(1.) THE question involved in this batch of appeals, arising out of an order of reference made by a three judge bench of this Court, is as to whether Article 301 of the Constitution of India (hereinafter referred to as "the Constitution") will have any application in relation to potable liquor the business whereof is said to be res extra commercium; in view of the decisions of this Court in Cooverjee B. Bharucha v. THE Excise Commissioner and THE Chief Commissioner, Ajmer, and Ors.; THE State of Bombay v. R.M.D. Chambarbaugwala; Har Shankar and Ors. v. THE Deputy Excise and Taxation Commissioner and Ors. and Khoday Distilleries Ltd. and Ors., v. State of Karnataka and Ors..
(2.) THESE appeals arise out of judgements and orders passed by Punjab and Haryana High Court and Kerala High Court. The State of Punjab imposed tax on import of potable liquor manufactured in other States. The State of Kerala also imposed a similar levy. The Punjab and Haryana High Court by its judgment dated 17.01.1997 passed in writ petition (civil) no. 5358 of 1996 quashed the notification dated 27.03.1996 imposing levy of import duty by the State of Punjab in exercise of its powers conferred upon it under sections 31, 32 and 58 of the Punjab Excise Act, 1914 (hereinafter referred to as "the Punjab Act') on two grounds viz.; (i) the State has no power to levy such tax under the Punjab Act and (ii) in view of the constitution bench decision of this Court in Kalyani Stores v. The State of Orissa and Others, the imposition of duty is ultra vires Article 301 of the Constitution.
(3.) MR. T.L.V. Iyer, the learned senior counsel appearing on behalf of State of Kerala submitted that it is within the province of the State to impose restrictions on import of potable liquor by imposing import duty. According to learned counsel such a duty has not been imposed by the State in exercise of its statutory power conferred upon it in terms of Entry 51, List II of the Seventh Schedule to the Constitution but regulatory powers as envisaged in Entry 8 thereof. In other words, MR. Iyer contended that the import duty has been levied not as a measure of tax but as a part of regulation on the trade. The learned counsel further contended, although such a stand has not been taken by the State before the High Court, but having regard to the well-settled principle of law as laid down by this Court and referred to hereinafter, the State can impose such duty as a price for parting with its exclusive privilege.
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