- (1.) By this writ-application under Article 226 of the Constitution of India, the writ-petitioners, while challenging the order dated April 22, 2010 passed by the West Bengal Taxation Tribunal in R. N. No.427 of 2004, has challenged Rule 14A of the Consolidated Rules framed under Section 86 of the Bengal Excise Act, 1909 so far as it relates to payment at the highest duty leviable on IMFL on unutilized cut spirit obtained after second re-distillation as ultra vires the provisions of the Bengal Excise Act, 1909 in addition to the prayer for direction upon the respondent to cancel/rescind/withdraw the demand notice dated 23rd August, 2004 by which the respondent imposed an amount of Rs.1,74,63,538/- towards payment on unutilized cut spirit.
(2.) Since the writ-petitioners challenged the aforesaid provision of the Rules as ultra vires the Act, a notice was given to the learned Advocate-General and consequently, Mr. Dutt, the learned Advocate, has appeared on behalf of the State to oppose the prayer for the writ-petitioner.
(3.) The case made out by the writ-petitioner No.1 in the writ-application may be summed up thus: a) The writ-petitioner carries on business in manufacture, production and sale of India Made Foreign Liquor ("IMFL") at Bengal Distillery, P.S. Bhadrakali in the District-Hooghly. b) At the material point of time and prior to the year 1995, the said Bengal Distillery used to import Rectified Spirit imported from outside the West Bengal and also used to purchase spirit already distilled once from other primary distillers for the purpose of manufacture of potable alcoholic drinks. c) The Bengal Distillery at Bhadrakali was holding large stock of about 79887.50 bulk litre of cut spirit in their storage vats since 1995, 1996 and 1997, from which it was not at all possible to manufacture IMFL due to impurity and lower strength. d) One M/s. Super Spirit Warehouse of 52-B, Hazra Road, Kolkata, pursuant to a letter written on 29th May, 2001 by Shaw Wallace wherein they had intimated that they were in a position to supply 85,000 bulk liters of cut spirit, replied in their letter dated 2nd July, 2001 that they intended to purchase the entire quantity for the purpose of manufacturing ordinary de-natured spirit at their bonded warehouse at Budge Budge subject to the permission of West Bengal Excise Authorities. e) In response to the said request furnished by the said Super Spirit Warehouse, the writ-petitioner had made communication with the Respondent through letter dated 13th July, 2001, inter alia, seeking approval for the above purposes to meet such request of M/S Super Spirit Warehouse. f) The petitioner No.1 subsequently received a demand notice dated 31st July, 2001 purportedly imposing an amount of Rs.1,25,38,799/- allegedly on unutilized cut spirit which was obtained after redistillation in exercise of the power conferred under Sub-Rule (4) of Rule 14A of the Consolidated Rules. g) In response to the said demand notice, the writ-petitioner by a letter dated 7th August, 2001 made representation to the District Magistrate and Collector seeking permission to allow them a period of 90 days to verify the records pertaining to the period against which the alleged wastage on re-distillation was made. h) By a letter dated 18th October, 2001, the Superintendent of Excise through a letter had acceded to the said request and deferred the purported demand for three months. i) By a letter dated 22nd October, 2001, the writ-petitioner sent a representation to the Excise Authorities praying for the following documents/information: 1) The direction by the Collector of Hooghly to impose the aforesaid demand. 2) Whether they scrutiny of any record and register during the period when the alleged redistilled cut spirit was obtained, was done with the prior notice of M/s. Shaw Wallace and the following actions, in relation thereto. 3) To furnish the audit report on the basis of which such purported demand was made. j) The respondent-Excise Authority had not furnished the aforesaid documents or information to the writ-petitioner and for nearly two years did not embark on the purported demand. k) According to the writ-petitioner, due to long lapse of time, it had reasonably inferred that the Excise Authorities on realizing that the demand was purported to have been made on a wrong and unfair premise had permanently withdrawn the same and absolved the writpetitioner of all the allegations raised in the demand notice dated 31st July, 2001. l) Thereafter on 10th April, 2003, an enquiry report was furnished to the Excise Commissioner with regard to an enquiry caused by the District Magistrate and Collector, Hooghly with respect to the alleged demand on unutilized cut spirit wherein the chargeable duty was modified to an amount of Rs.84,78,852/- from the earlier demand of Rs.1,25,38,799/-. m) On 7th February, 2003, the Super Spirit Warehouse had sent a letter to the writ-petitioner expressing their intentions to purchase the cut spirit and to meet such request, the petitioner had prayed for necessary approval from the Excise Commissioner by a letter dated 11th May, 2004. In the said letter, the writ-petitioner stated that they were holding a stock of 76894 bulk litre and cut spirit, the details of which was given therein since 1995-96 and 1996-97 and the consumption of which was not possible for them due to impurity and lower strength. n) However, without offering their views on the prayer, the Additional District Magistrate vide memo dated 23rd August, 2004 had once again imposed a demand of Rs.1,74,63,568/- towards accrued stock and cut spirit. o) The writ-petitioner being aggrieved by the said decision of issue of notice of demand challenged the same before the West Bengal Taxation Tribunal by invoking the jurisdiction under Section 8 of the West Bengal Taxation Tribunal Act and thereby challenged Rule 14A of the Consolidated Rules framed under Section 86 of the Bengal Excise Act. p) According to the writ-petitioner, after hearing the learned Counsel for the parties, the Tribunal verbally opined that due to existence of alternative remedy it was of the view that the writ-petitioner should be granted liberty to approach Excise Commissioner and pray for condonation of excess wastage by showing satisfactory and reasonable cause and consequently, the learned Advocate for the petitioner also did not seriously oppose such view expressed by the Tribunal. Thereafter on 22nd April, 2010, the Tribunal after a period of two years delivered the judgment and on perusal of the same, it came to the notice of the writ-petitioner that the Tribunal instead of restricting its view on the preliminary points decided the matter fully on merit and was pleased to reject the contention of the petitioner in so far as the challenge was made on the vires of Rule 14A. q) The Tribunal, however, stayed the operation of the impugned demand notice dated 23rd August, 2004 and granted liberty to the writpetitioner to submit appropriate application before the Commissioner within 15th June, 2010, failing which the Excise Authority was allowed to proceed against the petitioner in accordance with law. r) Being dissatisfied, the writ-petitioner has come up with the present writ-application. ;