Orissa High Court
Prabir Kumar Das vs State Of Odisha on 9 May, 2025
ORISSA HIGH COURT : CUTTACK
W.P.(C) No.6233 of 2025
In the matter of an Application under
Articles 226 and 227 of the Constitution of India, 1950
***
Prabir Kumar Das, Aged about 42 years Son of Bijay Das, At/P.O.: Puruna Balasore, P.S.: Chandipur, District: Balasore. ... Petitioner
-VERSUS-
1. State of Odisha Represented though Principal Secretary Excise Department At: Lokseva Bhawan, Odisha Bhubaneswar District: Khordha.
2. Excise Commissioner, Odisha CDA Road, Bidanasi District: Cuttack.
3. Collector-cum-District Magistrate Mayurbhanj, At/PO/P.S.: Baripada District: Mayurbhanj.
4. Authorized Officer-cum-Superintendent of Excise Mayurbhanj At/P.O./P.S.: Baripada District: Mayurbhanj.
W.P.(C) No.6233 of 2025 Page 1 of 725. Officer-in-Charge of Excise, Deuli Excise Station, Deuli District: Mayurbhanj. ... Opposite parties Counsel appeared for the parties:
For the Petitioner : M/s. Bibhuti Ranjan Mohanty, Bikram Keshari Raj and Bishakha Baisali Raj, Advocates For the Opposite Parties : Mr. Bimbisar Dash, Additional Government Advocate P R E S E N T:
HONOURABLE CHIEF JUSTICE MR. HARISH TANDON AND HONOURABLE JUSTICE MR. MURAHARI SRI RAMAN Date of Hearing : 21.04.2025 :: Date of Judgment : 09.05.2025 J UDGMENT MURAHARI SRI RAMAN, J.--
Assailing Order dated 08.01.2025 of the Excise Commissioner, Odisha, Cuttack-opposite party No.2 passed in Excise Appeal Case No.18/2024--366/Ex. (Annexure-6) affirming the Decision and Order dated 27.08.2024 of the Authorized Officer-cum-
Superintendent of Excise, Mayurbhanj-opposite party No.4 in Excise (Con) Case No.4 of 2024 (arising out of P.R. No.31/2024-25) in connection with a proceeding W.P.(C) No.6233 of 2025 Page 2 of 72 under Section 71(3) of the Odisha Excise Act, 2008, the petitioner has approached this Court by way of filing the instant writ petition invoking provisions of Articles 226 and 227 of the Constitution of India with the following prayer(s):
"The petitioner therefore prays that in view of the submission made above the Hon‟ble Court may be graciously pleased to admit the writ petition and issue rule nisi to the opposite parties as to;
i) Why the order dt.27.08.2024 in Excise (Con.) Case No.4/2024 (Annexure-4) and its confirmation vide order dt.08.01.2025 passed in Excise Appeal No.18/2024 (Annexure-6) will not be quashed.
ii) Why the seized TATA 407 truck vide Regd. No.OD-
01-AD-1005 shall not be given in Zima of the petitioner.
And if the opposite parties fail to show cause or show insufficient cause the said Rule may kindly be made absolute.
Or pass any appropriate order/direction as would be deemed fit and proper in the interest of justice.
And for this act of kindness the petitioner as in duty bound shall ever pray."
Facts:
2. Facts leading to filing of this writ petition, as emanating from the contents of writ petition, are narrated hereunder.W.P.(C) No.6233 of 2025 Page 3 of 72
2.1. The petitioner, Registered Owner of Truck (TATA-407) bearing Registration No.OD-01-AD-1005 (hereinafter referred to as "the vehicle"), alleged that on 18.05.2024 at about 2.00 P.M. the Officer-in-Charge of Deuli Excise Station, detained and conducted search of said vehicle at Chaksuliapada under Chandua Police Station in the district of Mayurbhanj and on search 200 tins (weighing 25kgs each, in toto 5,000 Kgs.) of Molasses (Tarala Gur) were found. As the petitioner could not produce any valid documents in support of loaded goods before the said Officer-in-Charge, the vehicle was seized in exercise of power under Section 71 for possession of "intoxicant" as defined under clause (t) of Section 2 read with Section 17 of the Odisha Excise Act, 2008 (for short, "the OE Act, 2008") and Rules 234 and 240 of the Odisha Excise Rules, 2017 (for brevity, "the OE Rules, 2017") and forwarded the petitioner-owner of the vehicle and the driver of said vehicle to the Court of the learned Judicial Magistrate, First Class-I (Cognizance Taking), Baripada to face trial. Sample of the goods were sent for chemical analysis.
