WP(C) Nos.29171/2013, 3018/2014 & 26873/2013 (Connected Petitions)

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE AMIT RAWAL TUESDAY, THE 28[TH] DAY OF FEBRUARY 2023 / 9TH PHALGUNA, 1944** ## **WP(C) NO. 29171 OF 2013** ## **PETITIONER:** M/S.BARGI CHEMICALS PRIVATE LIMITED NO.9 & 10, KIADB INDUSTRIAL AREA, TUBINAKERE, MANDYA - 571402 (KARNATAKA STATE) REPRESENTED BY ITSMANAGING DIRECTOR, MR.V.SATISH BARGI. BY ADV SMT.K.LATHA ## **RESPONDENTS:** 1 STATE OF KERALA REPRESENTED BY SECRETARY, EXCISE DEPARTMENT, SECRETARIAT,THIRUVANANTHAPURAM 695001. 2 JOINT COMMISSIONER OF EXCISE, CENTRAL ZONE, ERNAKULAM 682018. 3 THE COMMISSIONER OF EXCISE EXCISE DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM 695 001. SRI.JUSTIN JACOB, SR.GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28.02.2023, ALONG WITH WP(C).3018/2014, 26873/2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 WP(C)Nos.29171/2013 & conn. ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE AMIT RAWAL** **TUESDAY, THE 28[TH] DAY OF FEBRUARY 2023 / 9TH PHALGUNA, 1944** **WP(C) NO. 3018 OF 2014** ## **PETITIONER:** M/S.ASSOCIATE DECOR LIMITED (FORMERLY-STAR PANEL BOARDS LIMITED)PLOT NO 1, PHASE 4, KIADB INDUSTRIAL AREA, MALUR TALUK, KOLAR DIST, KARNATAKA-563160, INDIA, REP BY ITS PRESIDENT(WORKS)MR VITHAL M BARAPATRE BY ADV SMT.K.LATHA ## **RESPONDENTS:** 1 STATE OF KERALA REP BY THE EXCISE DEPARTMENT,SECRETARAIT, THIRUVANANTHAPURAM-695001 2 JOINT COMMISSIONER OF EXCISE CENTRAL ZONE, COCHIN-682025 3 THE COMMISSIONER OF EXCISE EXCISE DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695001 BY ADV SRI.K.A.JALEEL, ADDL. ADVOCATE GENERAL SRI.JUSTIN JACOB, SR.GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28.02.2023, ALONG WITH WP(C).29171/2013 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 3 WP(C)Nos.29171/2013 & conn. ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE AMIT RAWAL** **TUESDAY, THE 28[TH] DAY OF FEBRUARY 2023 / 9TH PHALGUNA, 1944** **WP(C) NO. 26873 OF 2013** ## **PETITIONER:** M/S. ASIAN PAINTS LTD. DEVI BUILDINGS, VYTTILA-PALARIVATTOM BYE PASS ROAD, ERNAKULAM - 682 025, REPRESENTED BY IT'S REGIONAL COMMERCIAL EXECUTIVE MR.M.G.SURESH. BY ADV SMT.K.LATHA ## **RESPONDENTS:** 1 STATE OF KERALA REPRESENTED BY ITS PRINCIPAL SECRETARY, TAXES (A) DEPARTMENT, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM - 695 001. 2 THE COMMISSIONER OF EXCISE COMMISSIONERATE OF EXCISE, THIRUVANANTHAPURAM - 695 001. 3 THE JOINT COMMISSIONER OF EXCISE CENTRAL ZONE, ERNAKULAM, COCHIN - 682 025. 4 THE DEPUTY COMMISSIONER OF EXCISE ERNAKULAM DIVISION, COCHIN - 682 018. BY ADV GOVERNMENT PLEADER SRI.JUSTIN JACOB, SR.GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28.02.2023, ALONG WITH WP(C).29171/2013 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 4 WP(C)Nos.29171/2013 & conn. ## **JUDGMENT** ## **[WP(C) Nos.29171/2013, 3018/2014, 26873/2013]** Petitioners are Companies who were transporting methanol (methyl alcohol) as a part of the business through the port at Kochi, Kerala. In this regard bill of entry was issued by the Indian Customs EDI System and thereafter started transportation from Kochi port. But, the respondents insisted for payment of permit fee for transporting the same. The petitioners procured the permit on payment of Rs.5,000/- each under protest for each vehicle. Thus the petitioner in W.P.