Patna High Court
Bacardi India Private Limited vs The State Of Bihar on 24 November, 2023
Author: P. B. Bajanthri
Bench: P. B. Bajanthri, Arun Kumar Jha
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
1/84
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.4882 of 2020
======================================================
United Spirits Limited a public limited company, having its registered office
at UB Tower, 24, Vittal Mallya Road, Bangalore- 560001, and also having its
office at United Spirits Limited, At and P.O.- Hathidah, NH-81, District-
Patna (Bihar), P.S.- Hathidah, Pin Code- 803301, through its Senior Manager
and authorized signatory Mr. Punjabi Singh, Male, aged 54 years, Son of Late
Mr. Brij Nandan Singh, Resident of Hemja Rampur Dumrah, P.S.
Panchmahla, District- Patna (Bihar), Pin Code- 803301. ... ... Petitioner/s
Versus
1. The State of Bihar through its Principal Secretary, Registration, Excise and
Prohibition Department, Government of Bihar, Patna.
2. The Commissioner, Excise, Government of Bihar, Patna.
3. Bihar State Beverages Corporation Limited, a Government of Bihar
Enterprise through its Managing Director, First Floor, Vidyut Bhawan-II,
Jawaharlal Nehru Marg, Patna- 800001.
4. The Joint Commissioner of Commercial Taxes, Bihar, Patna.
5. The Assistant Commissioner, Excise, Patna.
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 4911 of 2020
======================================================
Bacardi India Private Limited a private Company having its registered Office
at S-405 (LGF) Greater Kailash Part- II, New Delhi, 110048 through its
authorized signatory Mr. Sidharth Tandon, Son of Shri Prem Chand Tandon,
Resident of H-1/1 B, Model Town-3, P.S. Model Town , New Delhi- 110009
... ... Petitioner/s
Versus
1. The State of Bihar through its Principal Secretary, Registration, Excise and
Prohibition Department, Government of Bihar, Patna.
2. The Commissioner, Excise, Government of Bihar, Patna.
3. The Assistant Commissioner (Excise), Patna.
4. Bihar State Beverages Corporation Limited, a Government of Bihar
Enterprise through its Managing Director, First Floor, Vidyut Bhawan-II,
Jawaharlal Nehru Marg, Patna- 800001
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 5376 of 2020
======================================================
1. Colona Blenders and Bottlers (India) Pvt. Ltd. a Private Limited Company
having its registered Office at Janki Vila Basant Vihar Colony, Boring Road,
Patna-800001, through Its authorized Signatory Ranjeet Kumar Singh, Male
aged 35 Years, Son of Shri Rajeshwar Prasad Singh, resident of Eliza-10,
P.S. Uttar Para, Hoogly, West Bengal-712233.
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
2/84
2. Anusuya Blenders Pvt. Ltd. a Private Limited Company having its registered
Office at Goldar Patti, Nath Nagar, Bhagalpur Bihar, through its authorized
Signatory Ranjeet Kumar Singh, Male aged 35 Years, Son of Shri Rajeshwar
Prasad Singh, resident of Eliza-10, P.S. Uttar Para, Hoogly, West Bengal-
712233.
3. Chitwan Blenders and Bottlers Pvt. Ltd. a Private Limited Company having
its registered Office at Khagaul Road, Danapur-801503, Patna. through Its
authorized Signatory Ranjeet Kumar Singh, Male aged 35 Years, Son of Shri
Rajeshwar Prasad Singh, resident of Eliza-10, P.S. Uttar Para, Hoogly, West
Bengal-712233.
4. Saibya Liquors Private Ltd. a Private Limited Company having its registered
Office at 91, Koat Bazaar, Sitamarhi, Bihar-843302, through its authorized
Signatory Ranjeet Kumar Singh, Male aged 35 Years, Son of Shri Rajeshwar
Prasad Singh, resident of Eliza-10, P.S. Uttar Para, Hoogly, West Bengal-
712233.
5. Allied Blenders and Distillers Pvt. Ltd., a Private Limited Company having
its registered Office at 394-C, Lamington Chambers, Lamington Road,
Mumbai-400004 through its authorized Signatory Ranjeet Kumar Singh,
Male aged 35 Years, Son of Shri Rajeshwar Prasad Singh, resident of Eliza-
10, P.S. Uttar Para, Hoogly, West Bengal-712233.
... ... Petitioner/s
Versus
1. The State of Bihar through the Principal Secretary, Registration, Excise and
Prohibition Department, Government of Bihar, Patna.
2. The Excise Commissioner, Bihar, Patna.
3. The Assistant Commissioner of Excise, Patna.
4. The Bihar State Beverage Corporation Limited, a Government of BIhar
Enterprises, having its registered Office at 1st Floor, Vidyut Bhawan-II,
Jawaharlal Nehru Marg, Patna-800001 through its Managing Director.
5. The Commissioner, Commercial Taxes, Bihar, Patna.
6. The Joint Commissioner, State Taxes, Patna West Circle, Bihar, Patna.
7. The Joint Commissioner, State Taxes, Sitamarhi Circle, Sitamarhi.
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 5762 of 2020
======================================================
Carlsberg India Private Limited having registered office at 4th Floor,
Rectangle No.1, Commercial Complex, D4, Saket, New Delhi 110 017 and
Corporate Office at 3rd Floor, Tower A, Paras Twin Towers, Sector 54,
Gurgaon 122 002, Haryana through its Manager, Legal and authorized
signatory, Ms. Priyeta Chowdhary, Female, aged 32 years, daughter of Sri
Goutam Chowdhary, resident of P- 69, CIT Road, P.S. Entally, Kolkata-
700014. ... ... Petitioner/s
Versus
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
3/84
1. The State of Bihar through the Principal Secretary, Registration, Excise and
Prohibition Department, Government of Bihar, Patna.
2. The Principal Secretary, Registration, Excise and Prohibition Department,
Government of Bihar, Patna.
3. The Excise Commissioner, Bihar, Patna.
4. The Deputy Commissioner of Excise, Distillery and Warehouse, Bihar,
Patna.
5. The Assistant Commissioner of Excise, Patna.
6. The Bihar State Beverage Corporation Limited, a Government of Bihar
Enterprises, through its Managing Director, at 1st Floor, Vidyut Bhawan- II,
Jawaharlal Nehru Marg, Patna 800001.
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 7461 of 2020
======================================================
Molson Coors Cobra India Pvt. Ltd., A registered company incorporated
under the Companies Act, 1956 having its registered office at 501, DLF
Tower-B, District Centre Jasola, New Delhi- 110025 through its authorized
signatory Sri Santosh Kumar Gupta, Male aged 44 years, son of Late
Gupteshwar Prased Gupta, resident of 88, Near Lal Chowk, Jai Ram Nagar,
P.O. and P.S. Khagaul, Dist.- Patna- 80105 ... ... Petitioner/s
Versus
1. The State of Bihar Through the Principal Secretary, Registration, Excise and
Prohibition Department, Government of Bihar, Patna.
2. The Excise Commissioner Bihar, Patna.
3. The Assistant Commissioner of Excise Patna.
4. The Bihar State Beverage Corporation Limited A Government of Bihar
Enterprises, through its Managing Director, at 1st Floor, Vidyut Bhawan-II,
Jawaharlal Nehru Marg, Patna- 800001.
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 7473 of 2020
======================================================
Molson Coors India Pvt. Ltd. (formely Mount Shivalik Breweries Pvt Ltd) a
registered Company incorporated under the Companies Act, 1956 Having its
Corporate Office at 501, DLF Tower-B, District Centre Jasola, New Delhi-
110025 through its Authorized Signatory Sri Santosh Kumar Gupta, Male
aged 45 Years,Son of Late Gupteshwar Prasad Gupta, resident of 88, Near Lal
Chowk, Jai Ram Nagar, P.O. and P.S. Khagaul, Dist-Patna-80105
... ... Petitioner/s
Versus
1. The State of Bihar through the Principal Secretary, Registration, Excise and
Prohibition Department, Government of Bihar, Patna.
2. The Excise Commissioner, Bihar, Patna.
3. The Assistant Commissioner of Excise, Patna.
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
4/84
4. The Bihar State Beverage Corporation Limited, a Government of Bihar
Enterprises, through its Managing Director, at 1st Floor, Vidyut Bhawan-II,
Jawaharlal Nehru Marg, Patna-800001.
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 6561 of 2021
======================================================
Pernod Ricard India (P) Limited, a private limited company having its
registered office at 5th Floor, D-3, District Centre, Saket, New Delhi-110017,
through its authorized signatory Abhilasha Kanda, daughter of Col. Achal
Kumar (Retd.), and resident of D-5/4, Ground Floor, DLF Exclusive Floors,
DLF Phase 5, Gurugram-122002, Haryana. ... ... Petitioner/s
Versus
1. The State of Bihar through the Principal Secretary, Registration, Excise and
Prohibition Department, Government of Bihar, Patna.
2. The Commissioner of Excise, Government of Bihar, Patna.
3. Bihar State Beverages Corporation Limited, a Government of Bihar
Enterprise through its Managing Director at First Floor, Vidyut Bhawan-II,
Jawaharlal Nehru Marg, Patna-800001.
... Respondent/s
Appearance:
(In Civil Writ Jurisdiction Case No. 4882 of 2020)
For the Petitioner/s : Mr. Gopal Jain, Sr. Advocate
Mr. Satyabir Bharti, Advocate
Mr. Aditya Mukherjee, Advocate
Mr. Aditya Thyagarajan, Advocate
Ms. Divya Jhalani, Advocate
For the State : Mr. P.K. Shahi, Advocate General
Mr. Vikash Kumar, SC 11
For the BSCBCL : Mr. Lalit Kishore, Sr. Advocate
(In Civil Writ Jurisdiction Case No. 4911 of 2020)
For the Petitioner/s : Mr. Aditya Mukherjee, Advocate
Mr. Aditya Thyagarajan, Advocate
Ms. Divya Jhalani, Advocate
For the State : Mr. P. K. Shahi, Advocate General
Mr. Vikash Kumar, SC 11
For the BSCBCL : Mr. Lalit Kishore, Sr. Advocate
(In Civil Writ Jurisdiction Case No. 5376 of 2020)
For the Petitioner/s : Mr. Satyabir Bharti, Advocate
Ms. Kanupriya, Advocate
Ms. Sushmita Sharma, Advocate
Mr. Abhishek Anand, Advocate
For the State : Mr. P.K. Shahi, Advocate General
Mr. Vikash Kumar, SC 11
For the BSCBCL : Mr. Lalit Kishore, Sr. Advocate
(In Civil Writ Jurisdiction Case No. 5762 of 2020)
For the Petitioner/s : Mr. Satyabir Bharti, Advocate
Ms. Kanupriya, Advocate
Ms. Sushmita Sharma, Advocate
Mr. Abhishek Anand, Advocate
For the State : Mr. P.K. Shahi, Advocate General
Mr. Vikash Kumar, SC 11
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
5/84
For the BSCBCL : Mr. Lalit Kishore, Sr. Advocate
(In Civil Writ Jurisdiction Case No. 7461 of 2020)
For the Petitioner/s : Mr. Satyabir Bharti, Advocate
Ms. Kanupriya, Advocate
Ms. Sushmita Sharma, Advocate
Mr. Abhishek Anand, Advocate
For the State : Mr. P.K. Shahi, Advocate General
Mr. Vikash Kumar, SC 11
For the BSCBCL : Mr. Lalit Kishore, Sr. Advocate
(In Civil Writ Jurisdiction Case No. 7473 of 2020)
For the Petitioner/s : Mr. Satyabir Bharti, Advocate
Ms. Kanupriya, Advocate
Ms. Sushmita Sharma, Advocate
Mr. Abhishek Anand, Advocate
For the State : Mr. P.K. Shahi, Advocate General
Mr. Vikash Kumar, SC 11
For the BSBCL : Mr. Lalit Kishore, Sr. Advocate
(In Civil Writ Jurisdiction Case No. 6561 of 2021)
For the Petitioner/s : Mr. Dhruv Mehta, Sr. Advocate
Mr. Satyabir Bharti, Advocate
Mr. Aditya Mukherjee, Advocate
Mr. Aditya Thyagarajan, Advocate
Ms. Divya Jhalani, Advocate
For the State : Mr. P.K. Shahi, Advocate General
Mr. Vikash Kumar, SC 11
For the BSBCL : Mr. Lalit Kishore, Sr. Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE P. B. BAJANTHRI
and
HONOURABLE MR. JUSTICE ARUN KUMAR JHA
CAV JUDGMENT
(Per: HONOURABLE MR. JUSTICE P. B. BAJANTHRI)
Date : 24-11-2023
In these bunch of writ petitions, the petitioners have
questioned the validity of various orders passed by the official-
respondents like the Commissioner of Excise, Government of
Bihar, Patna (for short 'Excise Commissioner'), Bihar State
Beverages Corporation Limited (for short 'BSBCL'), a Joint
Commissioner, State Taxes/Commercial Taxes and the Assistant
Commissioner of Excise, Patna (for short 'Assistant
Commissioner'). In the cases mentioned herein below; the
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
6/84
petitioners have claimed for the refund of similar duties, the cases
are:
"(1) In CWJC 4882 of 2020, the
petitioner has challenged the order dated
25.09.2019
(Annexure-1), passed by the
Commissioner of Excise, Bihar, and the
order dated 22.07.2019 (Annexure-2)
passed by the Joint Commissioner, State
Taxes/Commercial Taxes, Barh Circle and
consequently, sought refund of Excise
Duty (2015-16), Bottling and License Fee
(2015-16 & 2016-17), License Fees under
Section 19B(2015-16 & 2016-17) and
19C(2016-17) (subject levies) and Value
Added Tax (In short 'VAT') for the
financial year 2015-16, amounting to Rs.
