State Cannot Demand Excise Duty Twice on the Same Transaction for Lifting Backlog Minimum Guaranteed Quantity

The Petitioner challenged a demand notice dated May 20, 2024, for a shortfall in lifting the Minimum Guaranteed Quantity (MGQ) of liquor for the year 2023-24.

In an earlier related writ [W.P.(C) No. 13668 of 2024], the Court issued an interim order on September 11, 2024, directing the Petitioner to deposit 50% of the demand to be permitted to lift the corresponding quantity of liquor.

Despite making the deposit, the authorities did not permit the lifting, leading to a second writ [W.P.(C) No. 8677 of 2026] where the Court directed immediate compliance.

Subsequently, the Principal Secretary of the Excise Department issued an order on May 20, 2026, requiring the Petitioner to pay the full amount into the Odisha State Beverages Corporation (OSBC) wallet to lift the liquor.

The Petitioner filed the instant writ, contending this resulted in a double demand for excise duty—once through the 50% deposit and again through the OSBC wallet.

1. Whether the State can demand the payment of excise duty via the OSBC wallet for the shortfall quantity when 50% of the demand (which includes excise duty) has already been deposited pursuant to a Court order.

2. Whether the interim order dated September 11, 2024, regarding the lifting of MGQ refers to the shortfall of the previous year (2023-24) or only to the renewed period.

The Court applied the Supreme Court's principle that Court orders are not to be interpreted as statutes but understood in the perspective of the subject dispute.

Rule 34 of the Odisha Excise Rules, 2017, which governs fees for exclusive privileges and penalties for MGQ shortfalls.

The Supply Chain Management Policy, 2020, regarding the calculation of Maximum Retail Price (MRP) and the inclusion of excise duty in the purchase price.

The Constitutional principle that the State cannot realize the same duty, cess, or tax twice on a single transaction.

The Court rejected the State’s interpretation that the interim order applied only to the renewed license period, noting that the root of the litigation was the 2023-24 shortfall; thus, the "lifting" permitted by the Court necessarily referred to that backlog.

The Court observed that in similar proceedings [W.P.(C) No. 17482 of 2024], the State had admitted in an affidavit that 50% depositors should be allowed to lift liquor "sans the excise duty" to prevent double taxation.

The Court reasoned that since the 50% deposit already included a component of excise duty, requiring a full payment into the OSBC wallet (which also includes excise duty) would be unconstitutional and inequitable.

The Court emphasized that while revenue interests must be protected, the government cannot bypass its own previous legal stances or seek double recovery.

It modified the impugned order, directing that the Petitioner be permitted to lift the MGQ shortfall for 2023-24 by depositing the MRP as per the Supply Chain Management Policy, 2020, but excluding the amount of excise duty already covered by the 50% deposit made under the interim order.

The Court ordered that this be facilitated immediately, noting the license validity expired on June 30, 2026. The writ petition was disposed of accordingly.