(C) No.3018 of 2014 was compelled to take total four permits for four vehicles and the petitioners in the other writ petitions were compelled to take total six permits for six vehicles for transporting methanol even after knowing that this industrial product was not falling within the purview of any of the respondent authority as either the product was liquor or fit for human consumption being poisonous much less excisable goods. Letters were submitted to the respondents for refund of the amount collected by the respondents for transporting methanol, but of no avail. 2. Learned counsel appearing on behalf of the petitioners 5 WP(C)Nos.29171/2013 & conn. submitted that the Abkari Act does not define methyl alcohol or methanol. In fact methanol is not a liquor and therefore, action could not have been taken under the Abkari Act for obtaining the permit. In support of the contention relied upon the Division Bench judgment of this Court in _**State of Kerala and others v. Chemplast Sanmar Ltd. and others**_ decided on 04.12.2018 in Writ Appeal Nos.1559 and 1577 of 2018 wherein obtaining of the permit fee was found to be without jurisdiction. 3. Mr.Justin Jacob, learned counsel appearing on behalf of the State do not deny the ratio decidendi culled out in the aforesaid judgment. 4. I have heard the counsel for the parties and appraised the paper books. 5. Paragraphs 10, 11, 12, 13 and 14 of the above cited ## judgment held as under: _“10. The learned Special Government Pleader refers to these decisions of the Honourable Supreme Court to argue that in spite of the finding that the State Government cannot levy any tax, in both the decisions, it has been held that the State Government is competent to levy fee for the purpose of ensuring that industrial liquor is not surreptitiously converted into potable liquor, so that the State is deprived of the revenue on the sale of such potable alcohol and the public is protected from consuming such illicit liquor._ 6 WP(C)Nos.29171/2013 & conn. _11. Denatured spirit has been held by the Honourable Supreme Court to be outside the seisin of State legislature. Industrial alcohol or denatured spirit falls within the exclusive control of the Union. It is true that the Transit Rules so as to prevent misuse of such denatured spirit could be implemented on quid pro quo basis. But for that, there must be a subordinate legislation and the present Rules relied upon by the State Government is not sufficient to support the levy of transit fees on denatured spirit. We reiterate that the Transit Rules relied upon by the State is exclusively for potable liquor coming within the purview of Abkari Act, which has consciously omitted 'denatured spirit' from its purview. Hence, even though the purpose behind the imposition of fee by the State Government for transit of liquor is understandable, there is no statute or rules to support the levy of such fee._ _12. In Bombay Oil Mills Industries (P) Ltd. (supra), it is held that methyl alcohol being unfit for human consumption, will not come within the purview of Abkari Act and therefore, in the nature of these provisions, it is not possible to understand that Abkari Act 1 of 1077 relates to or deals with methyl alcohol and its manufacture or production, transport, sale, import and possession of it. That being so, the Abkari Act has no application with regard to methyl alcohol or denatured spirit. It has been made clear in the said decision that if the Abkari Act takes in methyl alcohol, to that extent the Act is ultra vires of the State legislature._ _13. The learned Special Government Pleader also refers to