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IN THE HIGH COURT OF JUDICATURE AT PATNA
P. B. BAJANTHRI and ARUN KUMAR JHA, JJ.
CWJC Nos. 4882 with 4911, 5376, 5762, 7461, 7473 of 2020 and 6561 of 2021
(24.11.2023)
United Spirits Ltd. (in 4882)
Bacardi India Private Ltd. (in 4911)
Colona Blenders and Bottlers (India) Pvt. Ltd. & Ors. (in 5376)
Carlsberg India Pvt. Ltd. (in 5762)
Molson Coors Cobra India Pvt. Ltd. (in 7461, 7473)
Pernod Ricard India (P) Ltd. (in 6561)
vs.
State of Bihar & Ors. .... Respondents
(in all)
Constitution of India—Article 226—Bihar Prohibition and Excise Act, 2016—Sections 23, 92 and 93 read with Rule 73 of Bihar Value Added Tax Rules, 2005—Bihar Excise Act, 1915—Section 19 (4)—Bihar and Orissa Excise Rules, 1919—Rule 147—Bihar Value Added Tax Act, 2005—Sections 3 and 3A–Petitioners being registered companies, manufacturing various kinds of liquors, claiming refund of duties and taxes deposited for manufacture and supply of liquor and also refund of unutilized bottling and license fee and label, registration/renewal fees inter alia, on 10.12.2016–under the statutory provisions of Entry 51 of list II of Constitution of India, excise duties could be levied only in respect of alcoholic liquors for human consumption–in respect of unsold stocks, the same were not consumed by the end users–in other words, there is no sale–be that it may, such un-sold stock would be wasteful alcoholic liquors for human consumption in view of the fact that excise department authorities have destroyed the unsold stocks which were lying in the manufacture unit, goods that were in transit and goods lying with the BSBCL (Bihar State Beverage Corporation Ltd.)–reading of statutory Sections like Section 2(21), 2(22), 2(25) and Section 27 of Act, 1915, it is crystal clear that the excise duty can be levied only on sale–no doubt, excise revenue defined under Section 2(25) relates to duty, fee, tax, further excisable article imported or exported or transported and manufactured etc.– however, the same has been reflected even in Rule 147 like manufacture in distillery and stored in an excise warehouse in Rule 147(b) of 1919, Rules–under notification dated 05.04.2016, there is no break up of imposition of excise duty like manufacture in distillery and stored in distillery excise warehouse–on the other hand, in lump sum, excise duty has been levied–in fact, there is no identification of duties for labeling and bottling and other ancilliary levies–Notification dated 05.04.2016 should have been in the form of break up of levy of excise duty like manufacture in distillery, stored in distillery or excise warehouse and then sale of liquor the absence of identification of particular excise duty on manufacture in a distillery, stored in a distillery or excise warehouse and sale of liquor one cannot draw inference that there is a specific levy of excise duty at the stage of manufacture in distillery, stored in a distillery or excise warehouse and sale of liquor–the overall intention of the State is to levy excise duty on alcoholic liquors for human consumption–therefore, levy of excise of duty or any adjustment of excise duty towards destroyed liquor stocks is without authority of law–as such, levy could be only on sale of liquor for human consumption and in the present case for destroyed liquor, levy of excise duty is not permissible–writ petitions allowed–petitioners directed to file their claims before the concerned Excise Commissioner–Excise Commissioner directed to disburse the withheld excise duty. (Paras 78, 79, 82 and 88)
M/s Godrej Sara Lee Ltd. vs. Excise and Taxation Officer cum Assessing Authority, 2023 SCC OnLine SC 95; Magadh Sugar & Energy Ltd. vs. State of Bihar, 2021(4) PLJR 142 (SC); State of Orissa vs. Utkal Distilleries, (2022) 5 SCC 326—Relied.
