JUDGMENT

B.N. Lokur, J. - The petitioner firm which is a wholesale dealer in poppy heads imported in Uttar Pradesh from Madhya Pradesh and Rajasthan was served with notices to pay duty on poppy heads sold during the months of July and August 1969. This writ petition seeks to quash the notices on the ground that the poppy heads concerned are not leviable to duty.

2. The duty, it is common ground, is sought to be levied as a countervailing duty under rule 42 (ii) of U.P. Poppy Head Rules, 1961, framed under the Opium Act, 1878. Rule 42-A which was added on the 1st July 1969, reads as follows :-

"42-A (i) Excise Duty shall be payable on poppy heads produced in Uttar Pradesh at the following rates :-

(ii) A counter-wailing duty at the rate of 50 Paise per kilogram shall be payable on poppy heads produced outside Uttar Pradesh and imported into Uttar Pradesh."

It is averred by the petitioner firm and not dispute by the State and the excise authorities that the entire quantity of poppy heads in respect of which the duty has been demanded was imported into Uttar Pradesh before the 1st July 1969, i.e., before the date on which rule 42-A was made.

3. The contention of the petitioner firm is that the countervailing duty imposed by rule 42-A (ii) is leviable in respect of poppy heads imported into Uttar Pradesh after and not before the rule came into force and as the poppy heads for which the duty has been demanded were imported before the rule came into force, they are not leviable to duty. This contention raises the true scope and interpretation of rule 42-A(ii).

4. Rule 42-A (1) purports to impose excise duty on poppy heads produced in Uttar Pradesh while rule 42-A (ii) imposes a countervailing duty on poppy heads imported into Uttar Pradesh. It cannot be denied that the countervailing duty on imported poppy heads has close relation with, corresponds to and is intended as a set off against the excise duty oil poppy heads locally produced. Excise duty is essentially a duty on production of goods and is leviable on goods produced after the law under which it is leviable comes into force, unless the law, in clear language, is made applicable to goods produced prior to the enactment of the law Rule 42-A (i) does not in terms gives retrospective effect to the levy of excise duty. It was, however, submitted on behalf of the State that the form in which the rule is framed permits the levy of excise duty on poppy heads produced even before the rule came into existence on the 1st July 1969. I am unable to accept such all interpretation of Rule 42-A (i) Apart from the question whether excise duty can be levied retrospectively by a rule, it would be straining the language of rule 42-A(i) to hold that it contemplates levy of excise duty on poppy heads produced prior to the making of the rule; any such interpretation would be tantamount to a levy of duty on goods already produced and held in stock. It cannot be denied that the Legislature is competent to levy excise duty on such goods, but one would expected a clear and express provision to that effect. In my opinion, rule 42-A(i) is not capable of being construed as justifying levy of excise duty on poppy heads produced in Uttar Pradesh before the 1st July 1969 on which date the rule was made. A taxing statute has to be construed strictly and, in the event of any doubt, in favour of the assessee. I hold that excise duty under rule 42-A(i) could be levied only on poppy heads produced after the 1st July 1969 and not also on poppy heads produced before that date.

5. Rule 42-A (ii) , which provides for a countervailing duty and corresponds to the excise duty imposed by rule 42-A (i) has to be construed on the principle applicable to the levy of excise duty under rule 42-A (i) . As I have held that the excise duty under rule 42-A (i) is leviable on poppy heads pr