dmt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 2922 OF 2001
with 50 OTHER PETITIONS
(1) WRIT PETITION NO. 2922 of 2001
SAHAKAR MAHARSHI SHANKARRAO
MOHITE PATIL SAHAKARI SAKHAR
KARKHANA LTD., Shankar Nagar,
Akluj, District: SOLAPUR. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary, Home
(Transport), Maharashtra State,
Mantralaya,
MUMBAI.
2. THE COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI.
::: Downloaded on - 09/06/2013 17:15:40 :::
2 Wp no. 2922-01 &
50 other wps.
3. THE COLLECTOR OF SOLAPUR.
(State Excise Department)
District : SOLAPUR. .... Respondents.
WITH
(2) WRIT PETITION NO. 2928 OF 2001
MESSRS VAM ORGANIC CHEMICALS LTD.,
a company incorporated under
Companies Act, having its
registered office and distillelry at
Bhartiyagram, Gajraula,
District Jyotiba Phule Nagar, U.P. and
also having a Distillery and Chemical
Plant at Village Nira, Taluka Baramati,
District PUNE .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary, Home
::: Downloaded on - 09/06/2013 17:15:40 :::
3 Wp no. 2922-01 &
50 other wps.
(Transport), Maharashtra State, Mantralaya,
MUMBAI.
2. COMMISSIONER OF STATE EXCISE,
Old Custom House,
MUMBAI.
3. THE COLLECTOR OF PUNE.
(State Excise Department)
District PUNE.
ig .... Respondents.
WITH
(3) WRIT PETITION NO. 6114 OF 2001
WITH
CIVIL APPLICATION NO. 2542 OF 2007
M/S. BRIHAN MAHARASHTRA
SUGAR SYNDICATE LIMITED,
Sheerpur, Taluka Malsiras,
District : SOLAPUR, .... Petitioners.
::: Downloaded on - 09/06/2013 17:15:40 :::
4 Wp no. 2922-01 &
50 other wps.
Versus
1. STATE OF MAHARASHTRA
through Secretary, Government of
Maharashtra, Home (Transport)
Department, Mantralaya,
MUMBAI- 400 032.
2. THE COMMISSIONER OF STATE EXCISE,
Old Custom House,
MUMBAI.
3. THE COLLECTOR OF SOLAPUR
(State Excise Department)
District SOLAPUR. .... Respondents.
WITH
(4) WRIT PETITION NO. 6115 OF 2001
M/S. BHOGAVATI SAHAKARI SAKHAR
KARKHANA LIMITED, Shahunagar,
(Parite), District : KOLHAPUR, .... Petitioners.
::: Downloaded on - 09/06/2013 17:15:40 :::
5 Wp no. 2922-01 &
50 other wps.
Versus
1. STATE OF MAHARASHTRA
through Secretary, Government of
Maharashtra, Home (Transport)
Department, Mantralaya,
MUMBAI- 400 020.
2. THE COMMISSIONER OF STATE EXCISE,
Old Custom House,
MUMBAI - 400 032.
3. THE COLLECTOR OF KOLHAPUR.
(State Excise Department)
District KOLHAPUR. .... Respondents.
WITH
(5) WRIT PETITION NO. 6116 OF 2001
WITH
CIVIL APPLICATION NO. 23 OF 2008
M/S. KRISHNA SAHAKARI SAKHAR
::: Downloaded on - 09/06/2013 17:15:40 :::
6 Wp no. 2922-01 &
50 other wps.
KARKHANALIMITED, Rethare Bk.
Post. Shivnagar, Taluka Karad,
District : SATARA, .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary, Government of
Maharashtra, Home (Transport)
Department, Mantralaya,
MUMBAI- 400 032.
2. THE COMMISSIONER OF STATE EXCISE,
Old Custom House,
MUMBAI.
3. THE COLLECTOR OF KOLHAPUR.
(State Excise Department)
District KOLHAPUR. .... Respondents.
WITH
(6) WRIT PETITION NO. 6117 OF 2001
::: Downloaded on - 09/06/2013 17:15:40 :::
7 Wp no. 2922-01 &
50 other wps.
SHRI TATYASAHEB KORE WARNA
SAHAKARI SAKHAR KARKHANA LTD.,
Warna Nagar, Taluka Panhala,
District : KOLHAPUR, .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary,
Home (Transport), Maharashtra
State, Mantralaya,
Mumbai.
2. THE COMMISSIONER OF STATE EXCISE,
Old Custom House,
Mumbai.
3. THE COLLECTOR OF KOLHAPUR.
(State Excise Department)
District Kolhapur. ....
Respondents.
WITH
::: Downloaded on - 09/06/2013 17:15:40 :::
8 Wp no. 2922-01 &
50 other wps.
(7) WRIT PETITION NO. 6118 OF 2001
WITH
CIVIL APPLICATION NO. 877 OF 2008
VASANTDADA SHETKARI
SAHAKARI SAKHAR KARKHANA LTD.,
Sangli, District: SANGLI, .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary,
Home (Transport), Maharashtra
State, Mantralaya,
MUMBAI.
2. THE COMMISSIONER OF STATE EXCISE,
Old Custom House,
MUMBAI.
3. THE COLLECTOR OF SANGLI.
(State Excise Department)
District SANGLI. .... Respondents.
::: Downloaded on - 09/06/2013 17:15:40 :::
9 Wp no. 2922-01 &
50 other wps.
WITH
(8) WRIT PETITION NO. 7040 OF 2009
M/S. VIRAJ ALCOHOLS & ALLIED
INDUSTRIES LTD., a Company incorporated
under the Companies Act, 1956 having its
registered office & Distillery at & Post :
Shirala, Taluka Shirala,
District : SANGLI. ig .... Petitioner.
Versus
1. THE GOVT. OF MAHARASHTRA
through Principal Secretary, Home
(State Excise),
Department, Mantralaya,
MUMBAI - 400 032.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 023.
::: Downloaded on - 09/06/2013 17:15:40 :::
10 Wp no. 2922-01 &
50 other wps.
3. THE COLLECTOR OF SANGLI.
(State Excise Department)
District SANGLI. .... Respondents.
WITH
(9) WRIT PETITION NO. 3401 OF 2004
SHRI SHANKAR SAHAKARI
SAKHAR KARKHANA LIMITED,
Sadashiv Nagar, Taluka Malshiras,
District SOLAPUR. .... Petitioner.
Versus
1. STATE OF MAHARASHTRA
through Principal Secretary,
Government of Maharashtra, Home
(Transport) Department, Mantralaya,
MUMBAI - 400 020.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 032.
::: Downloaded on - 09/06/2013 17:15:40 :::
11 Wp no. 2922-01 &
50 other wps.
3. THE COLLECTOR OF SOLAPUR.
(State Excise Department)
District SOLAPUR. .... Respondents.
WITH
(10) WRIT PETITION NO. 3454 OF 2004
WITH
CIVIL APPLICATION NO. 2779 OF 2008
M/s. JUBILANT ORGANOSYS LIMITED,
a firm incorporated under the provisions
of Indian Companies Act, having its unit
at Nira, Taluka Purandar,
District PUNE. .... Petitioner.
Versus
1. STATE OF MAHARASHTRA
through Principal Secretary,
Government of Maharashtra, Home
(Transport) Department, Mantralaya,
MUMBAI - 400 020.
::: Downloaded on - 09/06/2013 17:15:40 :::
12 Wp no. 2922-01 &
50 other wps.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 032.
3. THE COLLECTOR OF PUNE.
(State Excise Department)
District PUNE. .... Respondents.
WITH
(11)
WRIT PETITION NO. 3783 OF 2004 (Not on Board)
MAHARASHTRA MANUFACTURING
CORPORATION, Proprietor -
M/s. BHAGAT DISTILLERIES PVT. LTD.
Plot No. C-31, Road No. 16, Wagle
Industrial Estate, Thane,
District THANE. .... Petitioner.
Versus
1. STATE OF MAHARASHTRA
through Principal Secretary, to the
Government of Maharashtra, Home
::: Downloaded on - 09/06/2013 17:15:41 :::
13 Wp no. 2922-01 &
50 other wps.
(Transport) Department, Mantralaya,
MUMBAI - 400 020.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 032.
3. THE COLLECTOR OF THANE.
(State Excise Department)
District THANE.
ig .... Respondents.
WITH
(12) WRIT PETITION NO. 5530 OF 2004
KOLHAPUR SUGAR MILLS LTD,
(Distillery Division) a company incorporated
under the Companies Act, having its
manufactory at Kasbabauda,
Kolhapur, District KOLHAPUR. .... Petitioner.
Versus
1. THE GOVT. OF MAHARASHTRA
through Principal Secretary,
::: Downloaded on - 09/06/2013 17:15:41 :::
14 Wp no. 2922-01 &
50 other wps.
Home (Transport) Department, Mantralaya,
MUMBAI - 400 032.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 023.
3. THE COLLECTOR OF KOLHAPUR.
(State Excise Department)
KOLHAPUR. ig .... Respondents.
WITH
(13) WRIT PETITION NO. 6111 OF 2001
MESSRS. BELLOI DISTILLERIES.,
a partnership firm carrying on business
Village Vevoor, Taluka Palghar,
District THANE. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
::: Downloaded on - 09/06/2013 17:15:41 :::
15 Wp no. 2922-01 &
50 other wps.
Maharashtra State, Mantralaya,
MUMBAI - 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
Old Custom House,\
MUMBAI - 400 001.
3. THE COLLECTOR OF THANE.
(State Excise Department)
THANE. .... Respondents.
WITH
(14) WRIT PETITION NO. 6112 OF 2001
MESSRS. BHAV DISTILLERIES PVT.
LIMITED, a Company incorporated
under the Companies Act, 1956,
Village Vevoor, Taluka Palghar,
District THANE. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
::: Downloaded on - 09/06/2013 17:15:41 :::
16 Wp no. 2922-01 &
50 other wps.
through Secretary to the Government
of Maharashtra, Home (Transport)
Maharashtra State, Mantralaya,
MUMBAI - 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
Old Custom House,\
MUMBAI - 400 001.
3. THE COLLECTOR OF THANE.
(State Excise Department)
THANE. .... Respondents.
WITH
(15) WRIT PETITION NO. 6113 OF 2001
MESSRS. JAY DISTILLERIES PVT.
LIMITED, a Company incorporated
under the Companies Act, 1956,
Village Vevoor, Taluka Palghar,
District THANE. .... Petitioners.
::: Downloaded on - 09/06/2013 17:15:41 :::
17 Wp no. 2922-01 &
50 other wps.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
Maharashtra State, Mantralaya,
MUMBAI - 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
Old Custom House,\
MUMBAI - 400 001.
3. THE COLLECTOR OF THANE.
(State Excise Department)
THANE. .... Respondents.
WITH
(16) WRIT PETITION NO. 402 OF 2002
MESSRS. DEOKARS' DISTILLERY.
a firm incorporated under the
Indian Partnership Act, having its
::: Downloaded on - 09/06/2013 17:15:41 :::
18 Wp no. 2922-01 &
50 other wps.
Unit and Office at MIDC Plot No.D-1,
Kherdi, Taluka Chiplun,
District Ratnagir. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
Maharashtra State, Mantralaya,
MUMBAI - 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
Old Custom House,\
MUMBAI - 400 001.
3. THE COLLECTOR OF RATNAGIRI.
(State Excise Department)
RATNAGIRI. .... Respondents.
WITH
::: Downloaded on - 09/06/2013 17:15:41 :::
19 Wp no. 2922-01 &
50 other wps.
(17) WRIT PETITION NO. 1053 OF 2002
WITH
CIVIL APPLICATION NO. 2540 OF 2007
LOKRANJAN BREWERIES PVT. LTD.
a private limited company
incorporated under the provisions
of the CompaniesAct, having its
Unit at 58, Hadapsar Industrial
Estate, PUNE - 411 013. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
Maharashtra State, Mantralaya,
MUMBAI - 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
::: Downloaded on - 09/06/2013 17:15:41 :::
20 Wp no. 2922-01 &
50 other wps.
Old Custom House,\
MUMBAI - 400 001.
3. THE COLLECTOR OF PUNE.
(State Excise Department)
PUNE. .... Respondents.
WITH
(18)
WRIT PETITION NO. 1055 OF 2002
BHARAT D DISTILLERIES LIMITED,
a limited company incorporated under the
provisions of Companies Act, having its unit
at Survey No. 285, Agra Bombay
Road, Village Talegaon, Taluka Igatpuri,
District NASIK.. .... Petitioner.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport),
::: Downloaded on - 09/06/2013 17:15:41 :::
21 Wp no. 2922-01 &
50 other wps.
Department, Mantralaya,
MUMBAI - 400 032.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 001.
3. THE COLLECTOR OF NASIK.
(State Excise Department)
District NASIK. .... Respondents.
WITH
(19) WRIT PETITION NO. 1257 OF 2002
WITH
CIVIL APPLICATION NO. 2541 OF 2007
MESSRS DEEJAY DISTILLERIES PVT. LTD.
a firm incorporated under the Indian
Partnership Act having its
Unit at 36-A, Kolavali Bavada, Vangaon,
::: Downloaded on - 09/06/2013 17:15:41 :::
22 Wp no. 2922-01 &
50 other wps.
Taluka Dahanu, District THANE. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
Maharashtra State, Mantralaya,
MUMBAI - 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
Old Custom House,\
MUMBAI - 400 001.
3. THE COLLECTOR OF THANE.
(State Excise Department)
THANE. .... Respondents.
WITH
(20) WRIT PETITION NO. 1264 OF 2002
WITH
::: Downloaded on - 09/06/2013 17:15:41 :::
23 Wp no. 2922-01 &
50 other wps.
CIVIL APPLICATION NO. 35 OF 2008
MESSRS BRIHAN MAHARASHTRA
SUGAR SYNDICATE LIMITED.
a private limited company incorporated
under the provisions of the Companies
Act and having itsUnit at Gonde,
Taluka Igatpuri, District NASIK. .... Petitioners.
Versusig
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
Maharashtra State, Mantralaya,
MUMBAI - 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
Old Custom House,\
MUMBAI - 400 001.
3. THE COLLECTOR OF NASIK.
::: Downloaded on - 09/06/2013 17:15:41 :::
24 Wp no. 2922-01 &
50 other wps.
(State Excise Department)
NASIK. .... Respondents.
WITH
(21) WRIT PETITION NO. 2009 OF 2002
MESSRS UDV INDIA LIMITED.
a firm incorporated under the Indian
Companies Act having itsUnit at Nira,
Taluka Baramati, District PUNE. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
Maharashtra State, Mantralaya,
MUMBAI - 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
::: Downloaded on - 09/06/2013 17:15:41 :::
25 Wp no. 2922-01 &
50 other wps.
