UNITED DISTILLERS (PVT.) LTD AND 11 OTHERS Vs. THE STATE OF BIHAR AND OTHERS

JUDGEMENT

(1.) What is the true import of the concept of exclusive privilege under Sec. 22 of the Bihar and Orissa Excise Act, 1915 Whether Sec. 3 of the Bihar Excise (Amendment and Validation) Act, 1981 (Bihar Act 17 of 1982) validates the levy of exclusive privilege duty on all excise licensees not only, retrospectively, but also warrants such a levy prospectively This is the twin questions necessitating the hearing of this set of connected cases by the Division Bench. The facts are not in serious dispute and may be noticed with relative brevity from C.W.J.C. No. 3170 of 1984 (United Distillers (Private) Limited vs. The State of Bihar and others). The petitioners company runs a distillery at Mirganj, in the district of Gopalganj, for the manufacture of spirit for chemical and industrial uses. It is averred that the denatured spirit manufactured by the petitioner is unfit for human consumption. Under Sec. 13 of the Bihar and Orissa Excise Act, 1915 (hereinafter referred to as the 'Act'), the petitioner is obliged to obtain a license for the manufacture of spirit falling within the definition of the term 'intoxicant' under Sec. 2 (sic)(a), which is issued by the Collector of the district in which the distillery is situate and is issued in the prescribed form No. 28 A. Similarly, the petitioner has also to obtain another licence for the manufacture of denatured spirit from the Collector of the district in the prescribed form No. 25. It is highlighted on behalf of the petitioner that in antithesis to the ordinary licences, the Act has given special treatment for the grant of exclusive privilege of manufacturing, supplying or selling wholesale or retail any country liquor or intoxicating drug within a specified local area under Sec. 22. The grantee of such exclusive privilege has also to obtain a licence consequent to such grant from the Collector or the Excise Commissioner. But it is pointed out that the grant of this exclusive privilege lies with the State Government and it is conferred and relates to specified local area and is granted after due public notice. By the Amending Act 17 of 1982, of its predecessor Ordinances, the respondent State extended the grant of exclusive privilege to the manufacturing, storing, using, possessing, etc. of denatured spirit as well. It is, however, the case that the licences held by the petitioner earlier were not treated and cannot become the subject matter of grant of any exclusive privilege under the scheme of the Act. Detailed reference is then made to the appointment of Alcohal Committee by the Central Government and the consequent legislation in its wake, to which reference now seems unnecessary. Reference is then made to Sec. 29 of the Act which authorises the State Government to accept a sum in consideration of the grant of any exclusive privilege under Sec. 22 instead of or in addition to any duty leviable under the Act. A grievance is then made that in the purported exercise of the powers under Ss. 22 and 29 of the Act, the impugned notification (Annexure -1) has chosen to impose a liability of Rs. 2,000/ - per month on the petitioner on account of the so -called exclusive privilege in respect of the years 1984 and 1985. This levy is sought to be challenged on a wide varieties of grounds, but primarily on the premise that any levy of exclusive privilege duty is not at all attracted in the case of the petitioner with regard to its licences for the manufacture of spirit and denatured spirit, under Sec. 13 of the Act.

(2.) In the counter -affidavit filed on behalf of the respondent State, the factual position is not put in serious dispute. The firm stand taken on its behalf is that by virtue of the Bihar Excise (Amendment and Validation) Ordinance, 1980, which ultimately became Act No. 17 of 1982, all licences granted shall be deemed to be exclusive privilege within the meaning of Sec. 22 of the Act. It is claimed that the licence granted for manufacture under Sec. 13 of the Act is also a privilege grant and comes within the purview of exclusive privilege as visualised in Sec. 22 and, therefore, an exclusive privilege levy can be made thereon. It is the stand that the privilege of allowing the manufacture of intoxicants, liquor, denatured spirit, etc. vests in the Government and the grant of a mere licence will not mean parting with the privilege by the State Government exclusively held by it. Basic reliance is on the Amending Act 17 of 1982, as both validating and warranting the fiction that all licences shall be deemed to be exclusive privilege within the meaning of Sec. 22, prospectively also.

(3.) In the reply to the counter -affidavit, the writ petitioner's stand is highlighted on the ground that since the spirit manufactured by the petitioner is a denatured one and is unfit for human consumption, no such duty or levy can be imposed. It is the case that the licences having been granted to the petitioner under Sec. 13 of the Act, the question of further exclusive privilege under Sec. 22 and 29 cannot arise at all.