4,00,00,114/- along with applicable
interest from the Respondents therein.
Additionally, the petitioner has challenged
the order dated 22.01.2020 (Annexure-3),
passed by the Assistant Commissioner of
Excise, Patna, by which he has directed
adjustment of the amount refundable to
the petitioner from the dues of the Bihar
State Beverages Corporation Ltd.
(2) In CWJC 4911 of 2020, the
petitioner has challenged the order dated
25.09.2019 (Annexure-1), passed by the
Commissioner of Excise, Bihar and
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
consequently claimed for the refund of
Excise Duty, Bottling and License Fee,
Import Fee (Subject Levies) and Security
Deposit for the year 2015-16 which
amounts to a total of Rs.1,11,84,189/- by
Respondents therein. Additionally, the
petitioner has challenged the order dated
22.01.2020, passed by the Assistant
Commissioner of Excise, Patna, by which
he has directed adjustment of the amount
refundable to the petitioner from the dues
of the Bihar State Beverages Corporation
Ltd.
(3) Further in CWJC 5376 of
2020, there are five petitioners who have
challenged the order dated 25.09.2019
(Annexure-15), passed by the
Commissioner of Excise, Bihar.
Additionally, the petitioners have
challenged the order(s), both dated
09.12.2019 (Annexure-17), passed by the
Assistant Commissioner of Excise, Patna,
by which he has directed adjustment of the
amount refundable to the petitioner from
the dues of the Bihar State Beverages
Corporation Ltd.
The petitioners are claiming
refund of the subject levies which are as
follows:
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(a) Petitioner 1 is claiming
refund of Excise Duty deposited on stocks
which have been drained out, exported to
other states and decanted in the factory,
Bottling fee on stocks which have been
drained out and decanted and Distributor's
license fees on stocks which have been
drained out, exported to other states and
decanted for the year 2015-16 amounting
to Rs. Rs. 4,71,51,884.00 and Advance
excise duty, advance bottling fee, advance
distributor's license fee, advance label
registration fee and advance license fee for
2016-17 amounting to Rs.
Rs.10,54,448.00.
(b) Petitioner 2 is claiming
refund of Excise Duty deposited on stocks
which have been drained out, exported to
other states and decanted in the factory,
Bottling fee on stocks which have been
drained out and decanted and Distributor's
license fees on stocks which have been
drained out, exported to other states and
decanted for the year 2015-16 amounting
to Rs. 7,32,88,572.00 and Advance excise
duty, advance bottling fee, advance
distributor's license fee, advance label
registration fee and advance license fee for
2016-17 amounting to Rs. 53,11,969.00.
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(c) Petitioner 3 is claiming
refund of Excise Duty deposited on stocks
which have been drained out, exported to
other states and decanted in the factory,
Bottling fee on stocks which have been
drained out and decanted and Distributor's
license fees on stocks which have been
drained out, exported to other states and
decanted for the year 2015-16 amounting
to Rs. Rs. 1,199,87,257.00 and Advance
excise duty, advance bottling fee, advance
distributor's license fee. advance label
registration fee and advance license fee for
2016-17 amounting to Rs. Rs.3,47,770.00.
(d) Petitioner 4 is claiming
refund of Excise Duty deposited on stocks
which have been drained out, exported to
other states and decanted in the factory,
Bottling fee on stocks which have been
drained out and decanted and Distributor's
license fees on stocks which have been
drained out, exported to other states and
decanted for the year 2015-16 amounting
to Rs. Rs. 1,02,22,633.00 and Advance
excise duty, advance bottling fee, advance
distributor's license fee, advance label
registration fee and advance license fee for
2016-17 amounting to Rs. 4,85,895.00.
(4) Similarly in CWJC 5762 of
2020, the petitioner has challenged the
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
order dated 25.09.2019 (Annexure-19),
passed by the Commissioner of Excise,
Bihar and consequently claimed for refund
of Excise Duty, Bottling Fee and
Distributor's License Fee amounting to Rs
3,10,53,289.48; further it has also claimed
refunds for Advance Bottling Fee,
Advance Export Fee, Label Registration
Fee (Export), Brewery License Free Form
18, Bottling License fee- Form 20 and
Bonded Warehouse- Form 19B amounting
to Rs. 48,72,366.90 from the respondents
therein;
(5) In CWJC 7461 of 2020, the
petitioner has challenged the order dated
25.09.2019 (Annexure-14), passed by the
Commissioner of Excise, Bihar and
consequently claimed for the refund of
license fee, movement fee, label
registration fee and Excise Duty deposited
on the liquor manufactured and supplied
to BSBCL for the year 2015-16 amounting
to Rs.23,252,760.00 and also for the
refund of Advance Bottling Fee, Advance
19C Fee, Advance Excise Duty and
Advance Label Registration Fee
amounting to Rs. 1,56,70,123.00 from the
respondents therein; Additionally, the
petitioner has challenged the order(s), both
dated 9.12.2019 (Annexure-17) series, as
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
contained in memo nos 2341 and 2343,
passed by the Assistant Commissioner of
Excise, Patna, by which he has directed
adjustment of the amount refundable to
the petitioner from the dues of the Bihar
State Beverages Corporation Ltd.
(6) In CWJC 7473 of 2020, the
petitioner has challenged the order dated
25.09.2019 (Annexure-13), passed by the
Commissioner of Excise, Bihar and
consequently sought for refund of Excise
Duty, Import Fee and Distributor's License
Fee amounting to Rs. Rs.1,21,59,675.00
and also for the refund of advance excise
duty, advance distributor's license fees,
advance import fees and advance label
registration fees amounting to Rs.
76,67,600.00 from the respondents
therein.
(7) In CWJC 6561 of 2021 as
well, the petitioner has challenged the
order dated 03.03.2020 (Annexure-1),
passed by Commissioner of Excise, Bihar
and consequently asked for the refund of
VAT, bottling and license fees, label
renewal fees, excise duty and advance
excise duty for the year 2015-16 and
2016-17 amounting to Rs. 17.273 crores,
which are due and payable along with the
applicable interest by Respondents therein.
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
Submissions:
2. The petitioners are all registered companies under the
Companies Act. They were into the manufacture of various kinds
of liquors and they were operating manufacturing bottling
units/plant and machinery and/or warehouses within the State of
Bihar.
3. State of Bihar established Bihar State Beverage
Corporation Limited (hereinafter referred to as 'BSBCL') one of the
Government of Bihar Enterprises with an object of ease of doing
liquor business in the State of Bihar through the BSBCL to
wholesalers and retailers while getting supply from the petitioners'
company. In this regard, BSBCL evolved Liquor Sourcing Policy,
through which tenders were invited for supply of various kinds of
liquor and beer. Accordingly, petitioners were supplying liquors to
the BSBCL from time to time, such Liquor Sourcing Policy, 2013-
2014 was notified by means of Circular No. 1417 dated
26.03.2013. No agreement for 2016-17 was entered in term of
Liquor Sourcing Policy of year 2015.
4. Petitioners had executed agreement with BSBCL for the
Financial Year 2015-16.
5. State of Bihar- respondent No. 1 issued a notification
dated 21.12.2015 of the New Excise Policy, 2015 for the State of
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
Bihar which came into effect from 01.04.2016, by which State
sought to prohibit the distribution and consumption of alcohol in
State of Bihar in a phased manner. It has made provision only to
the extent of prohibiting distribution and consumption of country-
made liquor w.e.f. 01.04.2016. However, petitioners are all
manufacturer of liquors other than the Country-made Liquor and
Masala Liquor like India Made Foreign liquor (for short 'IMFL'),
wine, FMFL/FMFW/LAB and Beer.
6. In this backdrop, BSBCL issued a tender on 12.03.2016
titled as 'invitation of offer for supply of IMFL/FMFW/LAB and
Beer in State of Bihar (Tender).
7. Whereas, on 31.03.2016, State Government issued a
notification imposing absolute ban in manufacture, bottling,
distribution, sale, purchase, possession and consumption of country
made liquor by any manufacturer, bottling plant, license holder or
any other person in the State of Bihar w.e.f. 01.04.2016.
8. On 31.03.2016, State of Bihar issued a notification
relating to the Bihar Excise Act (Amendment) Act 2016 (Bihar Act
3 of 2016) (for short Act, 2016). Section 19 (4) of Bihar Excise
Act, 1915 (Bihar and Orissa Act- II of 1915) (for short 'Act 1915')
was substituted by new provision.
9. The State Government while invoking power under
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
Section 19 (4) of Bihar Excise Act, 1915 (Amended by Act of
2016) proceeded to impose ban on wholesale or retail trade or
consumption of foreign liquor by any license holder or any person
in the whole of the State of Bihar with immediate effect vide its
notification dated 05.04.2016.
10. The aforementioned notification dated 05.04.2016
relating to imposition of ban on wholesale or retail trade and
consumption of foreign liquor by any license holder or any person
in the whole of the State of Bihar was subject matter of CWJC No.
6675 of 2016 before this Court and it was filed by the
Confederation of Indian Alcoholic Beverage Companies which was
allowed by the High Court vide order dated 30.09.2016.
Notification dated 05.04.2016 insofar as imposition of ban on
wholesale or retail trade and consumption of foreign liquor by
license holder or any person in the whole of the State of Bihar was
found to be ultra vires and it was set aside by this Court in CWJC
No. 6675 of 2016.
11. Feeling aggrieved and dissatisfied by the order dated
30.09.2016 passed in CWJC No. 6675 of 2016, the State of Bihar
preferred SLP before the Hon'ble Supreme Court assailing the
judgment of this Court. On 07.10.2016, the Hon'ble Supreme Court
was pleased to stay the judgment dated 30.09.2016 passed in
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
CWJC No. 6675 of 2016.
12. State Government evolved policy for refund of excise
duty and VAT deposited by license holder for the Financial Year
(FY) 2016-17 with reference to deposit of interim VAT and excise
duty which has not been utilized, it was to be refunded on
proportionate basis.
13. State of Bihar passed the Bihar Prohibition and Excise
Act, 2016 in order to enforce, implement and promote complete
prohibition of liquor and intoxicants in Bihar and it came to be in
vogue from 02.10.2016. In other words, State of Bihar re-imposed
complete prohibition in the State.
14. State Government further proceeded to prohibit the
manufacture of IMFL in the State of Bihar which was not
prohibited on earlier occasion, in other words, petitioners were
earlier permitted to manufacture foreign liquor. By notification
dated 24.01.2017, the State Government even prohibited the
manufacture of foreign liquor within the State of Bihar. The
aforementioned notification also provided that no license would be
renewed by the State Government post expiry of licenses on
31.03.2017. Confederation of Indian Alcoholic Beverage
Companies preferred application before the Hon'ble Supreme Court
seeking periodical extension of time for removal of stocks from the
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
State of Bihar and for sale in other states. Hon'ble Supreme Court
was pleased to allow for removal of the stocks for a period upto
31.07.2017 vide orders dated 31.03.2017, 29.05.2017 and
08.06.2017, respectively passed on IA Nos. 61-75 of 2017 in
Special Leave to Appeal (C) Nos. 29749-29763 of 2016 (State of
Bihar and Other Vs. Confederation of Indian Alcoholic and
Beverage Companies and Another).
15. In this backdrop, the petitioners filed application before
the Excise Commissioner/Authorities, inter alia, seeking refund of
duties and taxes deposited for manufacture and supply of liquor.
The petitioners had also sought for refund of unutilized bottling
and license fee and label registration/renewal fees inter alia, on
10.12.2016.
16. Deputy Commissioner of Excise rejected the refund
application of the petitioners on 16.08.2017 to the extent that the
petitioners were not entitled to refund of VAT and excise duties in
the light of Section 23 of Act, 2016. United Spirits Ltd. filed writ
petition before this Court and it was numbered as CWJC No. 15316
of 2017 in which they sought for quashing of the order dated
16.08.2017 of the Deputy Commissioner of Excise. Similar writ
petitions were filed by Bacardi India Pvt Ltd, Colona Blenders and
Bottlers (India) Pvt Ltd and four others and Carlsberg India Pvt
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
Ltd, which was numbered as CWJC No. 13165 of 2018, CWJC No.
16716 of 2017 and CWJC No 514 of 2018 respectively.
17. Assistant Commissioner issued a notice to the petitioner
while directing the petitioner to place the documents in support of
those claims for the various levies pertained to FY 2016- 17 on
24.05.2018. The petitioners submitted representations and
affidavits on 09.06.2018 and 18.06.2018.
18. The petitioner Pernod Ricard filed CWJC No. 18064 of
2018 in which it sought for consideration of representations dated
10.12.2016, 09.06.2018 and 18.06.2018 related to refund of excise
duties and other levies with a prayer of refund of excise duty and
other levies.
19. The petitioner Molson Coors Cobra India Pvt Ltd filed
CWJC No. 6467 of 2019 and the petitioner Molson Coors India Pvt
Ltd filed CWJC No. 6757 of 2019, inter alia, seeking refund of the
Excise Levies and other deposits lying with the Excise Department.