Old Custom House,\
MUMBAI - 400 001.
3. THE COLLECTOR OF PUNE.
(State Excise Department)
PUNE. .... Respondents.
WITH
(22) WRIT PETITION NO. 2014 OF 2002
MESSRS PALBO DISTILLERIES PVT. LTD.
a company incorporated under the Indian
Companies Act having itsUnit at S.No. 17/1B
Plot No. 15, Kothrud Industrial Estate,
Kothrud, District PUNE. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
Maharashtra State, Mantralaya,
MUMBAI - 400 032.
::: Downloaded on - 09/06/2013 17:15:41 :::
26 Wp no. 2922-01 &
50 other wps.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
Old Custom House,\
MUMBAI - 400 001.
3. THE COLLECTOR OF PUNE.
(State Excise Department)
PUNE. ig .... Respondents.
WITH
(23) WRIT PETITION NO. 2454 OF 2002
MESSRS G.M. BREWERIES LIMITED.
a company incorporated under the provisions
of Indian Companies Act having itsUnit at
S. Veer Savarkar Marg, Virar (East)
District THANE. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
::: Downloaded on - 09/06/2013 17:15:41 :::
27 Wp no. 2922-01 &
50 other wps.
of Maharashtra, Home (Transport)
Maharashtra State, Mantralaya,
MUMBAI - 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
Old Custom House,
MUMBAI - 400 001.
3. THE COLLECTOR OF THANE.
(State Excise Department)
THANE. .... Respondents.
WITH
(24) WRIT PETITION NO. 2688 OF 2002
WITH
CIVIL APPLICATION NO. 50 OF 2008
WITH
::: Downloaded on - 09/06/2013 17:15:41 :::
28 Wp no. 2922-01 &
50 other wps.
CIVIL APPLICATION NO. 2881 OF 2009
M/s. SUBHASH LIQUORS PVT. LTD.,
A company incorporated under the provisions
of Indian Companies Act having itsUnit at
15-A, Mumbai Pune Road,
PUNE - 411 003. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
Maharashtra State, Mantralaya,
MUMBAI - 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
Old Custom House,\
MUMBAI - 400 001.
3. THE COLLECTOR OF PUNE.
(State Excise Department)
::: Downloaded on - 09/06/2013 17:15:41 :::
29 Wp no. 2922-01 &
50 other wps.
PUNE. .... Respondents.
WITH
(25) WRIT PETITION NO. 1259 OF 2002
MESSRS MASTER BLENDERS PVT. LTD.
a firm incorporated under the Indian
Partnership Act having its
Unit at 43/44, Khopoli Co-operative
Industrial Estate, Khopoli,
District Raigad. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
Maharashtra State, Mantralaya,
MUMBAI - 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
Old Custom House,\
::: Downloaded on - 09/06/2013 17:15:41 :::
30 Wp no. 2922-01 &
50 other wps.
MUMBAI - 400 001.
3. THE COLLECTOR OF RAIGAD.
(State Excise Department)
RAIGAD. .... Respondents.
WITH
(26) WRIT PETITION NO. 2800 OF 2007
SEAGRAM INDIA (PVT.) LTD.,
a company incorporated under the
Companies Act, 1956 and having its
registered office at 2130, "E" Ward,
Vikram Nager, Pune-Bangalore Road,
KOLHAPUR. .... Petitioners.
Versus
1. THE GOVERNMENT OF MAHARASHTRA
through Principal Secretary, Home
(Transport) Department, Mantralaya,
MUMBAI- 400 032.
2. COMMISSIONER OF STATE EXCISE,
::: Downloaded on - 09/06/2013 17:15:41 :::
31 Wp no. 2922-01 &
50 other wps.
Maharashtra State, Old Custom House,
MUMBAI - 400 023.
3. THE COLLECTOR OF KOLHAPUR.
(State Excise Department)
KOLHAPUR. .... Respondents.
WITH
(27) WRIT PETITION NO. 6752 OF 2002
WITH
CIVIL APPLICATION NO. 51 OF 2008
MESSERS DAHISAR DISTILLERIES PVT. LTD.,
A company incorporated under the
Companies Act having itsUnit and Office at
Sativali, Taluka Bassein,
District : THANE. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary , Home (Transport)
Maharashtra State, Mantralaya,
::: Downloaded on - 09/06/2013 17:15:41 :::
32 Wp no. 2922-01 &
50 other wps.
Mumbai.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
Old Custom House,\
MUMBAI - 400 001.
3. THE COLLECTOR OF THANE.
(State Excise Department)
THANE. ig .... Respondents.
WITH
(28) WRIT PETITION NO. 1375 OF 2003
WITH
CIVIL APPLICATION NO. 290 OF 2010
M/s. BDA LIMITED
A company incorporated under the provisions
of Indian Companies Act having its Office at
12, Evergreen Industrial Estate,
Shakti Mills Lane, Off. Haines Road,
Mahalaxmi, MUMBAI 400 011, and
::: Downloaded on - 09/06/2013 17:15:41 :::
33 Wp no. 2922-01 &
50 other wps.
its Unit at Chikalthana,
AURANGABAD. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
Maharashtra State, Mantralaya,
MUMBAI 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, Maharashtra State,
Old Custom House,\
MUMBAI - 400 001.
3. THE COLLECTOR OF MUMBAI.
(State Excise Department)
MUMBAI. .... Respondents.
WITH
(29) WRIT PETITION NO. 1377 OF 2003
::: Downloaded on - 09/06/2013 17:15:42 :::
34 Wp no. 2922-01 &
50 other wps.
SHIVDAS GAJANAN NAIK
an Indian National carrying on business
in the name and style of
M/s. SOUTH KOKAN DISTILLERIES
having his unit at Insuli, Taluka Sawantwadi,
District SINDHUDURG .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
Maharashtra State, Mantralaya,
MUMBAI 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, Old Custom House,
MUMBAI - 400 001.
3. THE COLLECTOR OF SINDHUDURG,
(State Excise Department)
Oras, District SINDHUDURG .... Respondents.
::: Downloaded on - 09/06/2013 17:15:42 :::
35 Wp no. 2922-01 &
50 other wps.
WITH
(30) WRIT PETITION NO. 6727 OF 2003
THE OAISIS ALCOHOL INDIA PVT. LTD.
A-47, M.I.D.C. Industrial area,
Karad, Taluka Karad,
District SATARA.. .... Petitioner.
Versus
1. STATE OF MAHARASHTRA
through Principal Secretary,
Home (Transport),
Department, Mantralaya,
MUMBAI - 400 020.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 032.
3. THE COLLECTOR OF SATARA.
(State Excise Department)
District SATARA. .... Respondents.
::: Downloaded on - 09/06/2013 17:15:42 :::
36 Wp no. 2922-01 &
50 other wps.
WITH
(31) WRIT PETITION NO. 9137 OF 2003
SEAGRAM DISTILLERIES PVT. LTD.
a private limited company incorporated under the
provisions of Companies Act, having its registered
office at Unit No. 208/210, 2nd floor, Turf Estate,
Opp. Shaki Mills. Off. Dr. E. Mosses Road,
Mahalaxmi, MUMBAI - 400 011.
ig .... Petitioner.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport),
Department, Mantralaya,
MUMBAI - 400 032.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 001.
3. THE COLLECTOR OF NASIK.
::: Downloaded on - 09/06/2013 17:15:42 :::
37 Wp no. 2922-01 &
50 other wps.
(State Excise Department)
District NASIK. ....
Respondents.
WITH
(32) WRIT PETITION NO. 1036 OF 2004
MESSRS. INDUSTRIAL CHEMICALS
& ALLIED PRODUCTS, a partnership firm
under the provisions of Indian Partnership Act,
and having its unit at Vasantdada Industrial
Estate, Sangli, District SANGLI- 416416. .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
Department, Mantralaya,
MUMBAI - 400 032.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
::: Downloaded on - 09/06/2013 17:15:42 :::
38 Wp no. 2922-01 &
50 other wps.
MUMBAI - 400 001.
3. THE COLLECTOR OF SANGLI.
(State Excise Department)
SANGLI. .... Respondents.
WITH
(33) WRIT PETITION NO. 3284 OF 2004
WITH
CIVIL APPLICATION NO. 1474 OF 2009
WITH
CIVIL APPLICATION NO. 1812 OF 2010
MOHAN ROCKY SPRING WATER
BREWERIES LIMITED having their
factory at Mohan Wadi, Khopoli
District Raigad. .... Petitioner.
Versus
1. STATE OF MAHARASHTRA
through Principal Secretary Home (Excise)
Department, Mantralaya,
::: Downloaded on - 09/06/2013 17:15:42 :::
39 Wp no. 2922-01 &
50 other wps.
MUMBAI - 400 032.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 023.
3. THE COLLECTOR OF RAIGAD.
(State Excise Department)
Alibaug, District RAIGAD. ....
Respondents.
WITH
(34) WRIT PETITION NO. 3415 OF 2007
DELTA DISTILLERIES PVT. LTD.,
a company incorporated under the
Companies Act, 1956 and having its
registered office at Plot No. 27-B,
Hadpsar Industrial Estate,Pune
DISTRICT PUNE .... Petitioners.
Versus
1. THE GOVERNMENT OF MAHARASHTRA
::: Downloaded on - 09/06/2013 17:15:42 :::
40 Wp no. 2922-01 &
50 other wps.
through Principal Secretary, Home
(Transport) Department, Mantralaya,
MUMBAI- 400 032.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 023.
3. THE COLLECTOR OF PUNE.
(State Excise Department)
PUNE. .... Respondents.
WITH
(35) WRIT PETITION NO. 3814 OF 2009 (Not on Board)
VISHNU LAXMI CO-OP. GRAPE
DISTILLERY LTD.,
a Co-operative Society incorporated under
The Maharashtra Co-operative Societies
Act, 1960 having its registered office
and factory at B-1, M.I.D.C.
Akkalkot Road, SOLAPUR-413 006. .... Petitioners.
::: Downloaded on - 09/06/2013 17:15:42 :::
41 Wp no. 2922-01 &
50 other wps.
Versus
1. THE GOVERNMENT OF MAHARASHTRA
through Principal Secretary, Home
(Transport) Department, Mantralaya,
MUMBAI- 400 032.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 023.
3. THE COLLECTOR OF SOLAPUR.
(State Excise Department)
SOLAPUR. .... Respondents.
WITH
(36) WRIT PETITION NO. 10497 OF 2009 (Not on Board)
SEAGRAM DISTILLERIES PVT. LTD.,
a Private Limited Company incorporated under the
provisions of Companies Act, having its
registered office at Unit No. 104
Ashoka Estate, Barakhamba Road,
::: Downloaded on - 09/06/2013 17:15:42 :::
42 Wp no. 2922-01 &
50 other wps.
NEW DELHI - 110 001. .... Petitioners.
Versus
1. THE GOVERNMENT OF MAHARASHTRA
through Principal Secretary, Home
(Transport) Department, Mantralaya,
MUMBAI- 400 032.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 023.
3. THE COLLECTOR OF NASIK.
(State Excise Department)
NASIK. .... Respondents.
WITH
(37) WRIT PETITION NO. 6149 OF 2003
MESSERS STERLING CHEMICALS &
ALCOHOLS PRIVATE LIMITED,
a Company incorporated under the
provisions of the Companies Act,
::: Downloaded on - 09/06/2013 17:15:42 :::
43 Wp no. 2922-01 &
50 other wps.
having its registered office at
15-A,Bhale Estate, Mumbai Pune Road,
Wakde Wadi, PUNE - 411 003. .... Petitioner.
Versus
1. STATE OF MAHARASHTRA
through Principal Secretary,
Government of Maharashtra,
Home (Transport),
Department, Mantralaya,
MUMBAI - 400 020.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 032.
3. THE COLLECTOR OF PUNE.
(State Excise Department)
District PUNE- 411 001. .... Respondents.
WITH
(38) WRIT PETITION NO. 9354 OF 2009
::: Downloaded on - 09/06/2013 17:15:42 :::
44 Wp no. 2922-01 &
50 other wps.
M/S. ANAND DISTILLERIES PVT. LTD.,
a Company incorporated under The
Companies Act, 1956 having its registered
office at Bapat Chowk, Amravati,
District AMRAVATI and Manufactory
at Kekatpur, Davargaon to Mozari Road,
District AMRAVATI. .... Petitioner.
Versusig
1. THE GOVT OF MAHARASHTRA
through Principal Secretary,
Home (State Excise),
Department, Mantralaya,
MUMBAI - 400 032.
2. COMMISSIONER OF STATE EXCISE,
Maharashtra State, Old Custom House,
MUMBAI - 400 023.
3. THE COLLECTOR OF AMRAVATI.
(State Excise Department)
::: Downloaded on - 09/06/2013 17:15:42 :::
45 Wp no. 2922-01 &
50 other wps.
District AMRAVATI. .... Respondents.
WITH
(39) WRIT PETITION NO. 6783 OF 2010 (Not on Board)
United Spirits Limited,
Plot No. 37 to 41,
Additional Industrial Area
MIDC, Chikalthana, Aurangabad
Through its Dy. General Manager,
Sanjay S/o Rambilas Gupta
Age : 39 years, Occ. : Service,
R/o Plot No. 120/121, Sector A,
N-1, CIDCO, Aurangabad. .... Petitioner.
Versus
1. The State of Maharashtra
Through the Principal Secretary,
Department of State Excise and
Transport, Maharashtra State,
Mantralaya, Mumbai - 400 032.
::: Downloaded on - 09/06/2013 17:15:42 :::
46 Wp no. 2922-01 &
50 other wps.
2. The Commissioner, State Excise,
Maharashtra State, Old Custom House,
Mumbai - 400 001.
3. The Superintendent of State
Excuse and Prohibition,
Kashmira Building,
Aurangabad.
4. Deputy Superintendent,
State Excise (Incharge),
United Spirits Ltd.,
Additional Industrial Area
Chikalthana, MIDC,
Aurangabad - 431 210. .... Respondents.
WITH
(40) WRIT PETITION NO. 6785 OF 2010 (Not on Board)
The United Spirits Limited,
Plot No. 36 to 41,
Additional Industrial Area
::: Downloaded on - 09/06/2013 17:15:42 :::
47 Wp no. 2922-01 &
50 other wps.
MIDC, Chikalthana, Aurangabad
Through its General Manager,
Sarbjitsing s/o Jagjitsingh
Age : 39 years, Occ. : Service,
R/o MDL Colony, N1
CIDCO, Aurangabad. .... Petitioner.
Versus
1. The State of Maharashtra
(copy to be served on
Government Pleader,
Bombay High Court,
Bench at Aurangabad).
2. The Commissioner,
State Excise,
Maharashtra State,
Mumbai.
3. The Inspector,
State Excise, Incharge
::: Downloaded on - 09/06/2013 17:15:42 :::
48 Wp no. 2922-01 &
50 other wps.
