M. K. PAPIAH & SONS versus THE EXCISE COMMISSIONER & ANR.

Citation: [1975] 3 S.C.R. 607 · Decided: 20-02-1975 · Supreme Court of India · Bench: KUTTYIL KURIEN MATHEW · Disposal: Dismissed

Cited by 5 judgment(s) · cites 3 · see the full citation network in Lexace

Judgment (excerpt)

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607 
M. K. P APIAH & SONS 
v. 
THE EXCISE COMMISSIONER & ANR. 
February 20, 1975 
[K. K. MATHEW, V. R. KIUSHN.\ IYER AND P. K. GOSWAMI, JJ.J 
.Mvsore Excise Act, 1965, Sections 16, 22 and 23 read with Mysore Excise 
(D1.ml/ery and W~rehouse) Rules, 1967 and with Mysore Excise (Excise Duties) 
Rules, 1968-Excise duty. levv of-Removal of arrack fi·o111 Govemment 1v,1re-
ho11scs after the purchase of the same, ij attracts liability to pay excise duty. 
Mvsore ~·xcise Act, 1965, Secs. 22 and 71- Dc/egotion of power to fi.t 
rates o.f excise duty I~ G?vemment by making rules-Legislarure, if has abdi-
cated Its essen11a/ leu1s/at1re functwn-Rule-making power, whether 
provides 
the necessary check. 
Karna/aka Sales Tax Act. 1957. Secs. 2, 5' and 19-Levy uf sales tax upon 
sale of arrack mnde by Government tn licensces-lmPositi011 of liability 
to 
sales tax, if covered by Entry 54, List fl, Schedule Vil of the Constitution. 
. 
'fh~ ~ppellan~. an exci~e contractor secured the privilege of vending arrack 
m retail m certain taluks in the State of Karnataka tor a period of 18 months 
beginning from 28-12-1967 and ending on 30-6-69. 
He purchased arrack from 
the Government at a tirice of 17 paise per litre and the Government collected 
besides the sale price of arrack, excise duty, health cess and 
education cess. 
Thti Government also collected sales tax on the sale price of arrack, on excise 
duty, on health cess and on education cess tor the period from 28-12-1967 to 
31-1-1968 and made similar demands for the month of February, 1968 
also.· 
The app6llant and other excise contractors filed writ petitions in the High Court 
at Karnataka challenging the validity of the levy and collection of exci'e Cluty, 
educatio11 cess. health ctss and sales tax. The High Court accepted some of 
the contentions of the appellant, granted him reliefs on that basis but rejected 
the other prayers. 
The appellant has filed these appeals on the basis of certi-
ficates granted by the High Court against the order. 
ft was contended for the appellant (i) that no excise duty can be levied on 
a licensee in respect of the quantity of arrack purchased by him from Govern· 
ment depots, (ii) that the. power to fix the rate of excise duty conferred under 
s. 22 of the Mvsore Excise Act of 1965 on the Government was bad for the 
reason that it was an abdication by the state legislature of its essential legislative 
ft~nction and (iii) that no sales tax could be levied on the price for sale of 
arrack since s. 19 of the Mysore Sales Tax Act, 19 57 under which the tax was 
levied was beyond the legislative competence of the state le~islaturc. 
Rejecting the contentions and dismissing the appeals, 
HELD : (i) It is clear from the return filed before the High Court that the 
Government ourchases arrack from the distillers and keeps it in the warehouses 
eatablished or licensed under s. 16 and that any removal of arrack after the 
purchase of the same will attract the liability to pay excise duty. Section 
23 
provides that excise duty shall be levied on the excisable article issued from a 
warehouse also. It cannot be said that a warehouse established or licensed 
under S. 16(e) is not warehouse within the meaning of that expression in s. 23. 
[609G:610A] 
(ii) The High Court held that the preamble of the A~t w~uld sen:e as 
a 
guidance to fix the rates of ·excise duty. 
It cannot be said with certainty that 
the preamble of the Act gives any guidance for fixing the rate of excise duty. 
But that does not mean that the legislature here has no control over the dele-
gate. 
In this case, s. 71 of the Act whi~h provides .for the rule-makine power 
imposes the necessary check upon the wide power g1ven to the Government to 
fix the rate. The laying of rules before the legislature provides control 
ov~r 
delegated legislation. Again the legislature may also retain its control over_ 111 
delegate by exercising its power of repeal The power to fix the rate of excise 
duty conferred on the Government by s. 22 is valid. 
[610E-F; 614E·Pl 
608 
SUPREME COURT REPORTS 
[1975] 3 S.C.R. 
Corporatio11 of C11lq11ta & Anr. v. Liberty Ci11e111a, [1965] 2. S.C.R. 
477, 
lla1wrsi D1is v. Slate of Madhya Pradesh, [1959] S.C.R. 427, Municipal Board, 
l1ap11r v. Ragli11rn1dra Kripal, [ 196n] l S.C.R. 1950, Deri Dm~i Gopa/ K,·is/ia11 
v. S/'ale of P11njab, [1967] 3 S.C.R. 557, Municipal Corporatio11 of Delhi 
v. 
Bir/a Cotton Spinning and Wearing Mills, [1

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