S. P. Bharucha, J. - (1.) These are appeals against the judgments and orders of Division Benches of the High Court at Madras in tax revision cases that involve the same issue, namely, whether the excise duty on potable liquor manufactured by the appellants, paid by the purchasers thereof, is includible in the taxable turnover of the appellants for the purpose of levy of tax under the Tamil Nadu General Sales Tax Act,
(2.) The appellants manufacture Indian Made Foreign Liquor (IMFL) on the strength of licences issued to them under the provisions of the Tamil Nadu Indian Made Foreign Spirits (Manufacture) Rules, 1981. The manufacture, supply and sale of the IMFL is governed by the Tamil Nadu Prohibition Act, 1937, (now referred to as the Act), the Tamil Nadu Indian-made Foreign Spirits (Supply by Wholesale) Rules, 1981, and the Tamil Nadu Indian Made Foreign Spirit (Manufacture) Rules, 1981 (now referred to as the Wholesale Rules and the Manufacture Rules respectively).
(3.) By reason of Section 17-C of the Act, (introduced by an amendment in 1983), the Tamil Nadu State Marketing Corporation Limited, a Corporation wholly owned and controlled by the Government of State of Tamil Nadu, had at the relevant time the exclusive privilege of supplying by wholesale IMFL for the whole of that State. Section 18-A provides for excise duty on liquor. Sub-section (1) thereof reads thus: "(1) An excise duty or countervailing duty of such amount as the State Government may, by notification in the Fort St. George Gazette, specify from time to time shall, if they so direct, be levied on all liquors and intoxicating drugs permitted to be imported, exported, transported, manufactured, issued from any manufactory or institution or sold, under the provisions of this Act or any rule, notification, licence or permit issued thereunder." Section 18-B provides for excise duty on excisable articles. It reads, so far as is relevant, thus: "18-B. Excise duty or countervailing duty on excisable articles - Notwithstanding anything contained in Section 18-A, with effect on and from the date of the commencement of the Tamil Nadu Prohibition (Amendment) Act, 1981, an excise duty or countervailing duty at such rate not exceeding rupees thirty per proof litre as the State Government may, from time to time, by notification specify, shall be levied (only under this section) on all excisable articles - ********** (d) manufactured under any licence granted under this Act; (e) manufactured at any distillery, blending unit or brewery licensed or established under this Act; (f) issued from a distillery, blending unit, brewery or warehouse licensed or established uder this Act," Section 18-C, so far as is relevant, reads thus: "18-C. How duty may be imposed. - The excise duty or the countervailing duty under Section 18-B may be levied in one or more of the following ways:- (a) by duty of excise to be charged in the case of spirits or beer either on the quantity produced in, or passed out of a distillery, blending unit, brewery or warehouse, licensed or established under this Act, or in accordance with such scale of equivalents, calculated on the qantity of materials used or by the degree of attenuation of the wash or wort, as the case may be, as may be prescribed." Rule 22 of the Manufacture Rules, as amended on 4th October, 1982, reads thus: "22. Payment of excise duty and vend fee. - (1) An excise duty, at such rate as the State Government may prescribe from time to time, shall be paid by the person who removes the goods from a manufactory, on the stock of Indian-made Foreign Spirits so removed from the manufactory. (2) A vend fee of rupees two per bulk litre shall be paid by the licensee on all stocks of Indian-made Foreign Spirits issued from the manufactory." Rule 15(1) of the Wholesale Rules, amended at the same time, reads thus: "15. Payment of excise duty and vend fee. - (1) The licensee shall pay the excise duty on the stock of Indian-made Foreign Spirits removed by him from a manufactory in the State as required under sub-rule (1) of Rule 22 of the Tamil Nadu Indian-made Foreign Spirits (Manufacture) Rules, 1981, or the countervailing duty on the stock of Indian-made Foreign Spirits imported from a manufactory outside the State or the excise duty or countervailing duty as the case may be, on the stock of Indian-made Foreign Spirits removed by him from a bonded warehouse licensed under the Tamil Nadu Indian-made Foreign Spirits (Storage-in-Bond) Rules, 1981." These amendments were given retrospective effect from 23rd May, 1981.;