2.2. The Authorized Officer-cum-Superintendent of Excise, Mayurbhanj-opposite party No.4 (referred to as "AO") issued show-cause notice under Section 71(4)(a) of the OE Act contemplating confiscation of the vehicle. Show-
cause reply being filed, on consideration of which, Order W.P.(C) No.6233 of 2025 Page 4 of 72 dated 27.08.2024 was passed in Excise (Con) Case No.4 of 2024 (Arising out of P.R. No.31 of 2024-25) by the AO taking into consideration the definitions of the commodities, namely "INTOXICANT" and "MOLASSES" contained in Clauses (t) and (x) respectively under Section 21.
2.3. Finding that the petitioner was in possession of "molasses" comprehended within the meaning of "intoxicant" and transporting the same without any permit granted by the Collector as required under Section 17(1) of the OE Act, 2008 and Rules 234 and 240 of the OE Rules, 2017, the AO returned factual finding on the basis of chemical test report that subject goods found in the vehicle was cane molasses having probable outturn of alcohol. Since the vehicle so seized was not accompanied by necessary documents including valid permit, the AO established the allegation of commission of contravention of Section 17 of the OE Act, 2008 which attracted exercise of power under Section 1 Clauses (t) and (u) of Section 2 of the OE Act stand as follows:
"(t) "Intoxicant" means any liquor, other intoxicating substance other than Narcotic drug or a psychotropic substance regulated by the Narcotic Drugs and Psychotropic Substances Act, 61 of 1985 which the State Government may, by notification, declare to be an intoxicant and includes mohua flower and molasses;
***
(x) "Molasses" means the heavy dark coloured residual syrup drained away in the final stage of the manufacture of gur or sugar containing, in solution or suspension, sugars which can be fermented and includes any product formed by the addition to such syrup of any ingredient which does not substantially alter the character of such syrup, but does not include any article which the State Government may, by notification, declare not to be molasses, for the purposes of this Act;"W.P.(C) No.6233 of 2025 Page 5 of 72
71(3). Accordingly, order was passed, relevant portion of which runs as follows:
"The seized vehicle bearing registration No.OD-01AD- 1005 (TATA-407), Engine No.4SPCR11CPY609492, Chassis No.MAT505560K8C06390 seized on 18.05.2024 vide P.R. No.31/2024-25 dated 18.05.2024 is hereby confiscated to Government under Section 71(3) of the Odisha Excise Act, 2008 for contravention of Section 17 of the Odisha Excise Act, 2008 read with Rule 234 & Rule 240 of the Odisha Excise Rules, 2017.
The Investigating Officer here in the O.I.C of Excise, Deuli Excise Station, Mayurbhanj is directed to take necessary follow-up action for auction sale of the seized vehicle following due procedure after expiry of the appeal period and deposit the sale proceeds into proper head of account.
A copy of the order be sent to the Investing Officer/ registered owner of the seized vehicle for information.
Pronounced in the open Court this the 27th day of August, 2024."
