Full Judgment Text
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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.5409 OF 2002
KOPARGAON SAHAKARI SAKHAR KARKHANA LTD. ... APPELLANT
VERSUS
STATE OF MAHARASHTRA & ORS. ... RESPONDENTS
With
C.A.No.5410/2002 and C.A.No.5411/2002.
O R D E R
The appellants are Co-operative Sugar Factories in the State of
Maharashtra engaged in the business of producing sugar and allied products
including rectified spirit and country liquor. They claim that the State Government
has granted licences to them for manufacturing country liquor from the rectified
spirit produced by them and that their units producing rectified spirit and country
liquor are situated in the same premises. It is their contention that the rectified spirit
is not “transported” but moved from one part of their factory to another through an
internal pipeline. It is also their contention that as there is no transportation of the
rectified spirit, the State does not render any service related to the transportation or
supervision of transportation of rectified spirit and there is no justification for levy of
any transport fee under the Bombay Rectified Spirit (Transport in Bond) Rules, 1951
(The 'Rules' for short).
2. Rule 5(2) of the Rules prescribes a transport fee at a specified rate for
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issue of passes under Rule 5(1) for transport of the rectified spirit in bond. The
Rules were amended on 22.3.1994 whereby a proviso was added to Rule 5(2) which
provided that no transport fee or administrative fee shall be levied if the rectified
spirit is transported for consumption as a raw material in the manufacture of
IMFL/country liquor in the units belonging to the distillery. The said proviso to Rule
5(2) was subsequently deleted by another amendment to the said Rules on 12.7.1999.
Resultantly, the appellants were required to pay transport fee prescribed under Rule
5(2).
3. The appellants challenged the deletion of the proviso to Section 5(2) of the
Rules in writ petitions before the Bombay High Court. The writ petitions were
admitted in 2001 and are pending. While granting Rule the High Court made an
interim order directing the appellants to continue depositing the transport fee. It
further directed the concerned Superintendent of State Excise to keep a separate
account in regard to the deposit of the transport fee with a condition that if the
appellants ultimately succeeded in the writ petitions, the respondents should refund
the amount deposited towards the transport fee with interest at the rate of 6% per
annum. The said interim orders are challenged in these appeals by special leave.
4. On 29.8.2002 while granting leave this Court has stayed recovery of
transport fee from the appellants subject to the appellants filing undertakings that in
the event of the appeals being dismissed or the interim order being vacated, the
appellants shall satisfy the liability in accordance with law and/or as determined by
this Court within the time appointed by this Court.
5. When the matters came up for final hearing today, the learned counsel for
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the appellants submitted that an identical issue arose before the Bombay High Court
with reference to Rule 50 of the Bombay Denatured Spirit Rules, 1959 and the High
Court by its judgment dated 9.1.2001 (in Writ Petition No.2275 of 2000-M/s. Vam
Organic Chemicals Ltd. vs. State of Maharashtra) had quashed the amendment
Notification dated 12.7.1999 whereby the proviso to Rule 50 of these Rules, was
deleted. The High Court also directed the State Government to refund the transport
fee collected from the writ petitioner in that case. The learned counsel for the
appellants submitted that the decision in Vam Organic was challenged by the State
before this Court and this Court has dismissed the appeal (Civil Appeal No.7126 of
2001) by order dated 13.3.2008. The appellants contend that as the issue involved in
these cases is similar to the issue which was decided by the Bombay High Court in
Vam Organic and upheld by this Court, these appeals should be dispoed of by
making a final order in terms of the interim order already granted on 29.8.2002.
6. Learned counsel for the State opposes the said submissions. According to
him the facts of these case are distinguishable from the facts of Vam Organic. He
contended that in Vam Organic, the licencee did not manufacture rectified spirit,
and there was a contention that the State had no right to regulate or levy any fee
regarding de-natured spirit. He also submitted the assumption by the Bombay High
Court that individual quid-pro-quo was necessary for levy of fee is not sound as there
was no need to justify the levy by showing that service was rendered individually to
the person paying the fee. He also submitted that the order of this Court upholding
the decision of the Bombay High Court is not a reasoned order. Be that as it may.
7. It is not necessary to examine the matter on merits as the writ petitions of
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the appellants are still pending in the Bombay High Court. However, the fact remains
that an amendment similar to the amendment which is the subject matter of the
pending writ petitions has been held to be invalid by the Bombay High Court and
that decision has been upheld by this Court.
8. In the circumstances, we are of the view that the matters can be disposed
of with the following direction
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(i) In regard to the period between 29.8.2002 till 30 September, 2008 the
interim order that there shall be no recovery of transport fee subject to
the appellants filing undertakings, shall continue. This shall however be
subject to the condition that if ultimately the appellants lose in the writ
petitions, they shall pay the transport fee due for that period with
interest at the rate of 9% per annum from the respective due date to the
date of payment. The third respondent shall prepare the statement of
such dues upto 30.9.2008 and file it before the High Court by end of
November 2008.
(ii)In regard to the transport fee payable for the period from 1.10.2008 till
the final disposal of the writ petitions, the appellants shall deposit 50%
of transport fee with the third respondent subject to the conditions
mentioned by the High Court in the impugned order. The appellants
shall file an undertaking before the High Court to pay the remaining
50% of transport fee in the event of their failure in the writ petition
with interest at the rate of 9% per annum from the respective due dates
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to date of payment.
(iii)In the event of the contention of appellants being upheld and
appellants are found not liable to pay the transport fee, the amounts
paid by the appellants in pursuance of this order shall be refunded by
the State with interest at the rate of 9% per annum from the date of
payment till it is refunded.
9. Having regard to the fact that similar matters relating to Denatured Spirit
have already been disposed of, we request the High Court to consider expeditious
disposal of the pending writ petitions, preferably within four months. We make it
clear that nothing stated herein shall be construed as expression of any opinion on the
merits of the case.
The appeals are disposed of accordingly.
............................J.
( R.V. RAVEENDRAN )
............................J.
( LOKESHWAR SINGH PANTA )
NEW DELHI,
SEPTEMBER 24, 2008.
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ITEM NO.103 COURT NO.10 SECTION IX
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
CIVIL APPEAL NO(s). 5409 OF 2002
KOPARGAON SAHAKARI SAKHAR KARKHANA LTD. Appellant (s)
VERSUS
STATE OF MAHARASHTRA & ORS. Respondent(s)
(With office report )
WITH Civil Appeal NO. 5410 of 2002 and
Civil Appeal NO. 5411 of 2002
Date: 24/09/2008 These Appeals were called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE R.V. RAVEENDRAN
HON'BLE MR. JUSTICE LOKESHWAR SINGH PANTA
For Appellant(s) Mr. Shekhar Naphade, Sr.Adv.
Mr. S.D. Avtade, Adv.
Mr. Arvind S. Avhad, Adv.
Ms. Chandan Ramamurthi,Adv.
Mr. S. Ganesh,Sr.Adv.
Mrs. Rohina Nath, Adv.
Mr. Umesh Kumar Khaitan, Adv.
Dr. Kailash Chand, Adv.
For Respondent(s) Mr. Manish Pitale, Adv.
Ms. Asha Gopalan Nair, Adv.
UPON hearing counsel the Court made the following
O R D E R
The appeals are disposed of in terms of the signed
order.
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(PAWAN KUMAR) (ANAND SINGH)
COURT MASTER COURT MASTER
(signed order is placed on the file)