Ghanshyam Agrawal vs. State Of Odisha

Held

The Court upheld the constitutional validity of the amended entries regarding 'molasses' in the Excise Act. However, it clarified that the State Government would not have the power to levy excise duty on molasses if it is used for purposes other than distillery. This is in view of Entry-84 of the Union List. Specifically, if molasses is used for cattle feed, poultry, or for the preparation of 'gudakhu', it will be exempted from excise duty. The writ petitions were allowed to this extent, with the provision that petitioners are entitled to a refund of excise duty paid on molasses used for non-distillery purposes from the date of filing the petition. The Court also addressed the post-GST scenario, stating the issue would not arise after July 1, 2017. Applications for refund with supporting documents were to be considered within three months, with interest payable for delays.

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 goods subject to excise duty. The petitioner argued this amendment violated constitutional provisions concerning the legislative competence of the Union and State lists, specifically Entry-84 of the Union List and Entries-8 and 51 of the State List. The petitioner relied on the Supreme Court judgment in "Synthetics & Chemicals Ltd. Vs. State of U.P.". The State did not refute the petitioner's contentions. The Court considered a previous Division Bench decision in "M/s Uma Enterprises" and the constitutional and statutory provisions.

Key Issues

1. Whether the amended provision of Section 2 of the Bihar and Orissa Excise Act, 1915, including 'molasses' in the definition of exciseable goods, is constitutionally valid, considering Entries-84 of the Union List and Entries-8 and 51 of the State List? Petitioner's arguments: The inclusion of 'molasses' violates constitutional provisions. The State lacks the power to levy excise duty on molasses for purposes other than distillery, as this falls under the Union List's exclusive domain (Entry-84). Reliance was placed on "Synthetics & Chemicals Ltd. Vs. State of U.P." which held that industrial alcohol, not directly consumable by humans, is outside the State's excise power for human consumption. Revenue's arguments: The judgment notes the learned Additional Government Advocate was not in a position to refute the petitioner's submissions.