was limited to alcoholic liquor for human consumption and that the framers of the Constitution, when they used the expression "alcohol liquors for human consumption", meant, and the expression still means, that liquor which, as it is, is consumable in the sense that it is capable of being taken by human beings as such as a beverage or drink. ... Dictionaries and technical books showed that rectified spirit (95 per cent) was an industrial alcohol and not potable as such. ... Therefore even if ethyl alcohol (95 per cent) could be used as a raw material or input, after processing and substantial dilution, in the production of whisky, gin, country liquor etc. nevertheless, it was not "intoxicating liquor" which expression meant only that liquor which was consumable by human beings as it was. (emphasis supplied) Thus the State cannot legislate on industrial alcohol despite the fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng it in the form of IMFL, a new produce. The last part of the rule stipulates the quantum of charges to be levied on such utilised imported rectified spirit for production of the foreign liquor. For that limited purpose, the quantity of imported rectified spirit utilised in the production of potable liquor, is reckoned." 30. Then, relying on the decision of the Supreme Court in Synthetics and Chemicals Limited (supra) and another Constitution bench decision of the Supreme Court in M.P.V. Sundararamier & Co. Vs. State of A.P. & Ors., AIR 1958 SC 468 as also the decision of the Supreme Court in State of Mysore & Ors. Vs. D. Cawasji & Company & Ors., (1970) 3 SCC 710, it has been submitted, the legislative competence to enact a law imposing tax, cannot be derived from a general entry, falling under either of the three Lists of the Seventh Schedule, to the Constitution of India. Such competence must be derived under a specific taxing entry alone. Therefore, according to learned senior counsel for the petitioner, there is no applicability of Entry 8 of List II of the Seventh Schedule, to the Constitution and that general Entry cannot be referred to or relied upon to enact a law to imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Article 366 (12A) of the Constitution of India, it has been further submitted, insofar as taxes on supply of goods/commodities are concerned, upon the 101st Constitution amendment, besides "alcoholic liquor for human consumption", all other goods or commodities may remain under the GST regime. Therefore, in any case, UPVAT may never be imposed on ENA as it is alcohol not-for human consumption, and therefore necessarily included under the GST regime. That intent of the Constitution of India was acknowledged and statutorily incorporated, by virtue of Section 174(1)(i) of the UPGST Act. It repealed UPVAT Act, 2008 except with respect to laws-to tax goods included under Entry 54 of List II of the Seventh Schedule, to the Constitution of India i.e., with respect to the six commodities (including alcoholic liquor for human consumption), specified under that legislative entry. 35. Thus, of all alcohols, only "alcoholic liquor for human consumption" may be subjected to UPVAT. Correspondingly, the Parliament has substituted Section 2(d) of the Central Sales Tax Act, 1956 to include "alcoholic liquor for human consumption", in the definition of 'goods' but it has purposely lef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ohol can generally be classified into the following categories: "I. Isopropyl alcohol (or IPA or isopropanol) is a compound with the chemical formula CH3CHOHCH3. It is a colourless, flammable chemical compound with a strong odour. As an isopropyl group linked to a hydroxyl group, it is the simplest example of a secondary alcohol, where the alcohol carbon atom is attached to two other carbon atoms. If consumed, isopropanol is converted into acetone in the liver, which makes it extremely toxic. Often used for disinfecting skin an antiseptic. II. Methyl Alcohol (or Methanol): Chemical formula - CH3OH: Not for human consumption. If consumed, can cause blindness and death. Methanol acquired the name wood alcohol because it was once produced chiefly by the destructive distillation of wood. Today, methanol is mainly produced industrially by hydrogenation of carbon monoxide. III. Ethyl alcohol, (also known as Ethanol and abbreviated as EtOH), is a colourless, volatile, and flammable liquid that is soluble in water. Its chemical formula is C2H6O, or can be written as C2H5OH or CH3CH2OH. It has one methyl (-CH3) group, one methylene (-CH2-) group, and one hydroxyl (-OH-) group." The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her processes including addition and mixing of colouring and flavouring agents (compounding), as well as dilution with water must be applied. The concoction is then left for maturation, to be bottled and used as an 'intoxicating liquor' or 'potable liquor' known as Indian Made Foreign Liquor (IMFL) etc. All throughout, such processes, the chemical composition of Ethyl alcohol or Ethanol remains the same, yet ENA as such can never be called or classified as "alcoholic liquor for human consumption". 