Chattisgarh High Court
M/S Swastik Cattle Feed Industries vs State Of Chhattisgarh on 27 March, 2026
Author: Ramesh Sinha
Bench: Ramesh Sinha
1
2026:CGHC:14468-DB
AFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
WPC No. 3580 of 2022
M/s Kedia Trading Registered Address Near Durga Fuels, Ring Road No.2,
Gondwara, Raipur, District Raipur, Chhattisgarh Pin Code - 492001. Through
Its Proprietor - Pravin Kumar Kedia, S/o Shri Madan Prasad Kedia, Aged
About 58 Years, R/o Flat No.15 Gf, Janta Flats, Pocket-1, Sector- A-5, Narela,
North West Delhi, Delhi, Pin Code- 110040.
--- Petitioner(s)
versus
1 - State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur, District Raipur, Chhattisgarh, Pin
Code- 492002.
2 - Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi, Pin Code- 110001.
--- Respondent(s)
WPC No. 64 of 2023
Agrawal Gudakhu Factory A Registered Partnership Firm Through Its Partner
Namely Shri Sanjay Kumar Agrawal, S/o. Shri Ramchandra Agrawal, Aged
About 51 Years, R/o Ram Kunj, Sultaniya Gali, Vinoba Nagar, Bilaspur,
District: Bilaspur, Chhattisgarh
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur, District : Raipur, Chhattisgarh
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block , New Delhi, Pin Code 110001
— Respondent(s)
2
WPC No. 98 of 2023
1 – Suraj Gudakhu Karkhana, A Proprietorship Firm Through Its Sole
Proprietor Manoj Kumar Sharma, S/o. Kailashchand Sharma, Aged About 63
Years, R/o. Suraj Gudakhu Karkhana, Industrial Estate Bhanpuri, Raipur,
District Raipur Chhattisgarh.
2 – Sharma Industries Sader Bazar, A Proprietorship Firm, Through Its Sole
Proprietor Sanjay Kumar Sharma, S/o. Kailashchand Sharma, Aged About 61
Years, R/o. Sharma Industries Sadar Bazar Raipur District Raipur
Chhattisgarh.
3 – Sharma Industries Dumartarai, A Proprietorship Firm, Through Its Sole
Proprietor Rajendra Kumar Sharma, S/o. Late Shri Laxmikant Sharma, Aged
About 66 Years, R/o. Sharma Industries Dumartarai, Raipur, District Raipur
Chhattisgarh.
4 – Sharma Industries Uparwara, A Proprietorship Firm, Through Its Sloe
Proprietor Mahesh Kumar Sharma, S/o. Late Shri Brijmohan Sharma, Aged
About 58 Years, R/o. Sharma Industries Uparwara, Abhanpur, Raipur, District
Raipur Chhattisgarh.
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur District Raipur Chhattisgarh Pin
Code -492002.
2 – Union Of India, Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi. Pin Code -110001.
— Respondent(s)
WPC No. 152 of 2023
Ajanta Gudakhu Udyog A Registered Partnership Firm Reistered Under The
Relevant Provisions Of The Indian Partnership Act, 1986 Having Its Head
Office At Main Road, Koni Bilaspur, Through Its Partner Namely Ashish Kumar
Agrawal, S/o Shri Brijmohan Agrawal, Aged About 41 Years R/o Flat No. 26,
Block B, 3rd Floor, Kachna Road, Khamhardih, Shankar Nagar, Raipur District
Raipur Chhattisgarh
—Petitioner(s)
Versus
3
1 – State Of Chhattisgarh Through Secretary, Ministry Of Finance, Government
Of India, North Block, New Delhi Pin Code 110001
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi Pin Code 110001
— Respondent(s)
WPC No. 211 of 2023
M/s Raman Agro Exports Pvt. Ltd. Through – General Power Of Attorney
Holder, Rahul Singh, S/o Ghanshyam Singh, R/o Radhe Storage Sarangarh
Road Chhatamuda Raigarh, Chhattisgarh
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Secretary Ministry Of Finance, Government
Of India, North Block, New Delhi.
2 – Special Secretary, Commercial Tax (Excise Department) State Government
Of Chhattisgarh, Mantralaya, Mahanadi Bhawan, New Raipur. Chhattisgarh
3 – Union Of India, Through Secretary Ministry Of Finance, Government Of
India, North Block, New Delhi.
— Respondent(s)
WPC No. 218 of 2023
M/s Single Point Solutions, Proprietor, Ankur Sharma, S/o Shri Gopal Sharma,
Aged About 26 Years R/o 416 Lifestyle, Empressa, Kota Road, Raipur District
Raipur Chhattisgarh
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Secretary, Excise Department, Mahanadi
Bhavan, New Raipur District Raipur Chhattisgarh
2 – Special Secretary Commercial Tax (Excise Department ), State Govt. Of
Chhattisgarh, Mantralaya, Mahanadi Bhawan, New Raipur District Raipur
Chhattisgarh
3 – Union Of India Through Secretary, Ministry Of Finannce, Government Of
India, North Blocik, New Delhi
— Respondent(s)
WPC No. 380 of 2023
Siddhi Deal Trade Pvt. Ltd., A Company Registered Under The Relevant
Provisions Of Companies Act, 1956 Through Its Director namely Gopal
4
Sharma, S/o Shri Mahadev Prasad Sharma, Aged About 59 Years, R/o. Flat
No. 307, Sarla Villa, Chakradhar Nagar, Raigarh, District Raigarh Chhattisgarh
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through – Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur, District – Raipur Chhattisgarh Pin
code 492002
2 – Union Of India, Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi. Pin Code 110001
— Respondent(s)
WPC No. 498 of 2023
Sun And Sun Cattle Feed Pvt. Ltd. A Company Registered Under The Relevant
Provisions Of Companies Act, 1956 Through Its Director Shyam Sunder
Sharma, S/o. Shri Brijmohan Sharma, Aged About 51 Years, R/o. 11/146,
Near Chikni Mandir, Malviya Road, Raipur, District Raipur (C.G.)
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur, District Raipur (C.G.) Pin code
492002
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi Pin Code 110001
— Respondent(s)
WPC No. 614 of 2023
M/s Shriaman Agrovet Pvt. Ltd. Through Managing Director, Gopal Agrawal
S/o Shri Parmeshwari Das Agrawal, Aged About 54 Years, Address Mayapur,
Chandani Chowk, Ambikapur, District – Sarguja (C.G.)
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Secretary Excise Department, Mahanadi
Bhavan New Raipur (C.G.)
2 – Special Secretary Commercial Tax (Excise Department) State Govt. Of
Chhattisgarh, Mantralaya, Mahanadi Bhawan, New Raipur,(C.G.)
5
3 – Union Of India Through Secretary Ministry Of Finance, Government Of
India, North Block, New Delhi.
— Respondent(s)
WPC No. 813 of 2023
Annapurna Gudakhu Karkhana, A Registered Partnership Firm Registered
Under The Relevant Provisions Of The Indian Partnership Act, 1986 Having Its
Head Office M.W. No.12, Main Road, Saraipali, Mahasamund Through Its
Partner Namely Vishwajeet Gupta, S/o Shri Jai Narayan Gupta, Aged About
58 Years, R/o Annapurna Karkhana, Main Road, Saraipali, District
Mahasamund Chhattisgarh
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Secretary, Ministry Of Finance, Government
Of India, North Block, New Delhi, Pin Code 110001
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi, Pin Code 110001
— Respondent(s)
WPC No. 817 of 2023
Aryan Feeds Pvt. Ltd. A Company Registered Under The Relevant Provisions
Of Companies Act, 1956 Through Its Director Shri Sashikant Jain, S/o Shri
Premchand Jain, Age About 48 Years, R/o C-17, Near Shankracharya,
Garden, Samta Colony, District Raipur Chhattisgarh
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Secretary, Ministry Of Finance, Government
Of India, North Block, New Delhi, Pin Code 110001
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi, Pin Code 110001
— Respondent(s)
WPC No. 1106 of 2023
Agrawal Gudakhu Factory A Partnership Firm, Registered Under The Relevant
Provisions Of The Partnership Act Through Its Partner Namely Anand Kumar
Agrawal, S/o Late Gajanand Agrawal, Aged About 59 Years, R/o Gajanand
Puram Colony, Kharsia, District : Raigarh, Chhattisgarh
—Petitioner(s)
6
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur, District Raipur, Chhattisgarh Pin
Code 492002
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi Pin Code 110001
— Respondent(s)
WPC No. 1376 of 2023
Rashtriya Gudakhu Factory A Registered Proprietorship Firm Through Its
Proprietor Namely Shri Baijnath Agrawal, S/o Laxmi Narayan Agrawal, Aged
About 75 Years R/o Lal Tanki Road, Raigarh, District – Raigarh Chhattisgarh.
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur District – Raipur Chhattisgarh. Pin
Code 492002
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi. Pin Code 110001
— Respondent(s)
WPC No. 1713 of 2023
Vardhaman Trading A Proprietorship Firm Through Its Proprietor Namely Smt.
Mamta Jain, W/o Manoj Jain, Aged About 50 Years, R/o House No. C E-11,
Kundala Vashundhara City, Ambikapur, District Sarguja Chhattisgarh.
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur District Raipur Chhattisgarh Pin code
492002
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi, Pin Code 110001
— Respondent(s)
7
WPC No. 1943 of 2023
Rameshwar Cattle Feed Industries Through Its Propriter- Shri Bhuneshwar
Patel S/o Shri Shiv Charan Patel Aged About 53 Years, R/o Kalgamuda,
Urdana Sai Temple, Gharghoda Road Raigarh, District : Raigarh, Chhattisgarh
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur Atal Nagar, Raipur Pin Code 492002, District : Raipur,
Chhattisgarh
2 – Union Of India Through Secretary, Ministry Of Finance Government Of
India, North Block, New Delhi. Pin Code-110001, District : New Delhi, Delhi
— Respondent(s)
WPC No. 2099 of 2023
Tirumala Balaji Alloys Ltd. A Registered Company Under Company Law
Through Its Authorised Represetative Namely Shri Jaynarayan Pradhan, S/o
Shri Makhanlal Pradhan, Aged About 55 Years, Registred Address-O.P. Jindal
Industrial Park, Sector-B, Punjipathra, Tahsil Gharghoda, District : Raigarh,
Chhattisgarh
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur,, District : Raipur, Chhattisgarh
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block New Delhi., District : New Delhi, Delhi
— Respondent(s)
WPC No. 2480 of 2023
M/s. Shubham Trading Company A Proprietorship Firm Registered Address –
D – 94, Badi Parking, Zone -2, Vyapar Vihaar, Bilaspur, District – Bilaspur
Chhattisgarh Pin Code – 495001. Through Its Proprietor Gajanand Agrawal,
S/o Shri Kedar Nath Agrawal, Aged About 49 Years, R/o – Hansa Vihaar,
Shrikant Verma Road, Bilaspur, District – Bilaspur Chhattisgarh Pin Code –
495001.
—Petitioner(s)
8
Versus
1 – State Of Chhattisgarh Through – Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur, District – Raipur Chhattisgarh Pin
Code – 492002
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi. Pin Code – 110001
— Respondent(s)
WPC No. 2481 of 2023
M/s Arihant Feeds A Proprietorship Firm Through Its Sole Proprietor Namely,
Mehul Prakash, S/o Ashok Parakh, Aged About 33 Years, R/o House No. 24,
South Avenue, Choubey Colony, Raipur, District Raipur Chhattisgarh
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur District Raipur Chhattisgarh Pin code
492002
2 – Union Of India Through Secretary, Ministry Of Finanace, Government Of
India, North Block, New Delhi Pin Code 110001
— Respondent(s)
WPC No. 2519 of 2023
M/s Swastik Cattle Feed Industries, Through Its Power Of Attorney Holder-Shri
Nilesh Sharma, S/o Shri Kishan Sharma, Aged About 35 Years R/o Mission
Road, Near Shyam Baba Temple, Korba District – Korba Chhattisgarh.
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur, District Raipur Chhattisgarh. Pin
Code 492002
2 – Union Of India, Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi, Pin Code 110001
— Respondent(s)
9
WPC No. 2533 of 2023
M/s Sadashiv Cattle Feed Industries Through Its Partnership Firm Authorized –
Shri Shyam Sunder Agrawal S/o Shri Mahabir Prasad Agrawal, Aged About 65
Years, R/o Mission Road, Near Shyam Baba Temple, Korba, District : Korba,
Chhattisgarh
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur, District – Raipur, Chhattisgarh. Pin
Code 492002.
