The Division Bench of the Supreme Court comprising of Justice A.M Khanwilkar and Justice Ajay Rastogi has reversed the order of Jharkhand High Court and has empowered the State of Jharkhand to levy charges on foreign liquor manufactured by use of imported rectified spirit.
Earlier the matter was placed before the Jharkhand High Court where it was held that the State of Jharkhand is not empowered to levy charges on the imported rectified spirit. The court held that the challenge to amended rule 106b (Tha) framed under section 90 of Jharkhand Excise Act, 1915 is unfounded.
However, in the appeal to the Supreme Court, it was reversed. The court held that the substance of the provision is to impose charges on manufactured product produced by using imported rectified spirit and not on the spirit itself.if the State was to provide for levy on the imported rectified spirit per se the same would be without any jurisdiction as laid down by Constitutional Bench judgement in Deccan Sugar & Abkari Co. Ltd. vs. Commissioner of Excise, A.P . The court also stated that the impost is not in the form of tax or excise duty but it is in the form of charges for regulating the production of portable liquor to preserve the health and morality of general public.