39. Shri Pawan Shree Agarwal learned counsel for some of the other petitioners has adopted the submissions advanced by Shri Sinha and Shri Rahul Agarwal. He further emphasized, by virtue of Section 174 (1)(i) of the UPGST Act, 2017, the UPVAT Act, 2008 was repealed in toto, except with respect to the goods specified under Entry 54 of List II of the Seventh Schedule, to the Constitution of India. That legislative field, became limited (for our discussion) to the commodity "alcoholic liquor for human consumption" upon enactment of the 101st Constitution amendment. Therefore, besides the general legislative incompetence arising upon the amendments made to the Constitution of India, there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the UPVAT Act. He would submit, prior to issuance of the impugned Notification dated 17.12.2019, the commodity ENA suffered UPVAT at the rate of 32.5 percent. However, by virtue of the impugned Notification and introduction of the new entry 1-A, to Schedule IV to the UPVAT Act, the said commodity became taxable at a lower rate of tax, being 5 percent, with effect from 09.12.2019. Thus, the State Government has reduced the rate of tax on ENA. Hence, there can be no quarrel to the same. As to the identity of ENA, the learned AAG has also referred in extenso, to the discussion made by the Supreme Court in State of Jharkhand & Ors. Vs. Ajanta Bottlers and Blenders Private Ltd. (supra). He would, however, contend, it does not lead to the conclusion - ENA falls outside the competence of the State legislature to impose tax on its sale. Here, he would rely on another three-Judge bench decision of the Supreme Court in State of Bihar & Ors. Vs. Shree Baidyanath Ayurved Bhawan (P) Ltd. & Ors., (2005) 2 SCC 762. In that case, a question had arisen, to the legislative competence of the State legislature to redefine the word 'intoxicant' appearing in Section 2(12-a) of the Bihar and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icating liquor or alcoholic liquor for human consumption. Hence, so long as alcoholic preparation can be diverted to human consumption, the States shall have the power to legislate as also to impose taxes on such diversion. This is also the ratio of the judgment of this Court in the case of Vam Organic Chemicals Ltd. v. State of U.P. [(1997) 2 SCC 715]." 43. Placing heavy reliance on the aforesaid law laid down by the Supreme Court, it has been submitted, Entry 8 of List II of the Seventh Schedule, to the Constitution of India is wide enough to take within its amplitude and cover, any law to impose tax on sale of ENA if that intoxicating liquor may be diverted to human consumption. 44. To clarify his submission further, the learned AAG would insist, ENA is not Rectified Spirit but only an 'intoxicating liquor'. Intoxicating liquor includes both "alcoholic liquor for human consumption" and alcoholic liquor not for human consumption. Therefore, the State legislature has the legislative competence to enact laws under Entry 8 of List II of the Seventh Schedule, to the Constitution of India with respect to 'intoxicating liquor'. There is no warrant to limit or restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on quid pro quo. See in this connection, the observations of Indian Mica case [Indian Mica Micanite Industries v. State of Bihar, (1971) 2 SCC 236] ." Denaturation of spirit meant for industrial use is meant to prevent misuse of non-potable alcohol for human consumption and as such specifically mentioned by the Court to be within the legislative competence of the State." 46. Reference has also been made to paragraphs 14 and 17 of the said report, which read as under: "14. It is to be noticed that the States under Entries 8 and 51 of List II read with Entry 84 of List I have exclusive privilege to legislate on intoxicating liquor or alcoholic liquor for human consumption. Hence, so long as any alcoholic preparation can be diverted to human consumption, the States shall have the power to legislate as also to impose taxes etc. In this view, denaturation of spirit is not only an obligation on the States but also within the competence of the States to enforce. 17. M/s McDowell & Co., manufacturers of intoxicating liquors challenged the constitutional validity of the Act by which the Prohibition Act was amended to include Section 7-A. One of the grounds of challenge was lack ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Legislatures. Item 26 in the First Schedule to the IDR Act must be read subject to Entry 8 - and for that matter, Entry 6 - in List II. So read, the said item does not and cannot deal with manufacture, production of intoxicating liquors. All the petitioners before us are engaged in the manufacture of intoxicating liquors. The State Legislature is, therefore, perfectly competent to make a law prohibiting their manufacture and production - in addition to their sale, consumption, possession and transport - with reference to Entries 8 and 6 in List II of the Seventh Schedule to the Constitution read with Article 47 thereof." 47. Last, reference has been made to a Constitution Bench decision of the Supreme Court in Navnit Lal C Javeri Vs. K.K. Sen, Appellate Assistant Commissioner of Income Tax, Bombay, AIR 1965 SC 1375. In that case, it had been submitted before a five-Judge Constitution Bench of the Supreme Court, Entry 82 of List I of the Seventh Schedule, to the Constitution of India, deals with taxes on income other than agricultural income. In that context, it was observed as under: "8. In dealing with this point, it is necessary to consider what exactly is the denotation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 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. 50. Having thus categorized the three types of industrial alcohols, the Supreme Court further observed, the first two categories i.e., Isopropyl and Methyl Alcohol are poisonous, toxic, and fatal for human consumption. Therefore, they are capable of industrial use only. Further, owing to their inherent chemical properties, those two categories of alcohol cannot be purified or used to produce any "intoxicating liquor" or "potable liquor", for human consumption. Only the third category of industrial alcohol name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the sense capable of being taken by human beings as such as beverage of drinks. ..." 