Dhampur Sugar Mills Ltd. vs State of UP, (2007) 8 SCC 338 (Para 23); M/s Godrej Sara Lee Ltd. vs. Excise and Taxation Officer cum Assessing Authority, 2023 SCC OnLine SC 95 (Para 4); Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai, (1998) 8 SCC 1 (Para 14 and 15); Harbanslal Sahnia vs. Indian Oil Corporation Ltd., (2003) 2 SCC 107 (Para 7); Neelima Srivastava vs. State of Uttar Pradesh, 2021 SCC online SC 610 (Para Nos. 27, 32-36); Union of India vs. K. Shankarappa (2001) 1 SCC 582 (Para 7); Union of India vs. Kamlakshi Finance Corporation Ltd., 1992 Suppl. (1) SCC 648 (Para Nos. 4,6 and 7); Neelima Mishra vs. Harinder Kaur Pental, (1990) 2 SCC 746 (Para Nos. 23, 29); S.N Mukherjee vs. Union of India, (1990) 4 SCC 594 (Para Nos. 29-40) ; Union of India vs. Kamlakshi Finance Corporation Ltd.; Idea Cellular Ltd. vs. Union of India, (2015) SCC OnLine P&H 6354 (Para Nos. 14-19, 21-22); U.P. Pollution Control Board vs. Kanoria Industrial Ltd., (2001) 2 SCC 549 (Para 9, 12 & 17); Salonah Tea Company Ltd. vs. Superintendent of Taxes, Nawgong, (1998) 1 SCC 401 (Para No. 6); Siemens Ltd. vs. State of Maharastra, (2006) 12 SCC 33 (Paras 2, 8, 9 &11); Premier Printing Press vs. State of Rajasthan, SBCW No. 3677/2015 dated 23.2.2017 (Para Nos. 17, 26); Shrebatsa Mishra vs. State of Odisha, WPC No. 4881 of 2018 dated 8.2.2023 (Para 2 to 4 and 12 to 14); Bibekanad Mondal vs. State of West Bengal, (2002) SCC Online Cal. 571 (Para 2, 4- 6); Committee of Management vs. Vice Chancellor, (2009) 2 SCC 630 (Para 22, 23 & 30); State of Rajasthan vs. Rajasthan Chemists Association, (2006) 6 SCC 773 (Paras 10, 28, 44, 53); (2004) 11 SCC 26 State of Punjab vs. Devans Modern Breweries Ltd. (Para Nos. 102 & 103); (1990) 1 SCC 109 Synthetics and Chemicals Ltd. vs. State of Uttar Pradesh (Para 87); (2005) 11 SCC 1 State of Kerala vs. Maharashtra Distilleris Ltd. (Para 58 and 84); Commissioner of Income Tax vs. Chhabbil Das Agarwal, (2014) 1 SCC 603 (Para 15); Mohan Breweriess & Distileries Limited vs. Commerical Tax Officer, Madras, (1997) 7 SCC 542 (Para 6,7 and 8); Moriraku UT India (P) Ltd. vs. State of Uttar Pradesh, (2008) 4 SCC 548 (Para 15 and 23); Vidya Devi vs. Commisioner of Income Tax, SCCOnline Cal. 215 (Para 5); State of Kerala vs. MF Ltd. 2016, SCCOnline Kerala 1058 (Para 8); (1994) 6 SCC 610; Indian Cable Company vs. Kolkata (Para 12 and 13); State of Kerala vs. Maharshtra Distilleries, (2005) 11 SCC 1 (Para 3, 13, 15, 50, 58, 69, 70, 71, 83 and 84); Mahadev Carrier Pvt. Ltd. vs. State of Bihar, 2019 (3) PLJR 740 (Para 28)—Referred.
