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2008 Supreme(All) 2663
[2009(1) ADJ 11]
ALLAHABAD HIGH COURT
BEFORE : SUNIL AMBWANI, J.
M/s.DAURALA FOODS AND BEVERAGES PVT. LTD. ........Petitioner
Versus
STATE OF U.P. AND OTHERS ..............Respondents
(Civil Misc. Writ Petition No. 1299 of 2007, decided on 4th December, 2008)
Counsel :
Bharat ji Agrawal and Nikhil Agrawal for the Petitioner; S.C. for the Respondents.
Headnote:U.P. Excise Act, 1910—Sections 28, 34(1)(b), 11(2), 31-C and 2(42-B)—U.P. Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939—Sections 3(1)(a) and 3(c)—General Clauses Act, 1901—Section 21—Purchase tax—Realisation of—Issue of notice—Petitioner engaged in business of manufacturing and sale of Indian made foreign liquor—Petition challenging order of Principal Secretary, Excise, Government of U.P. and prayed for setting aside his order—And also prayed for issue of prohibition restraining respondents to proceed as per impugned order passed by him—By impugned order, Secy. Excise, U.P. Government, set aside order of Excise Commissioner and remanded matter back to Excise Commissioner to reconsider it afresh—State Government found revision against order of Excise Commissioner, was maintainable by taking suo motu cognizance under Section 11(2)—In instant case, Secy. Excise, U.P. fell in error to set aside order of Excise Commissioner—Also, State Government committed error in taking suo motu action and issuing show-cause notice to petitioner for revising order of Excise Commissioner—And licencee could obtain such spirit with or without payment of duty at prevalent rates—Held, order passed by Principal Secy. Excise, Government of U.P. in revision in the matter of F.L. 3-A licence of petitioner, is set aside. [Paras 13, 29, 30 and 31]
Honble Sunil Ambwani, J.—M/s. Daurala Foods & Beverages Pvt. Ltd., a company incorporated under the Companies Act, 1956, initially in the name of M/s. Pelican Beverages Pvt. Ltd., which was then changed to DCM Remy (P) Limited in which majority shares were held by M/s. Highland Distilleries Co. PLC, U.K. and M/s Remy Cointrau S.A., France, is engaged in the business of manufacturing and sale of Indian made foreign liquor. By this writ petition the petitioner has prayed for setting aside the order dated 7.8.2007 passed by the Principal Secretary (Excise), Government of U.P., Lucknow and for writ of prohibition restraining the respondents to proceed in any manner pursuant to the order dated 7.8.2007.
2. Heard Shri Bharatji Agrawal, Senior Advocate assisted by Shri Nikhil Agrawal for the petitioner. Learned Standing Counsel appears for the respondents.
3. Brief facts giving rise to this petition are that DCM Remy Private Limited entered into a memorandum of association with DCM Shriram, Daurala Sugar Works for assignment of the facility to manufacture of Indian made Foreign Liquor in the distillery with capacity of 5000 KL, and for the purposes of bottling their IMFL at Daurala for their own manufactured Indian Made Foreign Liquor from the spirit brought by them. DCM Shriram Daurala Sugar Works holds a licence in Form FL-3 under U.P. Bottling of Foreign Liquor Rules, 1969.
4. DCM Remy Pvt. Ltd. sought permission from the U.P. Excise Commissioner for assignment of a part of bottling privilege of DCM Shriram Daurala Sugar Works in accordance with the provisions of Section 28 of the U.P. Excise Act. The permission was granted in Form FL-3A under the U.P. Bottling of Foreign Liquor Rules, 1969. One of the condition namely condition No. 2 of the Licence FL-3A provided :
“2. Licensee shall obtain spirit manufactured in/imported into India for bottling as and when required in bulk only from the distiller, brewer or vintner as the case may be which has let or assigned its bottling privilege, with or without payment of duty at the prevalent rates.”
5. One of the conditions in the letter of permission written by DCM Shriram Ltd. to the U.P. Excise Commissioner was also that the petitioner company proposes to bring its own spirit to the manufacture and bottling of Indian Made Foreign Liquor. Subsequently permissions were sought from U.P. Excise Commissioner for import of different quantities of grain neutral spirit (GNS) as well as concentrated alcohol beverages (CAB) from outside the State of U.P. for manufacture and bottling. The permissions were duly granted by the U.P. Excise Commissioner with the imposition of condition that the petitioner will be liable to pay a separate import fee of Rs. 2/- per AL on the entire spirit so imported from outside the State of U.P. It is stated that in each and every instance of import and procurement of GNS and CAB upto the year 2006 permissions were obtained and before importing each consignments permits were issued and that on demand import fee at the rate of Rs. 2/- per AL was paid. The conditions in the special permission given by the Excise Commissioner provided :
“1. Before the import of Spirit, Seagram should deposit by way of import fee/ levy, an amount @ Rs. 2/- per AL.
2. Separate account shall be kept of the imported spirit.
3. Imported spirit shall be included in the total capacity of the unit, i.e., 5000 KL.
4. This spirit shall have strength of 94.8% v/v.”
6. In para 24 of the writ petition it is stated that whenever the petitioner had purchased alcohol from within the State of U.P., the purchase tax at the rate of Rs. 0.80 per bulk litre was paid under the U.P. Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939 (the Act of 1939) to the State Government. This averment has not been denied in para 12 of the counter affidavit of Shri Bhanu Prakash Yadav, Asstt. Excise Commissioner, Daurala Distillery, Meerut.
7. It is stated that M/s. Daurala Sugar Works Distillery only produces m
