The levy of excise duty on absolute alcohol is not within the competence of the State Government because absolute alcohol is not an alcoholic liquor for human consumption.

1. - By this writ petition filed under Article 226 of the Constitution of India, the petitioner has challenged the validity of the Notification No. F.4(2)FD/GRIV/77-14, dated 30.3.1977 issued by the Govt. of Rajasthan in exercise of the powers conferred upon it under Section 28 of the Rajasthan Excise Act, 1950 (for short 'the Act' herein.)

2. The facts necessary to be noticed for the disposal of this writ petition briefly stated are : that M/s Mawar Oil and General Mills Ltd. Udaipur is a public limited Company registered under the Companies Ac and its Head Office is situated at Udaipur and it carried on the business of manufacturing Pesticides and other medical and toilet preparations under the name and style of M/s Pesticides India. The petitioner Company is having licence under the Rajasthan Excise Act for dealing in excise Articles including absolute alcohol, which is required in some of the products and preparations which are manufactured by it. It is alleged that on the recommendation of the Excise Commissioner, Rajasthan, 10,000 litres alcohol was allotted to the petitioner Company by the Excise Commissioner, Uttar Pradesh. On receipt of the said allocation of 10000 litres of absolute alcohol, the petitioner Company approached the District Excise Officer, Udaipur on 25.7.1980 for the issue of permit under the provisions of the Excise Act for import of 10000 litres of absolute alcohol from the State of Uttar Pradesh. A reminder was issued on 9.8.1980. The District Excise Officer vide his letter Ex. 3 dated 18.8.1980 informed the petitioner Company that permission can only be issued if Rs. 25/- per L.P. litre Excise duty is deposited.

3. According to the petitioner-company, Sub-section (4) of Section 3 of the Rajasthan Excise Act, 1950 defines excisable articles as under:

(i) Spirit fermented liquor or any alcoholic liquor for human consumption or danatured spirit or denatured spiritous preparation; or

(ii) any intoxicating drug; or

(iii) stills or other applicances for distillation; or

(iv) fermented wash or other material for distillation; or

(v) any other article which the State Govt. may, from time to time, declare to be an excisable article for the purpose of this Act.
and Section 28 of the Act empowers the State Govt. to levy excise duty on excisable articles. Accordingly, the State Govt. in exercise of the powers conferred on it under Section 28 of the Act issued Notification No. F. 4(2)FD/GR IV/77-14 dated 30.3.1977 imposing excise duty on various excisable articles at different rates and in the garb of this notification, the District Excise Officer, Udaipur has demanded excise duty @ Rs. 25/- per L.P. litre from the petitioner Company.

4. It was submitted that Entry 84, of List I of Schedule VII of the Constitution as also Entry 51 of the State List authorised the State Govt. to levy excise duty on alcoholic liquors for human consumption. It was further submitted that according to the Indian standard specifications for rectified spirit revised IV reprint, January 1975 Absolute Alcohol' is technically called an ethyal alcohol and it is not a beverage containing alcohol. It is not fit for human consumption as such, because absolute alcohol is not intended to be used as intoxicated beverage and, therefore, it is not an alcoholic liquor. Thus, the levy of excise duty on absolute liquor is not within the competence of the State Govt. The petitioner-Company has therefore, prayed that the respondents be directed not to demand excise duty at the rate of Rs. 25/- per L.P. litre on absolute alcohol and further, a writ in the nature of mandamus or any other appropriate writ, order or direction, be issued quashing the Notification dated 30.3.1977 and the respondents be directed to issue permit to the petitioner Company for import of absolute alcohol immediately for their own use for the manufacture of technical grade pesticides.

5. A reply to the writ petition was filed on behalf of the State of Rajasthan in which it has bee