M/S.Maa Stores vs. State Of Odisha

Held

The Court held that the issues involved in the writ petition were covered by a previous Division Bench decision of the same Court dated July 16, 2019. While upholding the constitutional validity of the amended entries regarding 'molasses', the Court clarified that the State Government would not have the power to levy excise duty on molasses used for purposes other than distillery, in view of Union List Entry-84. Specifically, if molasses is used for cattle feed, poultry, or for the preparation of 'gudakhu', it would be exempted from excise duty. The Court directed that petitioners would be entitled to a refund of excise duty paid from the date of filing the petition for molasses used for purposes other than distillery. The Court also addressed the applicability of the amended provision post-July 1, 2017, in light of GST, stating the question would not arise. It outlined a procedure for refund applications and stipulated interest on delayed refunds, to be recovered from the responsible officer.

Facts

The petitioner challenged the amended provision of Section 2 of the Bihar and Orissa Excise Act, 1915, which included 'molasses' in the definition of excisable goods. The petitioner argued that this amendment violated constitutional provisions, specifically Union List Entry-84 and State List Entries-8 and 51. The petitioner relied on a Supreme Court judgment in Synthetics & Chemicals Ltd. Vs. State of U.P. and others, which dealt with the legislative competence to tax industrial alcohol. The High Court, in a previous order on July 16, 2019, had considered similar issues. The current writ petition was taken up as a specially mentioned matter.

Key Issues

1. Whether the inclusion of 'molasses' in Section 2(12-a) of the Bihar and Orissa Excise Act, 1915, by the Orissa Act-2 of 1999, is in violation of Union List Entry-84 and State List Entries-8 and 51 of the Constitution of India? Petitioner's arguments: The petitioner contended that the amendment violates constitutional provisions. They relied on the Supreme Court judgment in Synthetics & Chemicals Ltd. Vs. State of U.P. and others, arguing that the State Legislature lacks the power to legislate on industrial alcohol, which includes molasses, as it falls under the Union List Entry-84, excluding alcoholic liquor for human consumption. The State's power is limited to alcoholic liquor for human consumption under State List Entries-8 and 51. Revenue's arguments: The judgment records that the learned Additional Government Advocate was not in a position to refute the petitioner's contentions.