The imposition of additional duty on excisable articles that have already been subjected to duty is illegal and ultra vires the Bombay Abkari Act, 1878, as there is no provision in the Act authorizing such additional duty.

Judgment

WANCHOO, J. : This is an appeal on a certificate granted by the Bombay High Court. The brief facts necessary for its disposal are these. Messrs. S. S. Miranda Limited (hereinafter called the respondent) is a company and was holding a trade and import licence of foreign liquor as well as a vendor s licence under the Bombay Abkari Act, No. V of 1878, (hereinafter called the Act), upto the end of March 1949. It used to keep the liquor in a bounded warehouse. On April 2, 1948, the respondent was informed by the State of Bombay (hereinafter called the appellant) to remove the liquor from the bounded warehouse after paying the necessary excise duty. In pursuance of this letter, the respondent paid the duty and got transport permits from the appellant. It may be mentioned that the bonded warehouse was in the premises of the respondent itself and all that happened after the payment of the duty was that the liquor no longer remained in bond but came into possession of the respondent. The transport permits were issued on April 5, 1948, and thereafter the respondent took over the liquor and some of it was sold. On December 16, 1948, a notification was issued by the appellant (hereinafter referred to as the Notification) whereby the duty on foreign liquor was doubled. Thereupon the respondent was asked by the appellant to pay the additional duty upon the liquor which was still lying in its godown and was also told that it would not be permitted to deal with that liquor until the additional duty was paid. The respondent objected to this demand but paid the duty, which came to over two lacs of rupees, under protest. Thereafter a notice was given by the respondent under S. 80 of the Code of Civil Procedure to the appellant and was followed by a suit on the original side of the Bombay High Court.

2. The main contention of the respondent was that the Notification in so far as it imposed and levied additional duty on the stock of foreign liquor on which the duty had already been paid at the time of its issue from the bonded warehouse was illegal, invalid and ultra vires the Act and in particular beyond the scope of S. 19 of the Act. The respondent therefore claimed refund of the duty which it had paid under protest and also interest at 6 per cent, per annum from the date of payment till the date of recovery.

3. The suit was resisted by the appellant, and its case was that the Notification was valid and that the respondent was bound to pay the duty prevailing on the transport of the excisable articles at the time of transporting the same from its premises to another place within the State of Bombay.

4. Thus the only question that fell for consideration was whether the additional duty imposed and levied under the Notification was legally levied. The learned Judge, who tried the suit, was of the opinion that it was competent for the legislature to impose tax on excisable articles whenever they were transported from one place to another and that that power was delegated to the State Government which was thus competent to impose a duty on excisable articles not only once when they were transported in the beginning but also thereafter whenever the were transported from one place to another within the State before the goods passed into hands of the consumer, and dismissed the suit.

5. The respondent went in appeal against the dismissal. The appeal was heard by a Division Bench and was allowed and the suit wad decreed with interest at certain rates. The Division Bench was of the opinion that reading Ss. 10 and 19 together it was clear that when the duty mentioned in S. 19 had been paid, the prohibition contained in S. 10 must disappear subject to the Explanation to S. 19. It also held that the first proviso to S. 19A of the Act was really a proviso to S. 19 and determined the rate at which the duty was to be paid and that there could be no further imposition of duty against the terms of that proviso by the Notification.

6. The main contention on beh