LexPANNA LAL AND ORS. ETC. ETC. versus STATE OF RAJASTHAN AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A B c D E y r. H 21~ -"---- PANNA LAL AND ORS. ETC. ETC. v. STATE OF RAJASTHAN AND ORS. August 1, 1975 [A. N. RAY, C. J., M. H. BEG ANDY. V. CHANDRACHUD, JJ.] Rajastba11 Excise Act, 1950, Sections 24, 28, 29 and 30 and Rajasthan F,'xcise Rules, 1956~ rules 67A, 671, 67/, 67K and 67L-Excise! license for sale of country liquor under systen1s of Guarantee and Exclush·e PriVilege-Failure of contrac- tors to pay stipulated sum-Recovery of unfulfilled guarantee amount, if a1nounts. to levy and reco;,'l'rY (,,1 excise duty. The licenses for sale of country liquor were granted under the Rajasthan Ex- cise Act, 1950. For lhe years 1962-63 and 1963-64 Ecenses for sale of country liquor were given to contractors under a guaranteed system. Tho!re \Vas a total guaranteed an1ount. \Vhere the! contractors failed to fulfil the guaranteed il.n1ount and there was a short-fall, demand notices were issued for the total short-fall. There was no levy of excise duty prior to 6 March, 1964. l~or the years 1967-tiS, 1968-69 and 1969-70 the liquor contractors obtained licences for sale of country liquor at a specified amount of licence fee under the exclusive privilege system. Where the contractors failed to pay the guaranteed atnount there was a demand for a shortfaUi 1 The appellants who \Vere the liquor contractors chiflenged the demand for short-fall of the guaranteed amount by way of writ petitions._ in the High Court. Their conte.ntion was that what \Vas being demanded as short-fall amounted to levy of excise duty. The, State, on the other hand, contended that what was being realised from tht: liquor contractors \Vas the guaranteed amount_ in the licence for the cxclu&ive pnvilege of selling country liquor. The State further contended that what ¥.'as being den1anded for the year 1967-68 and thereafter as short·fall was the stipu- lated guaranteed Rmount which was excise revenue. , The High Court accepted th~ cc.utentions of the State and dismissed the writ petitions. These appeals have: been preferred on the basis of the certificate granted by the High Court. It was contended for the appellants : (i) The issqe prices in the licence are exclusive of vrice~ of container but inclusive of excis¢ duty levied under the Government notification a.nd therefore, enforcement Of the guaranteed amount meant realisation of e>..cise duty; (ii) A prom1se to give income to the Guvern-· meet by purchasing u minimum quantity of liquor fnom the GoVernment \V<ire- house \\'as not· equivalent to the :iayment of sum of money in con~ideration of grant of such priv!.lege \Vithin the meaning of s. 30 of the Act; (iii) The an1ounts. of money sought to be recovered from the licensee under the exclusi'.'e privilege system introduced f1om the year 1968 as well as under the guaranlee &ystem prevalent prlbr to the year 1968 are nothing but demands for excise duty on unlifted liquor; (iv) The word 'issue price' occurring in the conditions attached· to the licences granted upto the year 1967·68 was a comvosite name for 'cost price of liquor' and 'excise duty leviable thereon' and therefore. an agreement by the licensees under the guarantee system to pay 'issue price' was tantan1ount to an agreement to pay 'cost price' and 'excise duty' as distinct items though des- cribed as issue price; ( v) The licences under both sYstems of Guarnntee and Exclusive Privilege contain a term about the payment and adjustment of excise· duty and under both svstems 'excise duty' is a distinct item ·agreed to be paid as such :n terms of the licences. Reiecting the contentions and dismissing the appeals (except c:.A. No. 1433 of 1974 and C.A. No. 1871 of 1974). HELD : (1) Provisions of section 24, 28, 29 and 30 of the Act and rules 67-A, 67-I, 67-S, 67-K and 67-L of Rajasthan Excise Rules. 19'56, clearly esta- blished that the licence fee stipulated to be paid by the appellants :s the price or consideratioq or rental which the Government charges from the licensees for parting with its privilege in stipUlated lump sum payqient and is a· normal inci- dent of trading or business transaction. [225A-Bl 220 SUPREME COURT REPORTS [1976] 1 s.c.R 11I"rhirwar and Ors. ·V. State of Madhya Pradesh and Ors. (1975] \lo!. I S.C.C. 29, Hari Shanker v. Deputy Excise and Taxation Con1rnissioller, de1..:idt:d on 21 January, 1975 in Civ!.l Appeal No. 365 of 1969, Madhavan v. Assfr!aJ1t Exc:ise Cv1n111issio1ier, Pa/ghat and
Excerpt shown. Read the full judgment & AI analysis in Lexace.