20. During pendency of the said petition, on 30.04.2019,
the writ petitions bearing CWJC No. 15316 of 2017, (USL
Judgment) CWJC No. 13165 of 2018, CWJC No. 16716 of 2017
and CWJC No 514 of 2018 were disposed of with the following
observations: -
a. Respondent No. 2's position that the
Respondent had provided ample opportunity
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
to the Petitioner to export its Stock outside
Bihar could not be a ground for denying the
claims for refund of Excise Duty on stocks for
those manufacturers that could not export
finished goods/raw materials outside the State
of Bihar.
b. The claims for refund of Excise
as on 31.03.2017 were required to be
considered along with other claims for bottling
and license fee.
c. The Respondent were not entitled to
retain Bottling and License Fees deposited by
the Petitioners, since the same was only
payable on "saleable stock" and the
Respondent had destroyed such Stock of the
Petitioner.
21. On 01.05.2019, order to the following effect was passed
in CWJC No. 18064 of 2018 (Pernod Judgment) disposing of the
writ petition:-
a. Respondent No. 2 and Respondent
No. 3 are under a duty to consider the
representations of the Petitioner and dispose of
the same.
b. Respondent No. 2 and Respondent
No. 3 to examine the Petitioner's claims after
giving the Petitioners an opportunity of
hearing, within 3 months.
c. The Respondent to consider the
claims of the Petitioner, in view of the legal
position as settled in the USL judgment.
22. CWJC No. 6467 of 2019 and CWJC No. 6757 of 2019
was disposed of on 7.5.2019, directing the concerned authorities to
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
consider the claim and dispose of the same in accordance with law
with an opportunity of hearing to the petitioner, within a period of
six weeks of receipt/production of a copy of the judgment.
23. Under the aforesaid facts and circumstances, the
petitioners submitted representation to the Commissioner of Excise
and BSBCL, inter alia, on 04.09.2019 to comply the directions of
the USL Judgment. Petitioners had also requested the
Commissioner of Excise orally and filed detailed representation on
21.11.2019 along with certain documents during the period from
06.11.2019 to 06.03.2020, whereas petitioners received partial
refund or amount in relation to the claims for advance duties/fees
deposited for FY 2016-2017.
24. Commissioner of Excise proceeded to pass orders on
25.09.2029 and 03.03.2020, respectively rejecting the remaining
claim of the petitioners, which are impugned in their respective
writ petitions. Gist of the impugned order dated 25.09.2029 and
03.03.2020 of the Excise Commissioner are as follows:-
"i Given that the Petitioner had
failed to avail of the opportunity to export
its stock outside the State of Bihar, the said
stock was destroyed. Therefore, the
Petitioner was not entitled to claim refund
of Excise Duty.
ii Since the Petitioner had
enjoyed the privileges granted by the Excise
Department in the FY 2015-16 without any
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
hindrance, the amount deposited inter-alia
towards 19- C License Fee and Excise Duty
had been utilized, and no refund for the
same could be granted.
iii The Departmental Gazette
Notification dated 18.04.2016 did not allow
refund of Bottling and License Fees. Thus,
the same was not refundable to the
Petitioner.
iv Respondent No. 2 did not
consider/provide any reasons for the denial
(if at all) of amounts claimed towards
advance Import Fees deposited by the
Petitioner for FY 2016-17, for stocks that
could not even be imported into Bihar due
to imposition of complete prohibition."
25. Petitioner Pernod submitted representation on
10.09.2020 to Commissioner of Excise- BSBCL while stating that
authorities have failed to consider the claims of the petitioner in the
light of the directions of this Court dated 30.04.2019 passed in
CWJC No. 15316 of 2017 read with CWJC No. 18064 of 2018
decided on 01.05.2019.
26. For consideration of the grievance of the petitioner
Pernod another representation was submitted on 17.12.2020, thus,
as there was no response from the Commissioner of Excise-
BSBCL hence the present petitions.
27. Learned Senior Counsel, Mr. Dhruv Mehta appearing
for petitioner-Pernod Ricard India (P) Limited (CWJC No. 6561 of
2021), firstly advanced the argument on preliminary issue of non-
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
exhaustion of alternative remedy. It has been contended that
impugned order/action of the respondents are arbitrary and
violative of Article 14 of the Constitution which is contrary to the
extant legal regime and ignorance of the orders of this Court passed
in Pernod Judgment read with USL Judgment. It has also been
submitted that respondents have not raised any objection in respect
of maintainability of the petition by way of their respective
pleadings in the counter affidavit and such issue was raised during
the course of the argument on 24.08.2023. Further, it is contended
that appeal against the impugned order would not be an alternative
and efficacious remedy for the petitioner. In the instant case, appeal
lies to the State Government against the order of the Excise
Commissioner. It is also submitted that State Government has
already taken position in their counter affidavit to the extent that
the petitioner is not entitled to refund of subject levies. In support
of the aforementioned contention, he relied on the following
decisions:-
(i) Dhampur Sugar Mills Ltd. Vs State of UP
reported in (2007) 8 SCC 338 (Para 23)
(ii) M/s Godrej Sara Lee Ltd. Vs. The Excise and
Taxation Officer cum Assessing Authority and
Ors. reported in 2023 SCC OnLine SC 95 (Para 4).
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(iii) Whirlpool Corporation Vs. Registrar of
Trade Marks, Mumbai and Ors. reported in
(1998) 8 SCC 1 (Para 14 and 15).
(iv) Harbanslal Sahnia and Anr. Vs. Indian Oil
Corporation Ltd. and Ors. reported in (2003) 2
SCC 107 (Para 7).
28. Learned Senior Counsel, Mr. Dhruv Mehta further
submitted that rejection of the petitioners' claim for refund of excise
duty by the Excise Commissioner is in violation of the Pernod
Judgment read with USL judgment. It is contended that order dated
03.03.2020 of the Excise Commissioner, rejecting claim for refund of
excise levies is incorrect, since in the order dated 06.08.2018, passed
by the Excise Commissioner, it has already been noticed that:-
(i) Petitioners had not exported their stocks outside the
State of Bihar, despite the State of Bihar affording
opportunity for them to export the same.
(ii) The petitioners had utilized (allegedly so) the excise
duty for FY 2015-16.
(iii) The petitioners' claim could not be allowed in view
of Section 23 of Act, 2016.
29. The aforementioned reasoning was rejected by this
Court in the USL Judgment by holding as under:-
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
"It is apparent from reading of the
order passed by respondent no.3 that it
nowhere considers the claim of the petitioner
towards refund of excise duty paid on the
stocks lying with the respondent no. 4 or the
petitioner as on 31.03.2017. The view taken by
the respondent no.3 that the Prohibition and
Excise Department provided ample
opportunity to the manufacturers of
IMFL/BEER to export the finished goods and
raw materials outside the State of Bihar and
some of the manufacturers availed the
opportunity thus provided and taken stocks
and raw materials back from the BSBCL
Godowns and got them exported outside the
State of Bihar, cannot be a reason according
to us to take a view that those manufacturers
of IMFL/BEER who could not export the
finished goods or raw materials outside the
State of Bihar during given period would not
be liable for refund of the excise duty paid on
the stocks. This aspect of the matter has again
not been considered by the respondent no.3.
We are willing to agree with the
contentions of the petitioner that claim of the
petitioner to extent of INR6,73,61,950/- for the
refund of excise duty paid on stocks lying with
the respondent no.4 and/or the petitioner as
on 31.03.2017 is required to be considered
along with the other claims on account of
bottling and license fee which were deposited
by the petitioner. Learned counsel for the
petitioner has rightly submitted that the
bottling and license fee would be payable on
saleable stock of IMFL and since the
respondents have destroyed the stocks of the
petitioner, they are not entitled to retain the
bottling and license fee deposited for these
goods. The outstanding claims as shown
above in the table on account of excise duty,
19C fees and bottling fee for the financial year
2015-16 together with the carry forward
licence fee for the said period and the balance
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
for the period 2016-17 are thus liable to be
considered by the respondent no.2.
In the light of the discussions made
hereinabove, while we are not willing to
interfere with the adjustment of arrears out of
the refund of VAT, we leave it open for the
petitioner to challenge the adjustment of
refunds, in case, they succeed in challenging
the assessment order. We are of the considered
opinion that the respondent no.2 is required to
consider the claim of the petitioner on account
of surcharge on VAT and the VAT paid on
stock in transit. Let these claims of the
petitioner be considered by the respondent
no.2 and a reasoned order thereon be passed
after opportunity of hearing to the petitioner
and the admitted amount be paid to the
petitioner within a period of three months
from the date of receipt/production of a copy
of this order.
Similarly, we are of the view that the
Excise Commissioner, Bihar (respondent no.3)
would be obliged to consider the claims of the
petitioner on account of excise duty paid on
stocks lying with the respondent no.4 or the
petitioner as on 31.03.2017 and which were
not or could not be exported during the
available period. The respondent no.3 shall
accordingly be also obliged to consider the
other claims of the petitioner on account of
bottling and license fee for the financial year
2015-16, carry forward bottling and license
fee for the financial year 2015-16 and the
bottling and license fee for the financial year
2015-16 to the extent it has remained
undecided. The respondent no.3 shall thus
consider all these claims and pass a reasoned
order after opportunity of hearing to the
petitioner and refund the admitted amount
within a period of three months from the date
of receipt/production of a copy of this order. A
reasoned decision thereon shall be
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
communicated to the petitioner within the
aforesaid period. It will be open for the
petitioner to make submissions and produce
all relevant materials which may be required
for consideration of its claim before the
respondent nos.2 and 3 on a date and time to
be fixed by the respective respondents.
In consequence of the discussion above
while the order of the Deputy Commissioner
dated 16.08.2017 impugned in the writ
petition is set aside, the order of the Excise
Commissioner dated 06.08.2018 in Misc. Case
No. 1 of 2018 stands modified to that extent."
30. It is further submitted that Excise Commissioner has
rejected the claim of the petitioner on identical grounds which
had been rejected by this Hon'ble Court in USL Judgment.
31. Learned Senior Counsel, Mr. Dhruv Mehta on the
aforementioned point submitted that Commissioner of Excise
cannot reject the claim of the petitioners while assigning the
identical reasons when the same has been turned down by this
Court earlier in Pernod and USL Judgment. He has cited the
decision in the case of Neelima Srivastava Vs. State of Uttar
Pradesh and Ors, 2021 SCC online SC 610 (Para Nos. 27, 32
-36) in support of his argument that reconsideration of dispute,
which have attained finality inter se parties, is not permissible.
32. It is further submitted that executive cannot sit in
appeal over the judicial authorities' decisions and he cited the
decision in the case of Union of India and Ors. Vs. K.
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
Shankarappa (2001) 1 SCC 582 (Para 7). It is also submitted
that decision of this Court is binding on the Commissioner of
Excise. In support of this contention, he has been relying on
decision in the case of Union of India and Ors. Vs. Kamlakshi
Finance Corporation Ltd., 1992 Suppl (1) SCC 648 (Para
Nos. 4,6 and 7). It is also submitted that administrative action
cannot be illegal, irrational or arbitrary. On this point he relied
on Neelima Mishra vs. Harinder Kaur Pental & Ors.
reported in 1990 (2) SCC 746 (Para Nos. 23, 29).
33. Learned Senior Counsel, Mr. Dhruv Mehta further
submitted that Commissioner of Excise has failed to consider
the petitioner's claim for refund of import fee and has illegally
retained the import fee. Rejection of claim for refund of import
fee for financial year 2016-17 is contrary to Pernod Judgment,
since reasoned order has not been passed. In support of this
contention, he relied on decision of S.N Mukherjee Vs. Union
of India reported in (1990) 4 SCC 594 (Para Nos. 29-40). He
also relied on Union of India and Ors. Vs. Kamlakshi
Finance Corporation Ltd. (cited supra) (Para 4, 6 and 7).
34. The learned Senior Counsel further submitted that
Commissioner of Excise has rejected the petitioner's claim for
refund of bottling and license fee in violation of Pernod
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
Judgment. The reasons assigned by the Commissioner of Excise
is with reference to notification dated 18.04.2016 to the extent
that bottling and license fee for Financial Year 2015-16 is not
refundable in the light of order dated 06.08.2018. It is submitted
that this Court has already examined order dated 06.08.2018,
whereas this Court has not accepted the reasoning of the
decision of Commissioner of Excise. It is further submitted that
respondents have destroyed stocks of the petitioners, they were
not entitled to bottling and license fee for these goods as they
had rendered them non- saleable. This has been taken note of by
this Court in the case of Pernod and USL Judgments. Therefore,
rejecting the claim by the Commissioner of Excise in the
impugned order insofar as non-consideration of claim of refund
of bottling and license fee and holding it to be not refundable is
wholly illegal. It was further submitted that reliance placed on
Section 23 of the Act, 2016 was incorrect.
35. The decision of Commissioner of Excise is without
the authority of law in rejecting the petitioner's claim for refund
of 19C license fee. Even on this issue learned senior counsel for
the petitioner relied on order dated 06.08.2018 read with USL
and Pernod Judgment. The issue has been settled and the learned
Senior Counsel relied on the decisions of Neelima Srivastava,
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
K. Shankarappa and Kamalakshi Finance Corporation Ltd. cited
supra.
36. It has been submitted that this Court has power to
invoke its writ jurisdiction to grant refund of statutory levies
collected/retained without the authority of law. On this issue, he
relied on decision in the case of USL & Pernod Judgment.