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi, Pin Code 110001.
— Respondent(s)
WPC No. 4430 of 2023
M/s Maruti Feeds A Proprietorship Firm Through Its Sole Proprietor Namely
Smt. Anju Bansal, W/o. Shri Mukesh Bansal, Aged About 49 Years, R/o.
Kachna Raipur, District – Raipur, Chhattisgarh.
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur, District – Raipur, Chhattisgarh. Pin
Code 492002
2 – The Union Of India Through Secretary, Ministry Of Finance, Government
Of India, North Block, New Delhi, Pin Code -110001.
— Respondent(s)
WPC No. 1032 of 2024
M/s Sholey Coke And Briquettes Registered Address – Block No.58, Light
Industrial Area, Bhilai, District – Durg, Chhattisgarh. Through Its Proprietor
Manish Agrawal, Son Of Shri Darshan Lal Agrawal, Shop No.N-712, C-Market,
Sector -6, Civil Center, Bhilai, District – Durg, Chhattisgarh.
—Petitioner(s)
Versus
10
1 – State Of Chhattisgarh Through – The Special Secretary, Department Of
Commercial Tax (Excise), Mananadi Bhawan, Atal Nagar, Nawa Raipur,
District – Raipur, Chhattisgarh.
2 – Union Of India Through Its Secretary Ministry Of Finance, Govt. Of India,
North Block, New Delhi.
— Respondent(s)
WPC No. 2748 of 2024
M/s Shri Surya Feeds Pvt. Ltd. Through Its Director Shri S/o Shri Mohit Mittal,
Aged About 46 Years, R/o M/s Shri Surya Feeds Pvt. Ltd. Street No. 6b, New
Shanti Nagar, Geetanjali Clony, Shanker Nagar, Raipur, District- Raipur,
Chhattisgarh.
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur, District- Raipur Pin Code 492002
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi, Pin Code 110001
— Respondent(s)
WPC No. 1897 of 2025
Maa Banbhori Global Ventures Private Limited A Private Limited Company,
Registered Address – S.S.-16, Kundla, Vasundhara City, Ambikapur, District –
Surguja (C.G.), Pin Code – 497 001, Through The Director – Hitesh Jain S/o
Shri Manoj Jain, Aged About 22 Years, R/o House No. C.E. 11, Kundla,
Vasundhara City, Ambikapur, District – Surguja (C.G.) Pin Code – 497 001
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through – Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh, Mantralaya, Mahanadi
Bhawan, New Raipur Atal Nagar, Raipur, District – Raipur (C.G.), Pin Code –
492 002
2 – Union Of India Through – Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi, Pin Code – 110 001
— Respondent(s)
11
WPC No. 1898 of 2025
Vardhaman Trading Company, A Proprietorship Firm, Registered Address-
Ward No. 37, Agrasen Ward, Shop No. Ff 7, Kundla City Plaza Complex,
Vasundhara City, Ambikapur, District- Surguja (Cg) Pin Code- 497001
Through Its Proprietor Manoj Kumar Jain, S/o Shri Tara Chand Jain, Aged
About 50 Years, R/o – House No. CE 11, Kundla, Vasundhara City, Ambikapur,
District- Surguja (Cg) Pin Code- 497001
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh Mantralaya, Mahanadi
Bhawan, New Raipur, Atal Nagar, Raipur, District- Raipur (Cg) Pin Code-
492002
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block, New Delhi Pin Code- 110001
— Respondent(s)
WPC No. 4236 of 2025
Pasupati Agrovet Private Limited A Private Limited Company, Registered
Address Plot No. 93-110 Phase – Ii, Jagatpur New Industrial Estate Jagatpur,
District – Cuttack (Odisha) Pin 754021, Manufacturing Unit Chhattisgarh At
M/s Pasupati Agrovet Private Limited Registered Address Plot No. 67 Sector –
1 Food Park Bagoud Village Bagoud Tehsil Kurud, District Dhamtari (C.G.) Pin
Code – 493770 Through Its Authorised Representative Abhishek Agarwal S/o
Late Shri Dinesh Kumar Agarwal, Aged About 33 Years R/o N-2/106 I.R.C.
Village Nayapalli Bhubaneswar District – Khurda (Odisha ) Pin Code – 751015
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Special Secretary, Department Of
Commercial Taxes (Excise) Government Of Chhattisgarh Mantralaya,
Mahanadi Bhawan, New Raipur, Atal Nagar, Raipur District – Raipur (C.G.) Pin
Code – 492002
2 – Union Of India Through Secretary, Ministry Of Finance, Government Of
India, North Block New Delhi Pin Code – 110001
— Respondent(s)
12
WPC No. 536 of 2026
Shree Balaji Enterprises, Through- Ujjwal Sharma, S/o Shri Ramesh Kumar
Sharma, Aged About 33 Years, Proprietor, Having GST Registration No.
22DJTPS2475E1ZV, R/o House No. 97, TP Nagar Road, Korba, District
Korba, State Of Chhattisgarh
—Petitioner(s)
Versus
1 – State Of Chhattisgarh Through Its Principal Secretary, Department Of
Commercial Tax (Excise), Government Of Chhattisgarh, Mantralaya, Mahanadi
Bhawan, Atal Nagar, Nava Raipur, District Raipur, Chhattisgarh 492002
2 – Excise Commissioner State Of Chhattisgarh, Office At Raipur, District
Raipur, State Of Chhattisgarh
3 – District Excise Officer Korba, Office At District Korba, State Of Chhattisgarh
4 – Union Of India Through Secretary, Ministry Of Finance, Department Of
Revenue, North Block, New Delhi 110001
— Respondent(s)
For Petitioner(s) : Mr. Manoj Paranjpe, Senior Advocate assisted by
Mr. K. Rohan, Kabeer Kalwani, Advocates {WPC
No. 3580/2022, 4236/2025}
Mr. K. Rohan, Advocate {WPC No. 152/2023,
2480/2023, 2481/2023, 1897/2025, 1898/2025}
Mr. T.K.Tiwari, Advocate {WPC No. 211/2023,
218/2023, 614/2023}
Mr. Amit Sharma, Advocate {WPC No.
1376/2023, 1943/2023, 2099/2023, 2519/2023,
2533/2023, 2748/2024}
Mr. Manish Nigam, Advocate {WPC No.
1032/2024}
Mr. Pankaj Singh, Advocate {WPC No. 536/2026}
For Respondent(s)/State : Mr. Shashank Thakur, Additional Advocate
General
For Respondent/Union of India Mr. Ramakant Mishra, Deputy Solicitor General,
Mr. Roop Ram Naik, Ms. Annapurna Tiwari, Mr.
Amitesh Kumar Pandey and Mr. Rishabh Dev
Singh
Date of Hearing : 18/03/2026
Date of Judgment : 27/03/2026
13
Hon’ble Shri Ramesh Sinha, Chief Justice
Hon’ble Shri Ravindra Kumar Agrawal, Judge
C.A.V Order
Per Ramesh Sinha, Chief Justice
1 Heard Mr. Manoj Paranjpe, learned Senior Advocate assisted by Mr. K.
Rohan, Mr. Kabeer Kalwani, Mr. Pankaj Singh, Mr. Amit Sharma, Mr.
T.K.Tiwari, Mr. Manish Nigam, learned counsel appearing for the
respective petitioners. Also heard Mr. Shashank Thakur, learned
Additional Advocate General for the State, Mr. Ramakant Mishra,
learned Deputy Solicitor General alongwith Mr. Roop Ram Naik,
Ms.Annapurna Tiwari, Mr. Amitesh Kumar Pandey and Mr. Rishabh Dev
Singh, learned counsel appearing for the respondent/Union of India.
2 Since the facts and issues involved in this batch of petitions are
identical, they are being considered and decided by this common
judgment and WPC No. 3580/2022 is taken as the lead case.
3 By these petitions under Article 226 of the Constitution of India, the
petitioner seeks for the following relief(s):
“a) Call for the entire records pertaining to the present case.
b) Hold and declare that the impugned Enactment i.e.
Chhattisgarh Molasses Control and Regulation Rules, 2022
(Annexure P/1) is ultra vires to the Constitution of India.
c) Grant the cost of the petition to the petitioner.
d) Grant any other relief as deemed fit and proper in the
facts and circumstances of the case.”
4 Similar prayers have been made in all other petitions, except WPC
No.536/2026, wherein the following relief(s) have been claimed:
14
“A. hold and declare that the Chhattisgarh Molasses Control and
Regulation Rules, 2022, purportedly framed under Section 8
and Section 62 of the Chhattisgarh Excise Act, 1915, are ultra
vires the Constitution of India and beyond the legislative
competence of the State, in so far as they seek to regulate,
control, license or otherwise interfere with trade in molasses
used for non-intoxicant purposes. and are consequently null and
void to that extent;
B. hold and declare that molasses, when dealt with by the
Petitioner as a GST-registered trader for non-intoxicant purpose
is not an “intoxicant”, “liquor” or “excisable article within the
meaning of Sections 2(6), 2(11-a), 2(12) and 2(13) of the
Chhattisgarh Excise Act. 1915, and therefore does not fall within
the regulatory or fiscal ambit of the said Excise Act;
C. hold and declare that the State Government has no authority
in law under Entries 8 and 51 of List II of the Seventh Schedule
to the Constitution, read with the Chhattisgarh Excise Act, 1915,
to insist upon an Excise licence under Rule 8 of the
Chhattisgarh Molasses Control and Regulation Rules, 2022
from traders such as the Petitioner, who deal in molasses
exclusively for non-intoxicant uses and have no nexus with
manufacture, production or sale of liquor or intoxicants;
D. issue an appropriate writ, order or direction in the nature of
certiorari, quashing and setting aside:
i. the Chhattisgarh Molasses Control and Regulation Rules,
2022 (to the extent they are sought to be applied to the
Petitioner’s business of non-intoxicant molasses trade); andii. all consequential circulars, directions, notices,
communications, oral or written demands, and proposed or
initiated steps of the Respondent-authorities insisting that
the Petitioner obtain a licence under Rule 8 of the said
Rules, 2022, or threatening coercive measures for non-
compliance;
E. issue an appropriate writ, order or direction in the nature of
mandamus restraining the Respondents, their officers, servants
and agents from:
15
i. compelling the Petitioner to apply for or obtain any Excise
licence in respect of his trading activities in molasses for
non-intoxicant purposes;
ii. conducting Excise raids, inspections, seizures, searches,
or initiating prosecution or penal proceedings against the
Petitioner solely on the ground that he does not hold an
Excise licence under the impugned Rules, 2022, in relation
to such non-intoxicant activities; andiii. otherwise obstructing, interfering with or harassing the
Petitioner in the peaceful conduct of his GST-registered
business of trading in molasses;
F. hold and declare that any past, present or proposed invocation
of the impugned Rules, 2022 against the Petitioner’s non-
intoxicant molasses trading is illegal, arbitrary, unconstitutional
and unenforceable, and direct that any action already taken
thereunder, if any, shall stand recalled, withdrawn or treated as
non est in the eye of law;
G) award costs of the present Petition in favour of the Petitioner
and against the Respondents; andH) pass such other or further writs, orders or directions as this
Hon’ble Court may deem fit, proper and just in the facts and
circumstances of the case, in the interest of justice.”
5 The jurisdiction of this Hon’ble High Court is invoked to challenge the
legality, validity and constitutional permissibility of the Chhattisgarh
Molasses Control and Regulation Rules, 2022 (for short, the Rules of
2022), framed purportedly in exercise of powers conferred by clause (c)
of Section 8 of sub-section (1) and clause (f), (g), (h) of sub-section (2)
of Section 62 read with proviso to sub-section (3) of Section 62 of the
Chhattisgarh Excise Act, 1915 (No. 2 of 1915) (for short, the Excise Act),
in so far as the said Rules are being construed and implemented so as to
regulate, control and license ordinary traders like the petitioner, who deal
in Molasses purely for non-intoxicant purposes.