2.4. Dissatisfied with aforesaid decision and order of the AO, the petitioner carried the matter before the Excise Commissioner, Odisha, Cuttack under Section 71(6) of the OEA, 2008 by way of preferring an Appeal, registered as Excise Appeal Case No.18/2024-- 366/Ex. Upon hearing the petitioner, the AO and the Investigating Officer, said Appeal came to be disposed of vide Order dated 08.01.2025 (Annexure-6) by the Excise W.P.(C) No.6233 of 2025 Page 6 of 72 Commissioner, Odisha affirming Order of confiscation under Section 71(3) of the OEA, 2008, with direction to sell the vehicle in auction with the following observation:
"I went through the prayer petition filed by the Learned Counsel, the Seizure List, Prosecution Report, Chemical Examination report and the order passed by the Authorized Officer-cum-Superintendent of Excise, Mayurbhanj. A recovery of 5000 Kilograms of molasses has been made from the TATA 407 truck bearing Regd. No.OD-01-AD-1005. The appellant was present in the said vehicle and he is also an accused in this case. The Chemical Examination report reveals that the seized article is molasses. The appellant has failed to produce any pass/permit for transportation of the seized molasses. Further, ignorance of the appellant that the transported articles is molasses and its transportation without permit/pass is an offence cannot be a ground for setting aside the order of confiscation. Further the contention that the appellant had produced the online bill before the I.O. on the day of detection/seizure of molasses at the spot cannot be accepted, since officers from GST department and Police Department were also present during the seizure, the seizure being made during the joint checking on the eve of General Election-2024 and reportedly no online bill was submitted before the I.O. during the detection of the case, Hence, use of the said vehicle in carrying molasses illegally with the knowledge of the owner makes a good ground for confiscation of the vehicle. In the instant case, the Authorised Officer-cum-Superintendent of Excise, Mayurbhanj has rightly passed the order on 27.08.2024 for confiscation of the vehicle in Excise C.P. Case No. W.P.(C) No.6233 of 2025 Page 7 of 72 04/2024, which is in accordance with law. Thus, I find no reason to interfere in the order of the Authorized Officer- cum-Superintendent of Excise, Mayurbhanj.
Thus, the appeal does not hold any merit and is dismissed."
2.5. Aggrieved thereby, the instant writ petition has been filed invoking provisions of Articles 226 and 227 of the Constitution of India.
Hearing:
3. This matter came up before this Court under the heading "Fresh Admission". Contending that as the authority did not acknowledge the online bill/ invoice sought to be produced at a later date to the search, the petitioner, registered owner, is entitled to get the seized vehicle released in his favour.
3.1. On the concession of the learned counsel for both sides, this matter is disposed of at the stage of "Fresh Admission".
3.2. Accordingly, heard Sri Bibhuti Ranjan Mohanty, learned Advocate appearing for the petitioner and Sri Bimbisar Dash, learned Additional Government Advocate appearing for the opposite parties.
3.3. On conclusion of hearing, the matter stood reserved for preparation and pronouncement of Judgment/Order.
W.P.(C) No.6233 of 2025 Page 8 of 72Rival contentions and submissions of counsel for the respective parties:
4. Sri Bibhuti Ranjan Mohanty, learned Advocate submitted that the petitioner, the owner of the vehicle bearing Registration No.OD-01-AD-1005, was carrying gur, found to be "molasses" by the authorities, on the instruction of one Sri Madhusudan Sahu of M/s. Sai Marketing Agency, Ganeswarpur, Januganj in the district of Balasore being purchased from Shree Subham Enterprises, Raghunathpur, Jhargram in the State of West Bengal on 18.05.2024. Due to non-functioning of the printer, the goods in the vehicle could not be accompanied by invoice. However, there was no predicament on the part of the Investigating Officer to consider the online invoice sought to be produced by said Madhusudan Sahu of M/s. Sai Marketing Agency on a later date. Since the opposite parties did not choose to cross-examine the witnesses whom the petitioner examined, the matter should have been decided favourably and the authorities instead of proceeding to confiscate the vehicle should have taken pragmatic view by releasing the vehicle.
