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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R.M.CHHAYA, BIREN VAISHNAV, JJ.
GUJARAT ALCOHOL BASED IND DEVLOP ASSO (GABIDA) & others - Appellant
Versus
STATE OF GUJARAT - Respondent
LETTERS PATENT APPEAL NO. 2022 of 2010 in SPECIAL CIVIL APPLICATION NO. 1837 of 2000
Decided On : 24-12-2021
Constitution of India, 1950 - Article 19(l)(g) - Bombay Prohibition Act,1949 - Section 107, 143(2)(u), 105, 106, 2(10), 10(a), 2(22), 2(24), 2(26), 17 - Gujarat Prohibition Act, 1949 - Section 107, 139, 143, 143(h1), h1iii - Excise duties on any alcohol liquor for human consumption, any intoxicating drug or any or excisable article - Manner and method of levying excise duties - General powers of State Government in respect of licences, etc – Whether a particular enactment is within purview of one legislature or other, it is pith and substance of legislation in question that has to be seen - Whether restriction placed by impugned amendment is in interests of general public and can be considered reasonable - Whether restrictions are permissible only in relation to alcoholic liquors directly or can be extended to such articles which are not intoxicating by themselves but which have potentiality to defeat the policy - Whether that particular brand of liquor has been tested and tried extensively elsewhere and has found its acceptability in other States - Held, Court is of view that what is done by the respondent – State is merely an enhancement of fees, looking to changed circumstances - Original levy of fees was not challenged either by petitioner or by anyone else - Prior to 1996 there was no increase in fees since 1986-87 - Enhancement in fees was made after considering enhancement of salary and allowances of staff as well as increase of stationary charges - Amendments in rules made are regulatory in nature - It is also necessary to take note of fact that for purpose of implementation of prohibition policy in State, huge administrative expenses are to be incurred - State is giving due importance to constitutional spirit as contained in Article-47 of Constitution of India - By adopting this prohibition policy the State has to forgo its excise income running into crores of rupees and hence any comparison between State having prohibition policy and the State where there is no prohibition is absolutely illogical and impracticable - Fees which are charged by amending rules are regulatory in nature to control and supervise execution and enforcement of various provisions of rules - A dispute was raised by petitioners that there is no quid-pro-quo while enhancing fees and there is no reasonable relationship between levy of fees and service rendered by State - Considering various efforts made by State for purpose of regulating and implementing prohibition policy including modernization, computerization and providing training, creating website etc., maintaining vigilance staff, propaganda staff, incurring capital expenditure for purchase of vehicles, office furniture, constructing excise Bhavan, it cannot be said that increase in fees is not justified - Turnover and profit of manufacturers and sellers is one of factors and not sole factor as contended on behalf of petitioners - It is necessary to have proper check and balance so that unscrupulous manufacturer or trader may not misuse license or permit issued for specific purpose and convert an industrial alcohol into potable alcohol, as process for such conversion is so thin that unless there is close scrutiny and constant watch on their activities it is difficult to plug such illegal or unauthorized activities - Considering sensitive nature of intoxicants and avowed object behind enhancement of fees, Court does not find any substance in challenge to amendment in rules and especially when it is already implemented for last more than one decade - Appeal and same deserves to be dismissed.
JUDGMENT :
BIREN VAISHNAV, J.
1. This Appeal under Clause 15 of the Letters Patent arises out of CAV Judgment of the learned Single Judge dated 14.06.2010 passed in Special Civil Application No.1837 of 2000, whereby, the learned Single Judge dismissed the Petition of the Appellants - Petitioners herein. (hereinafter the Appellants for the sake of convenience shall be referred to as the “Petitioners”)
2. The Petitioners, Gujarat Alcohol Based Industries Development Association approached this Court in a petition under Article 226 of the Constitution of India for the following prayer:
3. The facts in brief are as under:
3.2 The challenge is to the various notifications issued by the Respondent State in exercise of powers under Section 107 read with Section 143(2)(u) of the Bombay Prohibition Act,1949 (hereinafter referred to as “Prohibition Act” for short). The appellants have challenged the following 4 amended Rules notified by the State of Gujarat under the provisions of the Bombay Prohibition Act, 1949 which read as under:
“a. Bombay Denatured Spirit (Gujarat Amendment) Rules, 1999.
b. Bombay Rectified Spirit (Gujarat Amendment) Rules, 1999.
c. Gujarat Industrial Alcohol (Import Storage and Sell for export overseas in Bond) Amendment Rules, 1999. d. Gujarat Denatured Spirituous Preparation (Amendment) Rules, 1999.”
3.3 The case of the Petitioners is that by issuing these amended Notifications there has been an increase in the levy of fees which is a substantial burden on the Industry and the Notifications so issued are without any authority of law.
4. Ms. Dharmishta Raval, learned advocate has appeared for the appellants and Ms. Manisha Lavkumar Shah, learned Government Pleader assisted by Ms. Aishwarya Gupta, learned Assis- tant Government Pleader has appeared for the Respondent- State.
5. Written submissions have been filed by Ms. Dharmishta Raval, learned counsel for the appellants. Her submissions are as under:
5.2 Industrial Alcohol is not Alcoholic Liquor for human consumption.
5.3 The learned Single Judge has erred in concluding that Alcoholic Liquids include all preparation made from Alcohol whether denatured or not and that expression “intoxicating liquor” would include “denatured alcohol” also.
5.4 The decisions in case of State of Bombay & Anr. v. F.N. Balsara reported in AIR 1951 SC 318. and Har Shankar v. Deputy Excise and Taxation Commissioner reported in AIR 1975 SC 1121 which dealt with potable alcohol have been implicitly overruled by the Hon’ble Supreme Court in the case of Synthetics and Chemicals and others v. State of UP and others reported in 1990 (1) SCC 109 and Mohan Meakin Limited v. State of Himachal Pradesh reported in 2009 (3) SCC 157.
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