Court upholds constitutionality of tobacco duties post-GST. Simultaneous GST & excise allowed. Appeal dismissed.

The court upheld the constitutionality and validity of the levy of Basic Excise Duty and National Calamity Contingent Duty (NCCD) on tobacco and tobacco products post-GST regime. It allowed for the simultaneous levy of GST and excise duty under different constitutional provisions, emphasizing the independent nature of the levies and rejecting claims of violation of Article 14. The appeal was dismissed, affirming the legality of the levies in question.

---

---

Issues Involved:
1. Constitutionality of the levy of Basic Excise Duty and National Calamity Contingent Duty (NCCD) on tobacco and tobacco products post-GST regime.
2. Simultaneous levy of GST under Article 246-A and Basic Excise Duty and NCCD under Article 246 on tobacco and tobacco products.
3. Distinct aspect of levy of excise duty on the manufacture of tobacco products.
4. Validity of NCCD as a surcharge on tobacco products.
5. Levy of excise duty on tobacco and tobacco products in relation to Article 14 of the Constitution of India.

Detailed Analysis:

1. Constitutionality of the Levy of Basic Excise Duty and NCCD:
The court held that the power under Article 246-A is independent and can be exercised notwithstanding anything contained in Article 246 and Article 254. Article 246-A embodies the principle of simultaneous levy and does not result in the denudation of power under Article 246. The levy of excise duty on tobacco and tobacco products under Entry 84 List I read with Article 246 is independent and co-exists without being impacted by the levy of GST on the same product under Article 246-A. Therefore, the levy of Basic Excise Duty and NCCD post-GST regime is constitutionally valid.

2. Simultaneous Levy of GST and Excise Duty:
The court observed that Article 246 and Article 246-A operate in different spheres and do not overlap. The Central Excise Duty and GST are levied under different sources of power and fields of legislation. The aspect doctrine was applied, which allows for the same transaction to involve multiple taxable events in its different aspects. Thus, simultaneous levy of GST and excise duty on tobacco and tobacco products is permissible.

3. Distinct Aspect of Levy of Excise Duty:
The court noted that excise duty under Entry 84 List I has a source of power to tax under Article 246 of the Constitution and is levied on a distinct aspect, namely the manufacture of tobacco products. The levy of GST is traceable to a different source of power, Article 246A, on a different aspect, namely the supply of tobacco and tobacco products. The activities of manufacture and supply remain independent in the goods chain.

4. Validity of NCCD as Surcharge:
The court referred to Section 136 of the Finance Act, 2001, which provides for the levy of NCCD. It was held that NCCD is a surcharge and can be levied simultaneously with GST and excise duty on tobacco products. The court distinguished the case from previous judgments like BAJAJ AUTO and SRD NUTRIENTS, noting that those decisions did not consider the binding precedent set by the Supreme Court in MODI RUBBER. Therefore, the levy of NCCD as a surcharge on tobacco products is valid.

5. Levy of Excise Duty and Article 14:
The court reiterated that a levy imposing tax is not immune from attack on the ground of violating Article 14 but emphasized the wide discretion the legislature has in matters of taxation. The court found no pleadings in the writ petition that demonstrated the levy of excise duty on tobacco and tobacco products amounted to hostile discrimination or was violative of Article 14. The court held that the levy of excise duty on tobacco and tobacco products is a matter of public policy and does not suffer from manifest arbitrariness or discrimination. Therefore, it is not violative of Article 14.

Conclusion:
The appeal was dismissed, upholding the constitutionality and validity of the levy of Basic Excise Duty and NCCD on tobacco and tobacco products post-GST regime, allowing for simultaneous levy under different constitutional provisions, and rejecting claims of violation of Article 14.

---