5. Sri Bimbisar Dash, learned Additional Government Advocate refuting the contentions of the counsel for the petitioner urged not to entertain this writ petition inasmuch as the vehicle was carrying molasses without W.P.(C) No.6233 of 2025 Page 9 of 72 necessary documents and seeking to produce invoice subsequently is an afterthought. Since at the stage of detention of the vehicle for search, necessary documents were not produced before the Officer-in-Charge of the Chaksuliapada, adverse inference could be taken against the petitioner and his ill-motive is tell-tale. Therefore, no infirmity or illegality could be imputed against the Excise Authorities.
5.1. Per contra, Sri Bimbisar Dash, learned Additional Government Advocate contended that on the date of search of the vehicle, the petitioner never produced online invoice nor could he produce pass/permit indicating transportation of molasses from Shree Subham Enterprises, Raghunathpur, Jhargram of West Bengal to Sai Marketing Agency, Balasore, Odisha.
5.2. He further submitted that the chemical examination confirmed that goods carried on in the vehicle are "molasses".
5.3. He, therefore, fervently pressed to dismiss the writ petition inasmuch as contradictory statement is being made by the petitioner at different times.
Analysis and discussions:
6. On appreciation of facts on record, it is seen that in the show cause reply filed by the petitioner before the AO W.P.(C) No.6233 of 2025 Page 10 of 72 vide Annexure-2 in connection with seizure of vehicle effected on 18.05.2024 it has been stated that:
"5. *** On the date of seizure, i.e., 18.05.2024 on the request of consignee namely Sai Marketing Agency, Balasore the goods were carried in the vehicle from Shree Subham Enterprises, Raghunathpur to Balasore on fare basis. As per tax invoice the goods were gur weighing 5200 kg. not molasses. Since the opposite party No.2-driver was unaware about the route the opposite party No.1 accompanied him. On the order of the said Marketing Agency the goods were carried under valid documents but without any basis the Investigating Officer had seized the goods and vehicle showing the goods to be molasses and arrested them illegally.
6. That the opposite parties have not committed any offence under the Excise Act and it was carried under valid documents and goods were nothing but gur as per tax invoice for which the case be dropped and vehicle is to be released in favour of owner/opposite party No.1."
6.1. An affidavit dated 23.07.2024 sworn to by Madhusudan Sahu of M/s. Sai Marketing Agency of Balasore claimed to have been filed before the AO reveals the following fact:
"I, Sri Madhusudan Sahu, aged 53 years, son of Late Sibanarayan Sahu, of village: Ganeswarpur, P.O.: Januganj, P.S. I.A. District: Balasore, do hereby solemnly affirm and state as follows:
*** W.P.(C) No.6233 of 2025 Page 11 of 72
4. That accordingly on the date of seizure my purchased gur was loaded in the seized vehicle at Raghunathpur but due to sudden breakdown of printer the bill could not be released immediately for which the consignor assured me to send the bill on online. While the vehicle was coming the with my purchased gur the Officer-in-Charge, Deuli Excise Station, detained the vehicle at Chaksuliapada and illegally seized the vehicle and gur showing the same as molasses.
5. That after obtaining the online bill I had shown the same to Investigating Officer but the Investigating Officer did not acknowledge it and filed PR against the owner and driver of the vehicle.
*** Verification I, Sri Prabir Kumar Das, the above named deponent being present in the Kachery Premises today 23.07.2024 do hereby declare that the statements made in the affidavit are all true and correct to the best of my knowledge and belief.
Identified by Sd/-
Sd/- 23.07.2024 Madhusudan Sahu
Advocate Verificant."
6.2. It is startling to notice that the Notary Public, Balasore (Sri Trayanath Bag) has certified the petitioner (Prabir Kumar Das) to be present in the kuchery premises being signed by "Madhusudan Sahu". The name of the W.P.(C) No.6233 of 2025 Page 12 of 72 advocate identifying the verificant could not be ascertained as the signature was not legible.
6.3. It is surfaced from scrutiny of the record that an affidavit dated 18.07.2024 being sworn to by Sri Mantu Mana (driver of the vehicle), enclosed at Annexure-3 of the writ petition, has not been signed neither at the space meant for "Deponent" nor "Verificant", yet the Notary Public, Balasore has certified his presence in the kuchery premises.