37. It is further submitted that tax cannot be levied or
retained without the authority of law and refund of such tax can
be sought as a consequential relief in writ proceedings. On this
point, he has relied on Idea Cellular Limited vs. Union of
India, (2015) SCC OnLine P&H 6354 (Para Nos. 14-19, 21-
22), U.P. Pollution Control Board and Ors. Vs. Kanoria
Industrial Limited and Anr. reported in (2001) 2 SCC 549
(Para 9, 12 & 17) and Salonah Tea Company Limited & Ors.
vs. Superintendent of Taxes, Nawgong & Ors, (1998) 1 SCC
38. Learned Senior Counsel, Mr. Gopal Jain appearing
on behalf of the United Spirits Limited (CWJC No. 4882 of
2020) submitted that petitioners cannot be relegated to invoke
alternative remedy since this preliminary objection does not oust
the jurisdiction of this Court. In support of this contention, he
relied on the following decisions:-
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(i) M/s Godrej Sara Lee Ltd. (cited supra)
(ii) Siemens Ltd. vs. State of Maharastra
& Ors. reported in (2006) 12 SCC 33 (Para
2, 8, 9 &11)
(ii) Premier Printing Press vs. State of
Rajasthan & Anr. SBCW No. 3677/2015
decided on 23.02.2017 (Para Nos. 17, 26)
(iii) Shrebatsa Mishra vs. State of Odisha
& Ors. WPC No. 4881 of 2018 decided on
08.02.2023 (Para 2 to 4 and 12 to 14)
(iv) Bibekanad Mondal vs. State of West
Bengal reported in (2002) SCC Online Cal
571 (Para 2, 4- 6).
39. It has been further submitted that impugned orders
have been passed without authority of law and are wholly
without jurisdiction. On this point, he relied on Idea Cellular
Limited (cited supra) (Para 14, 15, 19, 21-22), M/s Whirlpool
Corporation (cited supra) (Para 14, 15 & 20), Committee of
Management and Anr. vs. Vice Chancellor & Ors. reported in
(2009) 2 SCC 630 (Para 22, 23 & 30).
40. It has been further submitted that issue of legal
retention of the subject levies and VAT along with applicable
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
charge has been conclusively decided by this Court in its
judgment dated 30.04.2019 passed in CWJC No. 15316 of 2017.
He relied on certain findings and observations of this court in the
aforementioned judgment to contend that impugned orders are
not in consonance with the findings of this Court and
observation made therein. The authorities side stepped the order
of this Court and did not maintain sanctity of its order.
41. It has been further submitted that incidence of VAT
and surcharge leviable under Section 3 and 3A of the Bihar
Value Added Tax Act, 2005, occurs on sale. In support of this
contention, he placed reliance on State of Rajasthan & Anr. vs.
Rajasthan Chemists Association reported in (2006) 6 SCC 773
(Para 10, 28, 44, 53).
42. Learned counsel, Mr. Satyabir Bharti appearing
on behalf of Molson Coors Cobra India Pvt. Ltd. and other cases
submitted that the petitioners have no equally efficacious and
speedy alternative remedy for the reasons that Section 92 & 93
of Bihar Prohibition and Excise Act, 2016 (Amended 2018) is
impracticable insofar as filing of appeal against the orders of the
Commissioner of Excise, since the State of Bihar have not
identified the Appellate Authority and Revisional Authority. On
this point, learned counsel pointed out that it is merely stated that
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
State Government is the Appellate Authority wherever Excise
Commissioner passes an order. The definition of State
Government refers to State Government of Bihar. Therefore,
there is no identification of particular designated officer. He has
also pointed out from Rule 20 and 24 of Bihar Prohibition and
Excise Rules, 2021 notified on 27.09.2021 does not specify, as to
who shall be the appellate authority. Rule 20 is relating to appeal
whereas Rule 24 is relating to procedure of revision. No doubt,
Secretary of the department has been identified to decide
revision at the same time it is to be noted that in the present case
Commissioner of Excise is also holder of the post of Secretary to
the Excise Department. Therefore, it is impracticable to prefer
any appeal or revision against the impugned orders of
Commissioner of Excise. Therefore, the present writ petition is
maintainable.
43. Learned counsel, Mr. Satyabir Bharti reiterated
the arguments advanced by the learned Senior counsels insofar
as impugned order of the Commissioner Excise read with the
decision rendered in the United Spirits Limited and Pernod
judgment in respect of refund of various levies/fees like Excise
Duty, distributor fee, bottling fees, import fee, on stock
destroyed at the end of BSBCL and manufacture (plant), which
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
could not be exported during the period from 01.04.2017 to
31.07.2017. It was pointed out that no provision has been made
for refund in the Government Order dated 18.04.2016, with
respect to stocks, which were manufactured and supplied in the
State of Bihar for sale, but could not be sold due to imposition of
prohibition in the State on sale and consumption of liquor. On
the other hand, there was an exemption of levy on bottling fee by
notification dated 06.10.2016. In other words, they are entitled to
refund of bottling fee, which has remained unutilized. Bottling
fee is levied on per litre basis, that is on the actual quantity of
liquor, which is bottled and if liquor has not been bottled from
1.4.2016 to 05.10.2016, they are entitled to refund of bottling
fee. It is also submitted that if the Commissioner of Excise/State
Government has agreed to refund the excise duty on liquor
which has been exported and further refund of certain advance
fee, then on the same principle, the Excise Duty and other fees
levied on destroyed stocks should also be refunded. He has also
contended that Commissioner of Excise has not taken a decision
as to whether the petitioners are entitled or not entitled insofar as
distributor fee under Section 19C and Import Fees on exported
stocks. Overall, it is submitted that respondents have only agreed
to settle and refund the (i) excise duty on exported stocks and (ii)
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
excise duty, distributor fee and label fees deposited in advance
for the year 2016-2017, but rejected claim for refund of Excise
Duty on destroyed stocks, distributor license fee, bottling fees
and import fee on destroyed stocks and bottling fees deposited in
advance for the period 2016-17, even though no bottling took
place and the levy was exempted from 6.10.2016. However, for
the earlier period it is stated that they are not entitled for refund
of bottling fee.
44. On destroyed stock lying with the BSBCL and
with the petitioners, the excise duty, bottling fee, distributor
license fees and import fees could not have been denied. This
has been taken note of by this Court in the earlier Judgement of
USL & Pernod.
45. Referring to Section 43 of the Bihar Excise Act,
1915, as it existed at the time of imposition of prohibition in the
State of Bihar, it has been contended by the Learned Counsel Sri
Satyabir Bharti, that entitles the licensee to claim refund of the
license fees as also compensation, if the license is withdrawn
without any prior notice. The licenses of the petitioners were
withdrawn without any prior notice and therefore they are
entitled for refund of the excise levies in question.
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
46. Referring to the impugned orders passed by the
Assistant Commissioner Excise, who proceeded to adjust
demurrages fee levied by BSBCL on 26.09.2019, with reference
to demurrages ordered by BSBCL dated 13.08.2019, it was
contended by the Learned Counsel Sri Satyabir Bharti that the
same is not permissible and without authority of law in the light
of Section 93 of Bihar Excise Act, 1915. On this point, learned
counsel for the petitioner pointed out sub-section (9) of Section 2
of Bihar Excise Act, 1915 defines 'Excise Revenue' and
demurrage charge levied by BSBCL is not an Excise Revenue,
which alone can be recovered by an Excise Officer under
Section 93 of the Act.
47. He has pointed out that no doubt Clause 16(d) of
Liquor Sourcing Policy 2013-14 on 26.03.2013 relates to
demurrages as demanded by the BSBCL, but Clause 16(d) can
only be applied under the circumstance that sale of liquor though
permitted in the State, it could not be sold resulting it being
declared an inactive stock and demurrage charge could not have
been recovered taking shelter under the said clause, when
prohibition on sale of liquor had been imposed in the State.
Besides, Clause 9 of the Policy also refers to "force majeure"
conditions under which, the parties are exempted from any
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
liability arising from the agreement/policy. It has also been
contended that the order dated 13.08.2019 and 26.09.2019 is
without notice to the petitioners. Firstly, how the Assistant
Commissioner of Excise adjusted certain alleged dues of BSBCL
without any source of power, so also BSBCL has not issued any
notice before demand of demurrages on 13.08.2019. On this
count, impugned order of the Assistant Commissioner of Excise
and so also BSBCL demand dated 13.08.2019 and 26.09.2019
are liable to be set aside, which is under challenge in CWJC NO.
8853 of 2021, CWJC No. 7463 of 2020, CWJC No. 7467 of
2020 and CWJC No.4652 of 2021.
48. It is also submitted that the State parted with its
privilege insofar as allowing the parties to conduct its business in
liquor by levying of tax or any fees, therefore, the same cannot
be withheld by the State if the said privilege was withdrawn. On
this issue, learned counsel for the petitioner relied on the
following decisions: -
(i) (2004) 11 SCC 26 State of Punjab and Anr.
vs. Devans Modern Breweries Ltd. & Anr.
(Para Nos. 102 & 103)
(ii) (1990) 1 SCC 109 Synthetics and
Chemicals Ltd. And Ors. vs. State of Uttar
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
Pradesh and Ors. (Para 87)
(iii) (2005) 11 SCC 1 State of Kerala and Ors.
vs. Maharashtra Distilleris Ltd. & Ors. (Para
58 and 84).
49. Mr. Bharti, learned counsel for the petitioners
appearing in CWJC No. 4882 of 2020 and other case further
submitted that impugned order dated 22.07.2019 passed by
fourth respondent-the Joint Commissioner of Commercial Taxes,
Bihar, Patna (In-charge) is without authority of law in view of
Section 3-Charge of Tax and Section 3A-Surcharge in Chapter II
and incidence of tax under Bihar Value Added Tax Act, 2005
would be levied only on sales with reference to gross turn over of
sales calculated from the commencement of the year ending on
the day immediately before the commencement of Act, exceeds
the specified quantum as applicable to him under the Bihar
Finance Act, 1981. In the present case, claim is for refund of
Value Added Tax which has been ordered by the Joint
Commissioner of Commercial Taxes, Bihar, Patna (In-charge)
towards unsold stocks and such stocks have been destroyed at the
behest of State-respondents.
50. Thus it has been submitted that in the light of
judicial pronouncements, petitioners are entitled to refund of
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
subject levies and the same cannot be withheld by the
respondents.
51. Mr. P.K. Shahi, learned Advocate General
representing State-respondents submitted that the writ petitions
filed by the petitioners are not maintainable in the light of Section
92 and 93 of Bihar Prohibition and Excise Act, 2016 (for short
'Act, 2016') read with Rules 20 & 24, appeal and revision, Bihar
Prohibition and Excise Rules, 2021 (for short 'Rules, 2021') read
with Clauses 3(i) and 3(ii) of Fourth Schedule of Rules of
Executive Business, 1979 (for short 'Rules 1979'). It has been
submitted that petitioners have statutory remedy of appeal and
revision. In the absence of identification of appellate authority in
the Act, 2016 and Rules, 2021 the appellate authority could be
identified under Rules, 1979 (cited supra) to the extent that against
the order of Excise Commissioner appellate authority shall be the
departmental Secretary or concerned Minister. It is further
submitted that petitioners' contention that Excise Commissioner is
holder of the post of both Excise Commissioner and Secretary,
therefore, it is not efficacious remedy for them, cannot be taken
note for the reason that as on the date of impugned order of the
Excise Commissioner both the posts of Excise Commissioner and
Secretary were manned by two independent Officers. Now, only
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
one official is manning both the posts on ad hoc basis for want of
adequate officers of such cadre. In not availing statutory remedy,
he has cited and relied on two decisions of Hon'ble Apex Court
namely Whirlpool Corporation vs. Registrar of Trade Marks,
Mumbai and Ors. reported in (1998) 8 SCC 1 (Para 14 and 15)
and Commissioner of Income Tax and Ors. vs. Chhabbil Das
Agarwal reported in (2014) 1 SCC 603 (Para 15). Therefore, the
present petition is not maintainable on the ground that petitioners
have statutory remedy of appeal against the impugned order.
52. It has been further submitted that what is refundable
under the head of excise duty has already been determined by the
Excise Commissioner on 18.04.2016 and it would be w.e.f.
01.04.2016. The petitioners have not assailed the Notification
dated 18.04.2016 so as to claim refund of excise duty for the year
2015-16 and to some extent FY 2016-17.
53. It has further been submitted that license for
manufacture of liquor and its sale were not renewed or fresh
license were given w.e.f. 01.04.2017. Such decision was taken by
the State Government on 24.01.2017. It is further submitted that
during the period from 05.04.2016 to 31.03.2017 petitioners were
permitted to manufacture and they were not permitted to trade in
the liquor business within the State of Bihar. Of course, the time
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
limit was extended by virtue of judicial pronouncement upto
31.03.2017 by Hon'ble Apex Court decision dated 31.07.2017
(State of Bihar and Ors. vs. Confederation of Indian Alcoholic
Beverage Companies and Another). Therefore, there is no
infirmity in the impugned decision of the Excise Commissioner.
54. It has further been submitted that liquor sourcing
policy was introduced in the year 2013-14 in terms of Clause 16(c)
(d)(e)(g) which relates to stocks held for sale. He has also pointed
out Clause 18(a)(b)(c) in this regard, in the light of liquor sourcing
policy for the year 2013-14 by which agreement form has been
prescribed (Annexure-4 to the liquors sourcing policy). These are
the material from which it is evident that respondent-Corporation
is empowered to levy demurrages in respect of stocks of the
petitioners lying with the Corporation. It is further submitted that
earlier judgment of CWJC No. 15316 of 2017 decided on
30.04.2019 only remanded the mater to the Excise Commissioner
to take decision. It was an open remand. Therefore, under Section
27 and 28 of Bihar Excise Act, 1915 read with Rule 147 excise
duty can be levied. In support of the aforementioned issue, he
relied on decision of the Hon'ble Apex Court in the case of Mohan
Breweriess & Distileries Limited vs. Commerical Tax Officer,
Madras & Ors. reported in (1997) 7 SCC 542 (Para 6,7 and 8).