the decision in (2007) 13 SCC 463 [State of Uttar Pradesh and Others v. Lalta Prasad Vaish], wherein, the three Judge Bench of the Honourable Supreme Court has observed that the decision in Synthetics & Chemicals Ltd. (supra) with regard to interpretation of Section 18G of the Industries (Development and Regulation) Act, 1951, if allowed to stand, would render the provisions of Entry 33(a) of List-III nugatory or otiose, and therefore, the Honourable Judges formulated six questions to be referred to a Larger Bench. The specific question dealt with by us, in these appeals, brooks no dispute. In view of the_ 7 WP(C)Nos.29171/2013 & conn. _precedent on that other aspect which still holds the field, we have no option._ _14. On consideration of the various precedents on the subject and considering the powers of the State, we are of the opinion that the learned Single Judge was justified in finding that the State Government had no authority to impose fee for transit of denatured spirits from Cochin Port to the State of Tamilnadu. There is absolutely no reason to interfere with that.”_ 6. Noticing the fact that the liquor includes spirits of wine, arrack, spirits, wine, toddy, beer and all liquids consisting of or containing alcohol, permit is to be acquired on deposit of the fees. However, methanol has not been defined under the Abkari Act. Thus the action of the respondents in insisting the petitioners to deposit the permit fee for obtaining the permit was wholly illegal. The action of the respondents are wholly contumacious and set aside. Accordingly, writ petitions are allowed. The respondents are directed to refund the permit fee deposited by the petitioners or adjust the same in some other transactions for which the petitioners ,if ,are liable to pay. Let a decision thereon be taken within a period of two months. **Sd/-** **AMIT RAWAL JUDGE** csl 8 WP(C)Nos.29171/2013 & conn. ## **APPENDIX OF WP(C) 3018/2014** PETITIONER'S EXHIBITS EXHIBIT P1 COPY OF EXPLOSIVE LICENSE NO.P/HQ/KA/15/2717(P271130)DTD 18/3/2013 EXHIBIT P2 TRUE COPY OF THAT REQUSTING LETTER DTD 20/1/2014 FILED BY THE PETITIONER COMPANY BEFORE THE 3RD RESPONDENT EXHIBIT P3 TRUE COPY OF THE INTERIM ORDER OF THIS HON'BE HIGH COURT IN WPC NO 26873 OF 2013 DTD 8TH NOVEMBER 2013 9 WP(C)Nos.29171/2013 & conn. ## **APPENDIX OF WP(C) 26873/2013** PETITIONER EXHIBITS EXHIBIT P1 THE TRUE COPY OF THE BILL OF ENTRY BEARING B/L NO.001 DATED 26.06.2013 AND B/L NO.006 DATED 21.07.2013 IMPORTING METHYL ALCOHOL (METHANOL). EXHIBIT P2 THE TRUE COPY OF DETENTION MEMO ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER COMPANY DATED 30.08.2013. EXHIBIT P3 THE TRUE COPY OF THE FORM T.P PERMIT FOR THE TRANSIT OF LIQUOR THROUGHOUT KERALA STATE DATED 03.09.2013. EXHIBIT P4 THE TRUE COPY OF THAT REQUESTING LETTER DATED 20.09.2013 FILED BY THE PETITIONER COMPANY BEFORE THE THIRD RESPONDENT. EXHIBIT P5 THE TRUE COPY OF THE WIKIPEDIA DETAILS OF THE PRODUCT "METHANOL". 10 WP(C)Nos.29171/2013 & conn. ## **APPENDIX OF WP(C) 29171/2013** PETITIONER EXHIBITS EXHIBIT P1 THE TRUE COPY OF THE BILL OF ENTRY FOR EXBOND PROVISIONAL WH BE NO/DT 2853691 DATED 30.7.2013 ISSUED BY INDIAN CUSTOMS EDI SYSTEM, COCHIN CUSTOMS HOUSE WILLINGTON ISLAND TO THE PETITIONER COMPANY. EXHIBIT P2 THE TRUE COPY OF THAT REQUESTING LETTER DATED 17.11.2013 FILED BY THE PETITIONER COMPANY BEFORE THE THIRD RESPONDENT. EXHIBIT P3 THE TRUE COPY OF THE INTERIM ORDER OF THIS HON'BLE HIGH COURT IN WPC NO.26873 OF 2013 DATED 8TH NOVEMBER 2013.