16
6 The impugned Rules, and the manner of their enforcement, are further
challenged in so far as they have led to consequential actions, demands
and threats by the Excise authorities, who have insisted that the
petitioner must obtain an Excise Licence under the Rules of 2022, on
pain of coercive measures such as inspection, seizure of stock, initiation
of proceedings, and exposure to penal and fiscal consequences. This
insistence is made despite the undisputed position that the petitioner are
only a GST-registered trader in Molasses for non-intoxicant uses and
neither manufactures, distills, bottles, stores nor sells any alcoholic liquor
for human consumption or other intoxicants.
7 Mr. Manoj Paranjpe, learned Senior Advocate appearing for the
petitioners would submit that impugned Rules of 2022, and their
extension to the petitioner’s trading activity, are ultra vires the
Constitution of India, fall beyond the legislative competence of the State
under Entries 8 and 51 of List II of the Seventh Schedule, and operate as
an arbitrary and unreasonable restriction on the petitioner’s fundamental
right to carry on trade and business guaranteed under Article 19(1)(g).
The impugned regime, by equating neutral commercial trading in
Molasses with excisable intoxicant activity, also offends Article 14 by
subjecting unlike entities to an identical and onerous excise framework
without any intelligible differentia or rational nexus to the purported
object of controlling intoxicants. The petitioner neither owns nor operates
any distillery, does not manufacture liquor or industrial alcohol, and has
no commercial engagement with intoxicating liquors for human
consumption. His business is confined to bona fide purchase and sale of
Molasses in the ordinary course of trade. In exercise of powers
traceable to the Excise Act, the State has framed the Rules of 2022.
Proceeding on the footing that Molasses is a potential input for liquor
17
manufacture, the Excise Authorities are now insisting that all persons
dealing in molasses, irrespective of the end-use, must obtain an Excise
licence under Rule 8 and submit to the entire Excise regulatory
apparatus. By treating an ordinary non-intoxicant trader in Molasses at
par with liquor manufacturers, the State has travelled beyond its
legislative field under Entries 8 and 51 of List II (State List), Seventh
Schedule, which are confined to intoxicating liquors and alcoholic liquors
for human consumption, and has thereby encroached into a general field
of trade and commerce not constitutionally earmarked for the Excise
power. The impugned Rules of 2022, to the extent they are sought to be
applied to traders like the petitioner, are ex facie ultra vires the
Constitution, lack legislative competence, and suffer from manifest
arbitrariness. The petitioner, therefore, seeks a declaration that pure
trading in Molasses for non-intoxicant purposes cannot be compulsorily
brought under an Excise licensing regime, and that he cannot be
compelled to obtain an Excise licence or be exposed to coercive Excise
action merely for carrying on a legitimate, GST-regulated trading activity
The challenge is thus founded on violation of Articles 14 and 19(1)(g) of
the Constitution, as also on the fundamental ground of absence and
excess of legislative competence
8 Mr. Paranjpe would submit that the petitioner M/s. Kedia Trading is a
proprietary firm engaged in carrying the business of cattle feed at Raipur
and for the purpose of its business needs molasses. The petitioner
purchases the Molasses from the Sugar Mills and then sells the
Molasses to the Manufacturers who prepare cattle feed from Molasses.
The petitioner also sells the Molasses to the Gudakhu Manufacturers as
Molasses is also the raw material for Gudakhu. Thus, the petitioner
purchases and stores the Molasses. Molasses is a by-product in the
18
manufacture of sugar from sugarcane or gur (jaggery) and it’s production
is directly related to sugar production. Molasses constitute about 42% of
the sugar produced. Major portion of the Molasses go into the production
of Alcohol (Rectified Spirit) and the remaining Molasses go into the
manufacture of cattle feed, Gudakhu, fodder, coal briquette, metal
briquette, bricks, refractories, chemicals like citric acid etc. Molasses is
also used in foundries. Out of the Alcohol prepared from Molasses, 50%
of the Alcohol goes for potable use (for human consumption) and the
remaining 50% goes for Industrial use. The industrial use of Alcohol is
for production for various chemicals. Molasses is the main ingredient in
manufacture of cattle feed and Gudakhu. Molasses in its basic form is
neither potable i.e. it cannot be consumed directly by human being nor it
has any intoxicating effect on human being. It does not content alcohol in
its basic form. However it can be fermented into alcohol through a very
complicated industrial process just like several other items like fruits
(Grapes, Apple, etc.), food grains (Rice, Wheat, Jowar, Barley, etc.),
Sugar, Gur, etc. Molasses per se is not an intoxicant and is unfit for
human consumption. Only when the Molasses is fermented, it turns into
Alcohol. Molasses is a by-product in the manufacture of sugar and the
Sugar Mill/Factory is an industrial undertaking as defined under Entry 25
of the Industries (Development and Regulation) Act, 1951 (for short, the
Act of 1951). The prices and distribution of the Molasses were being
regulated by the Central Government under the Molasses Control Order,
1961 (for short, the Control Order) till 10.06.1993 when the pricing and
distribution of Molasses was decontrolled by the Central Government.
The Molasses Control Order, 1961 was enacted under the provisions of
Section 18 G of the Act of 1951. After the decontrolling of the Molasses,
a Standing Committee on Petroleum & Chemicals (1994-1995) was
19
constituted which was authorised to submit their Report on “Molasses –
Distribution & Pricing”. The Standing Committee after due deliberations
submitted their Report dated 13.02.1995. Molasses, a by-product of
Sugar is controlled and charged by the Central Government at the time
of its disposal from the Sugar Mill/Factory. Earlier Central Excise Duty
was levied on Molasses and now the Central Government has enacted
the Central Goods and Services Tax Act, 2017 (for short, the GST Act)
for levy and collection of tax on intra-State supply of goods and services
or both by the Central Government. The Central Government though its
Ministry of Food Processing Industries has issued the product-wise GST
rates of food products wherein a GST of 28% is levied/applicable on
Molasses. Intoxicants are kept out of the purview of the GST Act. The
very inclusion of Molasses in the GST Act would establish the very fact
that Molasses per se is not an Intoxicant and therefore would not come
within the purview of Excise Act. Only when the Molasses are fermented
and turned into Alcohol (Rectified Spirit) and when the Alcohol is sent to
the Distilleries for manufacturing of potable Alcohol i.e. Alcohol for
human consumption; the State Legislature can levy tax, duty or impost.
Molasses being the raw material for preparation/manufacturing of
Alcohol can be termed as an Intoxicant as defined under the Excise Act
and thus, would be exempted from the tax, duty or impost as applicable
under the Excise Act. Furthermore, in light of the tax being levied by the
Central Government under the GST Act, 2017 on Molasses, it becomes
ex facie clear that the regulation, control pricing and distribution of
Molasses would remain exclusively with the Central Government.
9 Mr. Paranjpe would further submit that the petitioner was required to
seek license from the Department of Excise of the State of Chhattisgarh,
therefore, the proprietor of the petitioner firm preferred an application
20
under the provisions of the Right to Information Act, 2005 dated
25.04.2019 seeking information as to the Legislation governing the
regulation and control of the Molasses in the State of Chhattisgarh. As
the information sought was not provided within the prescribed time limit
of 30 days, the proprietor of the petitioner firm preferred an appeal under
the provisions of the Right to Information Act, 2005. Ultimately, the
petitioner was provided the information sought vide letter dated
27.05.2019.
10 The State of Chhattisgarh, vide Notification dated 12.07.2022 has
enacted the Rules of 2022 in exercise of the powers conferred by
Section 8(1)(c), Section 62 (2) (f)(g)(h) and Proviso to Section 62(3) of
the Excise Act. On a careful reading of the provisions of the Excise Act, it
is clear that Molasses is not an “excisable article” under the provisions
of Section 2(6). Molasses is neither an “intoxicant” under Section 2 (11-
a), nor an “intoxicating drug” under Section 2(12). Thus, the “excisable
duty” and “countervailing duty” defined under Section 2(6-a) of the
Excise Act to be imposed/levied by the State Government as envisaged
under Entry 51 of List II in the Seventh Schedule of the Constitution of
India cannot be imposed by the State Government on Molasses.
11 Mr. Paranjpe would further submit that the State of Odisha, vide an
amendment inserted the word “Molasses” in Section 2, Clause 12-a of
the definition clause under the Bihar and Orissa Excise Act, 1915 after
Mahua Flower. Thus, assailing the validity of the said amendment
enacted by the State of Odisha inserting “Molasses” in the Bihar and
Orissa Excise Act, 1915, several writ petitions were filed before the
Hon’ble High Court of Odisha. In one of the Writ Petition namely WP(C)
No. 3399/2011 {M/s. Uma Enterprises v. State of Orissa}, the
21
Hon’ble High Court of Orissa, vide order dated 12.02.2012 was pleased
to upheld the validity of the Amendment Act inserting “Molasses” in the
Bihar and Orissa Excise Act, 1915. Assailing the said judgment passed
by the Orissa High Court, the petitioner therein preferred a Special
Leave Petitions (SLP) in the Hon’ble Supreme Court of India and the
Hon’ble Supreme Court of India was pleased to dismiss the said Special
leave petition in limine. While other writ petitions were pending before
the Orissa High Court, a review petition was also preferred against the
judgment of M/s. Uma Enterprises (supra) on the grounds that one of
the judgments passed by the Hon’ble Supreme Court was not
considered while passing the final order. The other writ petitions as well
as the review petition came up for hearing and the Orissa High Court,
after careful consideration of the entire matter and also considering the
fact of enactment of the GST Act by the Central Government; was
pleased to uphold the validity of the Amendment Act in light of the
judgment passed in M/s. Uma Enterprises (supra), observed that the
State Government will not have power to levy excise duty in view of
Entry-84 of Union List. The constitutional validity of the entries were
upheld and it was made clear that the Molasses which is used other than
distillery purpose, the petitioners were not required to pay local tax i.e.
excise duty. If the molases was used for cattle feed, poultry or for
preparation of ‘gudakhu’, then it will be exempted from excise duty.
Assailing the said judgment passed by the Orissa High Court, the State
of Odisha preferred a Special Leave Petition before the Apex Court
wherein the Hon’ble Apex Court was pleased to stay the operation of the
judgment passed by the Orissa High Court vide order dated 20.08.2020
passed in SLP(Civil) Diary No. 13515/2020 {State of Odisha v. M/s.
Shree Lingraj Feeds Ltd.}. Mr. Paranjpe would further submit that in
22
light of entire facts and circumstances and also in light of the interim
order granted by the Hon’ble Supreme Court of India whereby the
operation of the judgment passed by the Hon’ble High Court of Orissa
has been stayed, the Petitioner has carved out a good case warranting
interference of this Hon’ble High Court.
12 Mr. Paranjpe would argue that Molasses is the main ingredient in
manufacture of cattle feed and Gudakhu. Molasses in its basic form is
neither potable i.e. it cannot be consumed directly by human being nor it
has any intoxicating effect on human being. It does not content alcohol in
its basic form. However it can be fermented into alcohol through a very
complicated industrial process just like several other items like fruits
(Grapes, Apple, etc.), food grains (Rice, Wheat, Jowar, Barley, etc.),
Sugar, Gur, etc. Molasses per se is not an intoxicant and is unfit for
human consumption. Only when the Molasses is fermented, it turns into
Alcohol. Molasses is a by-product in the manufacture of sugar and the
Sugar Mill/Factory is an industrial undertaking as defined under Entry 25
of the Act of1951. Section 2 of the Act of 1951 provides that in the public
interest, the Union should take under its control the industries specified
in the First Schedule and ‘sugar’ and ‘fermentation industries (other than
potable alcohol’ is provided in entry No. 25 and 26 of the First Schedule
of the Act of 1951. Thus, the license, production of sugar and its
distribution, transport, disposal or use are regulated by the provisions of
the Act of1951 and it is only the Central Government which can bring in
any enactment in relation to sugar.
13 Mr. Paranjpe would further place reliance on Entry 52 and Entry 84 of
List-I Union List of the Seventh Schedule and Entry 8 and Entry 51 of the
List-II State List of the Seventh Schedule to submit that it is the Central
23
Government / Parliament which has the exclusive power to make laws
with respect to industrial alcohol (unfit for human consumption) and it is
the Legislature of the State which has the exclusive power to make laws
with respect to the alcohol for human consumption.
