(S.B. Sinha, J.) - Leave granted.

2.Constitutional validity of increase in levy made by the State of Himachal Pradesh inter alia on import/transport of rectified spirit and/or potable alcohol is in question in these appeals which arise out of a judgment and order dated 27.6.2007 passed by the High Court of Himachal Pradesh, Shimla in C.W.P. No. 251 of 1999.

3.Appellant is a public limited company registered and incorporated under the Companies Act, 1956. It is carrying on business of manufacture and sale of India Made Foreign Liquor (IMFL) and beer, etc. Its distillery is situated at Kasauli in the District of Solan. It holds a licence in Form D-2 granted by the State of Himachal Pradesh in terms of the provisions of the Punjab Excise Act, 1914 (for short “the Act”) and the Rules framed thereunder. For the purpose of running the said distillery, it imported `Malt Spirit of over proof strength’ from its distillery situated at Mohan Nagar in the State of Uttar Pradesh. For the said purpose, it was required to obtain import permit from the Collector Excise, Himachal Pradesh. It also transported some quantities of Malt Spirit of over proof strength from M/s. Rangar Breweries Ltd., Mehatpur, Distt. Una as well as from its distillery situated at Mohan Nagar, Distt. Ghaziabad during the relevant years, viz., 1997-98 and 1998-99.

4.Admittedly, prior to 1.4.1996, no payment was required to be made for obtaining permit/transport fee on transportation of IMFL, country spirit, beer, etc. It was directed to be levied for the first time in terms of an excise policy for the year 1996-97 dated 12.3.1996. A permit fee at the rate of Rs. 2.50 per bulk litres on denatured spirit, Rs. 2.00 per proof litre and Rs. 1.00 per proof litre on foreign spirit and country liquor respectively became leviable. Such permit fee was payable at the time of grant of permission for transportation of liquor. It was payable by a person who makes an application for grant of permission for import and/or transport of foreign liquor or country liquor or both. A demand of Rs. 8,21,992/- was made by the Excise and Taxation Officer on or about 28.10.1997 towards permit fee on the spirit imported by the appellant during the year 1996-97. Another demand for as sum of Rs. 17,68,346/- was made upto 6.2.1999 for making similar import. Indisputably, no amount towards payment of licence fee was due from the appellant. It is also not in dispute that export duty at the rate of Rs. 1.00 per proof litre on Indian Made Foreign Spirit and at the rate of Rs. 0.50 per bulk litre on beer with alcoholic content upto 5% and at the rate of Rs. 0.75 per bulk litre with alcoholic content exceeding 5% has been paid by the appellant. It has also paid import fee at the rate of Rs. 6/- per proof litre on spirit imported by it.

5.A representation was made by the appellant in respect of the said demands by a letter dated 30.1.1999 inter alia contending that the State of Himachal Pradesh had no jurisdiction to levy such fee. In any event, no services having been rendered to the appellant, quantum jump of the licence fee in the name of such permit fee was not justified. The said representation of the appellant was rejected by an order dated 10.2.1999.

6.The High Court, however, by reason of the impugned judgment rejected the contentions of the appellant.

7.Mr. Anoop G. Chaudhary and Mr. Rakesh Dwivedi, learned senior Counsel appearing on behalf of the appellant, would submit :

(i) Transportation of industrial alcohol and/or rectified spirit being not within the legislative competence of the State, it cannot exercise any control thereover.

(ii) The High Court committed a serious error as it proceeded on the premise that there does not exist any distinction between import of potable liquor and that of Malt Spirit of over proof strength.

(iii) The element of quid pro quo being inherent in the levy of fee and as no material was produced by the State to justify its demand,