6.4. Cursory glance at copies of three affidavits of the petitioner, the driver and Sri Madhusudan Sahu enclosed to the writ petitions claimed to have been furnished before the AO as evidence under Order XVIII, Rule 4 of the Code of Civil Procedure, 1908, appears to be not executed by the "deponent" or "verificant". They are simply filed to misdirect and misguide the Court or the AO. Aforesaid affidavits enclosed at Annexure-3 do not inspire credibility.
6.5. Legal perspective of evidence on affidavit has been discussed in Ayaaubkhan Noorkhan Pathan Vrs. State of Maharashtra, (2013) 4 SCC 465 which is as follows:
"Affidavit-- Whether "evidence" within the meaning of Section 3 of the Evidence Act, 1872
31. It is a settled legal proposition that an affidavit is not "evidence" within the meaning of Section 3 of the W.P.(C) No.6233 of 2025 Page 13 of 72 Evidence Act, 1872 (hereinafter referred to as "the Evidence Act"). Affidavits are, therefore, not included within the purview of the definition of "evidence" as has been given in Section 3 of the Evidence Act, and the same can be used as "evidence" only if, for sufficient reasons, the court passes an order under Order 19 of the Code of Civil Procedure, 1908 (hereinafter referred to as "CPC"). Thus, the filing of an affidavit of one's own statement, in one's own favour, cannot be regarded as sufficient evidence for any court or tribunal, on the basis of which it can come to a conclusion as regards a particular fact situation. (Vide, Sudha Devi Vrs. M.P. Narayanan, (1988) 3 SCC 366 = AIR 1988 SC 1381 and Range Forest Officer Vrs. S.T. Hadimani, (2002) 3 SCC 25 = AIR 2002 SC 1147).
32. While examining a case under the provisions of the Industrial Disputes Act, 1947, this Court, in Bareilly Electricity Supply Co. Ltd. Vrs. Workmen, (1971) 2 SCC 617 = AIR 1972 SC 330, considered the application of Order 19 Rules 1 and 2 CPC, and observed as under: (SCC p. 629, para 14) „14. *** But the application of principles of natural justice does not imply that what is not evidence, can be acted upon. On the other hand, what it means is that no material can be relied upon to establish a contested fact which are not spoken to by the persons who are competent to speak about them and are subjected to cross-examination by the party against whom they are sought to be used.
When a document is produced in a court or a tribunal, the questions that naturally arise are :
W.P.(C) No.6233 of 2025 Page 14 of 72is it a genuine document, what are its contents and are the statements contained therein true? ... If a letter or other document is produced to establish some fact which is relevant to the inquiry, the writer must be produced or his affidavit in respect thereof be filed and opportunity afforded to the opposite party who challenges this fact. This is both in accord with the principles of natural justice as also according to the procedure under Order 19 of the Code and the Evidence Act, both of which incorporate the general principles.‟
33. In Needle Industries (India) Ltd. Vrs. Needle Industries Newey (India) Holding Ltd., (1981) 3 SCC 333 = AIR 1981 SC 1298, this Court considered a case under the Companies Act, and observed (at SCC p. 373, para 63) that, "it is generally unsatisfactory to record a finding involving grave consequences [with respect] to a person, on the basis of affidavits and documents [alone,] without asking that person to submit to cross-examination."
However, the conduct of the parties may be an important factor with regard to determining whether they showed their willingness to get the said issue determined on the basis of affidavits, correspondence and other documents, on the basis of which proper and necessary inferences can safely and legitimately be drawn.