Maharashtra Distilleries Ltd.,
Aurangabad. .... Respondents.
WITH
(41) WRIT PETITION NO. 3691 OF 2003
WITH
CIVIL APPLICATION NO. 2565 OF 2006
WITH
CIVIL APPLICATION NO. 2602 OF 2007
WITH
CIVIL APPLICATION NO. 1933 OF 2010
Baramati Grape Industries Limited,
a Company incorporated under the
Companies Act, 1956 and having its
registered office at Pimpali,
Tal. Baramati, Dist. Pune - 413 102.
2. Y.D. Acidwalla of Bombay, Indian
Inhabitant and having my office at Pimpli,
Taluka Baramati, District Pune-413 102. .... Petitioners.
::: Downloaded on - 09/06/2013 17:15:42 :::
49 Wp no. 2922-01 &
50 other wps.
Versus
1. The State of Maharashtra through
Secretary to the Government
of Maharashtra, Home (Transport),
Department, Mantralaya,
Mumbai - 400 032.
2. The Commissioner, State Excise,
Maharashtra State, Old Custom House,
Mumbai - 400 001.
3. Collector of Pune.
(State Excise Department)
Pune. .... Respondents.
WITH
(42) WRIT PETITION NO. 3692 OF 2003
WITH
CIVIL APPLICATION NO. 30 OF 2008
WITH
CIVIL APPLICATION NO. 1819 OF 2010
::: Downloaded on - 09/06/2013 17:15:42 :::
50 Wp no. 2922-01 &
50 other wps.
United Spirits Limited,
a Company incorporated under the
Companies Act, 1956 and having its
factory at Parmori Village, ,
Taluka-Dindori,
District, Nasik.
2. Satyanarayan Ramarao Ainapur of Mumbai
Indian Inhabitant, the Regional Manager of the
Petitioner No. 1 having my office at Sangam
Bhavan, Opp. Strand Cinema,
Mumbai - 400 005. .... Petitioners.
Versus
1. The State of Maharashtra through
Secretary to the Government
of Maharashtra, Home (Transport),
Department, Mantralaya,
Mumbai - 400 032.
2. The Commissioner, State Excise,
::: Downloaded on - 09/06/2013 17:15:42 :::
51 Wp no. 2922-01 &
50 other wps.
Maharashtra State, Old Custom House,
Mumbai - 400 001.
3. Collector of Nasik.
(State Excise Department)
Nasik. .... Respondents.
WITH
(43) WRIT PETITION NO. 3348 OF 2004
ig WITH
CIVIL APPLICATION NO. 1893 OF 2008
1. Associated Blenders Pvt. Ltd.,
a company incorporated under the
Companies Act, 1956 and having its
factory at 72, Ramtekdi Industrial Estate,
Haddapsar, Pune - 411 028.
2. Chandrashekhapuram Subramanian
Balkrishnan of Pune, Indian Inhabitant,
Director of the Petitioner No. 1, residing at
406, Livstonia I, Palmgroves, B.T. Kawde
::: Downloaded on - 09/06/2013 17:15:42 :::
52 Wp no. 2922-01 &
50 other wps.
Road, Pune - 411 036. .... Petitioners.
Versus
1. State of Maharashtra,
through Secretary to the Government
of Maharashtra, Home (Transport)0
Department, Mantralaya,
Mumbai - 400 032.
2. Commissioner of State Excise,
Maharashtra State, Old Custom House,
MUMBAI - 400 001.
3. The Collector of Pune,.
(State Excise Department)
Pune. .... Respondents.
WITH
(44) WRIT PETITION NO. 5467 OF 2001
Rajaram Bapu Patil Sahakari
Sakhar Karkhana Ltd., Rajaram
Nagar, Sakharale, Taluka Walwa,
::: Downloaded on - 09/06/2013 17:15:43 :::
53 Wp no. 2922-01 &
50 other wps.
District : Sangli.. .... Petitioner.
Versus
1. The State of Maharashtra
(Copy to be served on the
Governemnt Pleader, High
Court, Mumbai).
2. The Secretary,
Home Department, (Transport)
Maharashtra State, Mumbai.
3. Commissioienr of State Excise,
Maharashtra State, Old Custom House,
Mumbai.
4. The Superintendent of State
Excise, Sangli, District : Sangli,
M.S.
5. The Collector of Sangli.
District : Sangli. .... Respondents.
::: Downloaded on - 09/06/2013 17:15:43 :::
54 Wp no. 2922-01 &
50 other wps.
WITH
(45) WRIT PETITION NO. 4401 OF 2003
WITH
CIVIL APPLICATION NO. 2842 OF 2007
NEVITAD DISTILLERIES PRIVATE LIMITED
a limited Company incorporated under the
provisions of Companies Act having its unit at Village-
Borivali, Patalganga,ig
District - Raigad .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
Department, Mantralaya,
MUMBAI 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, having his office at Old Custom House,
MUMBAI.
::: Downloaded on - 09/06/2013 17:15:43 :::
55 Wp no. 2922-01 &
50 other wps.
3. THE COLLECTOR OF RAIGAD,
State Excise Department
Raigad .... Respondents.
WITH
(46) WRIT PETITION NO. 6309 OF 2003
WITH
CIVIL APPLICATION NO. 2604 OF 2007
SUNNYGOLD WINERIES PRIVATE LIMITED
a limited Company incorporated under the
provisions of Companies Act having its unit at
Gat No. 851/2, Koregaon Bhima,
Pune-Nagar Road, Taluka-Shirur,
Dist. Pune .... Petitioners.
Versus
1. STATE OF MAHARASHTRA
through Secretary to the Government
of Maharashtra, Home (Transport)
::: Downloaded on - 09/06/2013 17:15:43 :::
56 Wp no. 2922-01 &
50 other wps.
Department, Mantralaya,
MUMBAI 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, having his office at Old Custom House,
MUMBAI.
3. THE COLLECTOR OF PUNE
State Excise Department
Pune. ig .... Respondents.
WITH
(47) WRIT PETITION NO. 7082 OF 2003
M/s. SHRIRAM SAHAKARI SAKHAR
KARKHANA LTD.
a limited Company incorporated under the
provisions of Companies Act having its unit at
Nira, Valley, Phaltan, Taluka- Phaltan-415 423,
Dist. Satara. .... Petitioners.
Versus
::: Downloaded on - 09/06/2013 17:15:43 :::
57 Wp no. 2922-01 &
50 other wps.
1. THE STATE OF MAHARASHTRA
through the Secretary to the Government
of Maharashtra, Home (Transport)
Department, Mantralaya,
MUMBAI 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, having his office at Old Custom House,
MUMBAI.
3. THE COLLECTOR OF SATARA
State Excise Department
Satara. .... Respondents.
WITH
(48) WRIT PETITION NO. 3596 OF 2004 (Not on Board)
WITH
CIVIL APPLICATION NO. 3066 OF 2007
VEEKAY DISTILLERIES PRIVATE
LIMITED a limited Company incorporated
::: Downloaded on - 09/06/2013 17:15:43 :::
58 Wp no. 2922-01 &
50 other wps.
under the provisions of Companies Act
having its Tilaknagar, Taluka-Shrirampur,
Dist. Ahmednagar, Pin - 413 720,
Dist. Satara. .... Petitioners.
Versus
1. THE STATE OF MAHARASHTRA
through the Secretary to the Government
of Maharashtra, Home (Transport)
Department, Mantralaya,
MUMBAI 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, having his office at
Old Custom House,
MUMBAI. .... Respondents.
WITH
(49) WRIT PETITION NO. 7181 OF 2009 (Not on
Board)
CHITALI DISTILLERIES LTD.,
::: Downloaded on - 09/06/2013 17:15:43 :::
59 Wp no. 2922-01 &
50 other wps.
a limited Company incorporated
under the provisions of Companies Act
having its Office at 221,
2nd floor, Maker Chamber-V, Nariman Point,
Mumbai - 400 021. .... Petitioners.
Versus
1. THE STATE OF MAHARASHTRA
through the Secretary to the Government
of Maharashtra, Home (Transport)
Department, Mantralaya,
MUMBAI 400 032.
2. THE COMMISSIONER OF STATE
EXCISE, having his office at 2nd floor,
Old Custom House, S.B. Marg,
Fort, Mumbai-400 001. .... Respondents.
WITH
(50) WRIT PETITION NO. 9104 OF 2009
M/s. Vidarbha Distillers, Nagpur,
::: Downloaded on - 09/06/2013 17:15:43 :::
60 Wp no. 2922-01 &
50 other wps.
a Partnership Firm duly registered under the
provisions of Indian Partnership Act, 1932 and having its
place of business at Kamptee Road, Nagpur through its
Partner Shri Sanjeev s/o Late Shri Vinodkumar Sahu, aged
about 32years, R/o 'Saket', Cement Road, Dharampeth
Extension, Nagpur. .... Petitioners.
Versus
1. The State of Maharashtra,
through the Secretary, Home
Department, Mantralaya,
Bombay.
2. The Commissioner of State Excise,
Maharashtra State, Old Custom House,
Bombay. .... Respondents.
WITH
(51) WRIT PETITION NO. 9098 OF 2009 (Not on Board)
::: Downloaded on - 09/06/2013 17:15:43 :::
61 Wp no. 2922-01 &
50 other wps.
M/s. Nagpur Distillers, Nagpur,
a Partnership Firm duly registered under the
provisions of Indian Partnership Act, 1932
and having its place of business at
Teka Naka,Kamptee Road, Nagpur through its
Partner Shri Jasbir s/o Jagat Singh Anand,
aged about 47 years, resident of 108,
Dharampeth Extension, Nagpur.
ig .... Petitioners.
Versus
1. The State of Maharashtra,
through the Secretary, Home
Department, Mantralaya,
Bombay.
2. The Commissioner of State Excise,
Maharashtra State, Old Custom House,
Bombay. .... Respondents.
Mr. D.B. Sawant for Petitioners (in writ petitions at Sr. Nos. 1 to 43) and
in some writ petitions i/by Bharat Shah & Co.
::: Downloaded on - 09/06/2013 17:15:43 :::
62 Wp no. 2922-01 &
50 other wps.
Mr. A.A. Kumbhakoni with A.M. Kulkarni for Petitioner (in writ
petition no. at Sr. No. 44).
Mr. Vishal Thadani i/by Ms. V.B. Thadani for petitioners (in writ
petitions at Sr. Nos. 45 to 49)
Ms. Chandana Salgaonkar-Radia for petitioners (in writ petitions
at Sr. Nos. 50 & 51)
Ms. Neha Palshikar-Bhide "B" Panel Counsel with Mr. S.N. Patil
for Respondent State and its authorities (in all the writ petitions).
CORAM : P.B.MAJMUDAR & A.A.SAYED, JJ.
JUDGMENT RESERVED ON 18TH MARCH, 2011
JUDGMENT PRONOUNCED ON 6TH MAY, 2011
ORAL JUDGMENT (PER A.A. SAYED, J.):-
1. At the request of Ld. Counsel for the parties, writ petition nos. 3814/09,
10497/09, 6783/10, 6785/10, 9098/09, 3783/04, 3596/04 and 7181/2009 are also
taken on Board. Rule in all the petitions, where rule has not been issued and by
::: Downloaded on – 09/06/2013 17:15:43 :::
63 Wp no. 2922-01 &
50 other wps.
consent heard finally along with the other petitions. The learned counsel for the
State waives notice on behalf of the respondents.
2. The above bunch of petitions filed under Article 226 of the Constitution of India
question the legality and validity of Rule 19 of the Bombay Molasses Rules,
1955/Rule 5 of the Bombay Rectified Spirit (Transport in Bond) Rules,
1959/Rule 50 of the Bombay Denatured Spirit Rules, 1957, to the extent they
levy/impose transport fee/administrative fee in relation to the transport of
molasses/rectified spirit/extra neutral alcohol/silent spirit/denatured spirit. The
said Rules are framed in exercise of powers under The Bombay Prohibition Act,
1949.
3. The petitioners are producers/manufacturers/users/sellers/purchasers etc. of
molasses/rectified spirit/extra neutral alcohol/silent spirit/denatured spirit and
hold various licences for production/manufacture/possession/
use /storage /sale/purchase etc. of the said articles/products under the different
Rules framed under the Bombay Prohibition Act, 1949 (hereinafter referred to as
‘the said Act). Some of the petitioners are owners of sugar factories/distilleries
and produce/manufacture molasses/rectified spirit/extra neutral alcohol/silent
spirit/denatured spirit. Majority of the petitioners purchase and use the said
products as basic raw material in their manufactory for the manufacture of
potable alcohol (country liquor and Indian made foreign liquor), while some
petitioners purchase and use the said products as basic raw material for
manufacturing chemicals in their chemical plant. There are also few petitioners
::: Downloaded on – 09/06/2013 17:15:43 :::
64 Wp no. 2922-01 &
50 other wps.
who produce/manufacture molasses/rectified spirit/extra neutral alcohol/silent
spirit/denatured spirit in their sugar factory/distillery as well as manufacture
chemical/potable alcohol in their chemical plant/manufactory located in the same
premises/complex and in case of shortage of the said products purchase the same
from outside and in case of excess, sell it. For the transportation of
molasses/rectified spirit/extra neutral alcohol/silent spirit/denatured spirit
(hereinafter referred to as “industrial alcohol/spirit” for the sake of convenience),
the petitioners are required to pay transport fee to the excise authorities under the
State Government. It is the imposition/levy of this transport fee, which is
challenged in the above petitions. Inasmuch as the challenge in all the aforesaid
petitions is to either or all the aforementioned Rules imposing transport fee, and
as such raise common questions of law and facts, the petitions can be disposed of
by this common judgment.
4. To appreciate the controversy, a little needs to be mentioned about the
articles/products in question on which the transport fee is levied –
molasses/rectified spirit/extra neutral alcohol/silent spirit/denatured spirit are in a
generic sense referred to as industrial alcohol, though rectified spirit is also used
in the manufacture of alcoholic liquors meant for human consumption. Molasses
is a thick dark coloured viscous liquid, which is a by-product essentially
produced while manufacturing sugar or jaggery (gur). Rectified spirit is
manufactured by process of fermentation/distillation of molasses as also from
grain-based products. By common standards ethyl alcohol (which has above 95%
::: Downloaded on – 09/06/2013 17:15:43 :::
65 Wp no. 2922-01 &
50 other wps.
purity) is rectified spirit. Rectified spirit is unfit for human consumption. It is
however the main feed stock for manufacture of potable liquor viz. whisky, rum,
gin, etc., by distillation, or by compounding or blending it with essence,
colouring and flavouring substances. Extra Neutral Alcohol (ENA) and Silent
Spirit are a kind of rectified spirit that have been further purified and mainly used
in the manufacture of quality brands of Indian Made Foreign Liquor (IMFL).
