TaxTMI 
TaxTMI 
1996 (12) TMI 383
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....ors) and the Government. The price so determined was known as the cost price of country liquor which was payable by the retailer at the time of taking delivery from the concerned warehouse. The maintenance of warehouse was the responsibility of the wholesale supplier (Contractor). In the year 1989, a batch of writ petitions, C.W.J.C. No. 4722 of 1989 and others, were filed in the Patna High Court. The High Court made interim orders in those writ petitions directing that till the contract is settled and until further orders from the Court, the supply of country liquor to the retailers shall be made directly by the State through its officers. In view of the said orders the Government was obliged to undertake the supply of country liquor from the warehouses maintained by it to the retailers. Even after the said batch of writ petitions were disposed of, the practice of the Government undertaking wholesale supply of country liquor to retailers continued for some time. This happened during the period commencing on July 1, 1989, and ending with March 31, 1992. (These facts are taken from the preamble to the impugned Amendment Act being Bihar Act 9 of 1995.) On December 15, 1989, a m....
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..../electric charges/expenses on communications/ Water taxes, etc.) Rs.0.70 -do- (vi) Dividend Rs.0.20 -do- Total Rs.3.42 per L.P.L. (Rupees three and paise forty-two only) 2. If you are ready to supply the rectified spirit/ to the country spirit/liquor Warehouses from your distilleries, then please give your written consent at once accordingly. Thereafter necessary orders will be issued, so that the payment be made after recovery from the retail vendors. Yours faithfully, Sd/-Illegible (Mehesh Prasad) Excise Commissioner, Bihar, Patna" (The break-up of the cost price of Rs.3.42 paise per L.P.L. mentioned in the above letter is the very break-up which is said to have been mentioned at the end of the Minutes of the Meeting dated 15.12.1989.) This letter shows that pursuant to the discussion and negotiations held at the meeting held on 15th December, 1989, the Government fixed the cost price of "rectified spirit to be supplied as country spirit/liquor from the country spirit warehouses" at Rs.3.42 paise per L.P.L. The break-up of the said price was also mentioned in the letter which includes, "maintenance charge of spi....
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....the expenditure on day-to-day expenses, e.g. wages to coolies, electricity charges, expenses on communications, water supply tax, etc. has to be made twice in a month from the deposited sum by withdrawing the same as per need and its account has to be kept as per rule. Payment for the maintenance of the warehouses, e.g. house-rent, construction of the building, erection of the Vats, etc. shall be made by withdrawing from the balanced amount after obtaining sanction order from the Excise Commissioner and its account of such expenses shall be kept separately." Until the receipt of the Commissioner's letter dated 26th July, 1990, the distilleries were being paid at the rate of Rs.3.42 paise per L.P.L. for the spirit supplied by them. On receipt of the said letter the Collectors/Deputy Commissioners not only started deducting 0.70 paise from the price payable to the distilleries but also called upon the distilleries to refund the excess amount paid to them on that account. The distilleries thereupon approached the Patna High Court by way of a batch of writ petitions challenging the communication/letter of the Commissioner of Excise, Bihar dated 26th July, 1990 and the communicat....
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....he Bihar Excise Act seeking to provide statutory basis to the aforesaid price fixation and the deduction of 70 paise per L.P.L. In other words, the Governor of Bihar sought to remove the defect pointed out by the High Court viz., that the price fixation by the Commissioner was without jurisdiction and that that power belonged to the Board of Revenue alone. By amending the Act itself, the Ordinance sought to validate the saio price fixation by treating it as fixation by the Legislative itself. It is stated that one after the other, ordinances were issued to the same effect, until the enactment of the Bihar Excise (Amendment and Validating) Act, 1995 being Act 9 of 1995 in the same terms. The Amending Act was given retrospective effect from 20th February, 1990. The long Preamble to the Amending Act sets out the circumstances in which the Government was obliged to undertake supply of country liquor from the warehouses pursuant to the interim orders of the High Court, the fixation of cost price of country liquor at Rs.3.42 paise per L.P.L. by agreement between the government and the distilleries, the break-up of the price into several components and the developments leading to the enac....
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....rice:- Rs. Cost of spirit 1.72 Transit/Working wastages 0.08 Warehouse maintenance charges 0.70 Transportation charges 0.45 Sales Tax 0.27 Dividend. 0.20 Total 3.42 AND, WHEREAS, in February 1990 the Government had decided that country spirit would be supplied at the rate of Rs.3.42 per L.P. Litre which include Rs.0.70 Per L.P. Litre as maintenance charge of warehouses; AND, WHEREAS, the amount deposited by the retailers as price of country spirit was to be deposited in Treasury through Bank draft and thereafter the Distillers (Suppliers) were to be paid the amount after deduction of the component of price meant for maintenance of warehouse, that is Rs.3.42-0.70 = 4 Rs.2.72; AND, WHEREAS, in some cases by mistake the entire amount of Rs.3.42 was paid to the Distillers (Suppliers); AND, WHEREAS, some of the Distillers (Suppliers) challenged the authority of the State regarding deduction of warehouse maintenance charges from the cost price fixed for supply of country spirit to warehouses; AND, WHEREAS, in C.W.J.C. no. 6863/90 and in other similar writ petitions the Court held that in the absence....
