Decided on August 12,1954

S.S. Miranda, Ltd Appellant


DESAI, J. - (1.)THE plaintiffs sue the State of Bombay for a refund of a sum of Rs, 2,64,968 -15 -0 and interest on the same on the ground that they paid that amount under protest when additional duty was levied on foreign liquor by a notification issued on December 16, 1948.
(2.)THERE is no dispute about the facts having bearing on the case. The plaintiffs were holders of a Trade and Import License which continued till March 31, 1949. In view of the policy of prohibition which was being inaugurated by the defendant the Excise Officer in charge addressed a letter to the plaintiffs on April 2, 1948, asking the plaintiffs to keep their goods in bond in their own duty -paid godown after paying excise duty on the same. Prior to this the Government in accordance with the provisions contained in Section 15 of the Bombay Abkari Act, 1878, used to maintain established or licensed warehouses at various places in the State. In pursuance of that letter the plaintiffs paid a sum of Rs. 2,17,355 -14 -0 to the defendants. Transport permits were thereupon issued to the plaintiffs authorising the plaintiffs to transport their stock of foreign liquor from their private bonded warehouse at No. 3, Rose Cottage, Mazagaon, to the licensed premises of the plaintiffs in the same building. This was done, as learned Counsel for the plaintiffs stated, because the defendant wanted to introduce the policy of prohibition and discontinue the system of bonded warehouses where foreign liquor could lie without payment of duty. Learned counsel also stated that what was really done was that the bonded warehouse was converted into licensed premises for storing duty -paid foreign liquor. Some of the goods on which duty was paid were sold by the plaintiffs. On December 16, 1948, a notification was issued by the Government of Bombay in exercise of the powers vested in it under Section 19 of the Bombay Abkari Act, 1878, whereby Government inter alia doubled -the duty on foreign liquor which necessarily included the stock of foreign liquor owned by the plaintiffs. The plaintiffs thereafter wanted to transport their stock of foreign liquor from their godown where they kept their stock but could not do so without paying additional duty as the notification referred to by me had already come into force. Therefore, in December 1948 and January 1949 they paid to the defendant under protest an aggregate sum of Rs. 2,64,968 -15 -0 as being the amount of the difference between the excise duty on the increased scale and the duty originally paid by the plaintiffs.
The case of the plaintiffs was that what was done by the notification of December 16, 1948, was imposition of additional duty. This was denied by the defendant who contended that there was no imposition of any additinal duty but all that was done by the notification was that a new and enhanced rate of duty was fixed by it. The case of the plaintiffs was that the additional excise duty paid by the plaintiffs and received by the defendant was an illegal exaction by the treasury of the defendant. The principal contention raised in the plaint was that the notification was ultra vires the provisions of the Bombay Abkari Act and in particular went beyond the scope of Section 19 of that Act.

(3.)THE Bombay Abkari Act consolidates and lays down the law relating to the import, export, transport, manufacture, sale and possession of liquor and intoxicating drugs in the State of Bombay. In the present case I am only concerned with the provisions of that Act so far as they relate to transport of liquor and intoxicating drugs. The expression 'to transport' has been defined in Section 3, Sub -section (10), to mean 'to move from one place to another place within the Province.' Sections 10 and 19 of the Act are as follows : -
10. No intoxicant and no hemp shall be exported or transported unless : - (a) the duty, if any, payable under Chapter VI, or (b) if the article was previously imported, the duty, if any, imposed on its importation under the Indian Tariff Act, 1894, or the Sea Customs Act, 1878, has been paid, or a bond has been executed for the payment thereof. 19. An excise duty or countervailing duty, as the case may be, at such rate or rates, as the Provincial Government shall direct may be imposed, either generally or for any specified local area, on any excisable article - (a) imported in accordance with the provision of Sub -section (i) of Section 9 ; or (b) exported or transported in accordance with the provisions of Section 10 ; or (c) manufactured under a licence granted in accordance with the provisions of Section 14 or Section 15: Provided that: - (1) duty shall not be so imposed on any article which has been imported into British India and was liable on such importation to duty under the Indian Tariff Act, 1894, or the Sea Customs Act, 1878. Explanation ; -Duty may be imposed under this section at different rates according to the places to which any excisable article is to be removed for consumption or according to the varying strengths and quality of such article.

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