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
He has also cited decision in the case of Moriraku UT India (P)
Limited vs. State of Uttar Pradesh & Ors. reported in (2008) 4
SCC 548 (Para 15 and 23).
55. It has also been submitted that insofar as challenge
to the order dated 22.07.2019 of the Joint Commissioner
(Annexure-2), the petitioners have a statutory remedy under Rule
73 of the Bihar Value Added Tax Rules, 2005.
56. It has further been submitted that under Section 27
of Bihar Excise Act, 1915 read with Section 147(c)(d)(f) and Rule
147(i)(b) excise duty could be levied. Such duty paid in advance is
inclusive of sales duty. Therefore, refund of any excise duty to the
petitioner is not warranted, hence, writ petitions are liable to be
rejected.
57. learned Senior Counsel, Mr. Lalit Kishore for
BSBCL submitted that petitioners entered into contracts in terms
of liquor sourcing policy of the year 2013-14 (Anneuxre-IV-
Agreement) definition of landing cost is to be taken note of and it
is inclusive of commission of the BSBCL. It has been submitted
that sale and consumption of IMFL liquors was prohibited on
05.04.2016 and manufacturing was permitted upto 31.03.2017.
Once the sale and consumption of liquor was prohibited
respondent-BSBCL issued a communication to the respective
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
petitioners to lift the remaining stock of liquor which were lying in
the BSBCL. This was followed by reminders on 06.04.2016.
Thereafter, certain reminders were also sent to the respective
petitioners, even though deadline to lift the stock was 31.03.2017.
It has to be noted that time limit for stock of beer is 60 days and
for liquor 120 days.
58. It has further been submitted that show cause notices
were issued on 06.03.2018. Some of the petitioners have
questioned the legality but not disputed demurrages levied by the
BSBCL. Subsequently, action of the BSBCL was subject matter of
CWJC No. 4652 of 2021. It has also been submitted that Clause
18(c) of liquors sourcing policy permits for adjustment. It is
submitted that CWJC No. 16764 of 2019 was filed by Molson on
an earlier occasion. It was decided in the light of decision of this
Court in the case of United Spirits Limited.
59. Learned counsel for the petitioner, Mr. Satyabir
Bharti countered to the BSBCL counsel insofar as demurrage issue
is concerned. He has submitted that liquor sourcing policy of the
year 2013-14 issued on 26.03.2013 is not applicable to the case in
hand. On the other hand, liquors sourcing policy for the year 2016-
17 issued on 12.03.2016 is relevant. He has pointed out Clause
16(c), (i) active stock (ii) inactive stock and (d) demurrages and
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
contended that demurrage charges can only be levied on inactive
stocks, that is stocks remaining unsold over a period of time, when
sale is permitted. Prohibition having been imposed, there is no
applicability of the said clause. It has been submitted that there
was no agreement executed in the light of new liquors source
policy issued in the year 2016, the fact which has not been
disputed or denied in the Counter affidavit filed by BSBCL.
Therefore, in the absence of any agreement, question of levying
demurrages on the petitioner in the light of liquor sourcing policy
in the year, 2016 is impermissible. In terms of Annexure-12 dated
30.03.2017, stocks could be taken away from the State of Bihar
and time limit was fixed. By that time, the stocks of beer had been
rendered unfit for human consumption. Thereafter, it was extended
upto 31.05.2017. Further, it was extended upto 31.07.2017. In fact,
earlier petition was filed vide CWJC No. 6467 of 2019 by Molson
Coors for refund of deposits and it was disposed of on 07.05.2019
directing the concerned parties to hear and dispose of the
grievance of the petitioner by a reasoned and speaking order.
60. Mr. Aditya Mukherji, learned Counsel in CWJC No.
4882 of 2020 (United Spirits Limited vs. The State of Bihar &
Ors.), CWJC No. 4911 of 2020 (Bacardi India Private Limited vs.
The State of Bihar & Ors.) and CWJC No. 6561 of 2021 (Pernod
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
Ricard India (P) Ltd. vs. The State of Bihar & Ors.), countered the
learned Advocate General for the State and submitted that from a
reading of Section 92(1)(2)(3) read with Rule 20 of Rules, 2021, it
is clear that appellate authority has not been identified. In other
words, Rules are silent insofar as identification of appellate
authority. Statute provides to the extent that appellate authority is
required to be provided under the Excise Act read with Rules,
2021 but on the date the impugned order of the Excise
Commissioner, the appellate authority was not existing. On this
issue, countering the submission of the learned Advocate General,
he submitted that Bihar Prohibition and Excise Act, 2016 is a
complete code in itself and therefore the Rules of Executive
Business, 1979 cannot be relied upon and the post has been
identified as a departmental Secretary in Rules, 1979 is not
attracted in the present case. Therefore, one has to draw inference
that there is no appellate authority. State taking shelter under
Rules, 1979 to identify appellate authority with reference to
Section 92 of Bihar Prohibition and Excise Act, 2016 is not
permissible.
61. In response to the contention that the petitioners
have not challenged the validity of 18.04.2016 of the State
Government policy decision which was given effect from
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
01.04.2016, it is submitted that there is no specific denial of
grievance of the petitioner insofar as refund of excise duty for the
year 2015-16. Therefore, petitioners have not questioned the
validity of 18.04.2016. He has also pointed out that the notification
dated 18.04.2016 was already taken note of and discussed by this
Court in the earlier round of litigation in CWJC No. 15316 of
2017. He has also pointed out that Excise Commissioner is stated
to have refunded certain excise duty to some of the persons which
has been recorded by this Court in the aforementioned cited
decision of this Court. Therefore, question of challenging the order
dated 18.04.2016 is not warranted to the petitioner.
62. In response to the contention that pursuant to earlier
orders of this Court passed in United Spirits Limited is open
remand to the concerned official respondents, Learned counsel for
the petitioner cited two decisions namely Vidya Devi vs.
Commisioner of Income Tax, reported in SCCOnline Cal 215
(Para 5) and State of Kerala vs. MF Limited 2016 reported in
SCCOnline Kerala 1058 (Para 8) in support of the contention
that Excise Commissioner cannot travel beyond the order of this
Court insofar remanding the matter.
63. Mr. Aditya Mukherji, learned counsel for the
petitioner further submitted that decisions cited on behalf of State,
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
viz, Moriraku (cited supra) is not assisting the State. On this case,
he has pointed out decision of the Hon'ble Apex Court reported in
(1994) 6 SCC 610 Indian Cable Company vs. Kolkata (Para 12
and 13). Further, it is submitted that levy of excise duty is required
to be taken note of with reference to marketability of the liquor
product. It is submitted that Section 27 of the Act, 1915 read with
Section 2(15) and Section 2(6) relate to manufacture and excisable
article (duty is only on sale of excisable article). It is further
submitted that Rule 147 of Rules, 1919 read with Notification
dated 05.04.2006 has no relevancy to the case in hand. It does not
stipulate incidence of excise duty but only provides for the rates on
which the excise duty is to be levied. There is only one component
of levying excise duty, i.e., sale.
64. It is further submitted that Section 3 and 3A of Bihar
Value Added Tax Act, 2005 are relating to sale or purchase. In fact,
Section 3A is relating to surcharge on sale of goods whereas
grievance of the petitioner is with respect to refund of surcharge in
respect of destroyed liquor goods. Therefore, in the absence of sale
of excise product Section 3 and 3A of Bihar Value Added Tax Act,
2005 is not attracted on such of those goods which were not sold
in the market and it were destroyed by the officials of the State-
respondent in the BSBCL and in the petitioners' manufacture unit.
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
65. The State-respondents have not identified break up
of VAT like for production, distribution and marketing of product
by any statutory Rules or executive order so as to levy VAT at a
different stage. Further, reading of Section 3 and 3A of Bihar
Value Added Tax Act does not speak of VAT and Surcharge would
be levied from the production, distribution and marketing of a
product so as to identify the break up to the extent for production
the petitioners are liable to pay VAT. Therefore, the impugned
action of the Joint Commissioner of Commercial Taxes (In-charge)
is without authority of law.
66. Further, learned counsel for the petitioner, Mr.
Aditya Mukherji distinguished the decisions cited on behalf of the
learned Advocate General in the case of Commissioner of Income
Tax case (cited supra) with reference to Para 15 and 16 or not
available to the State -respondent in view of later decisions on the
point of alternative remedy.
67. Mr. Satyabir Bharti, learned counsel for the
petitioner countered the reply of the State contentions to the extent
that Mohan's case cited (supra) is distinguishable with reference to
the State of Kerala and Ors. Maharshtra Distilleries reported in
(2005) 11 SCC 1 (Para 3, 13, 15, 50, 58, 69, 70, 71, 83 and 84).
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
68. Mr. Satyabir Bharti, learned counsel for the
petitioner submitted that Fourth Schedule of Item no. 3(i) and 3(ii)
of Rules of Executive Business, 1979 is not assisting the State-
respondent in the light of Mahadev Carrier Pvt. Limited vs.
State of Bihar & Ors. reported in 2019 (3) PLJR 740 (Para 28).
Analysis:
69. Before adverting on merits of the case, it is first
necessary to take note of Constitutional Provisions and statutory
provisions:-
"(I). Entry 51 of List-II of Seventh Schedule of
the Constitution of India:
51. Duties of excise on the following goods
manufactured or produced in the State and
countervailing duties at the same or lower
rates on similar goods manufactured or
produced elsewhere in India:-
(a) alcoholic liquors for human consumption;
(b) opium, Indian hemp and other narcotic
drugs and narcotics;
but not including medicinal and toilet
preparations containing alcohol or any
substance included in sub-paragraph (b) of this
entry.
(Underlined for Emphasis)
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(II). Sections 2(21), 2(22), 2(25) and 27 of Bihar
Prohibition and Excise Act, 2016:
2(21) "duty" means the excisable duty or
the countervailing duty as mentioned in Entry 51
of List -II of Seventh Schedule of the
Constitution, or as the case may be;
2(22) "excisable articles or items" means-
(i) any liquor or intoxicant as defined under this
Act; or
(ii) any intoxicating drug; or
(iii) any intermediate/final product that serve as
raw material to any alcohol; or
(iv) Any item or substance that can be used as a
substitute of alcohol; or
(v) Any item or substance that can be used or
consumed for the purposes of intoxication.
2(25) "excise revenue" means revenue derived
or derivable from any duty, fee, tax, payment
(other than a fine imposed by a Criminal Court)
or confiscation imposed or ordered under this Act
or any other law for the time being in force
relating to liquor or intoxicating drugs;
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
27. Fees for terms, conditions, and form of,
and duration of, licenses, permits and passes.-
(1) Every licenses renewed or permit/pass granted
under this Act-
(a) shall be renewed or granted-
(i) On payment of such fees (if any), and
(ii) Subject to such restrictions and on such
conditions, and
(b) shall be in such form and contain such
particulars, as the Rules may provide.
(2) Every license renewed or permit or pass
granted under this Act shall be for such
period (if any) as prescribed by rule made by
the State Government under this Act.
Chapter-V (Bihar Excise Act, 2015)
Duty
27. Power to impose duty on import, export,
transport and manufacture.-(1) An excise duty or
a countervailing duty, as the case may be, at such
rate or rates as the State Government may direct,
may be imposed, either generally or for any
specified local area on-
(a) any excisable article imported, or
(b) any excisable article exported, or
(c) any excisable article transported, or
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(d) any excisable article (other than tari)
manufactured under any licence granted in
respect of clause (a) of Section 13, or
(e) any hemp plant cultivated, or any portion of
such plant collected, under any licence granted
in respect of clause (b) or clause (c) of Section
13, or (f) any excisable article manufactured in
any distillery or brewery licensed, established,
authorised or continued under this Act.
Explanation.-Duty may be imposed on any
article under this sub-section at different rates
according to the places to which such article is
to be removed for consumption, or according to the
varying strength and quality of such article.
(2) A duty, at such rate or rates as the State
Government may direct, may be imposed, either
generally or for any specified local area, on any tari
drawn under any licence granted under Section 14,
sub-section (1).
(3) Notwithstanding anything contained in sub-
section (1)-
(i) duty shall not be imposed thereunder on any
article which has been imported into India and was
liable, on such importation, to duty under the Indian
Tariff Act, 1894 (8 of 1894), or the Sea Customs Act,
1878 (8 of 1878) if-
(a) the duty as aforesaid has been already paid, or
(b) a bond has been executed for the payment of such
duty.
(ii) [Omitted by A.L.O.]