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.... the said amount shall not be payable to the Contractor (Distiller/Supplier). (2) The amount so collected shall be deemed to have been collected under the provision of this Act and the said amount of warehouse maintenance charges shall not be refundable and no Court, Tribunal or Authority shall order for refund of such amount; Provided that where the amount collected from the retailer has been paid to the Contractor (Distiller)/Supplier, the State Government shall realise such amount form the Contractor shall be required to refund the said amount to the State Government; Provided further, that the State Government may adjust, the said amounts from any amounts from any amount due or payable to the Contractor by the Government; Provided also that the said amount shall be spent by orders of the Excise Commissioner under administrative instructions issued for the maintenance of warehouses; Provided further also, that any amount realised on account of warehouse maintenance charges but refunded to the supplier, under the order of any Court, Tribunal or Authority shall be refunded by the Supplier and the State Government shall recover the same from the Contractor (Distil....
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....by the petitioners and supplied to the Respondents. No rate has been fixed by the State Government with respect to such `rectified spirit' be the impugned Act 9/95 and/or earlier ordinances. Thereby, I hold that the impugned Act 9/95 is not applicable to the petitioners, who supplied `rectified spirit' to the State in their Warehouses. It is for the said reason, the question of declaring the impugned Act as ultra vires does not arise, in the present case, and for similar reason, there is no necessity of giving any specific finding with respect to the first three issues raised by the counsel for the petitioners." The High Court also made certain observations as to the quantity of the rectified spirit required for obtaining 1 L.P.L. of country liquor, the cost structure of the country liquor as well as to the absence of the power in the State to fix the price of rectified spirit. Mr. S.B. Sanyal, the learned counsel for the State of Bihar assailed the judgment of the High Court on various grounds. He submitted that since the warehouses belong to and are maintained by the State Government, the State Government was fully justified in seeking to deduct 0.70 paise per L.P.L....
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....ng held on 15.12.89, the letter dated 19.2.90 (which was issued on the basis of the discussions held at the said meeting) as well as to the letter of the Commissioner dated 20.2.90. The minutes of the meeting dated 15th, December, 1989 speak of fixation of the cost price of country liquor. The letter dated 19th February, 1990 speaks of "cost price of rectified spirit to be supplied as country spirit/liquor from the country spirit warehouses" while the letter dated 20th February, 1990 speaks of "cost price of country liquor supplied from the warehouses." This mix up of the expressions of "rectified spirit to be supplied as country spirit/liquor" and "country liquor" in the said proceedings/letters may perhaps be for the reason that all that it takes to convert the rectified spirit into country spirit, it is said, is adding of water to rectified spirit. May be or may not be. That is not material for our purposes. What is material is that the price of Rs.3.42 per L.P.L. said to have been agreed upon at the meeting held on 15th December, 1989, and referred to in the said letters and which cost price has now been legislatively validated, all give the break-up of the said price which inc....
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....presents the will of the people and that cannot be lightly interfered with. The unconstitutionality must be plainly and clearly established before an enactment is declared as void. The same approach holds good while ascertaining the intent and purpose of an enactment or its scope and application. Now, the result of the impugned Judgment is that the Amending Act has become an exercise in futility - a purposeless piece of Legislation. And this result has been arrived at by pointing out some drafting errors and some imperfection in the language employed. If only the High Court had looked into the minutes of the meeting dated 15th December, 1989 and the two letters of the Commissioner aforementioned, it would have become clear that the Amending Act was doing no more than repeating contents of the said letters and placing the legislative imprimatur on them. As the impugned judgment itself suggests, part of the imperfection of language is perhaps attributable to translation from Hindi to English. Indeed, it is surprising that the Court has not even referred to the long preamble to the Act which clearly sets out the context and purpose of the said enactment. It was put in at such length o....
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....llowing perceptive observations in the decision of Lord Denning is Seaford Court Estates Ltd. v. Asher [1949 (2) K.B. 481]: "Whenever a statute comes up for consideration it must be remembered that it is not within human power to foresee the manifold sets of facts which may arise, and, even if it were, it is not possible to provide for them in terms free from all ambiguity. The English language is not an instrument of mathematical precision. Our literature would be much the poorer if it were. This is where the draftsmen of Acts of Parliament have often been unfairly criticized. A judge, believing himself to be fettered by the supposed rule that he must look to the language and nothing else, laments that the draftsman have not provided for this or that, or have been guilty of some or other ambiguity. It would certainly save the judges trouble if Acts of Parliament were drafted with divine prescience and perfect clarity. In the absence of it, when a defect appears a judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament, and he must do this not only from the language of the statute, but also f....