LexMOHAN MEAKIN BREWERIES LTD. versus EXCISE & TAXATION COMMER. CHANDIGARH & ORS.
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B 510 MOHAN MEAKIN BREWERIES LTD. v. EXCISE & TAXATION COMMER. CHANDIGARH & ORS. May 4, 1976 (A. c. GUPTA AND JAswANT SINGll, JJ.] Punjab Bonded Warehouse Rules, 1957, J?.ulcs 8 tuul 9 i111po•1itio11 of duty or regulatory provision, whether ultra vires the Finallcial Co111mis.rioner's powers countervailing duty, whether illiposs/blu oflly on liquor l'Xisting witl:i11 State territory. The appellant company carried on the business ol' manufacture, storage and t;ale of liquors. Bei..ween June, 1967 and April 1969, it uansported 't'arious C quantities of liquor from its dis:illeries in Uttar Pradesh to its bonded warehouse at Chandigarh. On arrival, the consignments were examined by the Ofliccr- .:n·Charge of the warehouse, and a shortage was found, exceeding the wastage a!Jowance permissible under rule 8 of the Punjab Bonded Warehouse Rules. 1957. The Excise and Taxation Commissioner, exercising the powers of the Financial Commissioner, issued a show cause notice and then ordered the appel- lant to pay duty on the wastage in ex~ess. The <:1PPellant's petit:ons to the Iligh Court under Articles 226 and 227 of the Constitution, \Vere dismissed. D It was contended before this Court, firstly that Rules 8 nnd 9 of the 1957 Rules under which the duty was sought to be imposed, were ultra vires the ru11> making power of the Financial C"Ornmissioner, and seccmdly, that these rules were iiilvalid as they went beyond the scope of Ss. J 6, 23 and 31 and Entr~ 51, List IL 7th Schedule of the Constitution, by imposing excise duty or counter· vailing duty on articles \vhich neither existed in the State. nor were removed fron1 the warehouse. E Dismissing the appeals the Courl, · ~ FJELD : ( 1) The. impugned rules do not in1pose any duties or prescribe the . rates thereof or create any liability in respect thereof. They are in essence and • • I .. > substance of a regulatory character meant to guard against perpetration of " fraud or deception on the revenue. They provide for and regulate the storage and subsequently the t"emoval of liquor from the bonded warehouse, on pay· nient or otherwise of the duty which is chargeable under the Fiscal Rules of 1937, issued hyl the State Government. The powers. exercised by the Financial F Commissioner were clearly available to him under sec1ions 59 and 22 of the G H Act and he has not overstepped the same. [5130-H; 514A] (2) Accordin~ to Section 31 of the Act read with Entry 51 of List II ot' the Seventh Sched.ule to the Constitution, countervailing duty can b~ imposed on fquor n1eant for Consumption which is :pJanufactured or produced elsewhere in India. It is immaterial whether the liqiior of which permits were obtained, was consumed within the union territory of Chandigarh or was in existeneei in that territory or not. Duty is sought to be charged on liquor which was actually manufactured and left Uttar Pradesh but was found short beyond the permis- sible limit and no reasonable explanation was tendered by tbe appellant in res· pect thereof. [5170-GJ Kalyani Stores v. The State of Oriss,1 & Ors. [1966] 1 S.C.R. 865, referred to. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 582 of 1971. •,, • Appeal by Special Leave from the Judgment and Order dated -., ,._ the 29th July 1970 of the Punjab & Haryana High Court in Civil Wr:it No. 2376170 and } . . ./ ' • • , ; II MOHAN MEAKIN LTD. v. E. T. c. (laswant Singh,!.) 5 1 l CIVIL APPEAL No. 1418 of 1970. From the Judgment Order dated 4th December 1969 of the Punjab and Haryana High Court in C.W.No. 342 of 1969. Tirath Singh Munjral, G. K. Arora, B. C. Das Gupta & Co. for the Appellant. N. S. Das Behl and 0. P. Sharma for the respondent. The Judgment of the Court was delivered by JASWANT SINGH, J.-There two Civil Appeals Nos. 1418 of 1970 and 582 of 1971, the first by certificate of fitness granted under Article 133(J)(a) of the Constitution by the Punjab and Haryana High Court and the second by special leave granted by this Court which are directed against the Judgments and orders of the said High Court dated December 4, 1969, and July 29, 1970, rendered in Civil Writ Petitions No. 342 of 1969 and No. 2376 of 1970 respectively shall be disposed of by this Judgment as they arise out of identical procee- dings and raise common questions of law. The appellant, a public limited company incorporated under the Indian Companies Act, which carried on the busi
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