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(Underlined for Emphasis)
28. Ways of levying such duty. Subject to any rules made
under Section 60, clause (12) any duty imposed
under Section 27 may be levied in any of the
following ways:-
(a) on an excisable article imported-
(i) by payment (upon or before importation) in the State or
territory from which the article is brought, or
(ii) by payment upon issue for sale from a warehouse
established, authorised or continued under this Act,
(b) on an excisable article exported- by payment in the
State or territory to which the article is sent;
(c) on an excisable article transported -
(i) by payment in the district from which the article is
sent, or
(ii) by payment upon issue for sale from a warehouse
established, authorised or continued under this Act
(d) on intoxicating drugs manufactured, cultivated or
collected -(i) by a rate charged upon the quantity
manufactured under a licence granted in respect of
the provisions of Section 13, clause (a), or issued for
sale from a warehouse established, authorised or
continued under this Act, or
(ii) by a rate assessed on the area covered by, or on the
quantity or out turn of, the crop cultivated or
collected under a licence granted in respect of the
provision of Section 13, clause (b) or clause (c):
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(e) on spirit or beer manufactured in any distillery or
brewery licensed, established, authorised or
continued under this Act, or-
(i) by a rate charged upon the quantity produced in or
issued from the distillery or brewery, as the case may
be, or issued for sale from a Warehouse established,
authorised or continued under this Act, or
(ii) in accordance with such scale of equivalents,
calculated on the quantity of materials used, or by
the degree of attenuation of the wash or wort, as the
case may be, as the State Government may
prescribe; and (f) on tari drawn under a licence
granted under Section 14, sub-section (1)-by a tax on
each tree from which the drawing of tari is
permitted:
Provided that, where payment is made upon the
issue of an excisable article for sale from a
warehouse, it shall be at the rate of duty in force on
the date of issue of such article from such
warehouse:[Provided further that in case of
excisable articles imported or transported on
payment of duty according to the provisions of sub-
clause(i) of clause (a) or clause (c) of this section,
the difference of duty resulting from any provision
in the rates of duty subsequent to such import shall
be realised from, or credited to the account of the
importing or transporting licence according to the
revised rate of duty which may be higher or lower
than the previous rate and the calculation thereof
shall be made on the balance stock of excisable
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
article on the date the revised rate of duty comes into
effect:
Provided also that no tax shall be levied in respect of
any tree from which tari is drawn only for the
manufacture of gur or molasses and under such
special conditions as the Board may prescribe.
(Underlined for
Emphasis)
Rule 147 of the Bihar and Orissa Excise Rules 1919:
147. The duty imposed on-
(i). foreign liquor and country spirit-
(a) imported under bond; or
(b) manufacture in a distillery, and stored in a distillery
or excise warehouse,
(ii) ganja and bhang-
(a) imported under bond, or
(b) stored in an excise warehouse,shall be paid before
removal from the distillery or excise warehouse unless
a bond has been executed for such payment.
[Provided that the additional duty, calculated on the
total issue of an excisable article in a calender month,
at the rates prescribed, shall be paid by the licencee to
whom such article has been issued by the fifth of the
following month:]
[Provided [further] that in case of any revision in the
rate of duty on an excisable article, the difference of
duty shall be realised from or credited to the licensee,
to whom such article has been issued on payment of
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
duty prior to such revision according as the revised rate
of duty is higher or lower than the old rate and the
calculation of the difference of duty shall be made on
the quantity of such article that may remain in
possession of such licensee when the revised rate of
duty comes into force.
(Underlined for Emphasis)
Section 92 of the Bihar Prohibition and Excise Act, 2016:
92. Appeals.-(1). All final orders passed by any Excise
Officer other than the Excise Commissioner or
Collector under this Act, shall be appellable to the
Collector within sixty days from the date of the order.
(2). All final orders passed by the Collector and Excise
Commissioner shall be appealable to the Excise
Commissioner and the State Government respectively
within ninety days from the date of the order
complained of.
Provided that no second appeal shall lie against an
order passed by the Excise Commissioner on appeal.
(3) The State Government may make rules in this
behalf.
(Underlined for Emphasis)
Section 2 (61) of the Bihar Prohibition and Excise
Act, 2016 "Rules" Rules made under this Act vide
Bihar Prohibition and Excise Rules, 2021.
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
*FOURTH SCHEDULE UNDER RULE-21 OF THE RULES OF
EXECUTIVE BUSINESS (A) DELEGATION OF POWERS IN
ADMINISTRATIVE MATTERS
Subject Decision
1. Matters relating to correspondence.
(i)Routine matters, where only (i) Section Officer/Under
information is to be made available. Secretary concerned with the
(ii) Less important matters. matter.
(ii) Deputy Secretary Joint
(iii) Important matters. Secretary/Additional
Secretary concerned with the
(iv)Very important matters and very matter.
important letters received from the (iii) Special
Government of India. Secretary/Secretary concerned
with the matter.
(iv) Minister (copy of the very
important letters will be sent
to the Chief Secretary. Chief
Minister and the Governor too
for perusal as per need.
2.Power to nominate members under Chief Minister through Chief
Act/ Statute/Rules/Regulation etc. or Secretary after consideration
power to by the Minister.
constitute Bodies or committees.
3.(i) Where the authority to hear the (i) Departmental Secretary.
representation under any
Act/Statute/ Rules/ Regulations etc is
not defined in original jurisdiction (ii) Departmental Secretary,
and such power is vested in the provided that the order has
(ii) Where authority to hear the not been passed by the
Appellate Secretary himself/herself but
government. Revision representation in the matters where the
is not defined under any order has been passed by the
Act/Statute/Rules/ Regulations etc. Secretary himself/herself,
and such power is vested in the the power to hear the
government. appeal/revision will vest in
the Departmental Minister.
**4.Extension of scheme and the Minister
temporary posts created under those.
5.Distribution of works in the Secretary
Department:- (i) Group 'A' Departmental
(i) Among the officers of group 'A' and Minister.
group 'B' (ii) Group 'B' Secretary
(ii) Among the officials of group 'C
and group 'D'
6.Training of officers/employees.
(i) Short term training (up to the period (i) Secretary
of one month) within the country.
(ii) Long term training (for more than (ii) Minister
one month) within the country.
(iii) Essential training of all types. (iii) Secretary
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(iv) Foreign training of State Official (iv) Chief Minister
or their participation in workshop etc
organised in foreign countries (where
other expenses. except the internal
training expenses are being borne by (v)Chief Minister
external sources).
(v) Foreign training of State Officials
or participation in workshop etc.
organised in foreign countries (where (vi) Chief Minister (through
internal travelling expenses along with Chief Secretary)
whole or part expense are to be borne
by the State Government). (vii) Minister
(vi) Training of officers of the All India
Services within and outside the
country or participation in workshop
etc.
(vii) Foreign tour (on personal
expenses of the official)
*Amended by Notification No.-602. Dt-20.03.2007 of Cabinet
Secretariat Department.
**Amended by Notification No.-306, Dt-17.03.2017 of Cabinet
Secretariat Department.
7. Issuance of No-Objection (i) Secretary of the cadre
Certificate for obtaining Passport. controlling department
in respect of gazetted
officers.
(ii) In respect of non
gazetted employees the
Head of the Department
under the cadre
controlling department
and where there is no
Head of the Department,
such officers, not below
the rank of Deputy
Secretary, authorized by
the Secretary.
8. Forwarding of representation for (i) Secretary, in respect
shift to another Service. of gazetted officers.
(ii) Head of Department
in respect of non-
gazetted officials.
9. (i) Power to depute gazetted (i) Chief Minister,
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
officers outside the State. through Chief Secretary
(ii) Power to depute non-gazetted
officers (ii) Chief Minister
outside the State.
(iii) Power to depute gazetted officers (iii) Minister of the
in any other department within the cadre controlling
State. department.
(iv) Power to depute non-gazetted
officials to any other department (iv) Head of
within the State. Department/Secretary of
(v) Power to send officers of the All the cadre controlling
India Services on deputation. department.
(v) Chief Minister
through Chief Secretary
*10. Proposals for amendment in Departmental Minister
forms and schedules covered by the
Act/Resolution/ Notification/Rules/By
Laws etc. sanctioned and issued
under the policy decision by the
Council of Ministers:
Provided that it is then while such
amendment of forms and schedules is
not contrary to the policy decision
sanctioned / approved by the Council
of Ministers.
Added by Notification No-1489, Dated-15.12.2016 of Cabinet
Secretariat Department.
70. Core issues involved in these bunch of petitions are
as under:-
(i) Whether writ petition is maintainable in
the absence of exhausting statutory remedy or not?
(ii) Whether levying of various kinds of
excise duty on unutilized liquor is in order or not?
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(iii) What reliefs petitioners are entitled to?
71. Prohibition is the act or practice of forbidding
something by law, more particularly the term refers to the
banning of the manufacture, storage (whether in barrels or
bottles), transportation, sale, possession and consumption of
alcohol beverages. Constitutional provisions like Article 47---
The Directive Principle in the Constitution of India states that
"the State shall undertake Rules to bring about prohibition of the
consumption except for medicinal purposes of intoxicating
drinks and of drugs which are injurious to health." Alcohol is
subject in the State list (List-II) under the Seventh Schedule of
the Indian Constitution vide (Entry 51 List-II).
72. Taking note of orders of the Excise Commissioner
the petitioners have statutory remedy of appeal under Section 92
and further revision under Section 93 of Act, 2016. Perusal of
the aforementioned Sections reveals the State was required to
issue statutory Rule under Section 93(3). Rules were framed in
the year, 2021 and the relevant Rules are 20 and 24 of Rules,
2021. In the absence of Rules framed under Act, 2016 whether
Rules, 1979 read with Schedule-4(3)(i) would be taken note of to
the effect that in the absence of any identification of appellate or
revisional authorities it could be identified under Rules, 1979 or
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
not? Section 92(3) of Act, 2016 is crystal clear that Rules were
required to be framed under the Act, 2016, such Rules were
framed in the year, 2021. Reading of Rules 20 and 24, it is not
crystal clear that appeals against the Excise Commissioner lies to
which authority. Rules, 1979 stipulate departmental
Secretary/concerned Minister. Rules, 1979 is not attracted for
the reasons that under Section 93(3) of Act, 2016 there is a
specific provision in respect of framing of Rules and Rules were
framed in the year 2021 and it is prospective in nature. Appellate
authority is not identified. On the other hand Revisional
authority is identified as Department Secretary under Rule 24 of
Rules, 2021. Having regard to the date of impugned orders of the
Excise Commissioner it is evident that they have been issued
prior to framing of Rules, 2021. Analyzing of provisions of Act,
2016, Rules, 1979 and Rules, 2021 it is crystal clear that even to
this day there is no identification of appellate/revisional
authorities under the Act, 2016 read with Rules, 2021. Assuming
that departmental Secretary is the appellate authority, as on today
the Excise Commissioner is holder of the post of departmental
Secretary. Therefore, prima facie, there is no efficacious remedy
available to the petitioners. Be that as it may, the present
litigation in respect of refund of excise duty etc. is the second
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
round litigation. In an earlier litigation in the case of USL, this
Court had an occasion to examine whether the petitioners are
entitled to have the benefit of refund of excise duty etc. or not?
After due examination of reasoning assigned by the Excise
Commissioner on an earlier occasion, this Court has turned
down the reasons and remanded the matter to the Excise
Commissioner for revisiting the issue. Whereas the Excise
Commissioner, after revisiting the subject matter, once again
reiterated the reasons that petitioners were having sufficient time
to lift the unutilized stocks of liquor with the BSBCL, transit of
liquor from the manufacturing unit to BSBCL and liquor stocks
lying in the manufacture units. The aforesaid exercise has not
been undertaken by the petitioners. Therefore, there was a
default on their part. But such reason has already been turned
down on an earlier occasion by this Court. Therefore, there is an
arbitrary action on the part of the Excise Commissioner. Having
regard to the fact that the respondent-State would fall under
Article 12 of the Constitution read with the arbitrariness in their
action, in such an event, writ Court can exercise power despite
the fact that concerned party has a statutory remedy as held by
the Hon'ble Apex Court in number of cases.
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
73. Learned counsel for the petitioners submitted that
inter se parties dispute has been settled in the light of earlier
judgments in USL and Pernod. Therefore, Excise Commissioner
cannot sit over the same issue and proceed to reject it. It is
further submitted that excise duty cannot be levied on unutilized
liquor stock in terms of statutory provision like Sections 27 and
28 of Act, 1915 read with Rule 147 of Rules, 1919. Therefore,
Excise Department has no power to impose or collect excise
duty on unutilized liquor stocks. In other words, there is no sale
of liquor of particular stocks for which the petitioners are
demanding for refund of excise duty collected in advance, hence,
levying of excise duty is without authority of law. It is further
submitted that authorities are exercising quasi-judicial powers
they have not assigned reasons for example denial of import fee
no reasons have been assigned to that effect there is no
application of mind. It is also submitted that Excise
Commissioner and other authorities who have passed the
impugned orders have travelled beyond the order of remand.
Even on this point, the petitioners need not exhaust the statutory
remedy of appeal.
74. The petitioners have cited number of decisions on
the issue of maintainability of the writ petition
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(i) Neelima Srivastava Vs. State of Uttar Pradesh
and Ors, 2021 SCC online SC 610 (Para Nos. 27,
32 -36).
(ii) Union of India and Ors. Vs. K. Shankarappa
(2001) 1 SCC 582 (Para 7).
(iii) Union of India and Ors. Vs. Kamlakshi
Finance Corporation Ltd., 1992 Suppl (1) SCC
(iv) Idea Cellular Limited vs. Union of India,
(2015) SCC OnLine P&H 6354 (Para Nos. 14-19,
21-22)
(v) U.P. Pollution Control Board and Ors. Vs.
Kanoria Industrial Limited and Anr. reported in
(2001) 2 SCC 549 (Para 9, 12 & 17).
(vi) Salonah Tea Company Limited & Ors. vs.
Superientendent of Taxes, Nawgong & Ors,
(1998) 1 SCC 401 (Para No. 6)
(vii) Whirlpool Corporation Vs. Registrar of
Trade Marks, Mumbai and Ors. reported in
(1998) 8 SCC 1 (Para 14 and 15).
(viii) Harbanslal Sahnia and Anr. Vs. Indian Oil
Corporation Ltd. and Ors. reported in (2003) 2
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
SCC 107 (Para 7).