14 In support of their contention, learned counsel appearing for the
respective petitioners would place reliance on the decision of the Apex
Court in Tika Ramji & Others v. State of Uttar Pradesh & Others
{(1956) 1 SCC 624}; Synthetics & Chemicals Limited v. State of
U.P.{(1990) 1 SCC 109}; Kerala Samsthana Chethu Thozhilali
Union v. State of Kerala & Others {(2006) 4 SCC 327}; State of
Orissa v. Utkal Distilleries Ltd. {(2022) 5 SCC 326}; Naresh
Chandra Agrawal v. Institute of Chartered Accountants of India &
Others {(2024) 13 SCC 241}; State of Uttar Pradesh & Others v.
Lalta Prasad Vaish & Others {(2024) 17 SCC 1}; and the decision of
the Orissa High Court in Sunil Kumar Dhanuka v. State of Orissa
{2019(2) ILR (Cut) 724}.
15 While adopting the arguments advanced by Mr. Paranjpe, Mr. K. Rohan,
learned counsel for the petitioner(s) would also draw attention of this
Court to page No. 165 of the WPC No. 3580/2022 which is product-wise
GST rates of food products. ‘Molasses’ finds place at serial No. 1, upon
which there is a GST of 28%. Imposition of excise duty by the State
would amount to double taxation. For obtaining licence, the petitioner
had to pay Rs. 1 Lac and till date, the petitioners have paid a sum of Rs.
9 Lacs towards the excise duty.
16 On the other hand, Mr. Shashank Thakur, learned Additional Advocate
General appearing for the State/respondent would submit that the
24
petitioners have placed reliance on Entry 52 and Entry 84 of List I Union
List of VII Schedule of Constitution of India, but no pleading have been
made regarding applicability of the said provisions in the instant case.
The petitioners have also placed reliance on Entry 8 and 51 of List II
State List of the VII Schedule but no pleadings have been made
regarding applicability of the said provisions in the instant case. Entry 8
provides exclusive power to the State Government/Legislature of
Chhattisgarh to make Laws with respect to production, manufacture,
possession, transport, purchase and sale of Intoxicating liquors. The
State Government/Legislature has full authority to make Laws with
respect to every item/things which is involved in production and
manufacture of liquor. The State Government/Legislature has full
authority to make laws with respect to every item/things which is
involved in production and manufacture of liquor. The petitioner has tried
to make out a case that the State Legislature can only make laws with
respect to alcohol which is being used for human consumption and not
with regard to any other material or things despite the same is used a
raw material, whereas the Entry 8 clearly provides legislative
competence to make specific Laws which is necessary for
manufacturing and production of liquor. It cannot be disputed by any
party that the Molasses is raw material for making potable liquor.
Accordingly the State Legislature has every right to make law for the
purposes of control and regulation of supply, possession, sale,
consumption, transport, import, export, license and permit for the use of
molasses. Since the Molasses is a raw material/basic product which can
be converted into a potable alcohol, therefore it is the prime duty of the
State Government/Legislature to keep an eye with respect to
unaccounted molasses, so that there cannot be any revenue loss which
25
may occur in case of conversion of Molasses into potable liquor without
the knowledge of the excise department. Mr. Thakur would place
reliance on the judgment of the Apex Court in the matter of Synthetic
and Chemicals Limited (supra) to contend that widest amplitude
should be given to the language of the entries in three lists but some of
these entries in different lists or in the same list may override and
sometimes may appear to be in direct conflict with each other, then and
then only comes the duty of the Court to find the true intent and purpose
and to examine the particular Legislation in question. Each general word
would be held to extend to all ancillary or subsidiary matters which can
fairly and reasonably be comprehended in it. In interpreting an entry it
would not be reasonable to import any limitation by comparing or
contrasting that entry with any other in the same list. It has to be
interpreted as the Constitution must be interpreted as an organic
document in the light of the experience gathered. Earlier there was law
made by the Central Government with respect to control of molasses,
however the same has been rescinded the Molasses Control Order 1961
vide notification dated 10.06.1993. Thus it is clear that so far as the
control of Molasses if concerned the aforesaid filed has not been
occupied by the Central Government/Parliament as at present no law
with respect to control of Molasses is available. Thus the petitioner
cannot contend and plead that the State Government/Legislature has
encroached upon the field occupied by the Central Legislation/Law. It
appears that the petitioner does not want to be regulated with respect to
use of Molasses and he also does not want to provide any
details/account with respect to use of molasses, which is not permissible
in any manner Under the provisions of Molasses Control Order, 1961 the
Excise Commissioner was declared as Molasses Controlling Authority.
26
In order to control/stop misuse of Molasses the Rules of 2022 has been
made, which has a prime duty and responsibility of the State
Government. It is own assertion of the petitioner that Molasses is the raw
material for preparation/ manufacturing of Alcohol. Accordingly the State
Legislature has the authority by invoking Entry 8 of List II of the Seventh
Schedule to make law with respect to production and manufacture of
intoxicating liquors. The Molasses being a raw material is required to be
controlled as content of alcohol is in the molasses. Accordingly the Rules
of 2022 has been made by invoking the provisions of clause (c) of
Section 8 of the Excise Act which clearly authorises the State
Government to make suitable provisions for effective control of Mahua
(Bassia Latifolia and Bassia Longifolia)or any other base which is or can
be utilized for the manufacturer of liquor. He would stress on the words
‘other bases’ which includes ‘Molasses’. As per the document filed by
the petitioner, it clearly appears that the Excise Commissioner of the
State of Chhattisgarh was declared as Molasses Controlling Authority.
The petitioners have not challenged any specific provision of the Rules
of 2022, but the entire Rules have been challenged on the ground that
the Legislature/Government of Chhattisgarh has no constitutional
competence to make law with respect to Molasses. The Legislature of
Chhattisgarh has constitutional authority under Entry 8 of List II of the
Seventh Schedule to make law with respect to production and
manufacture of intoxicating liquors. By invoking the aforesaid Entry, the
Legislature of Chhattisgarh has made the Excise Act in which it has
been clearly provided that the State Government may make suitable
provisions for effective control of Molasses which is or can be utilized for
the manufacturer of liquor. Thus the submission of the petitioners is ex-
facie wrong and liable to be rejected. These petitions are also liable to
27
be dismissed in absence of any specific challenge of the Rules of 2022.
A bare perusal of the Section 8 (c) it clarify that the State Government
has been authorized to make provision for control of the Molasses which
is base (raw material) for manufacturing alcohol. The petitioners
themselves have pleaded it therefore it is an admitted fact. Section 62
(1) authorises the State to make rules for the purpose of carrying out the
provision of the Excise Act. Section 8(c) of the Excise Act is clear and
unambiguous according to which the Government has been authorized
to make provision for control of the base (raw material) for
manufacturing alcohol. Under the powers conferred by the Excise Act,
the State Government made the Chhattisgarh Distillery Rules, 1995 (for
short, the Rules of 1995) way back in the year 1995. The Rules of 1995
provides the provisions of formation, enactment and functioning of
Distilleries within the State. As per the provisions, distillery licenses are
provided under the said rules. Molasses in one of the main source of
production of spirit as it contains high percentage of starch and sugar
content in it. As a result, Molasses have been separately defined vide
Rule 2(13) in the Chhattisgarh Distillery Rules, 1995 as the heavy dark
coloured residual syrup, drained away in the final stage of manufacture
of Gur or Sugar, containing in solution or suspension, Sugars which can
be fermented. In addition to this, in the Rules of 1995, Rule 5 specifies
the recovery of alcohol, which reads as under:
“5. Recovery of Alcohol:
(1). The distillers of Chhattisgarh shall be responsible for
maintaining such minimum fermentation and distillation
efficiency and such minimum recovery of alcohol from
Molasses or any other base used for production of alcohol
as is prescribed under these rules.
(2). The minimum fermentation and distillation efficiencies
28and recovery of alcohol from Molasses or any other base
shall be as under:
(a) Fermentation efficiency sugar present in Molasses.” 84%
of fermentable.”
17 Mentioning of Molasses in specific itself clears that Molasses is one of
the main source for the production of alcohol. Misuse of Molasses can
directly affect the revenue of the state, hence a strict control over
Molasses is necessary, as a result the State has formulated the Rules of
2022. In the Rules of 1995, the definition of Denatured Alcohol is
specifically provided, which says, “Denatured spirit” or “Denatured
Alcohol” means alcohol of any strength which has been rendered
effectively unfit for human consumption by admixture of such denaturant
as may be approved by the Excise Commissioner. Section 2 of the
Excise Act also provides the definition of Denatured Alcohol as rendered
unfit for human consumption in such manner as may be prescribed by
the Government. Hence from the definition of Denatured Spirit, it is clear
that denatured spirit is produced after undergoing a process as defined
by Excise Commissioner. It is the process by which such spirit is
converted into denatured spirit. That is to say that originally what all spirit
is produced after undergoing the distillation process, is fit for the
preparation of potable alcohol. In the initial condition, all the spirit
produced in the distillery has high percentage of alcohol content that
makes it unfit for human consumption. The produced spirit only after
undergoing the reduction process becomes fit for human consumption.
This is the very reason to control the production of spirit by the Excise
Department because a spirit which was to undergo the process for
conversion to denatured, might not be done so, in the light of illegal
activity and might be used in production of potable alcohol, then it would
cause a revenue loss to the State Government, directly and on the other
29
hand make way for illegal activity.
18 Mr. Thakur would further submit that the Hon’ble High Court of Orissa
has clearly held that the State Legislature has constitutional competence
to make law regarding molasses, but the Hon’ble High Court of Orissa
has further held that the State Government cannot levy excise duty.
Further the aforesaid judgment has been assailed by the State of Orissa
before the Hon’ble Supreme Court where an interim stay has been
granted by the Hon’ble Supreme Court. Thus the fact remains that the
State of Odisha is fully authorized to levy excise duty on Molasses by
way of interim order as the judgment passed by the Hon’ble High Court
of Orissa has been stayed. It is clear from the aforesaid judgment that
inclusion of Molasses in the Excise Act would not be in violation of Entry
8 and 51 of the State List. So far as levy of Excise duty is concerned the
same is pending consideration before the Hon’ble Supreme Court. The
petitioners have failed to see that the Hon’ble Supreme Court has
passed an interim order which is in favour of the State of Odisha and
similar provision has been challenged by the petitioners in the instant
writ petition by similar legal grounds. Thus the contention of the
petitioners is liable to be rejected. The petitioners have not made any
specific challenge to the provisions of Rules of 2022, thus these writ
petitions are not maintainable in absence of any specific pleadings.
There are several manufactures and traders have applied for grant of
license and the same have been provided to them in accordance with
the provisions of Rules of 2022.
19 Mr. Ramakant Mishra, learned Deputy Solicitor General appearing for
the Respondent/Union of India would submit that the contesting party in
this batch of writ petitions would be the State Government as the Rules
30
under challenge is the Rules of 2022 framed by the State of
Chhattisgarh. However, he would submit that under the Constitutional
and statutory framework, GST is a tax on supply of goods or services or
both and the levy is no based on the intoxicating nature of a product.
Currently, GST at the rate of 5% is levied on supply of Molasses vide
Notification bearing No. 17/2023-Central Tax (Rate) dated 19-10-2023.
The GST Act provides for various compliance and procedures (such as
invoicing / returns and movement related compliance) for administration
of tax. Such tax compliance procedures are distinct from and do not
amount to a substantive control / distribution /transport regime for the
commodity. The GST rates and procedures related to GST are
prescribed on the recommendations of GST Council which consists of
members of the Union and the State Governments. It is stated that as
per Section 9 of the CGST Act, 2017 which states as under:
“Section 9. Levy and collection. –
(1) Subject to the provisions of sub-section (2), there shall be
levied a tax called the central goods and services tax on all intra-
State supplies of goods or services or both, except on the supply
of alcoholic liquor for human consumption and un-denatured extra
neutral alcohol or rectified spirit used for manufacture of alcoholic
liquor, for human consumption), on the value determined under
section 15 and at such rates, not exceeding twenty per cent., us
may be notified by the Government on the recommendations of the
Council and collected in such manner as may be prescribed and
shall be paid by the taxable person.
(2) The central tax on the supply of petroleum crude, high speed
diesel, motor spirit (commonly known as petrol), natural gas and
aviation turbine fuel shall be levied with effect from such date as
may be notified by the Government on the recommendations of the
Council.”
From the above, it is crystal clear that only the goods mentioned in
31
section 9(1) of the above provision are out of purview of GST.
20 Mr. Mishra would further submit that no relief has been claimed as
against the Union of India and as such, the State would be in a better
position to rebut the submissions made by petitioners.
