The retrospective application of a taxing provision must have clarity and enforceability, and in the absence of definitions in the relevant Act, the levy of import fee is valid only from the date of clarity provided by the subsequent notification.

JUDGMENT

(Prayer: Writ Petition filed under Article 226 of the Constitution of India, for the issuance of a Writ of Certiorarified Mandamus, calling for the records of the third respondent comprised in its letter in Rc.No.28/2009/IMFS dated 15.9.2009 and quash the same as being arbitrary, illegal and Violative of the provisions of the Tamil Nadu Indian Made Foreign Spirits (Manufacture) Rules, 1981 and consequently direct the respondents to continue to levy and collect import fee of Re.1/- per bulk Litre of spirits in respect of import of spirits and to refund a sum of Rs.80,000/- which has been paid by the petitioner to the respondents under protest for issuance of permit consequent upon the impugned demand.)

Common Order

1. This batch of 13 Writ Petitions has been filed by different distilleries. Petitioner in W.P.No.13577 of 2010 seeks a Writ of Declaration challenging Clause 2(3) of Notification in G.O.Ms.No.112, Prohibition and Excise (III) Department, dated 03.06.2003 and clause 2(4) of Notification in G.O.Ms.No.23, Home, Prohibition & Excise (III) Department, dated 18.05.2010. A consequential direction is sought for refund of sums collected prior to impugned Notification dated 18.05.2010.

2. The other Writ Petitions filed by the Distilleries seek Writs of Certiorari challenging orders of recovery on the ground that there is a short payment of fee paid by the petitioners. If the Writ of Declaration is answered, there would be, as a consequence, an effective disposal of Writs of Certiorari as well.

3. The facts in brief, as necessary to decide these Writ Petitions, are as follows:

(i) The Government of Tamil Nadu / R1 had issued G.O.Ms.No.112 dated 03.06.2003 (in short ‘Notification I’) causing certain amendments to the Tamil Nadu Indian Made Foreign Spirits (Manufacture) Rules, 1981. The amendment as relevant to these matters is Rule 22, where under a new sub-rule (4) had been inserted in substitution of the existing sub-rule (4), reading as follows:

“(d) An import fee of rupees five per bulk litre shall be paid by the licensee on the stocks of concentrates imported for the manufacture of 'Indian Made Foreign Spirit'.”

(ii) The Notification stopped there as far as the levy of the import fee was concerned and did not proceed to define what a ‘Concentrate’ would be for the purposes of said levy.

(iii) This was followed by G.O.(D).No.272, Home, Prohibition and Excise (VI) Department, dated 23.10.2009 (in short ‘Notification II’) according approval to the Commissioner of Prohibition and Excise to permit seven Indian Made Foreign Spirit (IMFS) manufacturing units in the State, to import special spirits of the stated quantities for quarter ending dated 31.12.2009 for the use in the manufacture of IMFS.

(iv) This portion of the Government order is not relevant, per se, and what is relevant is the direction at clause (2) of Notification II, whereunder, the Commissioner of Prohibition and Excise was requested to collect Import Permit Fee that had been imposed under Notification I at the rate of Rs.5 per bulk litre as Import Permit Fee.

(v) Then came G.O.Ms.No.23 dated 18.05.2010 (‘in short Notification III’) when finally wisdom donned upon the State and realisation that ‘Concentrates’ and ‘Special Spirits’ had not been defined anywhere in the Tamil Nadu Prohibition Act, 1937 (in short ‘Act’) and must hence be defined in order to render the levy of import fee under Notification I, viable and enforceable.

(vi) The definitions, as inserted by amendments to Rule 2 are as follows:

“.......

In the said Rules:

(1) In rule 2:

(i) After clause (c), the following clause shall be inserted namely:

“(cc) “Concentrate” means any spirit which can be consumed by diluting it directly except rectified spirit, extra neutral alcohol and denatured spirit.”

(ii) After clause (1), the following clause shall be added, namely:

“(m) “Special Spirit” means all spirits which are used as an essence or flavouring agent exc