JUDGMENT

R. M. SAHAI, J. :—The short but important question of law that arises for consideration in this appeal directed against the judgment and order of the Kerala High Court is whether the bond executed under Section 7, of the Kerala Abkari Act for deferred payment of duty on export by the manufacturers of Indian made Foreign Liquor in Form VI was a bond within meaning of Article 13 of the Kerala Stamp Act 1939 (hereinafter referred to as `the Act) or an agreement as defined in Article 5 of the Schedule of the Act.

2. The manufacture, sale and supply of Indian made Foreign Liquor in the State of Kerala is governed by the Kerala Abkari Act. Under it a distiller is permitted to export liquor manufactured by it outside the State after obtaining permission from the excise authorities. Since such liquor is consumed in another State the Government in exercise of is power under Section 17, of the Act issued notification levying confessional duty of Rs. 0.50 per proof litre. But if the quantity exported did not reach the destination or there was wastage etc. then the liability to pay normal duty arose. To ensure such payment the distiller is required to execute a bond under Clause (b) of sub-section (i) of Section 7, of the Abkari Act which reads as under:

"No liquor or intoxicating drug shall be exported unless its export is permitted by the Government or any officer authorised by the Government in this behalf and unless:-

(a) the duties, taxes, fees and such other sum as are due to the Government under this Act, in respect of such liquor or intoxicating drug, have been paid, or

(b) a bond for such payment on its exportation or re-exportation has been executed."

The terms of the agreement are entered as provided in Form VI. Relevant portion of the agreement is extracted below:

"Whereas the boundens have been permitted by the Government under the Distillery and Warehouse Rules 1968 and the amendments thereof made from time to time (hereinafter called the Rules) to remove ..... to bulk litres ..... to proof litres) of I.M.E.L. of the strength of .... degree under proof from our distillery at Varanad to .... without previous payment of duty thereon subject to the conditions that (1) the boundens shall on or before the expriation of the currency of the permit from the date hereof deliver or cause to be delivered the above mentioned ..... to bulk litres of I.M.E.L. into the custody of the Government Officer in charge of the said imported (2) the boundens shall on demand to pay or cause to be paid to the said Government Officer duty at the tarrif rate on all or any portion of the above mentioned litres of I.M.E.L. JSP which shall not be so delivered. Now the conditions of the above written obligation is that in case the boundens commit breach of all or any of the provisions herein contained or contained in the Rules the boundens shall forthwith pay to the Government the said sum of .... and upon the payment of such sum the above written obligation shall be void and of no effect, otherwise this shall or and remain in full force and effect."

3. In 1982 the Board of Revenue issued a circular that such documents executed by the distillers were being treated as agreements when in fact they were bond, therefore, the duty be levied accordingly and the short levy may be recovered from them. This circular was quashed by the High Court and the Board of Revenue was directed to decide afresh after affording opportunity of hearing to the distiller. In pursuance of this direction the Board of Revenue on 26th December 1988 decided the dispute afresh and held that since obligation in the bond was to pay a fixed sum of money to Government on condition that the condition shall be void if a specified act was not performed the document was a bond and not an agreement. This order was challenged again by the distiller in the High Court. Both the Divsion Bench and the learned single Judge held the agreement executed in Form VI could be a bond for purposes of Stamp A