Supreme Court clarifies excise duty on undrawn liquor, affirms government's revenue authority.

The Supreme Court ruled in a case regarding excise duty on liquor not lifted by contractors, emphasizing the Government's right to manufacture and sell liquor for revenue. The Court clarified that excise duty is only applicable to the quantity of liquor actually drawn by contractors, not on undrawn liquor. Citing previous judgments, the Court held that excise duty cannot be levied on undrawn liquor. Consequently, the Court upheld the High Court's decision to quash the excise duty demands, leading to the dismissal of the appeals with each party bearing its own costs.

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Issues:
1. Whether the Government was justified in demanding excise duty on liquor not lifted by the liquor contractors.

Analysis:
The Supreme Court heard multiple Civil Appeals concerning the demand of excise duty on liquor not lifted by contractors. The Court emphasized the Government's right to manufacture and sell liquor for revenue generation, either through auction or private treaty. It was clarified that the rental paid by contractors is consideration for the privilege granted by the Government. Referring to previous judgments, the Court highlighted that excise duty cannot be levied on undrawn liquor, as it is only applicable to the quantity and quality of liquor actually drawn by the contractors. The Court distinguished between issue price and excise duty, stating that the latter is not payable on undrawn liquor. The demands in question were found to be similar to a previous case where the Court held that the State did not possess the power to impose excise duty on undrawn liquor. Consequently, the Court upheld the High Court's decision to quash the excise duty demands, leading to the dismissal of the appeals with each party bearing its own costs.

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