Rectified spirit is also used in manufacture of certain medicinal and toilet
preparations and certain other alcohol based products. Rectified spirit
manufactured in the distillery on being denatured as per the method approved by
the excise authority, is called denatured spirit. Denatured spirit is highly toxic
and is also unfit for human consumption. Denaturation has only one object – that
is to make the rectified spirit unfit for potable use by addition of substances
called denaturants which give a bad taste and/or odour to the rectified spirit to
make it unpalatable without altering the chemical composition of alcohol, so that
the denatured spirit is made available for non-potable use at a low-price by
relieving it of the burden of excise duty levied on rectified spirit (as denatured
spirit is exempt from excise duty), so as to develop the industries using alcohol
for non-potable purposes like manufacture of chemicals like acetic acid, acetic
anhydride, vinyl acetate, etc., domestic use by doctors, use in hospitals,
educational and scientific purposes, certain medicinal and toilet preparations
containing alcohol, etc. Until the commencement of the Constitution and for a
few years thereafter rectified spirit was mainly used for the purpose of
manufacturing country liquor, Indian made foreign liquor (IMFL). The rapid
::: Downloaded on – 09/06/2013 17:15:43 :::
66 Wp no. 2922-01 &
50 other wps.
space of industrialization brought into existence several industries which
required rectified spirit/denatured spirit as one of their raw-material with the
result that the demand for rectified spirit/denatured spirit for industrial purpose
went up substantially.
5. The excise duty on potable liquor is considerable, which makes potable liquor
quite dear. Molasses, rectified spirit, denatured spirit or denatured spirituous
preparations like French polish, varnish, thinner, etc., on the other hand are
available at low price because of less or no excise duty, and therefore there is
always a propensity of it’s misuse by diverting it surreptitiously and using it
illegally for making potable alcohol, commonly known as illicit liquor, which
many a times account for the unfortunate hooch tragedies that result in death or
blindness of the persons consuming the adulterated spirit. The State Government
therefore is faced with an unenviable task and required to keep a constant vigil
and supervise the manufacture, import, export, transport, storage, sale, purchase,
use, etc of the molasses, rectified spirit, denatured spirit or denatured spirituous
preparations through the Prohibition and Excise or Police staff so as to ensure
that the same are not diverted illegally and clandestinely for potable use and also
to ensure that excise duty is not evaded. It must however be also mentioned that
notwithstanding what is stated above, as well as article 47 of the Constitution,
though in the State of Maharashtra there is prohibition for all persons to
manufacture, possess, use, store, sale, purchase, transport, etc., of potable
liquors, the State Government parts with this privilege and permits the same by
issuing licences/permits/passes under various Rules framed under the Bombay
::: Downloaded on – 09/06/2013 17:15:43 :::
67 Wp no. 2922-01 &
50 other wps.
Prohibition Act, 1949, in view of the extensive revenues it earns on the excise
duty levied on potable liquors.
6. The petitioners in the above petitions, for the sake of convenience, can be
categorized under two categories viz: (i) captive users and (ii) non-captive users.
Insofar as petitioners who are captive users are concerned, the molasses and/or
industrial alcohol/spirit which is produced/manufactured by them in their
distillery is only transferred from their distillery through closed and sealed pipes
directly to their chemical plant and/or manufactory in the same premises/complex.
Insofar as the petitioners who are non-captive users are concerned, they purchase
the industrial alcohol/spirit from other distilleries and the same is transported to
their manufactory/chemical plant. Some of the captive users in case of shortage,
also purchase industrial alcohol/spirit from outside and therefore to the extent they
purchase the industrial alcohol/spirit from outside, they would be non-captive
users. At this juncture, it may be stated that the entire transactions/processes in
respect of the industrial alcohol/spirit including transport thereof are carried out
under strict excise supervision of the State Government.
7. It would be apposite at this stage, to reproduce the relevant Rules imposing
transport fee.
I. Rule 5 of the Bombay Rectified Spirit (Transport in Bond) Rules,
1951 reads as under:
::: Downloaded on – 09/06/2013 17:15:43 :::
68 Wp no. 2922-01 &
50 other wps.
“5(1) The Distillery or Warehouse Officer may then, if he is
satisfied after making such enquiries as he deems
necessary, that there is no objection to allow the purchase
and transport in bond of spirit indented for, issue a pass in
Form II. The spirits shall be issued in casks, drums or other
receptacles duly sealed with the seal of the Distillery or
Warehouse Officer. The officer shall keep Part I of the pass
on his record, shall also fill in the particulars to be filled in
by him on the reverse of Parts II and III of the pass and
shall hand over Part II of the pass to the purchaser duly
endorsed and forward Part III with an impression of the seal
placed on the drums, casks or other receptacles, to the
officer-in-charge.
(2)(a) No pass in Form II shall be issued under sub-rule (1)
unless transport fee at the following rates is paid.
(i) Extra Neutral Alcohol/Silent Spirit Rs. 3 per bulk litre.
issued for the manufacture of
Indian made Foreign Liquor.
(ii) Rectified spirit issued for manufacture of Rs. 2 per bulk litre.
Indian made Foreign Liquor.
(iii) Rectified spirit issued for the manufacture Rs. 1.25 per bulk litre.
::: Downloaded on – 09/06/2013 17:15:43 :::
69 Wp no. 2922-01 &
50 other wps.
of Country Liquor.
(b) No pass in Form II shall be issued under sub-rule (1)
unless administrative fee at the following rates is paid:-
(i) Rectified spirit, Extra Neutral Alcohol Rs. 1 per bulk litre.
issued to Medicinal and Toilet Preparation
Units.
(ii) Rectified spirit for industrial purpose. Re. 0-30 per bulk litre.
Provided that, no such fees shall be recovered where spirit to be
transported in bond is issued to any person.
(a) for use in the manufacture of Indian-made foreign
liquor in accordance with the conditions of a licence in
Form PLL granted under the Maharashtra Distillation of
Spirit and Manufacture of Potable Liquor Rules, 1966; or
(b) for use in the manufacture of country liquor in
accordance with the conditions of a licence in Form C.L.I.
Granted under the Maharashtra Country Liquor Rules,
1973.”
II. Rule 19 of the Bombay Molasses Rules, 1955 reads as under:
::: Downloaded on – 09/06/2013 17:15:43 :::
70 Wp no. 2922-01 &
50 other wps.
“19(1) On receipt of an application under Rule 18, the
Collector or the authorised officer may make such
inquiries as he deems necessary and if he is satisfied that
there is no objection to grant the permit applied for, he
may grant a permit in Form M-VI on payment of a fee
at the rate of rupee one per metric ton of molasses to be
transported.
(2) The permit shall be in four parts and shall be dealt with
as under:-
Part I shall be kept on the record in the office of the
Collector or the officer granting the permit.
Part II shall be sent to the person supplying molasses.
Part III shall be handed over to the applicant for sending
with the consignment and for record thereafter with
his accounts.
Part IV shall be forwarded to the Prohibition and Excise
Officer of the place to which molasses are to be
transported.”
III. Rule 50 of the Bombay Denatured Spirit Rules, 1957 reads as
under :
::: Downloaded on – 09/06/2013 17:15:43 :::
71 Wp no. 2922-01 &
50 other wps.
“50. If the Collector or the officer authorised to grant such
passes, after making such inquiries as he deems necessary,
is satisfied that there is no objection to grant the pass
applied for, he may grant the applicant a pass in Form
D.S. IX. The pass shall be in 4 parts and shall be dealt
with as under :-
Part I shall be recorded in the office of the
Prohibition and Excise Officer granting the pass.
igPart II shall be forwarded to the licence-holder
from whom the denatured spirit is to be obtained.
Part III shall be handed over to the transporter to
accompany the consignment and shall be recorded
in the licenced premises of the purchaser.
Part IV shall be forwarded to the Prohibition and
Excise Officer of the place to which denatured
spirit is to be transported;
Provided that no such pass shall be granted for the
transport of denatured spirit manufactured or
stored in any distillery, bonded warehouse, bonded
laboratory or bonded manufactory in the State of
Maharashtra from such distillery, warehouse,
::: Downloaded on – 09/06/2013 17:15:43 :::
72 Wp no. 2922-01 &50 other wps.
laboratory or manufactory for the transport of
denatured spirit from any Customs House, at any
Port, Land Custom Station or Airport, unless a
administrative fee at the rate of twenty paise
per litre of denatured spirit to be so transported
has been paid by the applicant.”
Thus, for the purposes of transport of molasses/rectified spirit/extra
neutral alcohol/silent spirit/denatured spirit under the aforementioned
Rules, the petitioners are required to pay transport fee to the excise
authorities of the State Government in advance and a pass/permit is
contemplated in that regard. It may be noted that insofar as captive users
manufacturing potable liquor or other alcohol based products are
concerned, their challenge is essentially to the Notification dated 12th July
1999 by which the aforementioned Rules were amended and the proviso
by which exemption was provided to them earlier, came to be deleted,
which has the effect of requiring them to pay transport fee. Thus, in both
cases viz captive users and non-captive users, it is the levy of the
transport fee which is the subject matter of challenge.
8. We have heard Mr. Sawant, learned Counsel for the petitioners and Mr.
Kumbhkoni, learned Counsel for the petitioners in Writ Petition No. 5467 of
2001. We have also heard Ms. Palshikar-Bhide, Counsel for the Respondent
State Government and its Authorities.
::: Downloaded on – 09/06/2013 17:15:43 :::
73 Wp no. 2922-01 &
50 other wps.
9. Mr. Sawant, learned counsel for the petitioners, submitted that rule 19 of the
1955 Rules, rule 5 of the 1951 Rules and rule 50 of the 1957 Rules imposing
transport fee on transport of molasses and industrial alcohol/spirit is outside of
the legislative competence of the State Government. He submitted that the State
has no power to impose or charge fees or duty on industrial alcohol/spirit which
is not for human consumption or which is not being used for potable purposes.
He submitted that the Bombay Prohibition Act, 1949 itself recognizes that
rectified spirit is unfit for human consumption as the same is of 95% purity
which is highly toxic. Mr. Sawant submitted that the regulation for the
manufacture of industrial alcohol/spirit is entirely different than regulating
potable liquor as industrial alcohol/spirit is required to be regulated under the
provisions of Industrial Development Regulation Act 1951, whereas potable
liquor is regulated under the provisions of the Bombay Prohibition Act, 1949. It
is submitted by Mr. Sawant that the power of the State Legislature under Entry 8
of List 2 of Seventh Schedule to the Constitution ceases to be in existence in
view of enactment of Industrial (Development &Regulation) Act, 1951 after its
amendment since 1956 which contains the declaration that Alcohol Industry is
one of the industry the control of which by Union is expedient in public interest.
It is contended that the power of the State Government to legislate with reference
to the matters enumerated in List 2 is subject to clauses (1) and (2) of Article 246
of the Constitution of India which confers exclusive powers upon the Parliament
to make laws in respect of any matter enumerated in List 1 of the Seventh
Schedule to the Constitution. The learned counsel further submitted that the
::: Downloaded on – 09/06/2013 17:15:43 :::
74 Wp no. 2922-01 &
50 other wps.
domain of the State Legislature, if any, is thus restricted only to potable liquor
which is fit for human consumption. Mr. Sawant submitted that the Bombay
Prohibition Act, 1949 does not provide for levy of transport fee for transportation
of industrial alcohol for captive use or non-captive use and, therefore, the State
has no power to invoke rule exercising power under Section 143 of the Bombay
Prohibition Act, 1949 and therefore the Rules seeking to impose transport fee
have no statutory backing. He further contended that the State has no power to
impose or charge the fees or duty on the industrial alcohol/spirit which is not fit
for human consumption or which is not being used for potable purpose and
outside the scope of State Legislature and hence the Rules to the extent they
impose transport fee are ultravires and unconstitutional.
10. Mr. Sawant then submitted that even assuming that the State had power to
impose or charge fees or duty on industrial alcohol, the State cannot arbitrarily
and illegally recover charges either by way of transport fees or administrative fee
without rendering any services. He pointed out that the State is already
recovering supervision charges under section 58A of the Bombay Prohibition
Act, 1949, for the staff appointed for the purpose of supervision and, therefore,
no further services are rendered justifying imposition of transport fee. Mr.
Sawant then argued that the fee is required to be charged with reference to the
cost of regulation by the excise authorities and there has to be an element of quid
pro quo. He submitted that prior to Notification of 14th January, 1987, no
transport fee was recovered for the use by manufacturers of Indian made foreign
liquor and country liquor. However, after the Notification of 14th January, 1987
::: Downloaded on – 09/06/2013 17:15:43 :::
75 Wp no. 2922-01 &
50 other wps.
manufacturers of IMFL and country liquor were liable to pay transport fee.
Again by Notification dated 22nd May, 1994 no transport fee was levied in
respect of rectified spirit or extra neutral alcohol (ENA) or Silent Spirit,
transported for consumption as raw material in manufacture of IMFL, Country
Liquor or other alcohol based products or both, in the units belonging to the
distillery i.e captive users. However, by Notification dated 12th July, 1999 the
proviso granting exemption was again deleted and the position was as it stood
prior to 14th January, 1987. He submitted that even the State was hesitant in
levying transport fee inasmuch as no additional services were rendered by the
excise authorities and that supervision charges were already being recovered for
the services which were being rendered by the excise authorities.
11. Mr. Sawant submitted that insofar as captive use is concerned, the Division
Bench of this Court vide its order dated 6th January, 2001 in the case of M/s.
Vam Organic Chemicals Ltd. vs. State of Maharashtra & Ors., in Writ Petition
No. 2275 of 2000 has held that since the transport of the spirit is through closed
pipelines, there is no service rendered and, therefore, the State is not entitled to
levy any charges towards the transportation and the Division Bench has set aside
the imposition of transport fee. Mr. Sawant pointed out that the order of the
Division Bench of this Court has been confirmed by the Apex Court in Appeal
filed by the State Government being Civil Appeal No. 7126 of 2001 vide order
dated 13th March 2008, which order was passed during the pendency of the above
petitions. He therefore submitted that the case of petitioners who are captive
users is completely covered by the aforesaid case of M/s. Vam Organic
::: Downloaded on – 09/06/2013 17:15:43 :::
76 Wp no. 2922-01 &
50 other wps.
Chemicals Ltd. and therefore there was no question of levying transport fee in
case of captive users.
12. Mr. Sawant, then submitted that even in the case of non-captive users, no
additional services are being rendered by the excise authorities for the transport
of the industrial alcohol, besides the services which were already being paid for
by the petitioners by way of supervision charges as per the provisions of Section
58A of the said Act. He submitted that even the transport is carried out under the
strict supervision of the excise authorities/staff and the salary, dearness
allowance, provident fund, house rent allowance and other perks of the staff of
the excise authorities/staff supervising the transport also are paid by the
distillery/manufactory owners in addition to the steep fees which are required to
be paid for the various licences. Mr. Sawant therefore urged that the petitions be
allowed and the imposition of transport fee be set aside.