P. B. Bajanthri, J.—In these bunch of writ petitions, the petitioners have questioned the validity of various orders passed by the official-respondents like the Commissioner of Excise, Government of Bihar, Patna (for short 'Excise Commissioner'), Bihar State Beverages Corporation Limited (for short 'BSBCL'), a Joint Commissioner, State Taxes/Commercial Taxes and the Assistant Commissioner of Excise, Patna (for short 'Assistant Commissioner'). In the cases mentioned herein below; the petitioners have claimed for the refund of similar duties, the cases are:—
"(1) In CWJC 4882 of 2020, the petitioner has challenged the order dated 25.09.2019 (Annexure-1), passed by the Commissioner of Excise, Bihar, and the order dated 22.07.2019 (Annexure-2) passed by the Joint Commissioner, State Taxes/Commercial Taxes, Barh Circle and consequently, sought refund of Excise Duty (2015-16), Bottling and License Fee (2015-16 & 2016-17), License Fees under Section 19B(2015-16 & 2016-17) and 19C(2016-17) (subject levies) and Value Added Tax (In short 'VAT') for the financial year 2015-16, amounting to Rs. 4,00,00,114/- along with applicable interest from the Respondents therein. Additionally, the petitioner has challenged the order dated 22.01.2020 (Annexure-3), passed by the Assistant Commissioner of Excise, Patna, by which he has directed adjustment of the amount refundable to the petitioner from the dues of the Bihar State Beverages Corporation Ltd.
(2) In CWJC 4911 of 2020, the petitioner has challenged the order dated 25.09.2019 (Annexure-1), passed by the Commissioner of Excise, Bihar and consequently claimed for the refund of Excise Duty, Bottling and License Fee, Import Fee (Subject Levies) and Security Deposit for the year 2015-16 which amounts to a total of Rs.1,11,84,189/- by Respondents therein. Additionally, the petitioner has challenged the order dated 22.01.2020, passed by the Assistant Commissioner of Excise, Patna, by which he has directed adjustment of the amount refundable to the petitioner from the dues of the Bihar State Beverages Corporation Ltd.
(3) Further in CWJC 5376 of 2020, there are five petitioners who have challenged the order dated 25.09.2019 (Annexure-15), passed by the Commissioner of Excise, Bihar. Additionally, the petitioners have challenged the order(s), both dated 09.12.2019 (Annexure-17), passed by the Assistant Commissioner of Excise, Patna, by which he has directed adjustment of the amount refundable to the petitioner from the dues of the Bihar State Beverages Corporation Ltd.
The petitioners are claiming refund of the subject levies which are as follows:
(a) Petitioner 1 is claiming refund of Excise Duty deposited on stocks which have been drained out, exported to other states and decanted in the factory, Bottling fee on stocks which have been drained out and decanted and Distributor's license fees on stocks which have been drained out, exported to other states and decanted for the year 2015-16 amounting to Rs. Rs. 4,71,51,884.00 and Advance excise duty, advance bottling fee, advance distributor's license fee, advance label registration fee and advance license fee for 2016-17 amounting to Rs. Rs.10,54,448.00.
(b) Petitioner 2 is claiming refund of Excise Duty deposited on stocks which have been drained out, exported to other states and decanted in the factory, Bottling fee on stocks which have been drained out and decanted and Distributor's license fees on stocks which have been drained out, exported to other states and decanted for the year 2015-16 amounting to Rs. 7,32,88,572.00 and Advance excise duty, advance bottling fee, advance distributor's license fee, advance label registration fee and advance license fee for 2016-17 amounting to Rs. 53,11,969.00.
(c) Petitioner 3 is claiming refund of Excise Duty deposited on stocks which have been drained out, exported to other states and decanted in the factory, Bottling fee on stocks which have been drained out and decanted and Distributor's license fees on stocks wh
The liability to pay excise duty is contingent upon the actual import taking place, and in the absence of provision for refunds in the Act and Rules, the court can award interest on equitable grounds....
The main legal point established in the judgment is that the principle of unjust enrichment is not applicable when a deposit is made without any statutory provision, as in the absence of a provision ....
The court established that licensed manufacturers must be compensated for all supplied inventory under contractual obligations, regardless of prohibition policies affecting sale.
The State had no legislative competence to levy Excise Duty on rectified spirit not fit for human consumption, and the imposition of Excise Duty on presumptive production of liquor was ultra vires to....
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