M/S.Krishna Gudakhu Factory vs. State Of Odisha
Held
The Court upheld the constitutional validity of the amended entries regarding molasses. However, it clarified that the State Government's power to levy excise duty on molasses is limited to its use for distillery purposes. For molasses used for other purposes, such as cattle feed, poultry, or preparation of 'gudakhu', the petitioners are exempted from paying excise duty. The Court directed that if molasses is used for purposes other than distillery, petitioners are entitled to a refund of excise duty paid from the date of filing the petition. Regarding the post-July 1, 2017 period, the Court noted that this issue would not arise as molasses is now under GST. It provided a mechanism for refund applications, requiring the State Government to consider them within three months, with a provision for interest at 8% in case of delay, to be recovered from the responsible officer. Petitioners are required to apply for licenses and pay license fees and excise duty to avail the refund benefit.
Facts
The petitioner challenged the amended provision of Section 2 of the Bihar and Orissa Excise Act, 1915, which included 'molasses' in Clause (12-a) after 'Mohua flower'. The petitioner argued this amendment violated constitutional provisions related to the legislative competence of the Union and State Lists, specifically Union List Entry-84 and State List Entries-8 and 51. The petitioner relied on the Supreme Court judgment in Synthetics & Chemicals Ltd. Vs. State of U.P. The Court referred to a previous order dated 16.07.2019 in a batch of writ petitions that dealt with similar issues. The revenue or State did not refute the petitioner's contentions. The Court considered the implications of molasses being included under GST from July 1, 2017.
Key Issues
1. Whether the inclusion of 'molasses' in Section 2(12-a) of the Bihar and Orissa Excise Act, 1915, by Orissa Act-2 of 1999, is unconstitutional and ultra vires the legislative powers of the State Legislature, particularly in light of Union List Entry-84 and State List Entries-8 and 51? The petitioner contended that Union List Entry-84 exclusively empowers the Union to levy excise duty on alcoholic liquors for human consumption, and industrial alcohol, including molasses, falls outside the State's power to levy excise duty, except for human consumption. They relied on the Supreme Court's decision in Synthetics & Chemicals Ltd. to argue that industrial alcohol is not 'alcoholic liquor for human consumption'. The revenue or State did not present any arguments against this contention. 2. Whether the amended provision remains in force after July 1, 2017, in view of molasses being included under GST? This issue was raised by the Court itself.
Sections Cited
Section 2, Entry-84, Entry-8, Entry-51, Entry-1703
AI-generated summary — verify with the full judgment below
11.12.2019
Heard learned counsel for the parties.
By way of this writ petition, the petitioner has mainly challenged the amended provision of Section 2 of the Bihar and Orissa Excise Act, 1915. 3. Learned counsel for the petitioner states that the issues involved in this petition are covered by the order of this Court dated 16.07.2019, passed in W.P.(C) No.2580 of 2019 and batch of writ petitions. For ready reference, the said order is reproduced hereunder:
“By way of these Writ Petitions, the petitioners have mainly challenged the amended provision of Section 2 of the Bihar and Orissa Excise Act, 1915 (for short, ‘the Act’) by Orissa Act-2 of 1999, the relevant portion of which is reads thus:- “In Section-2 of the Bihar and Orissa Excise Act, 1915 (hereinafter referred to as the Principal Act), in Clause (12-a), after the words “Mohua flower”, the words and molasses shall be inserted.”
It is contended that Inclusion of the word ‘molasses’ in Clause (12-a) after the words “Mohua flower” is in violation of Constitutional provisions, namely, Union List Entry-84 and Entry-8 and Entry-51 of State list which are
The judgment continues below.
Read the full judgment
A free account opens 10 full GST judgments a month (one account works on both bharattax.net and this site). Re-reading one you have already opened does not count again.
The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.
Reproduced from the public record of the Orissa High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.