Lilasons Breweries (Pvt. ) Ltd. vs State of M. P.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1992 Supreme(MP) 243

1992 JLJ 545
(SUPREME COURT)
Madan Mohan Punchhi and G.N. Ray, JJ.
Lilasons Breweries (Pvt.) Ltd. (M/s.) and another v. State of M.P. and others
Civil Appeal No. 1265 of 1981; against the judgment and order of the M.P.
High Court in M.P. No. 48 of 1978; Decided on 21.4.1992.

Advocates:
S.K. Mehta, Dhruv Mehta, Arnan Vachher and Arvind Verma for appellants;
B.Y. Kulkarni and S.K. Agnihotri for respondents.

Headnote:(1) Constitution of India -- Art. 19(1) (g) -- no citizen has fundamental right to manufacture or sell liquor -- State has exclusive right or privilege in that respect. 1975 JLJ 722 (SC) relied on. [Para 4
       (2) Excise Act, 1915 (M.P.) -- Ss. 62(2) (h) and (28) -- powers though wide yet confined within their frames -- State Government cannot assume power to impose or levy a tax or excise duty by means of a rule without sanction of the Act. [Para 10
       (3) Brewery Rules, 1970 (M.P.) -- R. 22 -- provision for raising demand which in sum and substance is additional excise duty -- the same not being due -- rule is ultra vires the Excise Act to that extent.
       It cannot for a moment be suggested that when there is a shortfall, the demand is as if of an "additional fee or consideration" and not additional excise duty. It is obvious from the language of the Rule that in the event of the excise duty leviable falling short of the expected five per cent to meet the pays of the officers cannot be met therefrom, the State has all the same to pay. The measure goes to recoup the state of the cl1arges by demanding a sum equal to the duty leviable to that extent without lifting excisable articles. Rule 22 to that extent is ultra vires the Act and beyond the rule making power of the State. 1971(1) SCR 844 and 1976 JLJ 597 (SC) relied on. [Para 9
       ¼1½ Hkkjr dk lafo/kku && vuq- 19¼1½ ¼N½ && efnjk dk fofuekZ.k vFkok foØ; djuk fdlh Hkh ukxfjd dk ewy vf/kdkj ugha gS && ml laca/k esa jkT; dks vuU; vf/kdkj vFkok fo‘ks"kkf/kdkj izkIr gSA 1975 ts ,y ts 722 ¼mPpre U;k-½ voyafcrA ¿ iSjk 4À

       ¼2½ vkcdkjh vf/kfu;e] 1915 ¼e-iz-½ && /kkjk 62 ¼2½ ¼,p½ rFkk 28 && ‘kfDr;k¡ ;|fi O;kid rFkkfi viuh fojpuk ds Hkhrj gh ifj:) && jkT; ljdkj vf/kfu;e ds leFkZu ds fcuk fdlh fu;e ds ek/;e ls dksbZ dkj vFkok mRikn&‘kqYd vf/kjksfir vFkok mn~x`ghr djus dh ‘kfDr /kkj.k ugha dj ldrhA ¿ iSjk 10À

       ¼3½ vklouh vf/kfu;e] 1970 ¼e-iz-½ && fu- 55 && ,slh ek¡x ds fy, mica/k tks fd la{ksi vkSj lkj esa vfrfjDr mRikn&‘kqYd gS && og Hkh fcuk ns; gq, && fu;e ml lhek rd vkcdkjh vf/kfu;e ds vf/kdkjkrhr gSA

       ;g ,d {k.k ds fy, Hkh lq>k;k ugha tk ldrk fd tc dksbZ deh gks] rc ek¡x vfrfjDr ‘kqYd vFkok izfrQy ds :i esa gS rFkk vfrfjDr mRikn&‘kqYd ugha gSA fu;edh Hkk"kk ls Li"V gS fd mn~xzg.kh; mRikn&‘kqYd vf/kdkfj;ksa ds osru dh iwfrZ ds fy, izR;kf‘kr ik¡p izfr‘kr ls de iM+us dh n‘kk esa mlesa ls ftl dh iwfrZ ugah dh tk ldrh] jkT; dks fQj Hkh lank; djuk gksrh gSA ;g mik; mRikn&‘kqYd ;ksX; oLrq,¡ mBk, fcuk ml ifjek.k rd mn~xzg.kh; ‘kqYd ds cjkcj jkf‘k dh ek¡x }kjk jkT; dks mu izHkkjksa dh izfriwfrZ ds fy, gSA fu;e 22 ml lhek rd vf/kfu;e ds vf/kdkjkrhr rFkk jkT; dh fu;e cukus dh ‘kfDr ds ijs gSA 1971 ¼1½ ,l lh vk 844 rFkk 1976 ts ,y ts 597 ¼mPpre U;k-½ voyafcrA ¿ iSjk 9À

ORDER

M. M. Punch hi, J. -- 1. This appeal is directed against the judgment and order dated September 4, 1980 of a Division Bench of the High Court of Madhya Pradesh at Jabalpur in Miscellaneous Petition No. 48 of 1978.