21 Mr. Paranjpe, relying on the rejoinder filed, would submit that these
petitions deserve to be allowed and the Rules of 2022 be declared ultra
vires the Constitution of India.
22 We have heard learned counsel appearing for the parties, perused the
pleadings and documents appended with the petitions.
23 It is common knowledge that Molasses is a by-product of sugar
industries. It is used as sweetener in food products like baked goods,
cookies, cakes, and breads, ingredient in traditional sweets, syrups, and
confectionery, flavoring agent in sauces, marinades and barbecue
sauces, animal feed as an energy source and to improve palatability,
raw material in alcohol production (rum, ethanol, industrial alcohol),
fermentation industries (yeast, citric acid, antibiotics), soil amendment in
agriculture to promote beneficial microbial activity, organic fertilizer
component due to mineral content (iron, calcium, potassium),
composting to accelerate decomposition, pharmaceuticals and home
remedies (iron supplement source), tobacco processing for flavor and
moisture retention, industrial use in adhesives and binding agents.
24 The term ‘Molasses’ is defined in Rule 2(c) of the Rules of 2022, which
means the thick, dark coloured syrup obtained at the end of manufacture
of sugar and jaggery which in the liquid form contains sugar, which can
be fermented. A note has also been added that the general Molasses
used in the cattle feed are Bago-Molasses.
32
25 The contention of the petitioners, in nutshell, is that when the petitioners
are using Molasses for manufacture of poultry feeds, cattle feeds,
gudakhu etc. and are not in the business of manufacture of
spirit/alcohol/liquor, then the State cannot compel them to obtain licence
and to pay the exicse duty and imposition of such condition in the garb of
Rules of 2022 is illegal and unjust. The Molasses itself is not an
intoxicant. Unless it is fermented and converted into spiritalcohol, the
raw Molasses cannot be said to be an intoxicant. It is an admitted
position that none of the petitioners in this batch of writ petitions are
involved in manufacture of spirit/liquor/alcohol out of Molasses. It would
be beneficial to take note of the relevant provisions of the Excise Act,
Rules of 2022 and various Articles of the Constitution and the entries of
List-I (Union List) and List-II (State List) of the Constitution.
26 Article 246 and 246A of the Constitution reads as under:
“246. Subject-matter of laws made by Parliament and
by the Legislatures of States.-
(1) Notwithstanding anything in clauses (2) and (3),
Parliament has exclusive power to make laws with respect
to any of the matters enumerated in List I in the Seventh
Schedule (in this Constitution referred to as the “Union
List”).
(2) Notwithstanding anything in clause (3), Parliament, and,
subject to clause (1), the Legislature of any State also, have
power to make laws with respect to any of the matters
enumerated in List III in the Seventh Schedule (in this
Constitution referred to as the “Concurrent List”).
(3) Subject to clauses (1) and (2), the Legislature of any
State has exclusive power to make laws for such State or
any part thereof with respect to any of the matters
enumerated in List II in the Seventh Schedule (in this
Constitution referred to as the “State List”).
33
(4) Parliament has power to make laws with respect to any
matter for any part of the territory of India not included in a
State notwithstanding that such matter is a matter
enumerated in the State List.
246A. Special provision with respect to goods and
services tax.-
(1) Notwithstanding anything contained in articles 246 and
254, Parliament, and, subject to clause (2), the Legislature
of every State, have power to make laws with respect to
goods and services tax imposed by the Union or by such
State.
(2) Parliament has exclusive power to make laws with
respect to goods and services tax where the supply of
goods, or of services, or both takes place in the course of
inter-State trade or commerce.
Explanation. The provisions of this article, shall, in respect
of goods and services tax referred to in clause (5) of article
279A, take effect from the date recommended by the Goods
and Services Tax Council.”
27 Entry 52 and 84 of List I (Union List) of the VII Schedule of the
Constitution 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.
84. Duties of excise on the following goods manufactured or
produced in India, namely:-
(a) petroleum crude;
(b) high speed diesel;
(c) motor spirit (commonly known as petrol);
(d) natural gas;
(e) aviation turbine fuel; and
(f) tobacco and tobacco products.”
28 Entry 8 and Entry 51 of List II (State List) of the VII Schedule of the
34
Constitution of India, reads as under:
“8. Intoxicating liquors, that is to say, the production,
manufacture, possession, transport, purchase and sale of
intoxicating liquors.
51. Duties of excise on the following goods manufactured or
produced in the State and countervailing duties at the same
or lower rates on similar goods manufactured or produced
elsewhere in India:-
(a) alcoholic liquors for human consumption;
(b) opium, Indian hemp and other narcotic drugs and
narcotics, but not including medicinal and toilet preparations
containing alcohol or any substance included in
subparagraph (b) of this entry.”
29 The opening paragraph of the Rules of 2022 is also relevant for deciding
the lis, hence is quoted hereinbelow for ready reference:
“In exercise of the powers conferred by clause (c) of Section
8, sub-section (1) and clause (f), (g), (h) of sub-section (2) of
Section 62 read with proviso to sub-section (3) of Section 62
of the Chhattisgarh Excise Act, 1915 (No. 2 of 1915), the
State Government, hereby, makes the following rules, for the
purposes of control and regulation of supply, possession,
sale, consumption, transport, import, export, license and
permits for the use of molasses for distillation of spirit in
distillery or for purpose to use as scientific, industrial,
agricultural, educational, medicine cattle-feed etc. of
Molasses, namely:
….”
30 A bare perusal of the above paragraph makes it amply clear that the
same is in two parts, firstly which deals with use of Molasses for
distillation of spirit in distillery and secondly, for purpose to use as
scientific, industrial, agricultural, educational, medicine, cattle-feed etc.
35
The Molasses used for distillation of spirit in distillery may be covered
under the Excise Act but the other uses such as scientific, industrial,
agricultural, educational, medicine and cattle feed etc. are not the field
which is governed by the Excise Act.
31 The Rules of 2022 have been framed by the State Government in
exercise of powers conferred by clause (c) of Section 8, sub-section (1)
and clause (f), (g), (h) of sub-section (2) of Section 62 read with proviso
to sub-section (3) of Section 62 of the of the Excise Act. The said
provisions are quoted hereinbelow:
“8. Power to prohibit import, export or transport. The
State Government may, by notification, –
(a) prohibit throughout the State or in any specified
area thereof, the import or export of any intoxicant;
(b) prohibit the transport of any intoxicant.
(c) make suitable provisions for the effective control of
Mahua (Bassia Latifolia and Bassia Longifolia) or any
other base which is or which can be utilised for the
manufacture of liquor.
62. Power to Make Rules. – (1) The State Government may
make rules for the purpose of carrying out the provisions of
this Act.
(2) In particular, and without prejudice to the generality of the
foregoing provision, the State Government may make rules –
(a) Prescribing the powers and duties of Exicse Officers;
(b) Regulating the delegation of any powers or duties by the
Chief Revenue authority, the Excise Commissioner or
Collectors under Section 7, Clause (g);
(c) Declaring in what cases or classes of cases and to what
authorities shall lie from orders, whether original or appellate,
passed under this Act or under any rule made thereunder, or
by what authorities such orders may be revised, and
36
prescribing the time and manner of presenting, and the
procedure for dealing with appeals and revisions;
(d) Regulating the import, export, transport, manufacture,
collection, possession, supply or storage of any intoxicant, or
the cultivation of the hemp plant and may, by such rules,
among other matters –
(i) Regulate the tapping of tari-producing trees, the
drawing of tari from such trees, the marking of the same
and the maintenance of such marks,
(ii) Declare the process by which spirit shall be
denatured and the denaturisation of spirit ascertained,
and
(iii) Cause spirit to be denatured through the agency or
under the supervision of its officers;
(d-1) regulating the import, export, transport, collection,
possession, supply, storage, or sale of Mahua flowers
prescribing licenses and permit therefor, throughout the State
or in any specified area or for any specified period;
(e) Regulating the periods and localities for which, and the
persons or classes of persons to whom, licenses for the
wholesale or retail vend of any intoxicant may be granted,
and regulating the number of such licenses which may be
granted in any local area;
(f) Prescribing the procedure to be followed and the matters
to be ascertained before any license for such vend is granted
for any locality;
(g) Regulating the amount, time, place and manner, of
payment of any duty or fee or tax or penalty;
(h) Prescribing the authority by, the form in which, and terms
and conditions on and subject to which any license, permit or
pass shall be granted, any by such rules, among other
matters,
(i) fix the period for which any license, permit or pass
shall continue in force,
37
(ii) prescribe the scale of fees or the manner of fixing the
fees payable in respect of any such license, permit or
pass,
(iii) prescribe the amount of security to be deposited by
holders of any license, permit or pass for the
performance of the conditions of the same,
(iv) prescribe the accounts to be maintained and the
returns to be submitted by license-holders, and
(v) prohibit and regulate the partnership in, or the
transfer of, licensees;
(i) prescribing the measures for ascertaining local public
opinion and prescribing the powers of District Planning
Committee constituted under sub-section (1) of Section 3 of
the Chhattisgarh Zila Yojana Samiti Adhiniyam, 1995 (No. 19
of 1995) in respect of advising about opening, closing or
shifting of any retail intoxicant shop;
(j) providing for the destruction or other disposal of any
intoxicant deemed to be unfit for use;
(k) regulating the disposal of confiscated articles;
(l) regulating the grant of expenses to witnesses and of
consumption to persons charged with offences under this Act
and subsequently released, discharged or acquitted; and
(m) regulating the power of Excise Officers to summon
witnesses from a distance;
(n) regulating the payment of rewards to officers, informers
and other persons out of the proceeds of fines and
confiscations under this Act.
(3) The power conferred by this section of making rules is
subject to the condition that the rules made under sub-
section (2)(a), (b), (c), (e), (f), (i), (l) and (m) shall be made
after previous publication:
Provided the any such rules may be made without previous
publication if the State Government considers that they
should be brought into force at once.”
38
32 It would be equally important to take note of various provisions of the
Excise Act, which reads as under:
“2. Definitions. -In this Act, unless there is anything repugnant
in the subject or context, –
xxx xxx xxx
(6) “excisable article” means-
(a) any alcoholic liquor for human consumption; or
(b) any intoxicating drug; or
(c) opium as defined in clause (xv) and poppy straw as
defined in clause (xviii) of Section 2 of the Narcotic
Drugs and Psychotropic Substances Act, 1985 (No. 61
of 1985);
(6-a) “excise duty” and “countervailing duty” means any such
excise duty or countervailing duty, as the case may be, as is
mentioned in entry 51 of list II in the Seventh Schedule to the
Constitution;
xxx xxx xxx
(8) “excise revenue’ means revenue derived or derivable from
any duty, fee, tax, penalty, payment (other than a fine
imposed by a Court of Law) or confiscation imposed or
ordered or agreed to under the provisions of the Act, or of
any other law for the time being in force relating to liquor or
intoxicating drugs;
xxx xxx xxx
(11-a) “intoxicant” means any liquor or intoxicating drug;
(12) “intoxicating drug” means-
(i) the leaves, small stalks and flowering or fruiting
tops of the Indian hemp plant (“Cannabis sative”),
including all forms known as “bhang”, “sindhi” or
“ganja”;
(ii) Omitted.
(iii) any mixture, with or without neutral materials, of
39
any of the above forms of intoxicating drug, or any
drink prepared therefrom; and
(iv) any other intoxicating or narcotic substance which
the State. Government may, by notification, declare to
be an intoxicating drug not being narcotic drug as
defined in the Narcotic Drugs and Psychotropic
Substances Act, 1985 (No. 61 of 1985).
(13) “liquor” means intoxicating liquor, and includes spirits of
wine, spirit, wine, tari, beer, all liquid consisting of or
containing alcohol, and any substance which the State
Government may, by notification, declare to be liquor for the
purposes of this Act;
(14) “manufacture” includes every process, whether natural
or artificial, by which any intoxicant is produced or prepared
and also redistillation and every process for the rectification,
flavouring, blending or colouring of liquor;”
33 From bare perusal of the above provisions, it is abundantly clear that
Molasses is not an excisable article under Section 2(6) of the Excise Act.
Further, it is neither an intoxicant as defined under Section 2(11-a) nor
an intoxicating drug as defined under Section 2(12) of the Excise Act.