54. Though that law emerged in the context of Entry 84 of List I of the Seventh Schedule, to the Constitution of India (with reference to imposition of duties of excise) yet, it clearly interprets the term "alcoholic liquor for human consumption", as it now appears under Entry 54 of List II of the Seventh Schedule, to the Constitution of India. The earlier use of the plural of the word liquor is not material. Applying that law, the Constitution bench of the Supreme Court could not be persuaded to accept, that denatured spirit, by appropriate cultivation or application or admixture with water or with other things, be transformed into an "alcoholic liquor for human consumption". It concluded, alcoholic or "intoxicant liquor" must be understood as these are, i.e., in the presenti, and not what these may become or be capable of or able to become upon application of certain processes etc. Applying that law, even today, as a commodity, ENA remains an alcohol or alcoholic liquor not for human consumption, under Entry 54 of List II of the Seventh Schedule, to the Constitution of India. There is absol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54 of List II of the Seventh Schedule, to the Constitution of India. 58. Whether by virtue of Article 366 (12-A) read with Article 246-A of the Constitution of India or the substituted Entry No. 54 of List II of the Seventh Schedule, to the Constitution of India, the nuanced distinction, between those two Constitutional provisions would have no bearing on the controversy at hand. The State legislature remains denuded of its preexisting competence to enact a law to tax sale of alcoholic liquor not for human consumption, in both contingencies. 59. To take note of all the changes thus made, correspondingly, the Parliament also amended Entry 84 of List I of the Seventh Schedule, to the Constitution of India, to limit its power to enact laws, to now impose duties of excise on only six items, in place of the pre-existing entry that included all manufactured goods, except "alcoholic liquor for human consumption" and opium, Indian hemp etc. 60. Thus, both the Parliament and the State legislatures, sacrificed their pre-existing, respective legislative competence to - enact laws to impose duties of excise and to tax sales of alcoholic liquors not-for human consumption, at the high altar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion". By virtue of the clear dictum of the Supreme Court in Synthetic and Chemicals Limited (supra), Modi Distillery (supra), VAM Organic Chemicals Ltd. (supra) and Ajanta Bottlers and Blenders Private Ltd. (supra), ENA is not fit for human consumption. Hence, for reasons noted above, it would remain a 'GST-alcohol', if such a thing exists. Second, the intended use to which a commodity may be put, and the character or identity of the commodity manufactured therefrom, would never be relevant to impose a differential rate of tax on sale of that commodity, depending upon different uses, it may be put to. For a tax to be levied on sale of a commodity, its identity in presenti alone is relevant. As a fact, there exists only one type of ENA. It may be put to different uses i.e., to manufacture either potable alcohol or chemicals or other commodities or all or any of them. By looking at any quantity of ENA, its use may never be predicted or pre-determined. To subject it to differential rates of tax under the UPVAT Act, depending solely on the intent of the purchaser (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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra). It was reiterated in Delhi Cloth and General Mills Co. Ltd. Vs. Excise Commissioner, U.P., Allahabad, 1973 All LJ 629. The principle thus laid down by the Supreme Court has been consistently applied without exception. Plainly, Entry 8 of List II of the Seventh Schedule, to the Constitution reads thus: "8. Intoxicating liquors, that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors." 68. That Entry only creates a field of legislation by State legislature to enact any law on intoxicating liquors. The words 'that is to say', restrict and confine the scope and ambit of those laws - with respect to production, manufacture, possession, transport, purchase, and sale and matters incidental or ancillary thereto. It does not grant any legislative competence to the State legislature to impose a tax on intoxicating liquors. In the oft cited decision of the four-Judge bench of the Supreme Court in State of T.N. Vs. Pyare Lal Malhotra, (1976) 1 SCC 834, the meaning 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss for a series of sales. Otherwise, the listing itself loses all meaning and would be without any purpose behind it". Similarly, the phrase "that is to say" appearing in Entry 8 of List II of the Seventh Schedule, to the Constitution of India may never be read to bestow legislative competence on the State legislatures to enact a law to tax "intoxicating liqours". That competence must remain confined to the matters specified after that phrase, appearing under that Entry or matters ancillary or incidental thereto, such as regulatory measures. 69. The ratio in the case of Shree Baidyanath Ayurved Bhawan (P) Ltd. & Ors. (supra), Bihar Distilleries (supra) and VAM Organic (supra), if read as suggested by the learned AAG, it would lead to a conflict between the seven-Judge Constitution bench decision of the Supreme Court in Synthetics and Chemicals Ltd. & Ors. Vs. State of U.P. & Ors. (supra), as explained and followed by three-Judge bench decisions of the Supreme Court in State of U.P. Vs. Modi 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
