Judgement

CHINNAPPA REDDY, J.:- The primary question involved in those appeals and petitions is whether under the Excise Law prevailing in the State of Andhra Pradesh. the Government is entitled to claim from the Excise Contractors who have failed to lift the Minimum Guaranteed Quantity of liquor the amount said to represent the excise duty component in the issue price of liquor relating to such unlifted quantity of liquor. A Full Bench of three judges of the High Court of Andhra Pradesh, in V. Narasimha Rao v. Superintendent of Excise AIR 1974 Andh Pra 157, held that the Government could but this view was overruled by a Full Bench of Five Judges of the same High Court in Atluri Brahmanandam v. Tahsildar of Gannavaram AIR 1977 Andh Pra 196 where it was held that the Government could not. It is the judgment of the Full Bench of Five Judges which is in question in the appeals and petitions filed by the Government. With a view to cure the defects pointed out by the Full Bench of Five Judges and to validate the demands raised by the Government, the Andhra Pradesh Legislature enacted the Andhra Pradesh Excise Amendment Act X of 1984. Demands raised pursuant to the Amending Act were upheld by the High Court by a latter judgment. The aggrieved Excise Contractors have filed appeals and they are also before us. In some cases the contractors who had originally succeeded because of the decision of the Five Judge Full Bench were again called upon to make good the deficit after the Amending Act was passed. They questioned the fresh demands but failed in the High Court. Their petitions for Special Leave to Appeal are also before us.

2. Entry 51 of List II of the seventh schedule to the Constitution empowers the State to levy duties of excise on alcoholic liquors for human consumption (not including medicinal and toilet preparations containing alcohol) manufactured or produced in the State and countervailing duties on such alcoholic liquors manufactured or produced elsewhere in India. An excise duty levied by the State on alcoholic liquors is, therefore, primarily a duty on the manufacture or production of such alcoholic liquors. Section 2(10). Andhra Pradesh Excise Act, 1968 defines "Excise Duty" or "Countervailing duty" to mean "the duty of excise or countervailing duty, as the case may be mentioned in entry 51 in List II of the Seventh Schedule to the Constitution." Excise -Revenue is defined by S. 2(12) to mean Revenue derived or derivable from any duty, fee, tax, rent, fine, penalty or confiscation levied, imposed or ordered under the provisions of this Act or other law for time being in force relating to intoxicating drugs. Section 17 of the Act, before and after the amendment was and is as follows:

"Section 17 before amendment Section 17 as amended by Act No. 10 of 1984

Power to grant lease : Section 17 : Grant of exclusive privilege of manufacture etc. :

(i) The Government may, subject to such conditions as they may deem fit to impose, grant for a fixed period to any person, at any place a lease jointly or severally for the supply, manufacture or sale of any intoxicant. (1) Subject to the provisions of S. 28 and any rules made in this behalf the Govt. may, subject to such conditions as they may deem fit to impose, grant for a fixed period to any person at any place a lease or licence, or both either jointly or severally for the exclusive privilege -

Explanation : A lease shall not take effect until the collector or any other competent officer has issued a licence under this Act. (i) of manufacturing or of supplying by wholesale or of both, or

(ii) or selling by wholesale or by retail, or

(iii) of manufacturing or of supplying by wholesale, or of both, and of Selling by retail. any liquor or other intoxicant within any such area in the State as may be specified in the said order.

(2) The Government may confer on any officer the power mentioned in sub-s. (1). Explan