TaxTMI 
TaxTMI 
2022 (3) TMI 270
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....the Respondent Company shall install one rectification column to rectify/purify the rectified spirit to be used in manufacturing of IMFL. 4. It is not in dispute that as per the condition in the license, the respondent Company installed Extra Natural Alcohol Column (hereinafter referred to 'ENA Column'). It is the case of the respondent-Company that the said ENA Column installed by it was the first of its kind in the State of Orissa. It was the case of the respondent-Company that the manufacturing process resulted in generation of certain weak spirit, which was not potable, and since the rules did not provide for allowing such a waste product, a representation was made by the respondent-Company to the appellant No.2 on 19th August, 1992. Accordingly, the appellants constituted a Technical Committee (hereinafter referred to as "the Committee") on 21st November, 1992, to examine the following issues: "i) to examine the details of E.N.A. columns including stock of spirit inside the same. ii) Loss during trial run along with the limit of wastage during the E.N.A. process adopted by M/s Utkal Distillery Pvt. Ltd. at Brahmapura Khurda in the district of Puri." 5. ....
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.... sent for chemical examination to the Chemical Examiner to the Government of Orissa and Deputy Drugs Controller. In the report of the Chemical Examiner dated 12th August, 1999, the sample was found unfit and unsafe for human consumption. 9. Two more demand notices dated 12th March, 2003 and 20th May, 2005, were issued to the respondent-Company, which were challenged by it before the High Court of Orissa by way of Writ Petitions being Writ Petition (Civil) No.3097 of 2003 and Writ Petition (Civil) No.7108 of 2005 respectively. 10. All the three writ petitions were finally decided together by the High Court on 5th December, 2008, thereby allowing the said writ petitions, as aforesaid. Being aggrieved, the present appeals are filed. 11. We have heard Shri M.N. Rao, learned Senior Counsel appearing on behalf of the appellants and Shri Soumyajit Pani, learned counsel appearing on behalf of the respondent. 12. Shri M.N. Rao, learned Senior Counsel appearing on behalf of the appellants submits that the Committee was constituted on the basis of the representation of the respondent-Company. He submitted that once the Committee had recommended allowing of wastage only to the exte....
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....so contended that the State ultimately falls back on the consideration for parting with the privilege to sell alcoholic liquors which has been the basis of series of decisions of this Court based on English and American decisions but according to the learned counsel for the petitioners this doctrine of privilege and consideration for sale of privilege also could be available to the State only in respect of alcohol or alcoholic liquors which are for human consumption. According to the learned counsel by merely widening the definition of intoxicating liquors in re10 spective excise laws enacted by the States the ambit of authority of taxation could not be enlarged by the State legislature when in List II Entry 51 the words used are alcoholic liquors for human consumption. Entry 84 in List I reads: "84. Duties of excise on tobacco and other goods manufactured or produced in India except- (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any substance included in subparagraph (b) of this entry." 96. Entry 51 in List II reads....
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.... falling in Entry 51, Entry 8 confers authority on the State legislature to enact laws for regulation. Similarly are entries in List I. As regards regulation or regulatory fees it was contended that Entry 52 in List I empowers the Parliament to declare the industries which the Union proposes to control in public interest under Industries Development and Regulation Act. 99. Entry 52 List I reads as under: "52. Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest." 100. Such a declaration is made by the Parliament and this industry that is industry based on fermentation and alcohol has been declared to be an industry under that Act and therefore is directly under the control of the Centre and therefore even in respect of regulation the authority of the State legislature in Entry 8 List II could only be subject to the Industries Development and Regulation Act or Rules made by the Centre. 101. Under these circumstances therefore it is clear that the State legislature had no authority to levy duty or tax on alcohol which is not for human consumption as that could only be levied by the Ce....
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.... hereunder: "Section 2(6) 2.DefinitionsIn this Act, unless there is anything repugnant in the subject or context; (6) "excisable article" means (a) any alcoholic liquor for human consumption; or (b) Any intoxicating drug; Section 27 (1) 27. Power to impose duty on import, transport and manufacture (1) An excise duty or countervailing duty, as the case may be, at such rate or rates as the State Government may direct, may be imposed either generally or for any specified local area, on (a) any excisable article imported; or (b) any excisable article exported; or (c) any excisable article transported; or (d) any excisable article (other than tari) manufactured under any licence granted in respect of Clause (a) of Section 13; or (e) any hemp plant cultivated, or any portion of such plant collected, under any licence granted in respect of Clause (b) or Clause (c) of Section 13; or (f) any excisable article manufactured in any distillery or brewery licensed, established, authorised or continued under this Act. Explanation Duty may be imposed on any ....