13. In support of his contentions, Mr. Sawant has placed reliance on the following
rulings:
(1) Synthetics & Chemicals Ltd., etc., v. State of U.P. & ors., AIR
1990 SC 1927.
(2) Bihar Distillery and Anr. vs. Union of India & Ors. AIR 1997
SC 1208.
::: Downloaded on – 09/06/2013 17:15:43 :::
77 Wp no. 2922-01 &
50 other wps.
(3) State of U.P. & Ors. vs. Vam Organic Chemicals Ltd., & Ors.
AIR 2003 SC 4650.
(4) Gupta Modern Breweries vs. State of J & K & Ors., (2007) 6
SCC 317.
(5) Judgment of the Division Bench of this Court in Writ Petition
No. 2275 of 2000 (M/s. Vam Organic Chemicals Ltd., vs.
State of Maharashtra & Ors. dated 9th January 2001.
(6) Mohan Meakin Limited vs. State of Himachal Pradesh & Ors.,
(2009) 3 SCC 157.
(7) Amit Maru & Anr. vs. State of Maharashtra & Anr., 2010(4)
ALL MR 596.
14. Mr. Kumbhakoni, the learned counsel for the petitioners in Writ Petition No.
5467 of 2001 pointed out that the petitioners whom he represents are captive
users. He supported the arguments of Mr. Sawant and reiterated that the case of
the petitioners whom he represents is squarely covered by the case of M/s Vam
Organic Chemicals Ltd (supra). The other Counsel supported the arguments of
Mr. Sawant.
15. Per contra Ms.Palshikar-Bhide, learned Counsel for the State submitted that the
State Government is empowered to levy transport fee. She relied upon the
rather lengthy 77-page counter affidavit filed on behalf of the respondents in
::: Downloaded on – 09/06/2013 17:15:43 :::
78 Wp no. 2922-01 &
50 other wps.
W.P. No. 2922 of 2001. She submitted that the affidavit sets out adequate data to
establish that the State is rendering services approximately to the transport fee
charges and that it is not necessary for the State to render a precise account of fee
collected and the services rendered and that a broad co-relationship in that regard
is enough. It is submitted that the exemption in the transport fee granted earlier to
some of the captive users was withdrawn as it was found to be discriminatory
and to bring parity, a decision was taken to withdraw the exemption.
16. Ms. Palshikar-Bhide also made the following submissions – that the services are
rendered by the personnel of the Personal Staff Department also, other than the
supervisory staff. The transactions under the licence are inspected by periodical
visits and by surprise checks, which activity ensures that the provisions, rules,
regulations and orders passed under the Act are complied with by the licensees
and to ensure that there are no serious breaches. High ranked officers like the
Commissioner, Joint or Deputy Commissioner, Superintendent or Deputy
Superintendent pay surprise visits, periodical visits with audit parties and inspect
and verify the stocks and tally them with entries in various registers, check
transactions, check if the supervisory staff is attending to duty properly,
yield/utilization is proper, correct fees are paid, whether supervisory staff has
been misled by the licensee and to check connivance between the supervisory
staff and the licensee. Records are maintained at the taluka, district and State
level in respect of licences granted, renewed, suspended, cancelled or
::: Downloaded on – 09/06/2013 17:15:43 :::
79 Wp no. 2922-01 &
50 other wps.
surrendered. Printing of necessary forms, registers, Government publications like
Gazettes is done for which the employees of the State Excise Department are
taking necessary action. In cases of accidents, the Inspector/Sub-Inspector of the
State Excise of the area is required to visit the site and carry out an inquiry, take
necessary photographs and obtain copies of police panchnama and other records
and make a report and this exercise is done to ensure that the industrial
alcohol/spirit is not disposed of illegally by the licensee or the driver and the
staff keeps track of the transport upto the consignee. Samples are drawn to
ascertain the correctness of the purity strength of alcohol, denaturant added, its
percentage or sugar contents in molasses. The State Excise Officers have to keep
strict vigilance on transport and export of molasses also to prevent theft of
molasses. Besides the Excise Department, services are rendered by government
personnel of different departments of the State Government as also by Collectors
of Districts and Tehsildars. It is submitted that substantial part of the duties of the
State Excise department is for regulation of activities in respect of industrial
alcohol/spirit. Ms. Palshikar-Bhide, therefore submitted that the impugned fees
are not excessive and that they meet the requirement of quid pro quo. She
therefore, submitted that the petitions are required to be dismissed.
17. We have given our anxious considerations to the rival contentions of the parties
and have perused the material on record and the rulings cited on behalf of the
petitioners.
::: Downloaded on – 09/06/2013 17:15:43 :::
80 Wp no. 2922-01 &
50 other wps.
18. Insofar the petitioners who are captive users are concerned, there is hardly any
element of transport inasmuch as the industrial alcohol/spirit is merely
transferred from their distillery through closed and sealed pipes directly to their
manufactory/chemical plant for manufacturing potable alcohol/chemical in the
same premises/complex. In the case of M/s. Vam Organic Chemicals Ltd.
(supra), a Division Bench of this Court by order dated 9 th January 2001 has,
while dealing with the issue of transport fee levied in the case of denatured
spirit, observed that the rectified spirit/industrial alcohol produced in the
distillery is first denatured as per the method approved by the excise authorities
and denatured alcohol which is unfit for human consumption can be used only
for industrial purpose to produce chemicals such as acetic acid, acetic anhydride,
vinyl acetate etc and is carried through closed and sealed pipes directly to its
main chemical plants for manufacture of chemicals, which ensures that the spirit
was manufactured in the distillery cannot be diverted at all. The Division Bench
while allowing the petition and setting aside the imposition of transport fee, in
paragraphs 12 and 13 of the judgment observed as under :
“12. In the light of the above decisions we find much
substance in the submission of the learned counsel for the
petitioner that the State Government has no legislative
competence to regulate denatured spirit which is totally
unfit for human consumption. In Bihar Distillery’s case it
::: Downloaded on – 09/06/2013 17:15:43 :::
81 Wp no. 2922-01 &50 other wps.
is clearly laid down by the Supreme Court that the power
of the States in case of such industries is only to see and
ensure that the rectified spirit whether in the course of
manufacture or after its manufacture is not diverted or
misused for potable purpose. For this purpose the State is
also entitled to place their staff in the distillery and levy
reasonable regulatory fee to defray the cost of such staff.
It is obvious that the power of the State is basically to take
necessary steps against misuse of rectified spirit meant for
industrial purpose. In the instant case we are concerned
with the denatured spirit. Once the denatured alcohol
becomes exclusively industrial alcohol since it cannot be
used for obtaining country liquor or for manufacturing
IMFLs. In the present case the rectified spirit distilled in
the petitioner’s distillery is denatured in accordance with
the procedure prescribed by the State Government and
denaturing is done under the supervision of the Excise
officers in charge of factory and in the manner prescribed
by the rules. However, once ethyl / rectified spirit which is
proposed to be used for industrial purpose is denatured it
cannot be used except for industrial purpose. Once
denatured it goes out of the seisin of the State Legislature.
But the State oversees the process of denaturing so that
::: Downloaded on – 09/06/2013 17:15:44 :::
82 Wp no. 2922-01 &
50 other wps.
the quantity of rectified spirit is no longer available for
obtaining or producing potable liquor. This process is
followed in the petitioner’s factory in accordance with the
Bombay Rectified Spirit Rules under the supervision of
excise staff of the State Government. However, once the
rectified spirit/ethyl/industrial alcohol is converted into
denatured spirit State has no power to regulate and to levy
any regulatory fee. In our opinion Mr. Thorat is right in
submitting that the State has no power to regulate
industrial alcohol once it is converted into denatured
spirit. However, we feel that it is not necessary to decide
this issue finally as in our opinion the second submission
of Mr. Thorat is sufficient to allow the present petition.
13. The second submission of Mr. Thorat is that the
transport fee of 30 paise per litre bears no relation
whatsoever to the expenses incurred if any by the State
Government. It is undisputed position that the denatured
spirit is manufactured in the distillery of the petitioner and
it is carried through close and sealed pipes directly to its
main chemical plant for manufacturing organic chemicals.
It is seen from the affidavit in reply that even the State
Government felt that no service was rendered to the
captive units and therefore a decision was taken to exempt
::: Downloaded on – 09/06/2013 17:15:44 :::
83 Wp no. 2922-01 &
50 other wps.
licensees who were using their own denatured spirit from
payment of transport fees, and therefore by notification
dated 22.3.1994 a proviso was inserted in rule 50 thereby
granting exemption from payment of transport fee when
the denatured spirit is transported for consumption as raw
material in the manufacture of alcohol based products in
the units belonging to the distilleries. There is absolutely
no material to indicate that any service is rendered by the
State Government in the transport of denatured spirit
through the pipelines to the chemical plant of the
petitioners. The only justification offered by the State
Government for withdrawing this exemption is that those
who did not have their own source of alcohol were
discriminated because the captive users are in a better
position to sell their products at lesser price than those
alcohol based industries who purchased alcohol from
manufacturers and therefore exemption was found to be
discriminatory. We fail to understand as to how the State
is in any way concerned whether petitioners are in
position to sell their produce at a lesser price than the
other manufacturers. It has been held by this Court in Smt.
Vimal D. Kalani’s case (supra) that the transport fee has
nothing to do with the grant of privilege to the licensee to
::: Downloaded on – 09/06/2013 17:15:44 :::
84 Wp no. 2922-01 &
50 other wps.
deal in denatured spirit nor the transport fee is a fee
payable as a condition precedent for grant of licence and it
is only an amount to be recovered from the licence holder
to cover the expenditure incurred by the department for
service rendered to the licence holder for transport of the
denatured spirit. It is therefore obligatory on the part of
the State Government to show that any service is rendered
by the State Government in the of transport of denatured
spirit from the distillery of the petitioner who has its own
chemical plant and supply is made through pipe lines
installed in the factory. In the circumstances, having
regard to the fact that transport of denatured spirit is
through the pipelines and in the total absence of any
service rendered we are of the view that the State
Government is not justified in charging transport fees
under rule 50. In our opinion the decision of the State
Government to delete the proviso to rule 50 (2) in case of
captive users under the impugned notification is patently
arbitrary and is therefore liable to be quashed and set
aside.”
19. The aforesaid judgment of the Division Bench of this Court was carried in
appeal by the State Government to the Hon’ble Supreme Court, being Civil
::: Downloaded on – 09/06/2013 17:15:44 :::
85 Wp no. 2922-01 &
50 other wps.
Appeal No. 7126 of 2001. The Hon’ble Supreme Court while dismissing the
Appeal on 13-03-2008 passed the following order:
“Heard the learned counsel for the appellant at great
length. We see no reason to interfere with the well merited
judgment recorded by the High Court. The appeal being
devoid of merit is accordingly dismissed.”
20. It is not in dispute that in the case of petitioners herein who are captive users, the
industrial alcohol/spirit is transferred through sealed and closed pipes from the
distillery of the petitioners who are manufacturers, to their manufactory/chemical
plant which is located in the same premises/complex. As extracted above, it has
been held in the case of M/s Vam Organic Chemical Ltd. by the Division Bench
of this Court that there is absolutely no material to indicate that any service is
rendered by the State Government in the transport of denatured spirit through the
pipelines to the manufactory/chemical plant of the petitioners. The Division
Bench further held that having regard to the fact that transport of denatured spirit
is through the pipelines and in absence of any service rendered, the State
Government was not justified in charging transport fees. The Division Bench
however found that though the Counsel on behalf of the petitioner therein was
right in submitting that the State has no power to regulate industrial alcohol once
it is converted into denatured spirit, the Bench did not feel it necessary to finally
decide the issue finally as the submission on the issue of absence of correlation
::: Downloaded on – 09/06/2013 17:15:44 :::
86 Wp no. 2922-01 &
50 other wps.
between the services rendered by the State Government and the transport fee
charged was sufficient to allow the petition.
21. The only distinction between the aforesaid case of M/s Vam Organic Chemicals
Ltd. and the case of the petitioners herein who are captive users, is that in the
case of M/s Vam Organic Chemicals Ltd., the Division Bench was only
concerned with denatured spirit. However it is required to be noted that the
finding of the Division Bench as regards the absence of any services rendered by
the State Government would apply on all fours in case of all the petitioners
herein who are captive users, whether the spirit was denatured spirit or rectified
spirit or molasses or extra neutral alcohol or silent spirit, inasmuch as admittedly
the State Government supervises the process and levies the transport fee in
respect of all the said products including denatured spirit. This order of the
Division Bench was affirmed by the Apex Court in Appeal. Thus it can be said
that in respect of all captive users, the issue whether or not there was any nexus
between the levy of transport fee by the State Government and the services
rendered by it, is no more res integra. We therefore, accordingly hold that in
respect of captive users, there is no quid pro quo between the services rendered
by the State Government to the transport fee levied by State Government and that
the imposition of transport fee on the petitioners who are such captive users as
mentioned above, is unsustainable and would therefore have to be set aside and
accordingly set aside.
::: Downloaded on – 09/06/2013 17:15:44 :::
87 Wp no. 2922-01 &
50 other wps.
22. Before we deal with the case of non-captive users [which did not fall for
consideration in M/s. Vam Organic Chemical’s case (supra)], we shall advert to
the rulings cited on behalf of the petitioners.
23. In the case of Synthetics & Chemicals Ltd. vs. State of U.P., (1990) 1 SCC 109
=AIR 1990 SC 1927, a Seven-Judge Bench of the Hon’ble Supreme Court
considered questions raised about the dichotomy and the scope and ambit of the
entries in three Lists of the Seventh Schedule to the Constitution with regard to
the subject of industrial alcohol and whether the power of levy in case of
industrial alcohol was with the Union or State Legislature. The Hon’ble
Supreme Court in paragraphs 62 and 63 of the judgment observed as follows:-
62. We are of the opinion that we need not detain ourselves
on the question whether the States have police power or
not. We must accept the position that the States have the
power to regulate the use of alcohol and that power must
include power to make provisions to prevent and/or check
industrial alcohol being used as intoxicating or drinkable
alcohol. The question is whether in the garb of regulations a
legislation which is in pith and substance, as we look upon
the instant legislation, fee or levy which has no connection
with the cost or expenses administering the regulation, can
be imposed purely as regulatory measure. Judged by the
pith and substance of the impugned legislation, we are
::: Downloaded on – 09/06/2013 17:15:44 :::
88 Wp no. 2922-01 &50 other wps.
definitely of the opinion that these levies cannot be treated
as part of regulatory measures. In this view of the matter we
do not detain ourselves with examining the numerous
American decisions to which our attention was drawn by
learned counsel very elaborately and thoroughly.