34 The preamble of the Excise Act states that whereas it is expedient to
consolidate and amend the law in Chhattisgarh relating to the import,
export, transport, manufacture, sale and possession of intoxicating liquor
and of intoxicating drugs, and whereas the previous sanction of the
Governor General required under Sections of the Indian Councils Act,
1892 (55 and 56, Vict., c. 14) has been obtained to the passing of this
Act. The Rule/legislation cannot be contrary to its preamble. Here, the
word ‘intoxicating liquor’ and ‘intoxicating drug’ are important, which
have been defined under the Excise Act. Molasses is neither a part of
‘intoxicating liquor’ nor ‘intoxicating drugs’. According to Mr. Paranjpe,
the power of distillation of Molasses into spirit/alcohol lies only with the
40State Government and the State Government has the monopoly with
regard to manufacture and sale of liquor. Molasses is further not an
excisable article which is evident from bare perusal of Section 2(6) of
the Excise Act. The petitioners here are not at all engaged in the
business of distilleries / manufacture / sale or otherwise of spirit / liquor /
intoxicating drug /alcoholic liquor for human consumption but still the
Molasses has been brought within the purview of excisable article and
the petitioners are compelled to obtain licence and to pay licence fee
and the duty on molasses.
35 Further, Section 8 of the Excise Act provides for the power to prohibit
import, export or transport. Clause (c) of Section 8 provides the State
Government the power to make suitable provisions for the effective
control of Mahua (Bassia Latifolia and Bassia Longifolia) or any other
base which is or which can be utilized for the manufacture of liquor. The
words ‘any other base’ cannot be interpreted to include Molasses as the
Molasses itself cannot be the base for manufacture of spirit/alcohol/
liquor as unless the Molassess undergoes fermentation process, it is of
no use for manufacture of liquor/alcohol.
36 Section 62 of the Excise Act is in respect of the power of the State
Government to make rules for the purpose of carrying out the provisions
of this Act. It means that the State Government cannot go beyond what
has been provided in the preamble which speaks about the object of this
Act. The Rules of 2022 have been framed in exercise of clause (f), (g)
and (h) of sub-section (2) of Section 62 of the Excise Act. The State
Government cannot frame rules in respect of any article which is not the
part of the Excise Act as the rules so framed is for carrying out the
provisions of the Excise Act only. Excisable article has been defined
41under Section 2(6) of the Excise Act, which states any alcoholic liquor
for human consumption, or any intoxicating drug or opium as defined
under clause (xv) and poppy straw as defined in clause (xviii) of Section
2 of the Narcotic Drugs and Psychotropic Substances Act, 1985. Till
date, in the State of Chhattisgarh, the Molasses is not the article which is
dealt with in under the Excise Act and it further does not fall within the
category of excisable article and as such, the Rules of 2022 compelling
the petitioners to obtain licence and further to pay excise duty, appears
to be unjust and unreasonable.
37 A restriction has been imposed vide Rule 3 of the Rules of 2022 which
states that the use of Molasses could not be done except for the
distillation of the spirit in the distilleries established under the Excise Act
and for any scientific, industrial, medicinal, agricultural, cattle feed,
educational or such other objective which could be decided time to time
by the Excise Commissioner. The said Rule would mean that if a farmer
uses the Molasses for the cattle feed, for such use, the person
concerned would have to obtain permission from the Excise
Commissioner. Molasses are not specifically manufactured but are the
by-product in the process of manufacture of sugar or jaggery. Rule 11 of
the Rules of 2022 provides for imposition of duty on Molasses within the
State. It provides that Molasses duty at the rate of Rs. 200/- per ton shall
be applicable on the Molasses within the State upon the license
approved under these Rules. The duty on Molasses shall be payable by
the purchaser and such duty shall be deposited prior to the receipt of the
permit for transportation of the molasses.
38 Rule 19 of the Rules of 2022 provides for possession and transport of
Molasses for domestic purpose. It states that any person can possess
42and transport Molasses up to a specific quantity for domestic use
without any license and permit, which is 20 Kg. At a point of time and the
purchase of Molasses for the domestic use shall be done only from the
license M-3 holder. The M-3 licensee is further obliged to maintain the
details of the purchase of Molasses for domestic use, in a register.
39 ‘Intoxicating liquor’ and ‘alcoholic liquor for human consumption’ are two
different things which finds place in Entry 8 and 51 of List II (State List)
of the VII Schedule of the Constitution. Entry 8 does not provide for
imposition of duty but is in relation to production, manufacture,
possession, transport, purchase and sale, whereas Entry 51(a) is in
regard to imposition of excise duty on alcoholic liquor for human
consumption and the term ‘Molasses’ is not found either within Entry 8 or
Entry 51.
40 A Seven Judge Bench of the Hon’ble Supreme Court in Synthetics and
Chemicals Limited (supra), the Hon’ble Supreme Court observed as
under:
“67. It is well to remember that the meaning of the expressions
used in the Constitution must be found from the language used.
We should interpret the words of the Constitution on the same
principle of interpretation as one applies to an ordinary law but
these very principles of interpretation compel one to take into
account the nature and scope of the Act which requires
interpretation. A Constitution is the mechanism under which laws
are to be made and not merely an Act which declares what the
law is to be. It is also well settled that a Constitution must not be
construed in any narrow or pedantic sense and that construction
which is most beneficial to the widest possible amplitude of its
power, must be adopted. An exclusionary clause in any of the
entries should be strictly and, therefore, narrowly construed. No
entry should, however, be so read as not (sic) to rob it of entire
43content. A broad and liberal spirit should, therefore, inspire those
whose duty it is to interpret the Constitution, and the courts are
not free to stretch or to pervert the language of an enactment in
the interest of any legal or constitutional theory. Constitutional
adjudication is not strengthened by such an attempt but it must
seek to declare the law but it must not try to give meaning on the
theory of what the law should be, but it must so look upon a
Constitution that it is a living and organic thing and must adapt
itself to the changing situations and pattern in which it has to be
interpreted. It has also to be borne in mind that where division of
powers and jurisdiction in a federal Constitution is the scheme, it
is desirable to read the Constitution in harmonious way. It is also
necessary that in deciding whether any particular enactment is
within the purview of one legislature or the other, it is the pith and
substance of the legislation in question that has to be looked into.
It is well settled that the various entries in the three lists of the
Indian Constitution are not powers but fields of legislation. The
power to legislate is given by Article 246 and other Articles of the
Constitution. The three lists of the Seventh Schedule to the
Constitution are legislative heads or fields of legislation. These
demarcate the area over which the appropriate legislatures can
operate. It is well settled that widest amplitude should be given to
the language of the entries in three Lists but some of these entries
in different lists or in the same list may override and sometimes
may appear to be in direct conflict with each other, then and then
only comes the duty of the court to find the true intent and
purpose and to examine the particular legislation in question.
Each general word should be held to extend to all ancillary or
subsidiary matters which can fairly and reasonably be
comprehended in it. In interpreting an entry it would not be
reasonable to import any limitation by comparing or contrasting
that entry with any other in the same list. It has to be interpreted
as the Constitution must be interpreted as an organic document in
the light of the experience gathered. In the constitutional scheme
of division of powers under the legislative lists, there are separate
entries pertaining to taxation and other laws. The aforesaid
principles are fairly well settled by various decisions of this Court
44and other courts. Some of these decisions have been referred to
in the decision of this Court in Civil Appeal No. 62 (N)/70 -India
Cement Ltd. v. State of Tamil Nadu [(1990) 1 SCC 12].
xxx xxx xxx
83. Having regard to the principles of interpretation and the
constitutional provisions, in the light of the language used and
having considered the impost and the composition of industrial
alcohol, and the legislative practice of this country, we are of the
opinion that the impost in question cannot be justified as State
imposts as these have been done. We have examined the
different provisions. These are not merely regulatory. These are
much more than that. These seek to levy imposition in their pith
and substance not as incidental or as merely disincentives but as
attempts to raise revenue for States’ purposes. There is no taxing
provision permitting these in the lists in the field of industrial
alcohol for the State to legislate.
xxx xxx xxx
85. After the 1956 amendment to the IDR Act bringing alcohol
industries (under fermentation industries) as Item 26 of the First
Schedule to IDR Act the control of this industry has vested
exclusively in the Union. Thereafter, licences to manufacture both
potable and non-potable alcohol is vested in the Central
Government. Distilleries are manufacturing alcohol under the
central licences under IDR Act. No privilege for manufacture even
if one existed, has been transferred to the distilleries by the State.
The State cannot itself manufacture industrial alcohol without the
permission of the Central Government. The States cannot claim to
pass a right which they do not possess. Nor can the States claim
exclusive right to produce and manufacture industrial alcohol
which are manufactured under the grant of licence from the
Central Government. Industrial alcohol cannot upon coming into
existence under such grant be amenable to States’ claim of
exclusive possession of privilege. The State can neither rely on
Entry 8 of List II nor Entry 33 of List III as a basis for such a claim.
The State cannot claim that under Entry 33 of List III, it can
regulate industrial alcohol as a product of the scheduled industry,
45because the Union, under Section 18-G of the IDR Act, has
evinced clear intention to occupy the whole field. Even otherwise
sections like Sections 24-A and 24-B of the U.P. Act do not
constitute any regulation in respect of the industrial alcohol as
product of the scheduled industry. On the contrary, these purport
to deal with the so-called transfer of privilege regarding
manufacturing and sale. This power, admittedly, has been
exercised by the State purporting to act under Entry 8 of List II
and not under Entry 33 of List III.
86. The position with regard to the control of alcohol industry has
undergone material and significant change after the amendment
of 1956 to the IDR Act. After the amendment, the State is left with
only the following powers to legislate in respect of alcohol:
(a) It may pass any legislation in the nature of prohibition of
potable liquor referable to Entry 6 of List II and regulating
powers.
(b) It may lay down regulations to ensure that non-potable
alcohol is not diverted and misused as a substitute for
potable alcohol.
(c) The State may charge excise duty on potable alcohol
and sales tax under Entry 52 of List II. However, sales tax
cannot be charged on industrial alcohol in the present
case, because under the Ethyl Alcohol (Price Control)
Orders, sales tax cannot be charged by the State on
industrial alcohol.
(d) However, in case State is rendering any service, as
distinct from its claim of so-called grant of privilege, it may
charge fees based on quid pro quo. See in this connection,
the observations of Indian Mica case [(1971) 2 SCC 236:
1971 Supp SCR 319 : AIR 1971 SC 1182].
xxx xxx xxx
93. In these matters the main question that arise for consideration
is about the validity of the levies made by the respondent States
on alcohol which is utilised by the industries for manufacturing the
products where alcohol is the raw material. Some of these
industries themselves manufacture alcohol as they have their own
46distilleries and from their distilleries through pipelines it goes to
their industrial units where this is used as a raw material whereas
some are industries which purchase alcohol or denatured spirit on
being allotted by the Government. It is alleged that in addition to
excise duty levied by the Central Government, excise duty and
various levies in various names like vend fee, transport fee and
others numbering about eight levies are imposed by the State
Government. The main contention on behalf of the industries is
that the State legislature has no authority in view of Entry 84 of
List I read with Entry 51 of List II to impose such levies, this being
alcohol which does not fall within the ambit of “Alcoholic liquors
for human consumption”. It is only the Centre which has the
authority under Entry 84 of List I to tax. Entry 51 of List II
authorises the State legislature to impose a tax on “Alcoholic
liquors for human consumption”.
94. It is further contended that Entry 8 in List II which talks of
intoxicating liquors only authorises the State legislature to enact
laws to regulate but does not empower the State legislature to
impose any levy and the various levies which have been imposed
by the State legislature on industrial alcohol and even methylated
spirit could not be brought within the ambit of regulatory duties for
purposes of regulation only and therefore could not be justified
under Entry 8 of List II.
95. It was also 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 respective
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
47manufactured 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 sub-
paragraph (b) of this entry.”
96. Entry 51 in List II reads:
“51. Duties of excise on the following goods manufactured or
produced in the State and countervailing duties at the same
or lower rates on similar goods manufactured or produced
elsewhere in India:
(a) alcoholic liquors for human consumption;
(b) opium, Indian hemp and other narcotic drugs and
narcotics;
but not including medicinal and toilet preparations containing
alcohol or any substance included in sub-paragraph (b) of
this entry.”
