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1960 Supreme(MP) 278
IN THE HIGH COURT OF MADHYA PRADESH (GWALIOR BENCH)
A.H. KHAN & P.R. SHARMA, JJ.
J.F. Shroff
Vs.
State
M.P. No. 18 of 1958
Decided On: 16.09.1960
Important Points
Subject
Taxation Law - EXCISE DUTY
Act Referred
MADHYA BHARAT EXCISE ACT : S.25, S.14, S.24, S.24(1)
Headnote
EXCISE DUTY - LEVY ON EXISTING STOCK - NOTIFICATION - RETROSPECTIVE EFFECT - VALIDITY - RULES FOR DISTRIBUTION OF SHOPS AND GRANT OF LICENCES, SAMVAT 2009, RULE 73 - VALIDITY.
Fact of the Case:
The petitioner, a license holder for the sale of foreign liquor, challenged the demand made by the Excise Department for additional excise duty on his existing stock of Indian made foreign liquor. The petitioner had already paid excise duty at the rate in force at the time of purchase. Subsequently, the Government issued two Notifications enhancing the excise duty on Indian made foreign liquor. The petitioner contended that the Notifications did not authorize the levy of additional duty on existing stocks and that the Notifications were not retrospective in effect.
Finding of the Court:
The Court held that the Notifications did not authorize the levy of additional duty on existing stocks and that the Notifications were not retrospective in effect. The Court also held that Rule 73 of the Rules for Distribution of Shops and Grant of Licences, Samvat 2009, which purported to authorize the levy of additional duty on existing stocks, was invalid.
Issues: 1. Whether the Notifications authorized the levy of additional duty on existing stocks? 2. Whether the Notifications were retrospective in effect? 3. Whether Rule 73 of the Rules for Distribution of Shops and Grant of Licences, Samvat 2009, was valid?
Ratio Decidendi: 1. The Notifications did not explicitly state that additional duty would be levied on existing stocks. 2. The Notifications did not contain any express provision making them retrospective in effect. 3. Rule 73 of the Rules for Distribution of Shops and Grant of Licences, Samvat 2009, was not authorized by any of the provisions of Section 68(2) of the Madhya Bharat Excise Act, 1952, under which the Rules were made.
Final Decision: The Court issued a writ of mandamus directing the State not to realize the difference in duty between the duty already paid by the petitioner on his existing stock and the enhanced rate of duty subsequently levied. The Court also quashed the orders of the Sub-Inspector, Gwalior Division, and the District Excise Officer, Gwalior, demanding the difference in duty.
For Appellant/Petitioner/Plaintiff: J.M. Anand
For Respondents/Defendant:S.T. Mungre, Government Advocate for State
A.H. Khan J.
1. This is a petition under Article 226 of the Constitution of India for the issue of a writ of mandamus or a direction, quashing the order of the Excise Department in respect of the demands made regarding the Excise duty.
2. The petitioner is a licence-holder for the sale of foreign liquor at Gwalior. He was in possession of some stock of Indian made foreign liquor, which he had purchased after paying the requisite excise duty in force at the time of the purchase. Subsequent to his purchase, the Government of Madhya Bharat issued two Notifications. By Notification No. 42/VII dated 24th March 1955 published in the Madhya Bharat Government Gazettee of 26th March 1955, Excise duty on Indian made foreign liquor was raised from Rs. 42/12/- to Rs. 56/4/- per L. P. Gallon with effect from 1st April 1955; by second Notification No. 124/U/SR, dated 16th October 1957 published in the Madhya Pradesh Gazette of 11/18/25 October 1957, the Excise duty was further enhanced from Rs. 56/4/- to Rs. 60/- per L. P. Gallon. A couple of months after these Notifications Sub-Inspector, Excise, Gwalior Division, served an order on the petitioner to deposit the difference of duty on his existing stock of Indian made liquor (on which he had already paid Excise-duty) in accordance with the two Notifications referred to above. The petitioner made a representation to the officer concerned that having already paid Excise Duty on the purchases according to the rates then in force, he was not liable to pay the enhanced duty. His representation was turned down. On 11-2-58, he served a notice on the Madhya Pradesh Government for demand of justice, but no reply was received from the Government. The petitioner has filed this writ and his main contentions are two:-
One, that the two Notifications on the basis of which further duty is demanded nowhere say that further duty shall be levied on the existing stocks in the hand of the dealer.
Two, that having paid the duty at the time of purchase and transport at the rate then in force, he is not liable to pay any more, because the Notifications are not retrospective in effect.
3. Let us first examine the arguments of the petitioner; the two Notifications on the basis of which difference in excise-duty is sought to be charged run as follows:-
Notification No. 42/VII-SR-dated 24th March 1955-
"In exercise of the powers conferred under sub-section (1) of Section 24 of the Madhya Bharat Excise Act, Samvat 2009 (Act No. 14 of 1952), the Government are pleased to direct that the Excise Duty on Indian made Foreign Liquor shall be levied at the rate of Rs. 56/4/- per L. P. Gallon with effect from 1st April, 1955.
The concessional rates of Excise-duty of Rs. 12/8/-per L. P. G. for Rum and Rs. 28/2/- per L. P. G. for other I. M. F. L. supplied by Military Canteens to the Defence Department shall continue as before, in accordance with the Notification published in the Madhya Bharat Government Gazette dated 26-1-52."
Notification No. 124/U/SR dated Bhopal, 16th October 1957 -
"In exercise of the powers conferred by sub-section (1) of Section 24 of the Madhya Bharat Excise Act Samvat 2009 (Act No. 14 of 1952) and in supersession of Notification No. 42/VII-SR, dated 26th March, 1955, the State Government are pleased to direct that in the Madhya Bharat region, the Excise Duty on Indian made Foreign Liquors shall be levied at the rate specified below, namely :-
Particulars
Rate of duty per L.P.G.
Indian made Foreign Liquor.
Rs 60/-.
Rum supplied by Military Canteens to the Military personnels other than Officers.
Rs. 12/50
I. M. F. L. other than Rum supplied by Military Canteens to Military personnels other than Officers.
Rs 30/-.
This Notification shall take effect from the date of its publication in the Madhya Pradesh Government Gazette."
These Notifications nowhere say that the difference in the Excise-duty should be charged on the existing stock of a dealer, who has already paid duty at the time of purchase and transport of goods