2. Vires of rule 220fthe Madhya Pradesh Brewery Rules, 1970 framed under section 62 of the Madhya Pradesh Excise Act, 1915 stands questioned. That Rule says:

"22. EXCISE COMMISSIONER TO APPOINT OFFICER-INCHARGE OF BREWERY :-- Every brewery shall be placed by the Excise Commissioner under the charge of an Excise Inspector to be designated as officer-in-charge of the brewery. The Excise Commissioner will further appoint such other officer of the Excise Department as he may deem fit to the charge of breweries. The pay of all such officers shall be met by the Government; provided that when the annual charges exceed five per cent of the duty leviable on the issue made from the brewery to districts within the State excess shall be realised from the brewer."

3. The roots of the Rule, through the provisions of the Madhya Pradesh Excise Act, require to be traced, as well as the nature of the exaction provided in it. A broad framework of the working of the Act would thus be necessary.

4. The State has the exclusive right or privilege of manufacture or sale of liquor. There is no fundamental right of any citizen to carryon trade and business of liquor. This is the settled position of law. See in this connection Nashirwarv. State of M.P. [1975 JLJ 722 (SC)= 1975 (2) SCR 861 ], a case under the Madhya Pradesh Excise Act and other cases of the same strand. It is open to the State through its Government to part with those rights in regard to liquor and intoxicants for a consideration. Any citizen wanting to do the business in liquor or intoxicants in the State of Madhya Pradesh has to seek permission under the Madhya Pradesh Excise Act, 1915. Section 13 of the Act provides inter alia that no intoxicant shall be manufactured or collected, no liquor shall be bottled for sale, no distillery or brewery shall be constructed or worked and no person shall use or have in his possession any materials, still, utensil, implement or apparatus whatsoever for the purpose of manufacturing any intoxicant other than tari, except under the authority and subject to the terms and conditions of a licence granted in that behalf. Section 18 empowers the State Government to lease to any person on such conditions and for such period as it may think fit, the right of manufacturing, supplying or selling of any liquor or intoxicating drug within any specified area. For the purpose there is a duty leviable and other fees collectable. Chapter V of the Act is earmarked for the purpose. Therein section 25 provides that Excise Duty is payable on all excisable articles imported, exported, transported, manufactured, cultivated or collected under any licence or manufactured in any distillery established, or any distillery or brewery licensed under the Act. In the same Chapter is section 27 which enables the Government to get payment for grant of leases. It says:

"27. PAYMENT FOR GRANT OF LEASES -- Instead of or in addition to any duty leviable under this Chapter, the State Government may accept payment of a sum in consideration of the grant of any lease under section 18."

5. It is evident from a bare reading of the aforesaid provision that two situations are envisaged. The first situation is when duty is leviable under Chapter V, the Government may accept instead a sum in substitution of the duty, in consideration of the grant of a lease under section 18. The second situation is that the Government may accept payment of an additional sum over and above the duty leviable under Chapter V, in consideration of the grant of a lease under section 18. Section 28 in the following Chapter then provides for the forms and conditions of licences and fees charged thereon. It provides that every licence, permit or pass granted under the Act shall be granted on payment of such fees

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1992 Supreme(MP) 243

1992 JLJ 545(SUPREME COURT)Madan Mohan Punchhi and G.N. Ray, JJ.Lilasons Breweries (Pvt.) Ltd. (M/s.) and another v. State of M.P. and othersCivil Appeal No. 1265 of 1981; against the judgment and order of the M.P.High Court in M.P. No. 48 of 1978; Decided on 21.4.1992.

Cases Referred (4)

1992 JLJ 545
(SUPREME COURT)
Madan Mohan Punchhi and G.N. Ray, JJ.
Lilasons Breweries (Pvt.) Ltd. (M/s.) and another v. State of M.P. and others
Civil Appeal No. 1265 of 1981; against the judgment and order of the M.P.
High Court in M.P. No. 48 of 1978; Decided on 21.4.1992.