COMMON ORDER

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 except rectified spirit, extra neutral alcohol and denatured spirit”.

(2) .............

(3) The amendment hereby made shall deemed to have come into force on 03.06.03.”

(vii) There is no dispute on the position that post 2010, all petitioners have been compliant with the Rules and have been remitting import fee, as introduced in 2003. Their challenge is only in respect of the demands raised prior to 18.05.2010.

4. Their submissions may be briefly summarised as under.

(i) The Act does not envisage the levy of tax or duty but only regulates the manufacture and sale of liquor. The thrust of the Act is to control the licensing of such activities and consider the era of prohibition.

(ii) Though Sections 18A, 18B and 18BB authorize levy of excise duty or countervailing duty (CVD)