Summary
Rule 106(Tha) authorised a charge on potable IMFL manufactured using imported rectified spirit, collected before bottling; imported spirit supplied the measure of the charge rather than its taxable subject. The challenge based on legislative incompetence over non-potable spirit therefore failed. The charge represented regulation of potable liquor and consideration for State privileges, requiring no quid pro quo for services to the manufacturer.
Issues
- Whether Rule 106(Tha) imposed a charge on imported rectified spirit itself or on the potable liquor manufactured from it.
- Whether the State had competence to impose the charge and had to establish quid pro quo.
Provisions considered
- Rule 106(Tha), Jharkhand Excise RulesConstrued as imposing the charge on the final potable IMFL before bottling, using the imported rectified-spirit quantity as its measure. (¶¶ 2, 8–11, 14–17)
Held
- The provision must be read as a whole. The levy arose after conversion into potable foreign liquor; the imported rectified spirit used in manufacture was the computational yardstick, not the subject of an independent import levy. (¶ 8–11)
- The State could regulate potable liquor and charge for parting with its privileges in its manufacture and sale. The impost was neither a tax nor excise duty as characterised here, and required no quid pro quo to services rendered to the licensee. (¶ 12–16)
- Existing import and manufacturing licences with fixed fees did not exhaust the State’s rights over all activities relating to potable liquor or prevent the additional impost authorised by the amendment. (¶ 15)
Result
Appeal allowed. High Court judgment dated 25 July 2013 set aside and WP(T) No. 7499 of 2012 dismissed. Pending interim applications disposed of; no costs.