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1997 Supreme(AP) 921
Andhra Pradesh High Court
Judges : V.BHASKARA RAO, V.RAJAGOPALA REDDY
Excise Superintendent vide his proceedings - Appellant
Versus
Commissioner of Excise, Government Of A.P.Hyd - Respondent
Decided On : 09-18-97
The provisions of the A. P. Excise Act, 1968, empowering the authorities to compound offences and release seized property on payment of its value, are not arbitrary or discriminatory and do not violate Article 14 of the Constitution.
Headnote:
EXCISE - COMPOUNDING OF OFFENCES - SECTIONS 45, 46, 47, 47A OF THE A. P. EXCISE ACT, 1968 - SCOPE AND INTERPRETATION - POWER OF COMMISSIONER TO COMPOUND OFFENCES AND DIRECT RELEASE OF DUTY PAID STOCKS ON PAYMENT OF VALUE - REASONABLENESS AND LEGALITY - CONSTITUTIONALITY - ARTICLES 14 AND 19(1)(G) OF THE CONSTITUTION OF INDIA.
Fact of the Case:
The petitioners, liquor licensees, challenged the orders of the Commissioner of Excise directing them to pay compounding fees, the value of seized stocks, and sales tax for the release of seized stocks. They contended that the direction to pay the value of seized duty-paid stocks was arbitrary and illegal, that the fixation of a uniform compounding fee of Rs. 15,000 was arbitrary, illegal, and discriminatory, and that no notice was issued to the owners of the stocks seized from the transporter before imposing the compounding fee.
Finding of the Court:
The court held that the provisions of Sections 45 to 47a of the A. P. Excise Act, 1968, empowering the authorities to compound offences and release seized property on payment of its value, were not arbitrary or discriminatory and did not violate Article 14 of the Constitution. The court further held that the power of the Commissioner to direct the release of duty-paid stocks on payment of their value was not arbitrary or unreasonable and was intended to prevent illegal sales of intoxicants and evasion of duty. The court also held that the levy of a compounding fee of Rs. 15,000 in cases where the value of the non-duty-paid liquor was less was not arbitrary or discriminatory and did not violate Articles 14 and 19(1)(g) of the Constitution.
Issues: 1. Whether the direction of the Commissioner of Excise for payment of the value of seized duty-paid stocks for getting them released was arbitrary and illegal? 2. Whether the fixation of compounding fee by the Commissioner of Excise at a uniform rate of Rs. 15,000.00 in all the cases irrespective of the quantity of the non-duty paid stocks was arbitrary, illegal, and discriminatory? 3. Whether no notice was issued to the owners of the stocks, where stocks were seized from the transporter, before imposing compounding fee?
Ratio Decidendi: 1. The provisions of Sections 45 to 47a of the A. P. Excise Act, 1968, empowering the authorities to compound offences and release seized property on payment of its value, were not arbitrary or discriminatory and did not violate Article 14 of the Constitution. 2. The power of the Commissioner to direct the release of duty-paid stocks on payment of their value was not arbitrary or unreasonable and was intended to prevent illegal sales of intoxicants and evasion of duty. 3. The levy of a compounding fee of Rs. 15,000 in cases where the value of the non-duty-paid liquor was less was not arbitrary or discriminatory and did not violate Articles 14 and 19(1)(g) of the Constitution.
Final Decision: The writ petitions were dismissed without costs.
( 1 ) THIS batch of writ petitions is filed questioning the order passed by the Commissioner of Excise, Government of Andhra Pradesh, Hyderabad to the extent they direct the licensees-petitioners to pay the compounding fees and the value of the stocks seized and sales tax for the purpose of release of stocks. The impugned orders were passed on the applications made by the petitioners under Section 47a of the A. P. Excise Act, 1968, for short the Act , for compounding the offences registered against them. Since the question of law involved in all the writ petitions being one and the same, they arc being disposed of by this common order.
( 2 ) WE will take up the facts of Writ Petition No. 4671 of 1992 for the purpose of deciding the issue.
( 3 ) IN that case, F. L. 24 licence was granted to the petitioner to conduct business in excisable articles and he has been doing so in the name and style of M/s. Amrutawines. The Excise authorities have inspected the shop of the petitioner and found certain quantity of non-duty paid liquor in his possession and seized the same. Then the authorities have issued show cause notice to the petitioner, who submitted his explanation. Ultimately, the licence of the petitioner was cancelled by the Excise Superintendent vide his proceedings dated 10-10-1991. Aggrieved by that order, the petitioner filed an appeal before the Commissioner of Excise, the first respondent. The petitioner also field an application under Section 47a of the Act to compound the offence. The first respondent compounded the offence directing the petitioner to pay a fee of Rs. 15,000. 00 and the value of the seized stock and the sales-tax for their release.
( 4 ) THE contentions raised on behalf of the petitioners are that the direction of the Commissioner of Excise for payment of value of the seized duty-paid stocks for getting them released is arbitrary and illegal, that fixation of compounding fee by the Commissioner of Excise at a uniform rate of Rs. 15,000. 00 in all the cases irrespective of the quantity of the non-duty paid stocks is arbitrary, illegal and discriminatory and that no notice was issued to the owners of the stocks, where stocks is seized from the transporter, before imposing compounding fee.
( 5 ) THE Government Pleader contended that Sections 45, 46 and 47 of the Act provide for compounding of offences and Section 47a empowers the Commissioner of Excise to fix compounding fee and order release of property seized on payment of its value and that the provisions are incorporated in the Act so as to curb the illegal sale of non-duty paid excisable articles and avoid loss of public money and also to check the violation of conditions of licence.
( 6 ) TO appreciate the above contentions, it is relevant to refer to the Statement of Object and Reasons of the Act, which reads : "at present the Andhra Pradesh (Telangana Area) Akbari Act, 1316f. (Act 1 of 1316f) and the Andhra Pradesh (Telangana Area) Intoxicating Drugs Act, 1333f. (Act IVof 1333f) are in force in the Tclangana Area of the State. The Andhra Pradesh (Andhra Area) Akbari Act, 1886, has ceased to be in force - in the Andhra Area by virtue of Section 2 of the Andhra Pradesh (Andhra Area) Prohibition Act, 1937. However, in case the State Government declares by notification under the proviso to Section 2 of the Andhra Pradesh (Andhra Area) Prohibition Act, 1937 that the provisions of the Act other than Sections 1, 3 and 6 shall cease to be in force in any local area on any particular date, the Andhra Pradesh (Andhra Area) Akbari Act, 1886, will revive and come into force in that local area from the said date. It will thus be seen that on the statute book there are in the two areas of the State two sets of laws relating to the production, manufacture, possession, transport, purchase and sale of intoxicating liquors and drugs and the levy of duties of excise and countervailing duties on alcoholic liquors for human consumption. Indian hemp