63. We recognise power of the State to regulate though
perhaps not as emanation of police power, but as an
expression of the sovereign power of the State. But that
power has its limitations. …….
24. In paragraphs 82-86 and 88, the Hon’ble Supreme Court held as follows:-
82. In that view of the matter, it appears to us that the
relevant provisions of the U.P. Act, A.P. Act, Tamil Nadu
Act, Bombay Prohibition Act, as mentioned hereinbefore,
are unconstitutional insofar as these purport to levy a tax or
charge imposts upon industrial alcohol, namely alcohol
used and usable for industrial purposes.
83. Having regard to the principles of interpretation and the
constitutional provisions, in the light of the language used
and having considered the impost and the composition of
industrial alcohol, and the legislative practice of this
country, we are of the opinion that the impost in question
cannot be justified as State imposts as these have been
::: Downloaded on – 09/06/2013 17:15:44 :::
89 Wp no. 2922-01 &50 other wps.
done. We have examined the different provisions. These are
not merely regulatory. These are much more than that.
These seek to levy imposition in their pith and substance
not as incidental or as merely disincentives but as attempts
to raise revenue for States’ purposes. There is no taxing
provision permitting these in the lists in the field of
industrial alcohol for the State to legislate.
84. Furthermore, in view of the occupation of the field by
the IDR Act, it was not possible to levy this impost.
85. After the 1956 amendment to the IDR Act bringing
alcohol industries (under fermentation industries) as Item
26 of the First Schedule to IDR Act the control of this
industry has vested exclusively in the Union. Thereafter,
licences to manufacture both potable and non-potable
alcohol is vested in the Central Government. Distilleries are
manufacturing alcohol under the central licences under IDR
Act. No privilege for manufacture even if one existed, has
been transferred to the distilleries by the State. The State
cannot itself manufacture industrial alcohol without the
permission of the Central Government. The States cannot
claim to pass a right which they do not possess. Nor can the
States claim exclusive right to produce and manufacture
industrial alcohol which are manufactured under the grant
::: Downloaded on – 09/06/2013 17:15:44 :::
90 Wp no. 2922-01 &
50 other wps.
of licence from the Central Government. Industrial alcohol
cannot upon coming into existence under such grant be
amenable to States’ claim of exclusive possession of
privilege. The State can neither rely on Entry 8 of List II
nor Entry 33 of List III as a basis for such a claim. The
State cannot claim that under Entry 33 of List III, it can
regulate industrial alcohol as a product of the scheduled
industry, because the Union, under Section 18-G of the IDR
Act, has evinced clear intention to occupy the whole field.
Even otherwise sections like Sections 24-A and 24-B of the
U.P. Act do not constitute any regulation in respect of the
industrial alcohol as product of the scheduled industry. On
the contrary, these purport to deal with the so-called
transfer of privilege regarding manufacturing and sale. This
power, admittedly, has been exercised by the State
purporting to act under Entry 8 of List II and not under
Entry 33 of List III.
86. The position with regard to the control of alcohol
industry has undergone material and significant change
after the amendment of 1956 to the IDR Act. After the
amendment, the State is left with only the following powers
to legislate in respect of alcohol:
::: Downloaded on – 09/06/2013 17:15:44 :::
91 Wp no. 2922-01 &
50 other wps.
(a) It may pass any legislation in the nature of
prohibition of potable liquor referable to Entry 6 of List II
and regulating powers.
(b) It may lay down regulations to ensure that
non-potable alcohol is not diverted and misused as a
substitute for potable alcohol.
(c) The State may charge excise duty on potable
alcohol and sales tax under Entry 52 of List II. However,
sales tax cannot be charged on industrial alcohol in the
present case, because under the Ethyl Alcohol (Price
Control) Orders, sales tax cannot be charged by the State on
industrial alcohol.
(d) However, in case State is rendering any
service, as distinct from its claim of so-called grant of
privilege, it may charge fees based on quid pro quo. See in
this connection, the observations of Indian Mica case13.
88. On an analysis of the aforesaid decisions and practice,
we are clearly of the opinion that in respect of industrial
alcohol the States are not authorised to impose the impost
they have purported to do. In that view of the matter, the
contentions of the petitioners must succeed and such
::: Downloaded on – 09/06/2013 17:15:44 :::
92 Wp no. 2922-01 &
50 other wps.
impositions and imposts must go as being invalid in law so
far as industrial alcohol is concerned. We make it clear that
this will not affect any impost so far as potable alcohol as
commonly understood is concerned. It will also not affect
any imposition of levy on industrial alcohol fee where there
are circumstances to establish that there was quid pro quo
for the fee sought to be imposed. This will not affect any
regulating measure as such.
25. In the case of Bihar Distillery and Anr. vs. Union of India & Ors., 1997 (2) SCC
727=AIR 1997 SC 1208, the Hon’ble Supreme Court considered the demarcation
of control over industrial alcohol in the Union of India and States and held in
paragraph 24 as follows:-
“24. We are of the respectful and considered opinion that
the decision in Synthetics1 did not deal with the aspects
which are arising for consideration herein and that it was
mainly concerned with industrial alcohol, i.e., denatured
rectified spirit. While holding that rectified spirit is
industrial alcohol, it recognised at the same time that it can
be utilised for obtaining country liquor (by diluting it) or
for manufacturing IMFLs. When the decision says that
::: Downloaded on – 09/06/2013 17:15:44 :::
93 Wp no. 2922-01 &50 other wps.
rectified spirit with 95% alcohol content v/v is “toxic”,
what it meant was that if taken as it is, it is harmful and
injurious to health. By saying “toxic” it did not mean that
it cannot be utilised for potable purposes either by diluting
it or by blending it with other items. The undeniable fact is
that rectified spirit is both industrial alcohol as well as a
liquor which can be converted into country liquor just by
adding water. It is also the basic substance from which
IMFLs are made. (Denatured rectified spirit, of course, is
wholly and exclusively industrial alcohol.) This basic
factual premise, which is not and cannot be denied by
anyone before us, raises certain aspects for consideration
herein which were not raised or considered in
Synthetics1. ………………. We proceed to elaborate:
(1) So far as industries engaged in manufacturing rectified
spirit meant exclusively for supply to industries (industries
other than those engaged in obtaining or manufacture of
potable liquors), whether after denaturing it or without
denaturing it, are concerned, they shall be under the total
and exclusive control of the Union and be governed by the
IDR Act and the rules and regulations made thereunder. In
other words, where the entire rectified spirit is supplied for
such industrial purposes, or to the extent it is so supplied,
::: Downloaded on – 09/06/2013 17:15:44 :::
94 Wp no. 2922-01 &
50 other wps.
as the case may be, the levy of excise duties and all other
control including establishment of distillery shall be that of
the Union. The power of the States in the case of such an
industry is only to see and ensure that rectified spirit,
whether in the course of its manufacture or after its
manufacture, is not diverted or misused for potable
purposes. They can make necessary regulations requiring
the industry to submit periodical statements of raw
material and the finished product (rectified spirit) and are
entitled to verify their correctness. For this purpose, the
States will also be entitled to post their staff in the
distilleries and levy reasonable regulatory fees to defray
the cost of such staff, as held by this Court in Shri
Bileshwar Khand Udyog Khedut Sahakari Mandali Ltd. v.
State of Gujarat9 and Gujchem Distillers India Ltd. v.
State of Gujarat10.
(2) So far as industries engaged in the manufacture of
rectified spirit exclusively for the purpose of obtaining or
manufacturing potable liquors – or supplying the same to
the State Government or its nominees for the said purpose
– are concerned, they shall be under the total and exclusive
control of the States in all respects and at all stages
including the establishment of the distillery. In other
::: Downloaded on – 09/06/2013 17:15:44 :::
95 Wp no. 2922-01 &
50 other wps.
words, where the entire rectified spirit produced is
supplied for potable purposes – or to the extent it is so
supplied, as the case may be – the levy of excise duties and
all other control shall be that of the States. According to
the State Governments, most of the distilleries fall under
this category.
(3) So far as industries engaged in the manufacture of
rectified spirit, both for the purpose of (a) supplying it to
industries (other than industries engaged in obtaining or
manufacturing potable liquors/intoxicating liquors) and (b)
for obtaining or manufacturing or supplying it to
Governments/persons for obtaining or manufacturing
potable liquors are concerned, the following is the
position: The power to permit the establishment and
regulation of the functioning of the distillery is concerned,
it shall be the exclusive domain of the Union. But so far as
the levy of excise duties is concerned, the duties on
rectified spirit removed/cleared for supply to industries
(other than industries engaged in obtaining or
manufacturing potable liquors), shall be levied by the
Union while the duties of excise on rectified spirit
cleared/removed for the purposes of obtaining or
manufacturing potable liquors shall be levied by the State
::: Downloaded on – 09/06/2013 17:15:44 :::
96 Wp no. 2922-01 &
50 other wps.
Government concerned. The disposal, i.e., clearance and
removal of rectified spirit in the case of such an industry
shall be under the joint control of the Union and the State
concerned to ensure evasion of excise duties on rectified
spirit removed/cleared from the distillery. It is obvious that
in respect of these industries too, the power of the States to
take necessary steps to ensure against the misuse or
diversion of rectified spirit meant for industrial purposes
(supply to industries other than those engaged in obtaining
or manufacturing potable liquors) to potable purposes,
both during and after the manufacture of rectified spirit,
continues unaffected. Any rectified spirit supplied,
diverted or utilised for potable purposes, i.e., for obtaining
or manufacturing potable liquors shall be supplied to
and/or utilised, as the case may be, in accordance with the
State excise enactment concerned and the rules and
regulations made thereunder. If the State is so advised, it is
equally competent to prohibit the use, diversion or supply
of rectified spirit for potable purposes.
(4) It is advisable — nay, necessary — that the Union
Government makes necessary rules/regulations under the
IDR Act directing that no rectified spirit shall be supplied
to industries except after denaturing it save those few
::: Downloaded on – 09/06/2013 17:15:44 :::
97 Wp no. 2922-01 &
50 other wps.
industries (other than those industries which are engaged
in obtaining or manufacturing potable liquors) where
denatured spirit cannot be used for manufacturing
purposes.
(6) So far as rectified spirit meant for being supplied to or
utilised for potable purposes is concerned, it shall be under
the exclusive control of the States from the moment it is
cleared/removed for that purpose from the distillery —
apart from other powers referred to above.
(7) The power to permit the establishment of any industry
engaged in the manufacture of potable liquors including
IMFLs, beer, country liquor and other intoxicating drinks
is exclusively vested in the States. The power to prohibit
and/or regulate the manufacture, production, sale, transport
or consumption of such intoxicating liquors is equally that
of the States, as held in McDowell3.
26. In the case of State of U.P. & Ors. vs. Vam Organic Chemicals Ltd., & Ors.,
(2004) 1 SCC 225=AIR 2003 SC 4650, the Hon’ble Supreme Court while
referring to Bihar Distillery’s case (supra), observed in paragraphs 23-26 and 29
as follows:
::: Downloaded on – 09/06/2013 17:15:44 :::
98 Wp no. 2922-01 &
50 other wps.
23. The principle was succinctly reiterated in State of U.P.
v. Modi Distillery4 where it was said that the State’s power
to levy excise duty was limited to alcoholic liquor for
human consumption and that the framers of the
Constitution, when they used the expression “alcohol
liquors for human consumption”, meant, and the expression
still means, that liquor which, as it is, is consumable in the
sense that it is capable of being taken by human beings as
such as a beverage or drink. … Dictionaries and technical
books showed that rectified spirit (95 per cent) was an
industrial alcohol and not potable as such. … Therefore
even if ethyl alcohol (95 per cent) could be used as a raw
material or input, after processing and substantial dilution,
in the production of whisky, gin, country liquor etc.
nevertheless, it was not “intoxicating liquor” which
expression meant only that liquor which was consumable
by human beings as it was. (emphasis supplied)
Thus the State cannot legislate on industrial alcohol despite
the fact that such industrial alcohol has the potential to be
used to manufacture alcoholic liquor.
24. A somewhat contrary view was taken by a Bench of
two Judges of this Court in Bihar Distillery v. Union of
::: Downloaded on – 09/06/2013 17:15:44 :::
99 Wp no. 2922-01 &
50 other wps.
India5. It was held that the decision in Synthetics1 did not
deal with rectified spirit which could be converted into
potable alcohol and was merely concerned with industrial
alcohol which could not be so converted i.e. denatured
rectified spirit. A distinction was drawn between industries
engaged in manufacturing rectified spirit meant exclusively
for supply to industries (industries other than those engaged
in obtaining or manufacturing of potable liquor), whether
after denaturing it or without denaturing it and industries
engaged in manufacturing rectified spirit exclusively for the
purpose of obtaining or manufacturing potable liquor. In
the first case, the industry was to be under “the total and
exclusive control of the Union and be governed by the IDR
Act and the rules and regulations made thereunder” (SCC
p. 743, para 23). As far as the second case is concerned,
“they shall be under the total and exclusive control of the
States in all respects and at all stages including the
establishment of the distillery” (SCC p.744, para 23).
25. The decision in Bihar Distillery5 was doubted in
Deccan Sugar and Abkari Co. Ltd. v. Commr. of Excise,
A.P.6 It was said that the decision in Bihar Distillery5 ran
counter to the scheme of legislative competence as
examined by the Constitution Bench of this Court as well as
::: Downloaded on – 09/06/2013 17:15:44 :::
100 Wp no. 2922-01 &
50 other wps.
in the three-Judge Bench decision of this Court in Modi
Distillery4. The appeals were accordingly referred to a
larger Bench for reconsideration of the judgment in Bihar
Distillery case5.
26. The larger Bench7 followed Synthetics1 and Modi
Distillery4 without expressly overruling the decision in
Bihar Distillery5. We, therefore, proceed on the basis that
the decision in Synthetics1 continues to exclude the State
from levying tax on industrial alcohol whether or not it has
the potential to be used as alcoholic liquor.
29. The State’s power is thus limited to (i) the regulation of
non-potable alcohol for the limited purpose of preventing
its use as alcoholic liquor, and (ii) the charging of fees
based on quid pro quo. The question then is — is the levy
under Rule 3(a) of the 1976 Rules justifiable as such fee?
27. While considering the competency of the State Government to levy fee and the
distinction between the fee and tax, the Hon’ble Supreme Court in paragraphs
43 to 45 held as follows :-
::: Downloaded on – 09/06/2013 17:15:44 :::
101 Wp no. 2922-01 &
50 other wps.