34. In Ramesh Kumar Vrs. Kesho Ram, 1992 Supp (2) SCC 623 = AIR 1992 SC 700, this Court considered the scope of application of the provisions of Order 19 Rules 1 and 2 CPC in a rent control matter, observing as under : (SCC p. 628, para 9) W.P.(C) No.6233 of 2025 Page 15 of 72 „9. *** The court may also treat any affidavit filed in support of the pleadings itself as one under the said provision and call upon the opposite side to traverse it. The court, if it finds that having regard to the nature of the allegations, it is necessary to record oral evidence tested by oral cross-examination, may have recourse to that procedure.‟
35. In Standard Chartered Bank Vrs. Andhra Bank Financial Services Ltd., (2006) 6 SCC 94, this Court while dealing with a case under the provisions of the Companies Act, 1956, while considering complex issues regarding the markets, exchanges and securities, and the procedure to be followed by special tribunals, held as under : (SCC pp. 121-22, para 48) „48. While it may be true that the Special Court has been given a certain amount of latitude in the matter of procedure, it surely cannot fly away from established legal principles while deciding the cases before it. As to what inference arises from a document, is always a matter of evidence unless the document is self- explanatory. ... In the absence of any such explanation, it was not open to the Special Court to come up with its own explanations and decide the fate of the suit on the basis of its inference based on such assumed explanations.‟
36. Therefore, affidavits in the light of the aforesaid discussion are not considered to be evidence, within the meaning of Section 3 of the Evidence Act. However, in a case where the deponent is available W.P.(C) No.6233 of 2025 Page 16 of 72 for cross-examination, and opportunity is given to the other side to cross-examine him, the same can be relied upon. Such view, stands fully affirmed particularly, in view of the amended provisions of Order 18 Rules 4 and 5 CPC. In certain other circumstances, in order to avoid technicalities of procedure, the legislature, or a court/tribunal, can even lay down a procedure to meet the requirement of compliance with the principles of natural justice, and thus, the case will be examined in the light of those statutory rules, etc. as framed by the aforementioned authorities."
6.6. This Court, nonetheless, entertains serious doubt about the execution of the affidavits on the dates specified therein before the aforesaid Notary Public, Balasore. The record does not contain even the copy of online invoice purported to have been produced before the AO. Pleading falls short of fact of waybill under the Goods and Services Tax statute or permit under the OE statute being available with the petitioner. Hence, this Court disbelieves the assertion of the petitioner that the Investigating Officer did not acknowledge production of the online bill/invoice later to 18.05.2024, i.e., date of search and seizure of vehicle, and finds the fact stated in the affidavits as myth and only to cover up the lacunae. The factual contents affirmed in such defective affidavits cannot be taken on evidence.
W.P.(C) No.6233 of 2025 Page 17 of 727. The argument of the advocate for the petitioner proceeded on the basis that due to defect in printer at the end of the supplier, the invoice/bill could not be generated and the vehicle carried goods from West Bengal to Odisha. He would rather insist that the online bill was produced on a subsequent date. But there is nothing on record to suggest that he had waybill or permit.
7.1. This Court culls out the following factual position as returned by the AO in his decision dated 27.08.2024:
"One Madhusudan Sahu son of Late Shibanarayan Sahu of Ganeswarpur (Remuna Golei) P.S.: Silpanchal P.S.:
Balasore appearing in person submitted that Sai Marketing Agency is a registered Farm and his wife Mira Sahu is the proprietor. It is submitted that he is looking after the affairs of aforesaid farm. It is submitted that on the date of seizure, i.e., 18.05.2024 their farm had purchased the aforesaid seized 5000 kgs. of Molasses (Gur) (an jaggery) from Subham Enterprises, Raghunathpur, Jhargram (W.B.). He booked the seized vehicle for bringing of aforesaid Gur (Molasses) on hire. It is submitted that due to breakdown of printer, the Bill could not be obtained and the consignor told him that, he would send the bill through online."
7.2. Further fact as settled by the AO makes it transparent that, "The Invoice exhibited by the O.Ps. was issued by Subham Enterprises, Raghunathpur, Jhargram in favour W.P.(C) No.6233 of 2025 Page 18 of 72 of Sai Marketing Agency, Balasore for transportation of 5,100 Kg of GUR in vehicle No. OD-01-AD-1005. But, the chemical examination report of the collected samples in respect of the seized molasses communicated by the Assistant Chemical Examiner, Excise Divisional Laboratory (CD), Cuttack vide C.E.R No.1236-497/I/24-25 dated 03.07.2024 discloses that "subject samples marked as „ML-1" & "ML-2" confirms to IS:1162:1958 for Cane Molasses having probable out turn of alcohol to be 271.43BI/tonne". Hence, it is beyond doubt that Molasses was transported in the seized vehicle without having any valid permit/documents."