(ix) M/s Godrej Sara Lee Ltd. Vs. The Excise and
Taxation Officer cum Assessing Authority and
Ors. reported in 2023 SCC OnLine SC 95 (Para 4).
(x) S.N Mukherjee Vs. Union of India reported in
(1990) 4 SCC 594 (Para Nos. 29-40).
(xi) South Indian Bank Ltd. & Ors. vs. Naveen
Mathew Philip & Anr. (2023) SCC Online SC 435
(Para 16, 18).
(xii) Premier Printing Press vs. State of
Rajasthan & Anr. SBCW No. 3677/2015 decided
on 23.02.2017 (Para Nos. 17, 26).
(xiii) Shrebatsa Mishra vs. State of Odisha & Ors.
WPC No. 4881 of 2018 decided on 08.02.2023
(Para 2 to 4 and 12 to 14)
(xiv) Bibekanad Mondal vs. State of West Bengal
reported in (2002) SCC Online Cal 571 (Para 2, 4-
6).
(xv) Vidya Devi vs. Commisioner of Income Tax ,
reported in SCCOnline Cal 215 (Para 5).
(xvi) State of Kerala vs. MF Limited 2016
reported in SCCOnline Kerala 1058 (Para 8)
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(xvii) State of Haryana vs. PC Wadhwa, IPS,
Inspector General of Police and Anr. reported in
(1987) 2 SCC 602.
75. On the other hand, Mr. P.K. Shahi, learned Advocate
General relied on Whirlpool Corporation Vs. Registrar of
Trade Marks, Mumbai and Ors. reported in (1998) 8 SCC 1
(Para 14 and 15) and Commissioner of Income Tax and Ors. vs.
Chhabbil Das Agarwal reported in (2014) 1 SCC 603 (Para 15) to
overcome the decisions cited on behalf of the petitioners to the
extent that the petitioners have to exhaust the statutory remedy
before invoking Article 226 in filing writ petition. The same was
distinguished by the petitioners' counsel while giving reply and
reiterated latest decision of the Hon'ble Apex Court in the case of
M/s Godrej Sara Lee Ltd. Vs. The Excise and Taxation Officer
cum Assessing Authority and Ors. reported in 2023 SCC OnLine
SC 95 (Para 4) read with Magadh Sugar and Energy Limited vs.
State of Bihar & Ors. reported in 2021(4) PLJR 142 (SC).
76. Instead of examining of each and every cited decisions
on behalf of the petitioners and learned Advocate General, we
thought of taking note of later decision of the Hon'ble Apex Court
namely M/s Godrej Sara Lee Ltd. Vs. The Excise and Taxation
Officer cum Assessing Authority and Ors. reported in 2023 SCC
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
OnLine SC 95 in which it is held that mere availability of an
alternative remedy of appeal/revision would not oust the
jurisdiction of the High Court under Article 226 of the Constitution
of India. The analysis of the aforementioned decision the power is
required to be taken note of for the purpose of entertaining the writ
petition under Article 226 of the Constitution of India despite the
fact that party has a statutory remedy.
"(i) The power under Article 226 of the Constitution
of India to issue writs can be exercised not only for
the enforcement of fundamental rights, but for any
other purpose as well;
(ii). The High Court has discretion not to entertain
the writ petition. One of the restrictions placed on
the power of the High Court is an effective
alternative remedy is available to the aggrieved
person;
(iii) Exceptions to the rule of alternative remedy
arises where:
(a) the writ petition has been filed for
the enforcement of fundamental right protected by
Part-III of the Constitution;
(b) there has been violation of the
principles of natural justice;
(c) the order or the proceedings are
wholly without jurisdiction; or
(d) the vires of legislation is challenged;
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(iv). An alternative remedy by itself does not divest
the High Court of its powers under Article 226 of the
Constitution of India in an appropriate case though
ordinarily; the writ petition should not be entertained
when an efficacious remedy is provided by a law;
(v) When a right is created by statute which itself
prescribes the remedy or procedure for enforcing the
right or the liability the short must be had to that
particulars statutory remedy before invoking the
discretionary remedy under Article 226 of the
Constitution of India;
(vi) This rule of the exhaustion of the statutory
remedies is a rule of Policy, convenience and
discretion;
(vii) In cases where there are disputed question of
facts, the High Court may decide to decline
jurisdiction in a writ petition. However, if the High
Court is objectively of the view that the nature of the
controversy requires the exercise of its writ
jurisdiction, such a view would not readily be
interference with."
The aforementioned principles have been taken note by the
Apex Court in the case of Magadh Sugar & Energy Ltd. Versus
State of Bihar and Ors [2021(4) PLJR 142 (SC)].
77. In the light of principle laid down in the aforementioned
cases, it is evident that the petitioners have no statutory remedy and
identified authority in the absence of Rules framed under Section
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
92(3) of the Act. As on the date of impugned order, excise duty is
not leviable in respect of un-sold or unutilized liquor stock, since
there is no provision for levying of excise duty on unsold liquor
stock, therefore, levying or retention of excise duty paid in advance
is in absence of source of law, therefore action of the State-
respondent in retention of excise duty paid by the petitioner in
advance is in the absence of any source of power under the Act,
1915 and Rules, 1919 read with any excise liquor sourcing policy
or notification issued under statute. There are no valid fresh reasons
as to why the petitioners are not entitled to refund of excise duty
etc. On the other hand, Excise Commissioner has reiterated the
earlier decision in the impugned order. Rules, 1979 read with
Schedule 3(i) is not attracted. It is only for the purpose of
administration. Further when there is specific provision under
Section 92(3) of Act, 2016 for framing of Rules and identification
of appellate/revisional authority and the same has not been acted
upon, hence, Rules, 1979 is not attracted. Rules, 2021 were notified
subsequent to the impugned orders and filing of these bunch of
petitions. Even Rule 24 of Rules, 2021 there is no identification of
Appellate authority and on the other hand Revisional authority has
been identified as Departmental Secretary. Moreover, there are no
new reasons assigned by the Excise Department with reference to
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
remand by this Court on earlier occasion. Therefore, there is no
point in invoking remedy of appeal. That apart, it is learnt that
Excise Commissioner is holder of the post of Departmental
Secretary. On all these points, petitioners have made out prima
facie case so as to entertain the present writ petitions in the absence
of invoking statutory remedy before the appellate and revisional
authorities.
78. On merits, whether Excise Department can levy excise
duty etc. or retain the advance excise duty paid by the petitioners
for the unsold liquors stocks at three points namely certain stocks
lying in the manufacture unit, certain stocks were on transit
(transport) from manufacture unit to BSBCL and unsold stocks
lying with the BSBCL delivered by the petitioners for sale purpose.
In this regard, it is necessary to take note of statutory provision of
Entry 51 of List II of Constitution of India about power of State to
levy excise duties and it could be levied only in respect of alcoholic
liquors for human consumption. In respect of the aforementioned
unsold stocks, the same were not consumed by the end users. In
other words, there is no sale. Be that as it may, such un-sold stock
would be wasteful alcoholic liquors for human consumption in
view of the fact that excise departmental authorities have destroyed
the unsold stocks which were lying in the manufacture unit, goods
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
that were in transit and goods which were lying with BSBCL.
79. Reading of statutory Sections like Section 2(21), 2 (22),
2(25) and Section 27 of Act, 1915, it is crystal clear that the excise
duty can be levied only on sale. No doubt, excise revenue defined
under Section 2(25) relates to duty, fee, tax, further excisable
article imported or exported or transported and manufactured etc.
However, the same has been reflected even in Rule 147 like
manufacture in distillery and stored in an excise warehouse in Rule
147(b) of 1919, Rules. In this regard, one of the notifications taken
note of by this Court dated 05.04.2006 wherein there is no break up
of imposition of excise duty like manufacture in distillery, stored in
distillery or excise warehouse. On the other hand, in lump sum,
excise duty has been levied. In fact, there is no identification of
duties for labeling and bottling and other ancillary levies.
80. Notification dated 05.04.2006 should have been in the
form of break up of levy of excise duty like manufacture in
distillery stored in distillery or excise warehouse and then sale of
liquor in the absence of identification of particular excise duty on
manufacture in a distillery, stored in a distillery or excise
warehouse and sale of liquor one cannot draw inference that there
is a specific levy of excise duty at the stage of manufacture in
distillery, stored in a distillery or excise warehouse and sale of
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
liquor. The overall intention of the State is to levy excise duty on
alcoholic liquors for human consumption. Therefore, levy of excise
duty or retention of petitioners' money towards the levy of excise
duty or any adjustment of excise duty towards destroyed liquor
stocks is without authority of law.
81. At this stage, it is beneficial to take note of decision of
the Hon'ble Apex Court in the case of State of Orissa and Ors. vs.
Utkal Distilleries reported in (2022) 5 SCC 326. The relevant para
nos. 17 to 23 reads as under:-
"17. The Constitution Bench of this Court in
Synthetics & Chemicals [Synthetics &
Chemicals Ltd. v. State of U.P., (1990) 1 SCC
109] was considering the issue, as to whether
the States are entitled to levy excise duty in
respect of industrial alcohol. Different
legislations in the different States dealing
with such a power of the State Government
came up for consideration before the
Constitution Bench of this Court in the said
case. The Constitution Bench observed thus :
(SCC pp. 160-62, paras 95-101)
"95. It was also contended that the State
ultimately falls back on the consideration for
parting with the privilege to sell alcoholic
liquors which has been the basis of series of
decisions of this Court based on English and
American decisions but according to the
learned counsel for the petitioners this
doctrine of privilege and consideration for
sale of privilege also could be available to the
State only in respect of alcohol or alcoholic
liquors which are for human consumption.
According to the learned counsel by merely
widening the definition of intoxicating liquors
in respective Excise laws enacted by the
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
States the ambit of authority of taxation could
not be enlarged by the State Legislature when
in List II Entry 51 the words used are
alcoholic liquors for human consumption.
Entry 84 in List I reads:
'84. Duties of excise on tobacco and other
goods manufactured or produced in India
except--
(a) alcoholic liquors for human consumption;
(b) opium, Indian hemp and other narcotic
drugs and narcotics,
but including medicinal and toilet
preparations containing alcohol or any
substance included in sub-paragraph (b) of
this entry.'
96. Entry 51 in List II reads:
'51. Duties of excise on the following goods
manufactured or produced in the State and
countervailing duties at the same or lower
rates on similar goods manufactured or
produced elsewhere in India--
(a) alcoholic liquors for human consumption;
(b) opium, Indian hemp and other narcotic
drugs and narcotics;
but not including medicinal and toilet
preparations containing alcohol or any
substance included in sub-para (b) of this
entry.'
97. A comparison of the language of these
two entries clearly demonstrates that the
powers of taxation on alcoholic liquors have
been based on the way in which they are used
as admittedly alcoholic liquor is a very wide
term and may include variety of types of
alcoholic liquors but our Constitution makers
distributed them into two heads:
(a) for human consumption;
(b) other than for human consumption
Alcoholic liquors which are for human
consumption were put in Entry 51 List II
authorising the State Legislature to levy tax
on them whereas alcoholic liquors other than
for human consumption have been left to the
Central Legislature under Entry 84 for levy of
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
duty of excise. This scheme of these two
entries in Lists I and II is clear enough to
indicate the line of demarcation for purposes
of taxation of alcoholic liquors. What has
been excluded in Entry 84 has specifically
been put within the authority of the State for
purposes of taxation.
98. Entry 8 in List II reads:
'8. Intoxicating liquors, that is to say, the
production, manufacture, possession,
transport, purchase and sale of intoxicating
liquors.'
This entry talks of intoxicating liquors and
further on refers to production, manufacture,
possession, transport, purchase and sale of
these liquors. It appears that the State has
levied some kind of duties in various names at
each of these stages used in this entry, that is,
production, manufacture, possession,
transport, purchase and sale. But from the
scheme of entries in the three Lists it is clear
that taxing entries have been specifically
enacted conferring powers of taxation
whereas other entries pertain to the authority
of the legislature to enact laws for purposes
of regulation. If we compare Entry 8 in List II
with Entry 51 it is clear that when Entry 51
authorises the State Legislature to levy tax
and duties on alcoholic liquors falling in
Entry 51, Entry 8 confers authority on the
State Legislature to enact laws for regulation.
Similarly are entries in List I. As regards
regulation or regulatory fees it was contended
that Entry 52 in List I empowers Parliament
to declare the industries which the Union
proposes to control in public interest under
the Industries (Development and Regulation)
Act.
99. Entry 52 List I reads as under:
'52. Industries, the control of which by the
Union is declared by Parliament by law to be
expedient in the public interest.'
100. Such a declaration is made by
Parliament and this industry, that is, industry
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
based on fermentation and alcohol has been
declared to be an industry under that Act and
therefore is directly under the control of the
Centre and therefore even in respect of
regulation the authority of the State
Legislature in Entry 8 List II could only be
subject to the Industries (Development and
Regulation) Act or Rules made by the Centre.
101. Under these circumstances therefore it is
clear that the State Legislature had no
authority to levy duty or tax on alcohol which
is not for human consumption as that could
only be levied by the Centre."
18. It could thus be seen that the Constitution
Bench has held that the Constitution makers
distributed the term "alcoholic liquor" into
two heads viz. (a) for human consumption;
and (b) other than for human consumption. It
has been held that the alcoholic liquors,
which are for human consumption, are put in
Entry 51 List II authorising the State
Legislature to levy tax on them, whereas
alcoholic liquors other than for human
consumption have been left to the Central
Legislature under Entry 84 for levy of duty of
excise. It has been held that what has been
excluded in Entry 84 has specifically been put
within the authority of the State for purposes
of taxation. The Constitution Bench clearly
held that the State Legislature had no
authority to levy duty or tax on alcohol, which
is not for human consumption as that could
be levied only by the Centre.