43. Considering the various authorities cited, we are of the
view that the State Government is competent to levy fee for
the purpose of ensuring that industrial alcohol is not
surreptitiously converted into potable alcohol so that the
State is deprived of revenue on the sale of such potable
alcohol and the public is protected from consuming such
illicit liquor. But this power stops with the denaturation of
the industrial alcohol. Denatured spirit has been held in
Vam Organics-I2 to be outside the seisin of the State
Legislature. Assuming that denatured spirit may by
whatever process be renatured (a proposition which is
seriously disputed by the respondents) and then converted
into potable liquor, this would not give the State the power
to regulate it. Even according to the demarcation of the
fields of legislative competence as envisaged in Bihar
Distillery5 industrial alcohol for industrial purposes falls
within the exclusive control of the Union and according to
Bihar Distillery5 “denatured rectified spirit, of course, is
wholly and exclusively industrial alcohol” (SCC p. 742,
para 23).
::: Downloaded on – 09/06/2013 17:15:44 :::
102 Wp no. 2922-01 &
50 other wps.
44. Besides, the fee is required to be justified with
reference to the cost of such regulation. The industry is
already paying a fee under Rule 2 for such regulation.
Indeed, the justification for levying the fee under Rule 3(a)
is the identical justification given by the State for levying
the fee under Rule 2. Presumably, a full complement of
excise officers and staff are appointed by the State in the
Excise Department to carry out their duties under the Act to
oversee, control and keep duty on the various kinds of
intoxicants under the Act. Having regard to the decision in
Vam Organics-I2 we must also assume that apart from the
normal strength, additional officers and staff were
appointed to regulate the denaturation of the industrial
alcohol. There is nothing to show that there has been any
deployment of any additional staff to oversee the possibility
of renaturation of the denatured spirit.
45. The question is (to borrow the language in
Synthetics1),whether in the garb of regulations a legislation
which is in pith and substance, as we look upon the instant
legislation, a fee or levy which has no connection with the
cost or expenses administering the regulation, can be
imposed purely as regulatory measure. Judged by the pith
and substance of the impugned legislation, we are definitely
::: Downloaded on – 09/06/2013 17:15:44 :::
103 Wp no. 2922-01 &
50 other wps.
of the opinion that these levies cannot be treated as part of
regulatory measures. (SCC p. 149, para 63)
The State has not produced any material to show that it was
incurring any additional cost for any further regulation of
denatured spirit. Any trace of a lingering doubt as to the
propriety of the levy under Rule 3(a) must be taken to have
been noted off effectively with the order passed by three
Judges of this Court in the writ petition filed by Synthetics
challenging the same levy as we have noted earlier. That
order has resulted in granting Synthetics and Chemicals
Ltd. relief from payment under Rule 3(a). The only
distinction between the present respondents’ cases and
Synthetics was that the respondents chose to challenge the
levy before the High Court. That could be no rational basis
for denying the respondents who are otherwise identically
situated, the same relief. (See Anil Kumar Neotia v. Union
of India18.) In the absence of any such correlation the fee
under Rule 3 is not a fee at all levied for the purpose of
additional regulation or for any service rendered but is
really a tax in the garb of a fee.
28. In case of Gupta Modern Breweries vs. State of J & K & Ors., (2007) 6 SCC 317
the Hon’ble Supreme Court considered the challenge to Rule 17 of Jammu &
Kashmir Distillery Rules, 1946 under which charges on account of salary of
::: Downloaded on – 09/06/2013 17:15:44 :::
104 Wp no. 2922-01 &
50 other wps.
excise department staff were to be recovered from management at 50% of total
expenses. Rule 17 was challenged as being ultra vires Jammu & Kashmir Excise
Act, 1901. Paragraphs 26, 27, 28, 31, 32, 33 and 34 of the said judgment read as
follows:-
26. The question as to whether the taxpayers or licence-
holders would have to pay for the official staff of the State
for supervising collection of the revenue, has been set at
rest by the Constitution Bench of this Court in Indian
Mica Micanite Industries v. State of Bihar8. It is held in
SCC at para 17 as under:
“The only services rendered by the Government to the
appellant and to other similar licensees is that the Excise
Department have to maintain an elaborate staff not only
for the purposes of ensuring that denaturing is done
properly by the manufacturer but also for the purpose of
seeing that the subsequent possession of denatured spirit in
the hands either of a wholesale dealer or retail seller or any
other licensee or permit-holder is not misused by
converting the denatured spirit into alcohol fit for human
consumption and thereby evade payment of heavy duty. So
far as the manufacturing process is concerned, the
appellant or other similar licensees have nothing to do with
::: Downloaded on – 09/06/2013 17:15:44 :::
105 Wp no. 2922-01 &50 other wps.
it. They are only the purchasers of manufactured denatured
spirit. Hence the cost of supervising the manufacturing
process or any assistance rendered to the manufacturers
cannot be recovered from the consumers like the appellant.
Further under Rule 9 of the Board’s rules, the actual cost
of supervision of the manufacturing process by the Excise
Department is required supervising the manufacturing
process or any assistance rendered to the manufacturers
cannot be recovered from the consumers like the appellant.
Further under Rule 9 of the Board’s rules, the actual cost
of supervision of the manufacturing process by the Excise
Department is required to be borne by the manufacturer.
There cannot be a double levy in that regard. In the
opinion of the High Court the subsequent transfer of
denatured spirit and possession of the same in the hands of
various persons such as wholesale dealer, retail dealer or
other manufacturers also requires close and effective
supervision because of the risk of the denatured spirit
being converted into palatable liquor and thus evading
heavy duty. Assuming this conclusion to be correct, by
doing so, the State is rendering no service to the
consumer. It is merely protecting its own rights. Further in
this case, the State which was in a position to place
::: Downloaded on – 09/06/2013 17:15:44 :::
106 Wp no. 2922-01 &
50 other wps.
material before the Court to show what services had been
rendered by it to the appellant and other similar licensees,
the costs or at any rate the probable costs that can be said
to have been incurred for rendering those services and the
amount realised as fees has failed to do so. On the side of
the appellant, it is alleged that the State is collecting huge
amount as fees and that it is rendering little or no service
in return. The co-relationship between the services
rendered and the fee levied is essentially a question of fact.
Prima facie, the levy appears to be excessive even if the
State can be said to be rendering some service to the
licensees. The State ought to be in possession of the
material from which the co-relationship between the levy
and the services rendered can be established at least in a
general way. But the State has not chosen to place those
materials before the Court. Therefore the levy under the
impugned rule cannot be justified.” (emphasis supplied).
27. In CCE v. Chhata Sugar Co. Ltd.9, one of the issues
was whether the State Government’s administrative
charges to collect a levy could be passed on to the person
from whom the tax, fee or levy was collected. This Court
::: Downloaded on – 09/06/2013 17:15:44 :::
107 Wp no. 2922-01 &
50 other wps.
categorically held that such an imposition would be a tax
and not a fee and must be duly authorised since it is a tax
(at para 14), it is held: (SCC p. 483)
“Hence, administrative charge under the U.P. Act is a tax
and not a fee.”
28. It is, thus, clear from the aforesaid decisions that
imposition of administrative services (sic charges) is a tax
and not a fee. Such imposition without backing of statutes
is unreasonable and unfair.
Why it is tax and not fee
31. Under the constitutional scheme, taxes are distinct
from fees. Excise is a form of tax. It is self-evident from
various constitutional provisions:
(i) the concept of a Money Bill in Articles 110(2) and
199(2) clearly postulates that taxes should be voted on by
Parliament. See Corpn. of Calcutta10 SCR at p. 483.
(ii) the taxes and excise in the Union List are to be found
in List I Entries 82-92-B; and
(iii) the taxes in the State List are to be found in List II
Entries 42-63;
::: Downloaded on – 09/06/2013 17:15:44 :::
108 Wp no. 2922-01 &
50 other wps.
(iv) excise is specifically dealt with in List I, Entry 84 and
List II Entry 51;
(v) List II Entry 51 specifically deals with excise on
alcohol;
(vi) fees are specifically dealt with in both these lists (List
I Entry 96 and List II Entry 66) and are a distinct concept
that has to be voted by Parliament.
Thus, taxes, excise and fees must be voted by Parliament.
32. In State of Punjab v. Devans Modern Breweries Ltd.12,
SCC at para 25, K.T. Moopil Nair v. State of Kerala13,
SCR at paras 89 & 91, Ahmedabad Urban Development
Authority v. Sharadkumar Jayantikumar Pasawalla14, SCC
at paras 6-7, Hindustan Times v. State of U.P.15, SCC at
para 30 and Bimal Chandra Banerjee v. State of M.P.16,
SCC at para 14, it has been held that a tax under Article
265 can only be imposed by way of legislation and it is
impermissible to be imposed by way of bye-laws or rules.
Whether there is a quid pro quo between the fee charged
and the service rendered
::: Downloaded on – 09/06/2013 17:15:44 :::
109 Wp no. 2922-01 &
50 other wps.
33. We have already noted that the plea of the respondents
is that it was rendering service by deputing Excise staff not
only for the purpose of ensuring that the denaturing of
spirit is done properly by the manufacturer but also for the
purpose of specifically seeing that the denatured spirit
does not go out of the hands, either of the distillery owner
or a retail seller or any licensee or permit-holder contrary
to law. It is, therefore, clear that there was no
correlationship between the expenses incurred by the
Government and the fee sought to be raised under Rule 17.
In other words, there is no quid pro quo between the fee
charged and the services rendered. A Constitution Bench
of this Court in Commr., Hindu Religious Endowments v.
Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt17
(SCR at pp. 1040, 1041 & 1044 held that a fee must be for
a quid pro quo:
“As the object of a tax is not to confer any special
benefit upon any particular individual, there is, as
it is said, no element of ‘quid pro quo’ between the
taxpayer and the public authority…. Another
feature of taxation is that as it is a part of the
common burden, the quantum of imposition upon
::: Downloaded on – 09/06/2013 17:15:44 :::
110 Wp no. 2922-01 &50 other wps.
the taxpayer depends generally upon his capacity
to pay.
Coming now to fees, a ‘fee’ is generally defined to
be a charge for a special service rendered to
individuals by some governmental agency. The
amount of fee levied is supposed to be based on the
expenses incurred by the Government in rendering
the service, though in many cases the costs are
arbitrarily assessed. (AIR p. 295, paras 43-44)
… but in this case there is total absence of any co-
relation between the expenses incurred by the
Government and the amount raised by contribution
under the provision of Section 76 and in these
circumstances the theory of a return or counter
payment or ‘quid pro quo’ cannot have any
possible application to this case.
In our opinion, therefore, the High Court was right in
holding that the contribution levied under Section 76 is a
tax and not a fee and consequently it was beyond the
power of the State to enact this provision. (AIR p. 296,
para 49)” (emphasis supplied)
::: Downloaded on – 09/06/2013 17:15:44 :::
111 Wp no. 2922-01 &
50 other wps.
34. For the reasons aforestated we hold that:
(a) Rule 17 has no statutory backing and it is in excess of
the Act.
(b) It is manifestly unjust and arbitrary.
(c) Provision of Rule 17 is clearly a tax and not a fee.
(d) Imposition of tax or fee on the citizens for the services
that the State renders to itself and not the taxpayers is
clearly impermissible, arbitrary and unjustifiable.”
29. In the case of Mohan Meakin Limited vs. State of Himachal Pradesh & Ors.,
(2009) 3 SCC 157, the constitutional validity of increase in levy made by the
State of Himachal Pradesh inter alia on import/transport of rectified spirit and/or
potable alcohol was under challenge and after considering the various decisions
of the Apex Court, the matter was ultimately remanded to the High Court.
30. In the case of Amit Maru vs. State of Maharashtra, 2010 (4) ALL MR 596, the
Division Bench of this Court reiterated the position that a tax or fee can only be
imposed/charged by a delegated authority if there is an express provision in the
statute authorizing such charge/levy and that a fee is a payment made for some
::: Downloaded on – 09/06/2013 17:15:44 :::
112 Wp no. 2922-01 &
50 other wps.
special benefit enjoyed by the payer and the payment is required to be proportional
to such benefit.
31. From an analysis of the aforementioned decisions therefore, the following
position can now be said to have been well settled – that the Union has exclusive
power to legislate and impose taxes in respect of all non-potable alcohols viz:
molasses/rectified spirit/extra neutral alcohol/silent spirit/denatured spirit, etc.
and the State Government has exclusive power to legislate and impose taxes in
respect of potable alcohol viz: Country Liquor, Indian Made Foreign Liquor
(IMFL), etc. Insofar as the power of the State Government to regulate
molasses/rectified spirit/extra neutral alcohol/silent spirit/denatured spirit is
concerned, the following is the position – the State’s power is limited to (i) the
regulation of molasses/rectified spirit/extra neutral alcohol/silent spirit/denatured
spirit etc. for the limited purpose of preventing its use as alcoholic liquor for
human consumption, and (ii) the charging of fee based on quid pro quo for the
services rendered.
32. We may now refer to some of the provisions of The Bombay Prohibition Act,
1949.
33. The preamble of the said Act states that the said Act was enacted interalia to
amend and consolidate the law relating to the promotion and enforcement of and
::: Downloaded on – 09/06/2013 17:15:45 :::
113 Wp no. 2922-01 &
50 other wps.
carrying into effect the policy of prohibition. Chapter III and V of the said Act
deals with the various prohibitions imposed by the State Government. Chapters
IV, IVA, IVB and VI deal with the control and regulation of various articles
mentioned therein and Chapter V deals with offences and penalties.
34. Section 2(49) defines transport. It reads as under:
“2(49) “transport” means to move from one place to another
within the State.
35. Section 49 deals with the exclusive privilege of the State Government. It reads as
under:
“49. Exclusive privilege of Government to import, etc., intoxicants,
etc., and fees levied include rent or considerations for grant of such
privilege to person concerned – Notwithstanding anything contained in
this Act, the State Government shall have the exclusive right or privilege
of importing, exporting, transporting, manufacturing, bottling, selling,
buying, possessing or using any intoxicant, hemp, or toddy, and
whenever under this Act or any licence, permit, pass, thereunder any fees
are levied and collected for any licence, permit, pass, authorization or
other permission given to any person for any such purpose, such fees
shall be deemed to include the rent or consideration for the grant of such
right or privilege to that person by or on behalf of the State Government.”
::: Downloaded on – 09/06/2013 17:15:45 :::
114 Wp no. 2922-01 &
50 other wps.
36. Section 105 of the said Act grants power to the State Government to impose
excise duty on excisable articles referred to therein which includes alcoholic
liquor for human consumption, whereas section 106 empowers the State
Government to formulate the manner in which the excise duty is to be levied.
Section 143 provides for the power of the State Government to make rules.
Section 143 (1) and (2) (b),(f) and (u) read as under:
143. Power of State Government to make rules –
(1) The State Government may make rules for the purposes of carrying
out the provisions of this Act or any other law for the time being in force
relating to excise revenues.
