K.C.AGARWAL, J. - (1.) THIS petition under Act, 226 of the Constitution of India has been filed by M/s Jaipur Minerals and Chemicials, Jaipur for directing and restraining the State of Rajasthan and other respondents arrayed as respondent Nos. 2 and 3 from collecting excise duty or bank guarantee or surety from the petitioner. The other relief claimed was that the respondents be directed to refund the amount realised from the petitioner byway of excise duty amounting to Rs. 16,800 along with interest at the rate of 12 percent per annum. The petitioner is carrying on business in manufacturing industrial chemicals using denatured spirit.
(2.) FOR appreciating the points involved in this petition, a brief history relevant for refund and invalidating the impugned notification would be necessary.
(3.) IN 1979, S.B. Civil Writ Petition No. 1688 of 1976 filed by Mahalaxmi Paints Industries against the State of Rajasthan, challenging the levy on denatured spirit by the State of Rajasthan, was decided by a learned Single Judge of this Court. The contention of the petitioner in that case was that the State Legislature was competent to levy excise duty or countervailing duty only on Alcoholic liquors not fit for human consumption, which were manufactured or produced in the State of Rajasthan and also not on denatured spirit which was imported from different parts of the country. The writ petition was allowed by the learned Single Judge holding that the State of Rajasthan was not competent in impose excise duty on denatured spirit, which was not fit for human consumption, Consequently, the notification dated 9th March 1970, which imposed excise duty and countervailing duty on denatured spirituous preparation was held to be unconstitutional and void. The State of Rajasthan took the matter in Special Appeal, which was numbered as 116 of 1979. The same was dismissed by a Division Bench upholding the Judgment of the learned Single Judge by which the notification dated 9th march 1970 imposing excise duty on denatured spirit and denatured spirituous preparation was held to be unconstitutional and void. Simultaneously, a similar type of dispute raising the competence of the State Legislature to impose excise duty was also going on in the State of UP M/s Synthetics and Chemicals Ltd., Bareilly challenged the notifications by which vend fee of Rs. 1.10P per bulk litre had been levied by the State of UP., by means of writ petition No. 8069 of 1972 in the Allahabad High Court. The High Court allowed the writ petition by its judgment reported in 1973 All. L.J. 732 Synthetics and Chemicals Ltd. Bareilly v. State. The Allahabad High Court held that denatured spirit being not fit for human consumption, therefore, no excise duty would be levied on it by the State Govt.;