HC directs recovery of Rs 1,27,38,460

DB directs Excise Commissioner to examine disciplinary action is required against Dy Excise Commissioner for overreaching the Excise Policy cost Rs 10,000 Imposed

13/02/2020

Jammu, Feb 12: In a petition filed by Naveen Singh Sambyal seeking quashment of communication dated 12.08.2014, issued by respondent No.3/ Dy. Excise Commissioner (Distilleries), Jammu raising a demand of Rs 1,27,38,460/- as franchise duty on account of export of beer by the petitioner during the period April to July, 2014.
A Division Bench Comprising Chief Justice and Justice Rajesh Bindal while dismissing the petition with costs of Rs 10000/- observed that communication dated April 2, 2013 issued by the Dy. Excise Commissioner (Distilleries), Jammu is totally without jurisdiction and overreaching the Excise Policy notified by the State, the matter be referred to the Commissioner/ Secretary, Department of Excise and Taxation to examine as to whether disciplinary action is required to be taken against the officer, who had issued the communication dated 02.04.2013.
During the course of hearing Adv Veenu Gupta appearing for the petitioner submitted that vide communication dated 28.03.2013, Excise Policy was notified. The same was effective from 1st April, 2013. In terms thereof, the export duty on beer was levied at ? 0.08 per bottle of 650 ml. In addition, duty on bottling of IMFL under arrangement of franchise was levied on beer @ ? 5/- per bottle of 650 ml. Fresh Excise Policy was notified on 19.05.2014 w.e.f 20.05.2014 providing for levy of export duty on beer @ ? 0.08 per bottle of 650 ml and duty on bottling of IMFL under arrangement of franchise on bear remained the same i.e., ? 5/- per bottle of 650 ml. The petitioner was bottling beer for certain established brands in the Country because of the international standard facilities being provided by it. With the levy of aforesaid duty, the economics could not be worked out. A representation was made to the Finance Minister on 23.12.2012 for waiving off franchise duty on bottling/filling of Beer. In furtherance thereto, a communication was received from the Dy. Excise Commissioner (Distilleries), Jammu dated 02.04.2013 clarifying that as per the Excise Policy for the year 2013-14 ? 0.08 per bottle of 650 ml is the export duty. No other duty or franchise duty is leviable on export of Beer for the year 2013-14. Despite this clarification, a demand notice was issued to the petitioner on 12.08.2014, which cannot be sustained.
Deputy AG KDS Kotwal appearing for the respondents submitted that once duty is leviable in terms of the Excise Policy, there is no reason for its non-payment. The Dy. Excise Commissioner (Distilleries), Jammu did not have any jurisdiction to issue clarification regarding levy of duty, which runs contrary to the Excise Policy. He further submitted that the petitioner got an interim order from this Court by misleading the facts. As a result, huge amount of duty has not been paid by him. He deserves to be burdened with interest and costs.
DB observed that the case in hand is a glaring example of the fact as to how the petitioner has been able to mislead this Court and deprive the State of his legitimate revenue running into crores of rupees for the last five years. The fact is that as per the Excise Policy notified on 28.03.2013 effective from 1st April, 2013, duty is leviable on export of Beer and also on bottling of IMFL under arrangement of franchise. The same system stands followed when the Excise Policy was notified on 19.05.2014 w.e.f May, 2014.
DB further observed that a perusal of the aforesaid communication shows that it has reference to some application dated 01.04.2013 filed by the petitioner. Hence, it has no connection with the representation made to the minister. The Excise Policy does not confer any power on the Dy. Excise Commissioner (Distilleries), Jammu to issue any clarification. Levy of duty on the transactions in question is explicit in the policy itself, to which no doubt can be raised. Furthermore, as to under what authority, the Dy. Excise Commissioner (Distilleries), Jammu had issued such a clarification, which runs contrary to the Excise Policy notified by the State, cannot be comprehended. In fact, it prima facie shows connivance of the officer with the party. Hence, this communication does not come to the rescue of the petitioner regarding the demand of duty from him vide demand notice dated 12.08.2014 for the period from April to July, 2014.
DB further observed that as the petitioner had retained huge sum of Rs 1,27,38,460/- on account of the interim order passed by this court, he is liable to compensate the State for retaining that amount during the period of stay as the settled principle of law is that no one will be prejudiced with any court order. In case the petitioner is let off at this stage merely by dismissing the writ petition, the result will be that he has been able to utilize huge amount of public money for a period of more than five years. Section 24(A) of the Jammu and Kashmir Excise Act, Svt. 1958 provides that in case of default in payment of any dues under the Act, a sum equal to 2% of amount of such tax for each month or part thereof is payable. It is directed that the petitioner shall pay the amount of duty demanded from him along with the amount as calculated in terms of Section 24 (A) of the Act.
As the connivance of the officers in the case in hand is apparent in view of the communication dated 02.04.2013 issued by the Dy. Excise Commissioner (Distilleries), Jammu for the year 2013-14 making a wrong reference to Excise Policy notified vide SRO 148 of 2013 dated 28.03.2013, we make it clear that in case any amount for the aforesaid period has not been recovered either from the petitioner or any other distiller, necessary steps be taken to recover the same, as well, DB said.

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