Important Point
Abkari Act 1 of 1077 relates to or deals with methyl alcohol and its manufacture or production, transport, sale, import and possession of it-The Abkari Act has no application with regard to methyl alcohol or denatured spirit-If the Abkari Act takes in methyl alcohol, to that extent the Act is ultra vires of the State legislature.

ASHOK MENON, J.

1. Does the State of Kerala have authority to impose transit levy on vehicles transporting denatured spirit from the Port of Cochin to Tamilnadu, is the question that arises for determination in these appeals before us.

2. The facts in Writ Petition Nos.29716/2004 and 30239/2004 in brief are that the writ petitioners therein are public limited companies involved in the businesses of manufacture and sale of Polyvinyl Chloride Resins (PVC) and alcohol based chemicals, respectively. One of the raw- material for their products is denatured spirit/industrial alcohol. Necessary licences have been obtained from the Tamilnadu State Government to possess, store, transport and consume the denatured spirit for that purpose.

3. Due to acute shortage of the denatured spirit in the internal market, the writ petitioners obtained permission from the Tamilnadu Government for importing denatured spirit, through the Port of Cochin. The writ petitioners' factories are situated in Mettur and Thiruchirappally, respectively, and the transportation of the spirit from the Port of Cochin to Mettur and Thiruchirappally has to be by road via. Walayar. Permission was sought to transport the spirit through the State of Kerala. The Deputy Commissioner of Excise, Central Zone, Ernakulam granted transit permission, subject to the condition that the petitioners remit a permit fee of Rs.2,500/- per transit and to produce challan evidencing remittance of the fee. The transit permits were issued by the Deputy Commissioner of Excise in each of the cases under the provisions of Rule 5(3) of the Kerala Liquor Transit Rules, 1975 ('Transit Rules', for short). The contention of the writ petitioners was that the only Rules available for transporting denatured spirit through the State of Kerala is the Cochin Denatured Spirit and Methyl Alcohol Rules, 1975 issued under the provisions of the Cochin Abkari Act. The Rules do not contemplate levy of any transit fee on the transportation and export of denatured spirit in the State. Hence, the decision of the Deputy Commissioner imposing a permit fee of Rs.2,500/-per transit was challenged in three Writ Petitions, which were allowed by the learned Single Judge directing refund of the transit fee collected by the State. Writ Appeals are filed challenging the judgment in two of the petitions.

4. Sri. C.E. Unnikrishnan, learned Special Government Pleader (Taxes), argues that as per Rule 3 of the Transit Rules, no liquor shall be allowed to be moved from one place in the State to another place in the State or to any other State through the territory of the State of Kerala, except under a permit issued by the Assistant Excise Commissioner of the Division through whose jurisdiction it is proposed to be moved, and as per Rule 3A, the person allowed to transit liquor under the Transit Rules shall produce the consignment to be transported with the original transit permit at the entry check post and two Excise Guards are to escort the liquor to the exit check post of the State. It is for that purpose that the State Government collects from the applicant a fee of Rs.2,500/- per transit.

5. The Transit Rules are made in exercise of powers conferred under Section 29 of the Abkari Act, 1 of 1077 (Abkari Act' for short) which empowers the State Government to make Rules for various purposes.

6. The learned counsel for the respondents/petitioners draws our attention to the Abkari Act, which relates to import, export, transport, manufacture, sale and possession of intoxicating liquor and intoxicating drugs in the State of Kerala. 'Spirits' is defined under Section 3(9) of the Abkari Act as 'any liquor containing alcohol and obtained by distillation'. It is pertinent to note here that earlier it also contained the words “whether it is denatured or not”. But by way of amendment to the Abkari Act, it was omitted by Act 4 of 1996. Similarly, the 'liquor' is defined under Section 3(10) of the Abkari Act as thus:

“Liquor includes s