Delegated fiscal power cannot create duty on wastage without express statutory authorisation; excise rule struck down to that extent.

Rule 14A(4) of the Bengal Excise Rules was examined for validity insofar as it authorised recovery of duty on wastage during re-distillation of rectified spirit at the highest rate applicable to foreign liquor. The Court treated the rule as regulatory in object, aimed at controlling wastage in the process, but held that the parent Act did not expressly confer power to impose a duty or fee for breach of such regulatory conditions. As delegated fiscal power must remain within the statutory delegation, the provision was held ultra vires the Bengal Excise Act, 1909 to that extent and invalidated, while the remaining regulatory parts of Rule 14A were left intact.

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Issues: Whether Rule 14A(4) of the Consolidated Rules framed under Section 86 of the Bengal Excise Act, 1909, which authorises recovery of duty on wastage in re-distillation of rectified spirit at the highest rate leviable on foreign liquor, was within the legislative competence conferred by the Act and valid as a regulatory measure.

Analysis: Rectified spirit was treated as industrial alcohol and not human consumption liquor in its own form, though it formed the basic material for manufacture of potable liquor. The rule was examined as a measure intended to prevent wastage in the process of second re-distillation and was therefore regulatory in character. However, the Act empowered the State to frame rules regulating manufacture, supply, storage and wastage-related controls, but it did not confer any express power to levy a duty or fee for breach of those regulatory conditions, except the limited penal power under Section 54A. The statutory scheme showed that where the Legislature intended a fiscal levy, it used express language, and no such authority could be implied for Rule 14A(4). A delegated authority in a fiscal field must stay strictly within the limits of the delegation, and regulatory power could not be converted into a taxing or duty-imposing power without legislative sanction.

Conclusion: Rule 14A(4), insofar as it imposed duty on excess wastage in re-distillation, was held ultra vires the Bengal Excise Act, 1909 and liable to be struck down. The challenge to that extent succeeded in favour of the assessee.

Final Conclusion: The writ petition was allowed and the impugned levy under Rule 14A(4) was invalidated, while the other regulatory provisions of Rule 14A were left undisturbed.

Ratio Decidendi: A delegated rule may validly regulate an excisable activity, but it cannot impose a fiscal exaction for breach of regulation unless the parent statute expressly authorises such levy.

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