7.3. No material is brought on record to put forth that the petitioner demonstrated before the AO and the Appellate Authority to establish that "molasses" as per such chemical report is not a fact. But he merely stated that the goods in vehicle was nothing but gur.
7.4. It is, at this juncture, noteworthy to have reference to Section 68 of the Central Goods and Services Act, 2017/ the Odisha Goods and Services Tax Rules, 2017, read with Rule 138 of the Odisha Goods and Services Tax Rules, 2017, whereby documents like invoices and e- waybill while carrying any consignment of goods in a vehicle during movement is necessary concomitant. Nowhere the petitioner has made reference to waybill obtained under either the West Bengal Goods and Services Tax or the Odisha Goods and Services Tax statute. The Goods and Services Tax statute provides for W.P.(C) No.6233 of 2025 Page 19 of 72 goods to be accompanied by valid waybill before commencement of movement. A registered person (here both the supplier and the recipient) is required to furnish information relating to the goods carried in part- A of Form GST EWB-01 electronically along with other information.
7.5. Relevant provisions of the OE Act restricting import of intoxicant/molasses read thus:
"7. Restrictions on import2.--
(1) No intoxicant shall be imported unless:
(a) the State Government have accorded permission, either by general or special order for its import;
(b) the conditions, if any, as the State Government may impose, have been satisfied; and
(c) the duty, if any, payable under Chapter V has been paid.
(2) Sub-section (1) shall not apply to any article which has been imported into India and was liable, on such importation, to duty under the Customs Tariff Act, 51 of 1975 or the Customs Act, 52 of 1962.
8. Restrictions on export or transport.--
2 The term "import" is defined under Section 2(q) of the Odisha Excise Act, 2008 as:
"IMPORT means to bring into State from any other State or Country;"W.P.(C) No.6233 of 2025 Page 20 of 72
No intoxicant shall be exported or transported unless the duty, if any, payable under Chapter V has been paid.
9. Power to prohibit import, export or transport.--
The State Government may, by notification,
(a) prohibit the import or export of any intoxicant into or from the State or any part thereof, or
(b) prohibit the transport of any intoxicant.
10. Passes for import, export and transport.--
(1) Unless otherwise provided in this Act, Collector shall be competent to grant passes for import, export and transport of intoxicant.
(2) No intoxicant exceeding such quantity as the State Government may prescribe by notification, either generally or for any specified local area, shall be imported, exported or transported except under a pass granted by the Collector.
(3) Such passes may be either general for definite periods and particular kinds of intoxicant or special for specified occasions and particular consignments only.
***
17. Possession of intoxicant generally.--
(1) No person not being licensed to manufacture, collect or sell any intoxicant shall have in his possession any quantity of any intoxicant in excess of such quantity as the State Government has, under Section 4, declared to be the limit of possession, except W.P.(C) No.6233 of 2025 Page 21 of 72 under a permit granted by the Collector in that behalf.
(2) Sub-section (1) shall not apply to:
(a) any foreign liquor or India made foreign liquor, other than denatured spirit, which is in the possession of any common carrier or warehouse man as such;
(b) any foreign liquor or India made foreign liquor which has been purchased by any person for his bona fide private consumption and not for sale or for use in the manufacture of any article for sale;
(c) tari intended to be used in the manufacture of gur; and
(d) tari intended to be used solely for the preparation of food for domestic consumption and not as an intoxicant, or for the preparation of any intoxicating article.
(3) A licensed vendor shall not have in his possession at any place other than that authorized by his licence any quantity of any intoxicant in excess of such quantity as declared under Section 4 to be the limit of possession, except under a permit granted by the Collector in that behalf.