19. A three-Judge Bench of this Court in State
of U.P. v. Modi Distillery [State of U.P. v.
Modi Distillery, (1995) 5 SCC 753] was
considering the power of the State
Government to levy excise duty on wastage of
liquor after distillation. Following the
judgment of the Constitution Bench of this
Court in Synthetics & Chemicals [Synthetics
& Chemicals Ltd. v. State of U.P., (1990) 1
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
SCC 109] , this Court observed thus : (Modi
Distillery case [State of U.P. v. Modi
Distillery, (1995) 5 SCC 753] , SCC p. 761,
para 10)
"10. What the State seeks to levy excise duty
upon in the Group 'B' cases is the wastage of
liquor after distillation, but before dilution;
and, in the Group 'D' cases, the pipeline loss
of liquor during the process of manufacture,
before dilution. It is clear, therefore, that what
the State seeks to levy excise duty upon is not
alcoholic liquor for human consumption but
the raw material or input still in process of
being rendered fit for consumption by human
beings. The State is not empowered to levy
excise duty on the raw material or input that
is in the process of being made into alcoholic
liquor for human consumption."
20. It could thus be seen that this Court held
that the State was only empowered to levy
excise duty on alcoholic liquor for human
consumption. This Court held that the State
has no power to levy excise duty on wastage
of liquor after distillation.
21. Even the perusal of Section 27(1) read
with Section 2(6) of the erstwhile Bihar and
Orissa Excise Act, 1915 (hereinafter referred
to as "the said Act"), which governed the
field at the relevant time, would clarify the
position. They are reproduced hereunder:
Section 2(6)
"2. Definitions.-- In this Act, unless there is
anything repugnant in the subject or context
--
***
(6) "excisable article" means--
(a) any alcoholic liquor for human
consumption; or
(b) any intoxicating drug;"
Section 27(1)
"27. Power to impose duty on import,
transport and manufacture.-- (1) An excise
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
duty or a countervailing duty, as the case may
be, at such rate or rates as the State
Government may direct, may be imposed
either generally or for any specified local
area on--
(a) any excisable article imported; or
(b) any excisable article exported; or
(c) any excisable article transported; or
(d) any excisable article (other than tari)
manufactured under any licence granted in
respect of clause (a) of Section 13; or
(e) any hemp plant cultivated, or any portion
of such plant collected, under any licence
granted in respect of clause (b) or clause (c)
of Section 13; or
(f) any excisable article manufactured in any
distillery or brewery licensed, established,
authorised or continued under this Act.
Explanation.-- Duty may be imposed on any
article under this sub-section at different
rates according to the places to which such
article is to be removed for consumption, or
according to the varying strengths and quality
of such article."
22. Perusal of Section 27(1) of the said Act
would reveal that the State's power to impose
duty on import, export, transport and
manufacture is only in respect of any
excisable articles imported, exported,
transported and manufactured. 'Excisable
article' has been defined to be any alcoholic
liquor for human consumption or any
intoxicating drug. It is thus clear that even
under the relevant statute, the State has
power to levy excise duty only in respect of
the alcoholic liquor for human consumption.
23. In view of the legal position as settled by
the Constitution Bench of this Court in
Synthetics & Chemicals [Synthetics &
Chemicals Ltd. v. State of U.P., (1990) 1 SCC
109] and the three-Judge Bench in Modi
Distillery [State of U.P. v. Modi Distillery,
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(1995) 5 SCC 753] and the statutory
provisions contained in the said Act, we see
no reason to interfere with the impugned
judgment and order [Utkal Distilleries v.
State, OJC No. 9369 of 1998, order dated 5-
12-2008 (Ori)] . The appeals, therefore, are
found to be without merit and as such,
dismissed. There shall be no order as to costs.
All pending applications, if any, shall stand
disposed of"
82. In the light of above decision that levy could be only on
sale or liquor for human consumption and in the present case for
destroyed liquor, levy of Excise duty is not permissible.
83. (a) Petitioners' cited decision in the case of Neelima
Srivastava (cited supra), on the issue of reconsideration of
disputed issues which have attained finality among the inter se
parties is not permissible is relevant to the case in hand in view of
the fact that this Court in the case of USL and Pernod Judgment
has already considered those issues. Therefore, decision of the
Excise Commissioner reiterating the same reasons for rejection of
the petitioners' claim is impermissible, would assist the petitioners'
contention to the extent of findings of this Court in the USL and
Pernod Cases.
(b) Levy of Duty or retention of the Excise Duty is
without authority of law. On this point, petitioners' have cited the
decision in the case of Idea Limited, U.P. Pollution Control
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
Board, Salona Tea Company Limited (cited supra), this decision
assists the petitioners' case.
(c) Imposition of VAT could only on sale of liquor. On
this point, petitioners cited the decision in the case of State of
Rajasthan Vs. Rajasthan Chemist Association (cited supra) is
assisting the petitioners' case to the extent that VAT would arise as
and when sale of a product materialises. In the present case, there
is no sale of product insofar as destroying the liquors stock on
three points, namely, manufacture, transportation and stock lying
with BSBCL.
(d) The petitioners submitted that Excise Commissioner
had exceeded his jurisdiction with reference to the earlier decision
in the cases of USL and Pernod. On this issue, learned counsel
for the petitioners submitted that reading of earlier Judgments read
with remand, the Excise Commissioner cannot sidetrack the orders
of this Court. On this point, they are relying on the decision of
Vidya Devi, Commissioner of Income Tax, Allahabad Vs. State
of Kerala Vs. MIF Limited (cited supra). It is a relevant decision
and is assisting the above contention of petitioner.
(e) Marketability is a sine qua non for levying of excise
duty. Petitioner's relying on Indian Cable Company Limited,
Calcutta (cited supra) has some bearing in the present case to the
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
extent that the liquor stocks which were destroyed on the three
points has not yet reached the market for the purpose of sale. In
other words, there is no sale of liquor. Therefore, levying of duty is
impermissible.
(f) Rules of Executive Business which has been cited on
behalf of the learned Advocate General is not applicable to the
present case. On this point, it is submitted that Rules of Executive
Business can not be contrary to the provisions of statute which
governs the field. Petitioners are relying on a decision in the case
of State of Haryana Vs. P.C. Wadhwa (cited supra). In the
present case, Section 92(3) of Act, 2016 provides for framing of
the rules insofar as the identification of the Appellate and
Revisional Authority. By virtue of Rules 24 of Rules 2021,
Appellate Authority has not been identified. On the other hand,
revisional authority has been identified to the extent that
Revisional Authority would be Departmental Secretary. In other
words, there is a lacuna insofar as the identification of the
appellate authority. Therefore, the above contention that Rules of
Executive Business is contrary to the Statute is not acceptable. On
the other hand, in the absence of identification, the appellate
authority under the Act, 2016 read with Rules 2021, Appellate
Authority has not been identified.
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
(g) Learned counsel for the petitioners submitted that
privilege fee has been levied for parting with the privilege and once
it has been withdrawn in that event petitioners are entitled for
refund of levies.
84. The respondents have taken a policy decision that they
would not realize levy of excise duty for the year 2016-17 for
unutilized liquors stocks. The same yardstick is applicable to the
previous period, i.e., from 02.04.2016 to 05.04.2016 and for
subsequent period in view of the fact that total ban of liquors sale
in the State of Bihar. It is a State policy decision to ban
manufacture, sale of liquor in the State of Bihar, in such an event
State should have been fair in not levying excise duty in respect of
unutilized liquor. That too, certain stocks have been destroyed in
the light of aforementioned policy of banning manufacture, sale
and consumption of liquor in the State of Bihar. Once the liquor
stocks were destroyed at three points stated (supra) it is not a
consumable and impracticable to consume such destroyed liquors.
In other words this is wasteful and it is not available for human
consumption so as to levy excise duty.
85. Learned counsel for the respective petitioners
vehemently contended that Excise Commissioner and his
subordinates have taken a very harsh step while ignoring the
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
observations made by this Court in the case of USL and Pernod.
There is a total non application of mind in not considering the fact
that there is already a finding given by this Court in respect of
destroyed un-sold liquor and State cannot levy excise duty.
86. Perusal of the records, the authorities have determined
certain fees like 19C fees, bottling fee-19B, (BSBCL) stock plus
factory stock excise duty, label registry fees, excise duty-PLA,
these were not identified under the Excise Department Notification
dated 05.04.2006. The State have not apprised this Court with any
other notification as to how the excise duty would be levied and its
break up like on manufacture, bottling, labelling, transport and
sales etc. Further, Excise Department have not produced any
material to show that what is the principle or structure of levying
fees and excise duty as determined by the officials on the terms and
conditions. In other words, levying of 19-C fees, bottling fee-19B,
label registration fee particular amount is not forthcoming in any of
the Government Notification so as to identify the respective fee or
excise duty. Therefore, there is a non-application of mind insofar as
identification of any fees structure as indicated (supra).
87. Yet another issue involved in the present lis is in respect
of levy of demurrages/demand of demurrages on behalf of BSBCL
is concerned, we have already del-linked those cases viz. CWJC
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
No. 7463 of 2020 (Molson Coors Cobra India Pvt. Ltd. vs. The
State of Bihar & Ors.), CWJC No. 7467 of 2020 (Molson Coors
Cobra India Pvt. Ltd. vs. The State of Bihar & Ors.), CWJC No.
8853 of 2020 (Colona Blenders and Bottlers (India) Pvt. Ltd. &
Ors. vs. The State of Bihar and Ors.) and CWJC No. 4652 of 2021
(United Breweries Limited vs. The State of Bihar & Ors.) from the
present bunch of petitions. These cases would be heard
independently after disposal of the present case.
88. Having considered these bunch of petitions, and for the
reasons which have been adduced for the present judgment, we
accordingly order and direct that :
(i) Petitions filed by the petitioners in
CWJC No. 4882 of 2020, against the
impugned orders passed by the second
respondent-the Commissioner Excise, Govt.
of Bihar, Patna dated 25.09.2019 (Annexure-
1), fourth respondent-Joint Commissioner of
Commercial Taxes, Bihar, Patna/Joint
Commissioner of State Tax (I/c), Barh Zone,
Barh, Patna dated 22.07.2019 (Annexure-2)
and third respondent-Assistant
Commissioner, Excise, Patna order dated
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
22.01.2020 (Annexure-3), in CWJC No.
4911 of 2020, the impugned orders passed by
the second respondent-the Commissioner
Excise, Govt. of Bihar, Patna dated
25.09.2019 (Annexure-1) and third
respondent-Assistant Commissioner, Excise,
Patna order dated 09.12.2019 (Annexure-2),
in CWJC No. 5376 of 2020, the impugned
orders passed by the second respondent-the
Commissioner Excise, Govt. of Bihar, Patna
dated 25.09.2019 (Annexure-15) and third
respondent-Assistant Commissioner, Excise,
Patna orders dated 09.12.2019/22.01.2020
(Annexure-17 series), in CWJC No. 5762 of
2020, the impugned order passed by the third
respondent-the Commissioner Excise, Govt.
of Bihar, Patna dated 25.09.2019 (Annexure-
19), in CWJC No. 7461 of 2020, the
impugned order passed by the second
respondent-the Commissioner Excise, Govt.
of Bihar, Patna dated 25.09.2019 (Annexure-
14) and third respondent-Assistant
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
Commissioner, Excise, Patna order dated
09.12.2019/22.01.2020 (Annexure-17 series),
in CWJC No. 7473 of 2020, the impugned
order passed by the second respondent-the
Commissioner Excise, Govt. of Bihar, Patna
dated 25.09.2019 (Annexure-13), in CWJC
No. 6561 of 2021, the impugned order passed
by the second respondent-the Commissioner
Excise, Govt. of Bihar, Patna dated
03.03.2020 (Annexure-1), are set aside and
all these petitions, i.e., CWJC No. 4882 of
2020 (United Spirits Limited Vs. The State of
Bihar and Ors.), CWJC No. 4911 of 2020
(Bacardi India Pvt Ltd. Vs. The State of Bihar
and Ors.), CWJC No. 5376 of 2020 (Colona
Blenders and Bottlers (India) Pvt. Ltd. Vs.
The State of Bihar and Ors.), CWJC No.
5762 of 2020 ( Carlsbeg India Pvt. Ltd. Vs.
The State of Bihar and Ors.), CWJC No.
7461 of 2020 ( Molson Coors Cobra India
Pvt. Ltd. Vs. The State of Bihar and Ors.),
CWJC No. 7473 of 2020 ( Molson Coors
Patna High Court CWJC No.4882 of 2020 dt. 24-11-2023
India Pvt. Ltd. Vs The State of Bihar and
Ors.), CWJC No. 6561 of 2021 (Pernod
Ricard India Pvt. Ltd. Vs. The State of Bihar
and Ors.) are allowed.
(ii) The petitioners are directed to file
their respective claim of refund of excise duty
before the concerned Excise Commissioner.
The Excise Commissioner is directed to
verify the records and disburse the withheld
excise duty to the respective petitioners
within a period of four months from the date
of receipt of the respective claim of the each
of the petitioners.
(iii)There shall be no order as to costs
(iv)Pending Interlocutory applications,
if any, stand disposed of.
(P. B. Bajanthri, J)
(Arun Kumar Jha, J)
Vikash/-
AFR/NAFR AFR
CAV DATE 20.09.2023
Uploading Date 24.11.2023
Transmission Date N/A