97. A comparison of the language of these two entries clearly
demonstrates that the powers of taxation on alcoholic liquors have
been based on the way in which they are used as admittedly
alcoholic liquor is a very wide term and may include variety of
types of alcoholic liquors but our Constitution-makers distributed
them into two heads:
(a) for human consumption
(b) other than for human consumption
Alcoholic liquors which are for human consumption were put in
Entry 51 List II authorising the State legislature to levy tax on them
whereas alcoholic liquors other than for human consumption have
been left to the central legislature under Entry 84 for levy of duty
of excise. This scheme of these two entries in Lists I and II is
clear enough to indicate the line of demarcation for purposes of
taxation of alcoholic liquors. What has been excluded in Entry 84
has specifically been put within the authority of the State for
48purposes of taxation.
98. Entry 8 in List II reads:
“8. Intoxicating liquors, that is to say, the production,
manufacture, possession, transport, purchase and sale of
intoxicating liquors.”
This entry talks of intoxicating liquors and further on refers to
production, manufacture, possession, transport, purchase and
sale of these liquors. It appears that the State has levied some
kind of duties in various names at each of these stages used in
this entry, that is, production, manufacture, possession, transport,
purchase and sale. But from the scheme of entries in the three
lists it is clear that taxing entries have been specifically enacted
conferring powers of taxation whereas other entries pertain to the
authority of the legislature to enact laws for purposes of
regulation. If we compare Entry 8 in List II with Entry 51 it is clear
that when Entry 51 authorises the State legislature to levy tax and
duties on alcoholic liquors 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 11 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
49
Centre.
xxx xxx xxx
110. In our opinion, therefore so far as the present case is
concerned the State in exercise of powers under Entry 8 of List II
and by appropriate law regulate and that regulation could be to
prevent the conversion of alcoholic liquors for industrial use to
one for human consumption and for purpose of regulation, the
regulatory fees only could be justified. In fact, the regulation
should be the main purpose, the fee or earning out of it has to be
incidental and that is why the learned counsel appearing for the
State attempted to use this terminology by saying that the
purpose is regulation, the earnings are incidental but frankly
conceded that in fact the earnings are substantial. In fact in some
of the excise laws in the States they have even used terminology
relying on the doctrine of privilege and parting with privilege but in
my opinion it is not necessary for us to go into these questions in
greater detail as we are not here concerned with the trade in
alcoholic liquors meant for human consumption and therefore in
view of clear demarcation of authority under various items in the
three lists, Entry 8 List II could not be invoked to justify the levies
which have been imposed by the State in respect of alcoholic
liquors which are not meant for human consumption.”
41 In Kerala Samsthana Chethu Thozhilali Union (supra), the Apex
Court observed that a rule is not only required to be made in conformity
with the provisions of the Act whereunder it is made, but the same must
be in conformity with the provisions of any other Act, as a subordinate
legislation cannot be violative of any plenary legislation made by
Parliament or the State Legislature. The relevant paragraphs reads
under:
“14. Drawing our attention to sub-rule (38) of Rule 7 , it was
urged that the licensees are bound by all the Rules which have
either been passed under the Act or which may thereafter be
made there under or under any law relating to Abkari Revenue
50which may be made in future and, thus, the power conferred upon
the State must be held to be of wide amplitude.
15. The Act was enacted to consolidate and amend the law
relating to the import, export, transport, manufacture, sale and
possession of intoxicating liquor and/ or intoxicating drugs in the
State of Kerala. While framing the Rules for the purposes of the
Act, the legislative policy cannot be abridged. The Rules must be
framed to carry out the purposes of the Act.
16. By reason of Section 8 of the Act, trade in arrack was
prohibited as far back as in the year 1996. By reason of the
impugned Rules, the State has not laid down the terms and
conditions for employment of a worker. The Act does not contain
any provision therefor. Under the common law as also under the
provisions of the Specific Relief Act, an employer is entitled to
employ any person he likes. It is well-settled that no person can
be thrust upon an unwilling employer except in accordance with
the provisions of a special statute operating in the field. Such a
provision cannot be made by the State in exercise of its power
under delegated legislation unless the same is expressly
conferred by the statute.
17. A rule is not only required to be made in conformity with the
provisions of the Act whereunder it is made, but the same must
be in conformity with the provisions of any other Act, as a
subordinate legislation cannot be violative of any plenary
legislation made by the Parliament or the State Legislature.
xxx xxx xxx
25. While imposing terms and conditions in terms of Section
18A of the Act, the State cannot take recourse to something
which is not within its jurisdiction or what is otherwise prohibited
in law. Sub-sections (c) and (d) of Section 24 of the Act provide
that every licence or permit granted under the Act would be
subject to such restrictions and on such conditions and shall be in
such form and contain such particulars as the Government may
direct either generally or in any particular instance in this behalf.
The said provisions are also subject to the inherent limitations of
the statute. Such an inherent limitation is that rules framed under
51the Act must be lawful and may not be contrary to the legislative
policy. The rule making power is contained in Section 29 of the
Act. At the relevant time, sub-section (1) of Section 29 of the Act
provided that the government may make rules for the purpose of
carrying out the provisions of the Act which has been amended by
Act No. 12 of 2003 with effect from 1.4.2003 empowering the
State to make rules either prospectively or retrospectively for the
purposes of the Act.
26. Its power, therefore, was to make rules only for the
purpose of carrying out the purposes of the Act and not de hors
the same. In other words, rules cannot be framed in matters that
are not contemplated under the Act.
xxx xxx xxx
28. The Rules in terms of sub-section (1) of Section 29 of the
Act, thus, could be framed only for the purpose of carrying out the
provisions of the Act. Both the power to frame rules and the power
to impose terms and conditions are, therefore, subject to the
provisions of the Act. They must conform to the legislative policy.
They must not be contrary to the other provisions of the Act. They
must not be framed in contravention of the constitutional or
statutory scheme.
29. In Ashok Lanka and Another v. Rishi Dixit and Others
[(2005) 5 SCC 598], it was held:
“We are not oblivious of the fact that framing of rules is not an
executive act but a legislative act; but there cannot be any
doubt whatsoever that such subordinate legislation must be
framed strictly in consonance with the legislative intent as
reflected in the rule-making power contained in Section 62 of
the Act.”
30. In Bombay Dyeing & Mfg. Co. Ltd. v. Bombay
Environmental Action Group & Ors. [2006 (3) SCALE 1], this
Court has stated the law in the following terms:
“A policy decision, as is well known, should not be lightly
interfered with but it is difficult to accept the submissions
made on behalf of the learned counsel appearing on behalf
of the Appellants that the courts cannot exercise their power
52of judicial review at all. By reason of any legislation whether
enacted by the legislature or by way of subordinate
legislation, the State gives effect to its legislative policy. Such
legislation, however, must not be ultra vires the Constitution.
A subordinate legislation apart from being intra vires the
Constitution, should not also be ultra vires the parent Act
under which it has been made. A subordinate legislation, it is
trite, must be reasonable and in consonance with the
legislative policy as also give effect to the purport and object
of the Act and in good faith.”
31. In Craies on Statute Law, 7th edition, it is stated at page 297:
“The initial difference between subordinate legislation (of the
kind dealt with in this chapter) and statute law lies in the fact
that a subordinate law-making body is bound by the terms of
its delegated or derived authority, and that courts of law, as a
general rule, will not give effect to the rules, etc., thus made,
unless satisfied that all the conditions precedent to the
validity of the rules have been fulfilled. The validity of statutes
cannot be canvassed by the courts, the validity of delegated
legislation as a general rule can be. The courts therefore (1)
will require due proof that the rules have been made and
promulgated in accordance with the statutory authority,
unless the statute directs them to be judicially noticed; (2) in
the absence of express statutory provision to the contrary,
may inquire whether the rule-making power has been
exercised in accordance with the provisions of the statute by
which it is created, either with respect to the procedure
adopted, the form or substance of the regulation, or the
sanction, if any, attached to the regulation : and it follows that
the court may reject as invalid and ultra vires a regulation
which fails to comply with the statutory essentials.”
32. In G.P. Singh’s Principles of Statutory Interpretation, Tenth
Edition, it is stated at page 916:
“Grounds for judicial review. Delegated legislation is open to
the scrutiny of courts and may be declared invalid particularly
on two grounds: (a) Violation of the Constitution; and (b)
53Violation of the enabling Act. The second ground includes
within itself not only cases of violation of the substantive
provisions of the enabling Act, but also cases of violation of
the mandatory procedure prescribed. It may also be
challenged on the ground that it cannot be said to be in
conformity with the statute or Article 14 of the Constitution or
that it has been exercised in bad faith. The limitations which
apply to the exercise of administrative or quasi-judicial power
conferred by a statute except the requirement of natural
justice also apply to the exercise of power of delegated
legislation. Rules made under the Constitution do not qualify
as legislation in true sense and are treated as subordinate
legislation and can be challenged in judicial review like
delegated legislation. Compliance with the laying requirement
or even approval by a resolution of Parliament does not
confer any immunity to the delegated legislation but it may be
a circumstance to be taken into account along with other
factors to uphold its validity although as earlier seen a laying
clause may prevent the enabling Act being declared invalid
for excessive delegation.”
33. In Clariant International Ltd. & Anr. vs. Securities & Exchange
Board of India [(2004) 8 SCC 524], this Court observed:
“63. When any criterion is fixed by a statute or by a policy,
an attempt should be made by the authority making the
delegated legislation to follow the policy formulation broadly
and substantially and in conformity therewith. [See Secy.,
Ministry of Chemicals & Fertilizers, Govt. of India v. Cipla
Ltd. 23, SCC para 4.1.)”
34. We may notice that in State of Rajasthan & Ors. vs. Basant
Nahata [(2005) 12 SCC 77 : AIR 2005 SC 3401], it was pointed
out :
“66. The contention raised to the effect that this Court would
not interfere with the policy decision is again devoid of any
merit. A legislative policy must conform to the provisions of
the constitutional mandates. Even otherwise a policy
decision can be subjected to judicial review”
54
35. In B.K. Industries & Others v. Union of India & Others [(1993)
Supp. 3 SCC 621], this Court clearly held that a delegate cannot
act contrary to the basic feature of the Act stating:
“The words ‘so far as may be’ occurring in Section 3(4) of
the Cess Act cannot be stretched to that extent. Above all it
is extremely doubtful whether the power of exemption
conferred by Rule 8 can be carried to the extent of nullifying
the very Act itself. It would be difficult to agree that by view of
the power of exemption, the very levy created by Section
3(1) can be dispensed with. Doing so would amount to
nullifying the Cess Act itself. Nothing remains thereafter to be
done under the Cess Act. Even the language of Rule 8 does
not warrant such extensive power. Rule 8 contemplates
merely exempting of certain exciseable goods from the
whole or any part of the duty leviable on such goods. The
principle of the decision of this Court in Kesavananda
Bharati v. State of Kerala applies here perfectly. It was held
therein that the power of amendment conferred by Article
368 cannot extend to scrapping of the Constitution or to
altering the basic structure of the Constitution. Applying the
principle of the decision, it must be held that the power of
exemption cannot be utilised for, nor can it extend to, the
scrapping of the very Act itself. To repeat, the power of
exemption cannot be utilised to dispense with the very levy
created under Section 3 of the Cess Act or for that matter
under Section 3 of the Central Excise Act.”
42 In Naresh Chandra Agrawal (supra), the Apex Court held as under:
“37. From reference to the precedents discussed above and
taking an overall view of the instant matter, we proceed to distil
and summarise the following legal principles that may be relevant
in adjudicating cases where subordinate legislation are
challenged on the ground of being ‘ultra vires’ the parent Act:
37.1 The doctrine of ultra vires envisages that a Rule making
body must function within the purview of the Rule making
authority, conferred on it by the parent Act. As the body making
55Rules or Regulations has no inherent power of its own to make
rules, but derives such power only from the statute, it must
necessarily function within the purview of the statute. Delegated
legislation should not travel beyond the purview of the parent Act.
37.2 Ultra vires may arise in several ways; there may be simple
excess of power over what is conferred by the parent Act;
delegated legislation may be inconsistent with the provisions of
the parent Act; there may be non-compliance with the procedural
requirement as laid down in the parent Act. It is the function of the
courts to keep all authorities within the confines of the law by
supplying the doctrine of ultra vires.
37.3 If a rule is challenged as being ultra vires, on the ground
that it exceeds the power conferred by the parent Act, the Court
must, firstly,determine and consider the source of power which is
relatable to the rule. Secondly, it must determine the meaning of
the subordinate legislation itself and finally, it must decide
whether the subordinate legislation is consistent with and within
the scope of the power delegated.