(2) In particular and without prejudice to the generality of the foregoing
provisions the State Government may make rules, –
(a) —
(b) regulating the import, export, transport, collection, sale, purchase,
bottling, consumption, use or possession of any intoxicant, denatured
spirituous preparation or hemp, mowhra flowers or molasses;
(f) regulating the grant, suspension or cancellation of licences, permits,
passes or authorizations for the import, export, transport, collection, sale,
purchase, possession, manufacture, bottling, consumption, use or
cultivation of any of the above articles mentioned in clause (b) and for the
matters specified in clause (e).
::: Downloaded on – 09/06/2013 17:15:45 :::
115 Wp no. 2922-01 &
50 other wps.
(u) prescribing the fees including rent or consideration payable in respect
of any privilege, licence, permit, pass or authorization granted or issued
under this Act.
(emphasis supplied)
37. Considering sections 2(49), 49, and 143 extracted hereinabove, the parent Act i.e
The Bombay Prohibition Act, 1949, under which the Rules under challenge have
been framed, clearly empowers the State Government to impose fee in relation to
transport and to frame Rules in that regard. We are therefore unable to accept the
submission made on behalf of the petitioners that the Rules imposing transport
fee on molasses/rectified spirit/extra neutral alcohol/silent spirit/denatured spirit
as a regulatory measure for the limited purpose of preventing its use as alcoholic
liquor for human consumption has no statutory backing. The transport fee
charged must however meet the requirement of quid pro quo to the services
rendered by the State Government. Having said that however, we may hasten to
add that we have not considered the aspect whether the transport fee charged by
the State Government is in the nature or garb or guise of a duty, which would
take it outside the seisin of the State legislature and therefore ultravires and
unconstitutional, as this point was made only in the passing and as such there
was no proper debate in that regard, and we need not express any definite
opinion on this aspect and we keep this issue open. This however, need not
detain us, inasmuch the last contention which has been urged on behalf of the
petitioners would be sufficient and entitle the petitioners to succeed viz – that
there is no element of quid pro quo between the services rendered by the State
::: Downloaded on – 09/06/2013 17:15:45 :::
116 Wp no. 2922-01 &
50 other wps.
Government to the transport fee charged even in case of petitioners who are non-
captive users, as discussed hereinbelow.
38. The thrust of the arguments of Mr. Sawant, learned Counsel for the petitioners
was that there was no co-relation between the services rendered by the State
Government and the transport fee charged, even in the case of non-captive users.
We have already noted that the entire transactions/processes in a distillery/
manufactory/chemical plant is carried on under strict excise supervision. Here,
reference may be made to section 58A of The Bombay Prohibition Act, which
provides for excise supervision over manufacture, etc. The same reads as under :-
“58A. Supervision over manufacture, etc. – The State
Government may by general or special order direct the
manufacture, import, export, transport, storage, sale,
purchase, use, collection or cultivation of any intoxicant,
denatured spirituous preparation, hemp, mhowra flowers,
or molasses shall be under the supervision of such
Prohibition and Excise or Police staff as it may deem
proper to appoint, and that the cost of such staff shall be
paid to the State Government by the person
manufacturing, importing, exporting, transporting, storing,
selling, purchasing, using, collecting or cultivating the
::: Downloaded on – 09/06/2013 17:15:45 :::
117 Wp no. 2922-01 &50 other wps.
intoxicant, denatured spirituous preparation, hemp,
mhowra flowers or molasses :
Provided that, the State Government may exempt any class
of persons or institutions from paying the whole or any
part of the cost of such staff”
39. Under the Maharashtra Distillation of Spirit & Manufacture of Potable Liquor
Rules, 1966 “Distillery Officer” is defined to mean a Prohibition and Excise
Officer appointed for the purpose of supervising the working of a distillery and
“Manufactory Officer” is defined to mean the Prohibition and Excise Officer
appointed for the purpose of supervising the operations in a manufactory. The
said officers as also other staff appointed are required to oversee and
supervise the entire operations.
40. We may also refer to some of the licence conditions of the licences granted under
some of the Rules which provide for excise supervision including transport
thereof by the State Government and the recovery of costs for the same.
Licence condition 12 under Rule 17 of the Maharashtra Distillation of
Spirit and Manufacture of Potable Liquor Rules, 1966, reads as under:
“(12) All transactions pertaining to the receipt, transport, storage
of spirit and manufacture bottling and issues of potable liquor
::: Downloaded on – 09/06/2013 17:15:45 :::
118 Wp no. 2922-01 &50 other wps.
shall be under excise supervision. The Commissioner may appoint
such staff as the manufactory for excise supervision as is
considered necessary and the cost of such staff shall be paid to the
State Government by the licensee annually in advance.”
Licence condition 12 under Rule 6 of the Maharashtra Country Liquor
Rules, 1973 reads as under:
“6.(12) All transactions pertaining to the receipt, transport and
storage of spirit and country liquor and manufacture, bottling and
issues of country liquor shall be under excise supervision. The
Director shall, according to the direction made under Section 58-
A of the Act by the State Government, station such staff at the
manufactory for excise supervision as is considered necessary and
the cost of such staff shall be paid to the State Government by the
manufactory licensee quarterly in advance.”
41. Thus, from the above, it is evident that the entire transactions in respect of
industrial alcohol/spirit in the distillery/manufactory/plant, are under strict excise
supervision and for that purpose the State Government stations such staff as
necessary at the distillery/manufactory/chemical plant and is recovering
supervision charges from the licensees in advance, as contemplated under the
Bombay Prohibition Act, 1949 and as per requirement of the licence conditions.
It is interesting to note that the owners of distillery and manufactory are not only
required to pay the salary of the prohibition and excise staff supervising the
::: Downloaded on – 09/06/2013 17:15:45 :::
119 Wp no. 2922-01 &
50 other wps.
entire transaction, but also dearness allowance, provident fund, house rent and
other perks, in addition to the licence fee paid in respect of various licences.
42. Admittedly, even the costs of excise staff who accompany the tanker/vehicle en
route transport, in which the molasses/rectified spirit/extra neutral alcohol/silent
spirit/denatured spirit is being transported, is being recovered by the State
Government. Thus at all three levels there is excise supervision i.e. (a) origin of
consignment (b) en route transport and (c) destination, the cost of which is
recovered by the State Government from the licensees.
43. As stated earlier, the transport fee is required to be justified with reference to the
cost of regulation by the State Government. It was sought to be contended on
behalf of the State Government that in addition to the services rendered by way
of supervision, there are other services also rendered (as set out in paragraph 16
hereinabove). It is submitted that a precise account of fee collected and services
rendered is not necessary and only a broad co-relation is enough. It is contended
that the fees charged by the State Government as transport fee, meet the
requirement of quid pro quo.
44. We have already noted in the earlier part of this judgment that in the case of M/s.
Vam Organic Chemicals Limited (supra), the Division Bench of this Court has
held that there is absolutely no material to indicate that any service is rendered
by the State Government in the transport of denatured spirit through the closed
and sealed pipelines to the chemical plant of the petitioners therein, which
decision has been affirmed by the Apex Court. The petitioner in the aforesaid
::: Downloaded on – 09/06/2013 17:15:45 :::
120 Wp no. 2922-01 &
50 other wps.
case of M/s. Vam Organic Chemicals Limited were captive users, inasmuch as
the industrial alcohol/spirit was transferred through sealed and closed pipes from
their distillery to their chemical plant in the same premises/complex. The
services rendered by the State Government in the case of all captive users is thus
restricted to the distillery/manufactory/chemical plant as there is no question of
any ‘transport’ in the case of captive users and it is merely a ‘transfer’ in closed
and sealed pipes of the industrial alcohol/spirit from the distillery to the
manufactory/chemical plant in the same premises/complex.
45. The basic difference between the case of the present petitioners who are non-
captive users and the case of the petitioner who was a captive user in the case of
M/s. Vam Organic Chemicals Limited, is that in case of the present petitioners
who are non-captive users, there is an ‘additional’ element of ‘transport’ (not
transfer) for which services are being rendered even en route transportation of
the industrial alcohol/spirit from the distillery/manufactory from where the
industrial alcohol/spirit is purchased to the destination where industrial
alcohol/spirit is delivered by deputing the excise staff in the tanker/vehicle to
oversee the transportation so as to prevent the industrial alcohol/spirit from being
diverted illegally for potable purposes as also to see that there is no evasion of
excise duty on potable alcohol.
46. It is pertinent to note that the assertions made on behalf of the State Government
in their Affidavit in Reply filed in the case of M/s Vam Organic Chemical Ltd.
(supra) (which is also annexed to the counter affidavit filed in the present W.P.
::: Downloaded on – 09/06/2013 17:15:45 :::
121 Wp no. 2922-01 &
50 other wps.
No. 2922 of 2001), that there were several other services rendered including
administrative services, not only by the excise authorities, but also other officials
of the State Government and that services rendered had a correlation with the
transport fee charged was not accepted by the Division Bench of this Court. The
Division Bench held that there was absolutely no material to indicate that any
services rendered by the State Government in the case of the petitioner therein
who was a captive user. In the present petitions also the same assertions have
been made in the counter affidavit of the State Government that there were
several other services rendered not only by the excise authorities but also other
officials of the State Government and that the services rendered had a co-relation
with the transport fee charged. We are afraid that once that argument has been
rejected by the Division Bench of this Court in the case of M/s. Vam Organic
Chemicals Ltd., which was affirmed by the Apex Court, it is really not open for
the State Government to raise the same assertions again in the present petitions.
It was incumbent on the State Government to point out what were the additional
expenses in case of non-captive users, incurred by the State Government in
connection with the services rendered en route transport when the
molasses/rectified spirit/extra neutral alcohol/silent spirit/denatured spirit was
being transported from the origin to the destination, which the State Government
has not done. As stated earlier, it is an admitted position that en route transport
also the State Government deploys excise staff who accompany the
tanker/vehicle in which the molasses/rectified spirit/extra neutral alcohol/silent
spirit/denatured spirit is being transported so as to ensure that the same is not
::: Downloaded on – 09/06/2013 17:15:45 :::
122 Wp no. 2922-01 &
50 other wps.
diverted for potable purposes. It is also an admitted position that the State
Government is also recovering supervision charges as contemplated under
Section 58A of the Bombay Prohibition Act, 1949, of such excise staff who
accompany the tanker/vehicle so as to supervise the transport of the
molasses/rectified spirit/extra neutral alcohol/silent spirit. Considering the above,
we are unable to persuade ourselves to accept the contention on behalf of the
State Government that over and above the supervision charges which includes
the cost for the excise staff who accompany the tanker/vehicle en route transport,
which the petitioners are already paying, any further expenses are being incurred
by the State Government in that behalf. In any event no material in that behalf
has been placed on record. Prima facie, we think this would in a sense amount to
double levy of fee in respect of the same services rendered in connection with the
transport. In the circumstances, therefore, we are of the view that, inasmuch as
the State Government is already recovering supervision charges for the escorts
comprising constabulary staff of the excise department en route transport of the
molasses/rectified spirit/extra neutral alcohol/silent spirit/denatured spirit, we do
not find any further and/or additional service being rendered by the State
Government in connection with the transport of the said products, so as to justify
the levy of transport fee on non-captive users which would meet the requirement
of quid pro quo.
47. In light of the aforesaid discussion, in our view, the transport fee imposed by the
State Government, even in the case of petitioners who are non-captive users,
::: Downloaded on – 09/06/2013 17:15:45 :::
123 Wp no. 2922-01 &
50 other wps.
does not commensurate to the services rendered and the imposition of transport
fee on the petitioners who are non-captive cannot be sustained and required to be
set aside and accordingly set aside. It may be mentioned here that we have, in
paragraph 21 hereinabove, already set aside the imposition of transport fee in
case of petitioners who are captive users.
48. In the result, the petitions succeed. Rule made absolute in all the petitions in the
aforesaid terms. No order as to costs.
49. Before we conclude however, certain directions are required to be given. It is
noticed that in some of the petitions, there are interim orders passed by this Court
as well as the Apex Court (in matters which were carried to the Apex Court at
the interlocutory stage). The orders that are passed are to the effect that the
petitioners in the said petitions are directed to pay to the State Government 50%
of the transport fee and give an Undertaking that in case the petitioners fail, the
petitioners would have to pay the balance 50% alongwith interest at the rate of
9% per annum to the State Government. Similarly, it was directed that if the said
petitioners succeed in the petitions, the State Government would refund to the
said petitioners 50% transport fee so collected alongwith interest at the rate of
9% per annum. In some petitions however, only an interim order is passed
restraining the State Government from recovering any transport fee subject to an
Undertaking by those petitioners that in the event the challenge to the levy of
transport fee fails, they shall be liable to pay the same. There are also petitions
where no interim order is obtained or passed.
::: Downloaded on – 09/06/2013 17:15:45 :::
124 Wp no. 2922-01 &
50 other wps.
50. Since the petitions have now been allowed, wherever the petitioners have
paid the entire transport fee, or 50% of the transport fee to the State
Government, the State Government is directed to refund the transport fee
so recovered to the said petitioners from the date of the filing of the
petition or the date of payments made, whichever is later, alongwith
interest at the rate of 9% per annum till repayment within a period of 10
weeks from the date of the receipt of application for refund as stated
hereinafter. This is however subject to the condition that in case where
the petitioners have passed on burden of the transport fee to the
consumer/s, they shall not be entitled to refund of the amount, as the
same would amount to unjust enrichment. The application for refund, if
any, by the petitioners who are entitled to the refund, shall be made to the
Commissioner, State Excise, Mumbai within six weeks from today. The
Commissioner State Excise, Mumbai or such officer nominated by him
shall verify the fact that the applicant-petitioner has not passed on the
transport fee charged to the consumer/s before the amount is refunded to
the applicant-petitioner by the State Government as stated hereinabove.
The prayer in few of the petitions for refund of transport fee paid prior
to the filing of the petitions, shall stand rejected.
::: Downloaded on – 09/06/2013 17:15:45 :::
125 Wp no. 2922-01 &
50 other wps.
51. All the above petitions stand disposed of accordingly. The Civil
Applications would not survive and also stand disposed of.
(A.A.SAYED, J.) (P.B.MAJMUDAR, J.)
::: Downloaded on - 09/06/2013 17:15:45 :::
126 Wp no. 2922-01 &
50 other wps.
52. After pronouncement of the judgment, the Ld. Counsel for the State
prayed that the operation of the order be stayed for a period of 10 weeks
from today. It is accordingly ordered.
(A.A.SAYED, J.) (P.B.MAJMUDAR, J.)
::: Downloaded on - 09/06/2013 17:15:45 :::
127 Wp no. 2922-01 &
50 other wps.
::: Downloaded on - 09/06/2013 17:15:45 :::
