B. P. Jeevan Reddy, J. - (1.) Leave granted.
(2.) Having voluntarily entered into contracts with the Government of Orissa, undertaking to lift a particular quantity of liquor every month and also to remit the monthly excise duty in two equal instalments on the fifth and fifteenth of the month, the respondents-licencees committed default on both counts and when the amount of excise duty is sought to be recovered from them, they have turned round and are contending that the said undertaking in the contract is not enforceable in law. They invoked the extra-ordinary jurisdiction of the High Court under Article 226 of the Constitution for the purpose. The High Court has upheld their contention. Hence, these appeals by the State of Orissa.
(3.) The grant of excise licences in the State of Orissa is governed by the Bihar and Orissa Excise Act, 1915 (the Act) and the rules made thereunder. Section 22 provides for grant of exclusive privilege of sale of country liquor, whether wholesae or retail. Section 27 empowers the State Government to impose excise duty or countervailing duty, as the case may be, at such rate as it may direct on any of the activities specified therein. It would be appropriate to set out sub-section (1) of Section 27: "27. Power to impose duty on import, export, transport and manufacture. (1) An excise duty or countervailing duty, as the case may be, at such rate or rates as the State Government may direct, may be imposed, either generally or for any specified local area, on- (a) any excisable article imported, or (b) any excisable article exported, or (c) any excisable article transported, or (d) any excisable article (other than tari) manufactured under any licence granted in respect of Cl. (a) of S. 13, or (e) any hemp plant cultivated, or any portion of such plant collected, under any licence granted in respect of Cl. (b) or Cl. (c) of S. 13, or (f) any excisable article manufactured in any distillery or brewery licensed, established, authorized or continued under this Act, Explanation:Duty may be imposed on any article under this sub-section at different rates according to the places to which such article is to be removed for consumption, or according to the varying strengths and quality of such article." ;