37.4 Delegated rule-making power in statutes generally follows a
standardized pattern. A broad section grants authority with
phrases like ‘to carry out the provisions’ or ‘to carry out the
purposes.’ Another sub-section specifies areas for delegation,
often using language like ‘without prejudice to the generality of the
foregoing power.’ In determining if the impugned rule is intra
vires/ultra vires the scope of delegated power, Courts have
applied the ‘generality vs enumeration’ principle.
37.5 The “generality vs enumeration” principle lays down that,
where a statute confers particular powers without prejudice to the
generality of a general power already conferred, the particular
powers are only illustrative of the general power, and do not in
any way restrict the general power. In that sense, even if the
impugned rule does not fall within the enumerated heads, that by
itself will not determine if the rule is ultra vires/intra vires. It must
be further examined if the impugned rule can be upheld by
reference to the scope of the general power.
37.6 The delegated power to legislate by making rules ‘for
56
carrying out the purposes of the Act’ is a general delegation,
without laying down any guidelines as such. When such a power
is given, it may be permissible to find out the object of the
enactment and then see if the rules framed satisfy the Act of
having been so framed as to fall within the scope of such general
power confirmed.
37.7 However, it must be remembered that such power
delegated by an enactment does not enable the authority, by
rules/regulations, to extend the scope or general operation of the
enactment but is strictly ancillary. It will authorize the provision of
subsidiary means of carrying into effect what is enacted in the
statute itself and will cover what is incidental to the execution of
its specific provision. In that sense, the general power cannot be
so exercised as to bring into existence substantive rights or
obligations or disabilities not contemplated by the provisions of
the Act itself.
37.8 If the rule making power is not expressed in such a usual
general form but are specifically enumerated, then it shall have to
be seen if the rules made are protected by the limits prescribed
by the parent Act.”
43 A 9 Judge Bench of the Apex Court, in Lalta Prasad Vaish & Sons
(supra), observed as under:
“78. As a consequence, Parliament does not have the
legislative competence to enact a law taking control of the
industry of intoxicating liquor under Entry 52 of List I.iv. Scope of Entry 8: Meaning of ‘intoxicating liquor’
79. Entry 8 of List II is a general entry and not a taxing
entry. However, it is a special entry in the sense that it specifically
enumerates ‘intoxicating liquors’ as a legislative field to the
exclusion of all other general entries under which it may have
otherwise been subsumed. The Entry stipulates that intoxicating
liquors would fall within the legislative domain of States. The
arguments of the counsel on either side on the scope of Entry 8 of
List II rest on the interpretation of the expression “intoxicating
liquor’.
57
xxx xxx xxx
121. The Oxford English Dictionary provides multiple
meanings of the word ‘Liquor’. They include: (a) alcoholic drinks,
especially spirits; (b) water used in brewing; (c) liquid that has
been produced in or used for cooking; and (d) liquid from which a
substance has been crystallized or extracted. Liquor thus broadly
takes two meanings, of an alcoholic beverage or liquid. The word
‘intoxicate’ is defined to mean: (a) cause someone to lose control
of their senses; (b) poison; and (c) excite or exhilarate.
122. The dictionary meanings of the phrases ‘liquor’ and
‘intoxicate’ are variable. If liquor is interpreted to mean ‘liquid’
instead of an alcoholic beverage and intoxication a reference to
alcohol, the Entry would cover all liquids that contain alcohol.
However, if liquor is interpreted to mean alcoholic beverage, the
Entry would only cover alcoholic beverages for human
consumption which causes intoxication, that is, potable alcohol.
123. Entry 51 of List II refers to duties of excise on, inter
alia, “alcoholic liquors for human consumption’. Article 47 which is
placed in the Part on the Directive Principles of State Policy
stipulates that the State shall endeavour to bring prohibition of the
consumption of intoxicating drinks and drugs injurious to health,
except for medicinal purposes. The provision lists this as one of
the aspects of the duty of the State to improve public health. The
phrase liquor is also used in multiple places in the 6th Schedule
to the Constitution. The sixth Schedule stipulates provisions on
the administration of Tribal Areas in the States of Assam,
Meghalaya, Tripura and Mizoram. Paragraphs 12, 12AA and 12B
provide for the application of Acts of Parliament and of the
Legislature of the State to the autonomous districts and regions in
the States of Assam, Tripura and Mizoram. The provisions
stipulate that the enactments of the Legislature of the State
“prohibiting or restricting the consumption of any non-distilled
alcoholic liquor” would not apply to the autonomous Districts or
autonomous regions192. The expressions in the 6th Schedule will
not be of aid to interpret Entry 8 because it refers to a legislation
enacted by the State Legislature under Entry 8.
58
124. Thus, the Constitution uses three distinct expressions
relating to alcohol: “intoxicating liquor”, “alcoholic liquor for human
consumption” and “intoxicating drinks”. The evolution of the
entries in the legislative Lists indicate that it was a conscious
decision to substitute ‘alcoholic liquor’ with ‘intoxicating liquor’ in
the regulatory provision. It was also a conscious decision to use
different phrases in the taxing entry and the regulatory entry. We
do not think that it is necessary for us to lay down the contours of
the different phrases used in the Constitution. That is a decision
for another day and in another case.
125. However, it is still possible to draw some inferences
from the different uses. The expressions “alcoholic liquor for
human consumption” and ‘intoxicating drink’ are used in the
context of ‘consumption’. However, the provision relating to
“intoxicating liquor” is not limited to its consumption. It stretches to
its ‘production, manufacture, possession, transport, purchase and
sale of intoxicating liquors’ and beyond. The second difference is
the use of the expression ‘intoxicating’ instead of ‘alcoholic’ as the
adjective to liquor. The following inferences can be drawn from
the above differences:
125.1 ‘Alcoholic liquor’ defines the scope of the provision
based on the ingredient, that is, ‘alcohol’. In contrast, ‘intoxicating
liquor’ defines the scope of the provision based on the effect, that
is, intoxication. Thus, even liquor which colloquially or traditionally
is not considered as alcoholic liquor may be covered by the
phrase ‘intoxicating liquor’ if it produces the effect of intoxication;
125.2 “Intoxicate” means the ability of someone to lose
control of their behaviour. It could also mean poison. Thus, the
purpose of substituting the adjective which indicates the
ingredient (alcohol) with the impact (intoxication) seems to be
enhance the scope of the Entry to cover liquor which has an
impact on health; and125.3 The public interest purpose of the provision is evident
from the accompanying words in the provision which includes
every stage from its production to consumption within the scope
of the Entry. The public interest purpose of the provision is also
59evident from the evolution of the Entry. The relevant entry in the
1935 Act also regulated narcotic drugs and opium along with
intoxicating liquor. References to narcotic drugs and opium were
deleted to prevent its overlap with entries in the Concurrent list.
As highlighted in the previous section, a common thread that runs
through alcohol, narcotic drugs and opium is that they are
products which can be noxiously used because they are also
used as raw materials in the production of other products.
xxx xxx xxx F. Conclusion
156. In view of the discussion above, the following
conclusions emerge:
156.1 Entry 8 of List II of the Seventh Schedule to the
Constitution is both an industry-based entry and a product-based
entry. The words that follow the expression “that is to say” in the
Entry are not exhaustive of its contents. It includes the regulation
of everything from the raw materials to the consumption of
‘intoxicating liquor’;
156.2 Parliament cannot occupy the field of the entire
industry merely by issuing a declaration under Entry 52 of List I.
The State Legislature’s competence under Entry 24 of List II is
denuded only to the extent of the field covered by the law of
Parliament under Entry 52 of List I;
156.3 Parliament does not have the legislative competence
to enact a law taking control of the industry of intoxicating liquor
covered by Entry 8 of List II in exercise of the power under Article
246 read with Entry 52 of List I;
156.4. The judgments of the Bombay High Court in Fram
Nusserwanji Balsara v. State of Bombay {1950 SCC OnLine Bom
57}, this Court in FN Balsara {AIR 1951 SC 318} and Southern
Pharmaceuticals {(1981) 4 SCC 391} did not limit the meaning of
the expression ‘intoxicating liquor’ to its popular meaning, that is,
alcoholic beverages that produce intoxication. All the three
judgments interpreted the expression to cover alcohol that could
be noxiously used to the detriment of health;
60
156.5 The expression ‘intoxicating liquor’ in Entry 8 has not
acquired a legislative meaning on an application of the test laid
down in Ganon Dunkerley {1958 SCC OnLine SC 100}.
156.6 The study of the evolution of the legislative entries on
alcohol indicates that the use of the expressions “intoxicating
liquor” and “alcoholic liquor for human consumption” in the
Seventh Schedule to the Constitution was a matter well-thought
of. It also indicates that the members of the Constituent Assembly
were aware of use of the variants of alcohol as a raw material in
the production of multiple products;
156.7 Entry 8 of List II is based on public interest. It seeks
to enhance the scope of the entry beyond potable alcohol. This is
inferable from the use of the phrase ‘intoxicating’ and other
accompanying words in the Entry. Alcohol is inherently a noxious
substance that is prone to misuse affecting public health at large.
Entry 8 covers alcohol that could be used noxiously to the
detriment of public health. This includes alcohol such as rectified
spirit, ENA and denatured spirit which are used as raw materials
in the production of potable alcohol and other products. However,
it does not include the final product (such as a hand sanitiser) that
contains alcohol since such an interpretation will substantially
diminish the scope of other legislative entries;
156.8 The judgment in Synthetics (7J) (supra) is overruled
in terms of this judgment;
156.9 Item 26 of the First Schedule to the IDRA must be
read as excluding the industry of “intoxicating liquor”, as
interpreted in this judgment;
156.10 The correctness of the judgment in Tika Ramji
(supra) on the interpretation of word ‘industry’ as it occurs in the
legislative entries does not fall for determination in this reference;
and
156.11 The issue of whether Section 18G of the IDRA
covers the field under Entry 33 of List III does not arise for
adjudication in view of the finding that denatured alcohol is
covered by Entry 8 of List II.”
61
44 It is not at all in dispute that Molasses is a by-product of sugar industry
and it is not fit for human consumption in its raw form. It further does not
contain alcohol and becomes capable of producing alcohol only after
fermentation. As such, the Molasses cannot per se be equated with
‘intoxicant’, ‘intoxicating liquor’ or ‘exisable article’ as defined under the
Excise Act. The Excise Act is a legislation dealing with intoxicating liquor
and intoxicating drugs. Therefore, bringing Molasses within the
regulatory fold of the Excise Act, without statutory backing, is
impermissible. The State’s attempt to regulate Molasses on the ground
that it may be used for producing alcohol amounts to over-extension of
legislative power. Accepting such a contention would permit the State to
regulate any substance capable of fermentation, which is constitutionally
impermissible. The State relies on Section 8(c) of the Excise Act, which
refers to “any other base” used for manufacture of liquor. This Court is
unable to accept that the expression “any other base” can be stretched
to include molasses in its raw, non-intoxicant form. Such interpretation
would override the definition provisions, expand the Act beyond its
object, and further violate settled principles of statutory interpretation.
Section 62 of the Excise Act empowers the State to make rules to carry
out the provisions of the Act. It is a settled principle that rules cannot
enlarge the scope of the parent statute. The Rules of 2022 extend
control to non-intoxicant uses, impose licensing and duty, regulate
ordinary trade activity. This clearly travels beyond the scope of the
Excise Act and is therefore ultra vires. A plain reading of the Rules
shows two categories: use for distillation (valid domain of State), and
use for industrial, agricultural, cattle feed etc. The latter category clearly
falls outside the Excise domain.
62
45 In view of the above discussion, this Court holds that the Rules of 2022
is ultra vires the Constitution.
46 As a result, all the writ petitions stand allowed. The petitioners would be
entitled to consequential relief(s) flowing from this order.
47 No order as to costs.
Sd/- Sd/-
(Ravindra Kumar Agrawal) (Ramesh Sinha)
JUDGE CHIEF JUSTICE
Amit
AMIT
KUMAR
DUBEY
Digitally signed by
AMIT KUMAR
DUBEY
Date: 2026.03.27
16:01:15 +0530
63
Head Note
Any Rules/Legislation framed cannot enlarge the scope of its parent
statute and cannot travel beyond the Preamble or the object for which
the said Rules/Legislation is framed.
