Kamal Kumar Gupta vs. State Of Odisha

Held

The Court held that the constitutional validity of the amended entries regarding 'molasses' in the Excise Act is upheld. However, it clarified that the State Government's power to levy excise duty on molasses is limited. Specifically, for molasses used for purposes other than distillery purposes, such as cattle feed, poultry, or preparation of 'gudakhu', the State Government does not have the power to levy excise duty, in view of Entry-84 of the Union List. The Court ruled that molasses used for these non-distillery purposes would be exempted from excise duty. The writ petitions were allowed to this extent, with the petitioners entitled to a refund of excise duty paid from the date of filing the petition if molasses was used for purposes other than distillery. The Court also addressed the post-July 1, 2017 scenario, noting that the issue would not arise due to molasses being included under GST. It provided a mechanism for refund applications and stipulated interest for delayed refunds.

Facts

The petitioner challenged the amended provision of Section 2 of the Bihar and Orissa Excise Act, 1915, which included 'molasses' after 'Mohua flower' in Clause (12-a). The petitioner argued this amendment violated constitutional provisions related to 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 contended that the inclusion of molasses for purposes other than human consumption falls under the exclusive domain of the Union. The court referred to a previous order dated 16.07.2019 in a batch of writ petitions that dealt with similar issues concerning the amendment of the Excise Act.

Key Issues

1. Whether the amendment to Section 2 of the Bihar and Orissa Excise Act, 1915, by Orissa Act-2 of 1999, which includes 'molasses' in Clause (12-a), is constitutionally valid, particularly in light of Union List Entry-84 and State List Entries-8 and 51? Petitioner's arguments: The petitioner contended that the inclusion of 'molasses' in the Excise Act amendment is unconstitutional. They argued that Entry-84 of the Union List exclusively empowers the Union to levy excise duty on goods manufactured or produced in India, except for alcoholic liquors for human consumption. They asserted that molasses, when not intended for human consumption, falls outside the State's legislative competence under Entry-8 and Entry-51 of the State List. They relied on the Supreme Court judgment in Synthetics & Chemicals Ltd. Vs. State of U.P. to support their contention that industrial alcohol (and by extension, molasses used for industrial purposes) is outside the State's excise duty purview. Revenue/State's arguments: The judgment does not explicitly record arguments from the revenue or State in this specific writ petition, but it notes that the Additional Government Advocate was not in a position to refute the petitioner's submissions, implying an acceptance of the precedent set by the earlier judgment.