2013 (7) TMI 602 - HC - Indian Laws

Court upholds Circular mandating hologram on liquor bottles, citing statutory provisions. Estoppel bars relief.

The court dismissed the writ petition challenging a Circular mandating hologram affixation on liquor bottles. It held that the Circular was valid and ... Sale of contry liquor - Circular asking for affixing of hologram is supported by any statutory provision - The Appellant could not sell country liquor unless the bottles had holograms affixed upon them. It is a compulsory exaction of money and amounts to tax - Article 265 of the Constitution prohibits any taxation without there being any law. No tax or fee can be imposed without being supported by any statutory provision. There is no statutory provision for issuing the Circular. It is violative of article 265 of the Constitution – Held that:- The affixation of holograms is merely a regulatory measure. This decision was taken by the State Government and direction in the form of the Circular was issued by the Commissioner to stop smuggling and evasion of excise duty under rule 4(12) of the Rules framed under the power conferred on the State Government under section 62 of the Chhattisgarh Excise Act, 1915. It is supported by a statutory provision – Decided against the Assessee. Damages, Return/Refund of price cannot be claimed - Circular was issued by the Commissioner on 23.05.2001 during continuance of the 2000-Tender. After issuance of the Circular, ten months period was still left. The Appellant continued during this period without raising any objection; it never claimed relief on this account: it was only after completion of this 2000-Tender and expiry of six months of the 2002-Tender that the Appellant started objecting to the price of the holograms – Held that:- There cannot be estoppel and acquiescence against constitutional and statutory provisions - The claim of the Petitioner cannot be denied on the ground of estopple – However, Circular is supported by a statutory provision and has statutory force – Therefore, no refund/return can be claimed – Decided against the Assessee. Issues Involved:1. Whether the writ petition should be dismissed on the ground of alternative remedy.2. What is the nature of the Circular.3. Whether the Circular is supported by any statutory provision.4. Whether the Appellant is entitled to revision of rates because of the financial burden due to affixing of hologram.5. Whether the Circular is valid.6. In case, the answer to the third point is in negative, then what relief may be granted to the Appellant.Issue-wise Detailed Analysis:1. Whether the writ petition should be dismissed on the ground of alternative remedy:The court noted that the main contention revolves around the validity of the Circular. If the Circular is valid, no relief can be granted to the Appellant, but if it is invalid, some relief must be granted. The question of the Circular's validity is a legal issue, not a factual one. The State had already realized the amount at the rate of Rs. 1,120/- per ten thousand holograms, and there was no dispute regarding this amount. The court concluded that there was no justification to dismiss the writ petition on the ground of alternative remedy and proceeded to decide the case on merits.2. What is the nature of the Circular:The court explained that Entry 51 of List 2 of Schedule VII of the Constitution confers regulatory powers on the State Government regarding duties on alcoholic liquors for human consumption. The Circular, which required affixing holograms on liquor bottles, was considered a regulatory measure to prevent smuggling and evasion of excise duty. The court differentiated this case from the Saraya case, where the imposition of penalties for wasted holograms was struck down due to lack of statutory support. The Circular in question here did not impose penalties but merely charged the price of holograms supplied to the Appellant.3. Whether the Circular is supported by any statutory provision:The court examined various cases cited by the Appellant, including the Saraya Case, Modern-Breweries case, Nagrik-Upbhokta case, Indian-Bank case, and Chhata case, which established that tax or fee cannot be levied without statutory authority. The court found that Section 62 of the Chhattisgarh Excise Act, 1915, empowers the State Government to make rules for carrying out the provisions of the Act. Specifically, Rule 4(12) of the Chhattisgarh Country Spirit Rules, 1995, allows the Commissioner to direct the sealing, labelling, and other processes related to liquor bottles. The court concluded that the Circular was supported by statutory provisions under Rule 4(12) and Section 62 of the Act.4. Whether the Appellant is entitled to revision of rates because of the financial burden due to affixing of hologram:The court noted that the financial burden of affixing holograms was a known factor during the tender process. Paragraph 8(b) of the tender conditions explicitly stated that the successful tenderer could not ask for a revision of rates due to changes in any levy or taxation during the contract period. The Appellant had not raised any objections during the 2000-Tender and only started objecting after six months into the 2002-Tender. The court held that the Appellant was estopped from claiming damages by way of a refund of the price of holograms, as the Circular had statutory support and the Appellant had accepted the terms during the tender process.5. Whether the Circular is valid:In light of the findings on the third and fourth points, the court concluded that the Circular was valid and supported by statutory provisions. The Appellant was not entitled to any relief or damages by way of a refund of the price of holograms.6. In case, the answer to the third point is in negative, then what relief may be granted to the Appellant:Since the court found that the Circular was supported by statutory provisions, this point became moot. No relief was granted to the Appellant.Conclusions:(a) The writ petition should not have been dismissed on the ground of alternative remedy.(b) The Circular issued by the Commissioner is a regulatory measure supported by Rule 4(12) of the Chhattisgarh Country Spirit Rules, 1995, framed under Section 62 of the Chhattisgarh Excise Act, 1915.(c) The Appellant is not entitled to revision of rates or damages by way of a refund of the price of holograms.The writ appeal was dismissed, but the court provided different reasons than those mentioned by the single judge.