Imperial Spirits Ltd vs State Of Kerala
2021 Latest Caselaw 15644 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                  PRESENT
                THE HONOURABLE MR. JUSTICE GOPINATH P.
        TUESDAY, THE 27TH DAY OF JULY 2021 / 5TH SRAVANA, 1943
                        WP(C) NO. 4666 OF 2015
PETITIONER:

            IMPERIAL SPIRITS LTD
            GOVINDAPURAM P.O., CHITTU TALUK,
            PALAKKAD 678 507 REP. BY ITS WORKS MANAGER,
            A VENKATESAN

            BY ADV SRI.S.SHARAN


RESPONDENTS:

    1       STATE OF KERALA
            REP. BY CHIEF SECRETARY TO GOVERNMENT,
            SECRETARIATE, THIRUVANANTHAPURAM 695 001

    2       SECRETARY TO GOVERNMENT
            TAXES (G) DEPARTMENT, SECRETARIAT,
            THIRUVANANTHAPURAM 695001

    3       THE EXCISE COMMISSSIONER ABKARI,
            COMMISSIONERATE OF EXCISE,
            THIRUVANANTHAPURAM

    4       DEPUTY COMMISSIONER (EXCISE),
            PALAKKAD 678001

    5       ASSISTANT EXCISE COMMISSIONER (ABKARI)
            O/O.THE COMMISSIONER OF EXCISE, KERALA,
            THIRUVANANTHAPURAM 695001

    6       THE EXCISE INSPECTOR
            IMPERIAL SPIRITS LTD.,
            GOVINDAPURAM PALAKKAD 578 507


     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
27.07.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C).No.4666 OF 2015

                                          2




                                       JUDGMENT

Dated this the 27th day of July 2021

This writ petition is filed challenging

Ext.P1 demand notice demanding the

payment of a sum of Rs.4,99,707/- (Rupees

Four Lakhs Ninety Nine Thousand Seven

Hundred and Seven only) as excise duty on

excess wastage during transport of Extra

Neutral Alcohol (ENA) by the petitioner during

the period of August 2005 to March 2009.

2. The learned counsel for the

petitioner would submit that the demand is

raised in terms of Rule 55 of Part-I of the

Kerala Distillery and Warehouse Rules. It is

the specific case of the petitioner that there

should be an adjudication of the issue

especially in the light of the proviso to Rule 55 WP(C).No.4666 OF 2015

which reads as follows:-

"Provided that if proved to the satisfaction of the Commissioner that such deficiency could not have been prevented by the exercise of proper care and precaution, and that the spirits could not have passed into consumption, the duty levied on such deficiency shall be refunded. The Commissioner's decision shall be final."

It is also pointed out that this Court in

judgment dated 03.09.2015 in W.P.

(C).No.4631/2012 had considered the effect

of the proviso and held as follows:-

"17. As can be seen from the above extract, the proviso to Rule 55 puts the whole issue in perspective. In fact, all sorts of wastage beyond the permissible limit do not automatically attract the penalty. It is, indeed, the deficiency or wastage that could have been prevented by the exercise of proper care and precaution, but not prevented, that alone attracts the penalty."

3. The learned Government Pleader

would submit that there is absolutely no

illegality in Ext.P1, as a demand has been WP(C).No.4666 OF 2015

raised in term of Rule 55 (supra).

4. A reading of Ext.P1 does not show

that it was preceded by any adjudication. In

the light of the proviso to Rule 55, the

demand in the nature of Ext.P1 should

necessarily be preceded by an adjudication, as

the penalty is not automatic. Therefore, I

quash Ext.P1 and direct the 3rd respondent or

any other officer competent to adjudicate the

matter to reconsider the issue after affording

an opportunity of being heard to the

petitioner. The proceedings as above shall be

completed within a period of three months

from the date of receipt of a copy of this

judgment.

The petitioner also has a case that the

claim is at any rate barred by limitation. In

the light of the fact that Ext.P1 has been WP(C).No.4666 OF 2015

quashed on the ground that, it was not

preceded by any adjudication, the issue has to

whether the claim is barred by limitation is left

open to be adjudicated, if necessary in

subsequent proceedings.

This writ petition will stand disposed of

as above.

Sd/-

GOPINATH P.

VPK JUDGE WP(C).No.4666 OF 2015

APPENDIX PETITIONER'S/S EXHIBITS:

P1:A TRUE COPY OF THE NOTICE DATED EXHIBIT P1 03.05.2014 ISSUED BY THE 6TH RESPONDENT TO THE PETITIONER

P2:A TRUE COPY OF THE LETTER NO.XF.3- 12736/14 DATED 23.05.2014 ISSUED BY THE EXHIBIT P2 EXCISE COMMISSIONER TO THE DEPUTY COMMISSIONER (EXCISE) ALONG WITH DRAFT NOTE

P3:A TRUE COPY OF THE REMINDER NOTICE EXHIBIT P3 DATED 10.10.2014 ISSUED BY 6TH RESPONDENT TO THE PETITIONER

P4:A TRUE COPY OF THE REPRESENTATION DATED 28.11.2014 FILED BY PETITIONER EXHIBIT P4 BEFORE THE EXCISE COMMISSIONER THIRUVANANTHAPURAM

RESPONDENT'S/S EXHIBITS

TRUE COPY OF THE SRO NO.235/2014 G.O(P) ANNEXURE R6(A) NO.57/2014 TD DATED 05.04.2014