LexMOHAN MEAKIN LTD. versus STATE OF H.P. & ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2008] 17 S.C.R. 1195
MOHAN MEAKIN LTD.
v.
STATE OF H.P. & ORS.
(Civil Appeal No. 7403 of 2008)
DECEMBER 18, 2009
[S.B. SINHA AND CYRIAC JOSEPH, JJ.]
A
B
Constitution of India, 1950-Article 304 (b); Schedule VII
List I Entries 42 and 52 - Levy of permit fee - By State
Government- On import of 'Malt spirit of over proof strength' c
- Held: Levy of permit fee on rectified spirit not permissible
- State did not have the legislative competence to make law
in respect of imported item as the item falls within legislative
competence of Union legislature under items 42 and 52 of
List I of VII Schedule - State has to make distinction between
'Malt spirit of over proof strength' and 'potable liquor' -
D
Doctrine of res extra commercium is not applicable to
industrial alchohol- Punjab Excise Act, 1914 - Import/export
of rectified spirit - Punjab Liquor Permit and Pass Rules,
1932- r. 7.2.
Doctrines/Principles - Doctrine of res extra commercium
-Applicability of- To industrial alcohol- Constitution of India,
1950 - Article 301.
~
Appellant-company was in the business of
manufacture and sale of India Made Foreign Liquor (IMFL)
and Beer etc. One of its distillery was in the State of
Himachal Pradesh. Appellant held a licence in Form D-2
in terms of provisions of Punjab Excise Act, 1914. For
running the said distillery, the appellant imported 'Malt
spirit of over proof strength' from its distillery situated in
the State of Uttar Pradesh.
The State in terms of an excise policy for the year
1996-97 introduced levy of permit fee for transportation
of liquor. Excise and Taxation Officer made demands
towards permit fee on the spirit, imported by the ·
1195
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F
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SUPREME COURT REPORTS
[2008] 17 S.C.R.
A appellant. Representation by the appellant questioning
levy of such fee by the State, was rejected. Writ Petition
challenging the validity of the levy was dismissed by High
Court.
~~
In appeal to this Court, appellant contended that
B State could not have levied the fee, as transportation of
Industrial alcohol and/or rectified spirit was not within
legislative competence of the State; that there ·is
distinction between import of 'potable liquor' and that of
'Malt spirit of over proof strength; that the element _of quid
c pro quo being inherent in the levy of fee and no material
was produced by the State to justify the demand.
Allowing !the appeals, and remitting the matter to High
Court, the Court
HELD:1. No person has any fundamental right to
D carry on business in liquor, it being res extra commercium.
The doctrine of res extra commercium would have no
application to industrial alcohol which is produced in an
industry controlled and regulated in terms of Entry 52, List
I of the Seventh Schedule of the Constitution of India. If
E manufacture and transport of industrial alcohol and/ or
Malt Spirit of over proof strength is not res extra
commercium it is axiomatic that the provisions of Article
301 of the Constitution of India shall apply in relation to
inter-State trade. The State's power to exercise control of
inter-State transport which is within the exclusive
F legislative competence of the Parliament having regard
to Entry 42, List I of the Seventh Schedule of the
Constitution of India would, thus, be limited. Its power to
impose compensatory tax and/ or fee would also be
limited as envisaged by Article 304{b) of the Constitution
G of India. [Paras 9 and 21] [1201-A; 1209-D-G]
H
Khoday Distilleries Ltd. and Ors. v. State of Karnataka
and Ors. 1995 (1) sec 57 4 and State of Punjab and Anr. v.
Devans Modern Breweries Ltd. and Anr. 2004 (11) SCC 26,
distinguished.
J
MOHAN MEAKIN LTD. v. STATE OF H.P. & ORS.
1197
'
2. Tbe State has to make distinction between a 'Malt A
Spirit of over proof strength' and 'potable liquor'. Entries
8, 51 and 66 of List II of the Seventh Schedule of the
Constitution of India confer jurisdiction upon the State
only to exercise its legislative control in respect of
matters which are covered thereby. Industrial alcohol or B
spirit having regard to Entry 52 of List I of the Seventh
Schedule of the Constitution of India cannot be subject
··matter of any regulation or control by the State, it being
not alcoholic liquor for human consumption. [Para 20]
(1207-8-C]
Synthetics and Chemicals Ltd. and Ors. v. State of U.P.
and Ors. 1990 (1) SCC 109, followed.
c
3. The State has not made any distinction betweeExcerpt shown. Read the full judgment & AI analysis in Lexace.