(4) Notwithstanding anything contained in the foregoing sub-sections, the State Government may, by notification, prohibit the possession by any person or class of persons with such exceptions, if any, as may be specified in the notification, either in the whole or any part of the State of Odisha, any W.P.(C) No.6233 of 2025 Page 22 of 72 intoxicant either absolutely, or subject to such conditions as it may prescribe."
7.6. Reference to Rules 234 and 2403 of the OE Rules may be relevant. Whereas Rule 234 allows possession, use, storage or sale of molasses subject to valid licence or permit with terms and conditions, Rule 240 of the OE Rules restricts and/or prohibits movement of molasses from one State to the other except "on the strength of permit" to the licensee. The modalities for making application for permit and issue of permit is regulated under Rule 241 and Rule 242 of the OE Rules.
7.7. Conjoint reading of provisions of Sections 7, 8, 9, 10 and 17 of the OE Act manifests that restriction is imposed on import of molasses to this State from outside. Such "molasses" which comes within the fold of definition of "intoxicant", the same cannot be transported without valid documents/permit. Cursory glance at provisions of said sections and rules makes it abundantly clear that the language used therein is in the negative. The expressions "no intoxicant shall be imported" in Section 7, "no person not being licensed ... shall have in his 3 Rules 234 and 240 of the Odisha Excise Rules, 2017, stands thus:
"234. Possession, Storage, Sale and Use of Molasses.--
No molasses shall be possessed, used, stored or sold by any person or factory except under a valid licence or permit and subject to the terms and conditions contained therein.
240. Restriction on import of Molasses.--
Molasses shall not be imported except on the strength of a permit issued under these rules from any place outside the State of Odisha and no permit shall be issued to any person other than a licensee."W.P.(C) No.6233 of 2025 Page 23 of 72
possession" in Section 17 of the OE Act, "no molasses shall be" in Rule 234 and "molasses shall not be imported" in Rule 240 of the OE Rules negatively worded make the compliance of the requirement of provisions mandatory. The restriction has been imposed on not only possession, use, storage or sale of molasses but also its movement from one State to the other.
7.8. When the word "shall" is juxtaposed with the word "no", the provision of the statute is intended to be mandatory. The use of "shall" and "no" in one sentence in the provision indicates that the provision is indeed mandatory. This clarifies the position that Section 7 of the OE Act read with Rules 234 and 240 of the OE Rules imposes an obligation to refrain from a particular action or behavior.
7.9. In Adani Gas Limited Vrs. Union of India, (2021) 13 SCR 1146 the Hon'ble Supreme Court of India interpreted the negatively worded statutory provision in the following manner:
"73. The opening words of Section 16 are cast in negative terms ("no entity shall"). In a series of judgments, this Court has ruled that negative words are prohibitory. As held in M. Pentiah Vrs. Muddala Veeramallappa, (1961) 2 SCR 295, „Negative imperative words are clearly prohibitory and are ordinarily used as a W.P.(C) No.6233 of 2025 Page 24 of 72 legislative device to make a statute imperative.‟
74. In Superintendent and Legal Remembrancer of Legal Affairs to Government of West Bengal Vrs. Abani Maity, (1979) 4 SCC 85 this Court observed as follows:
„Exposition ex visceribus actus is a long-recognised rule of construction. Words in a statute often take their meaning from the context of the statute as a whole. They are therefore, not to be construed in isolation. For instance, the use of the word „may‟ would normally indicate that the provision was not mandatory. But in the context of a particular statute, this word may connote a legislative imperative, particularly when its construction in a permissive sense would relegate it to the unenviable position, as it were, „of an ineffectual angel beating its wings in a luminous void in vain‟. „If the choice is between two interpretations‟, said Viscount Simon, L.C. In Nokes Vrs. Doncaster Amalgamated Collieries, Ltd. (AC at p. 1022):
„The narrower of which would fail to achieve the manifest purpose of the legislation, we should avoid a construction which would reduce the legislation to futility and should rather accept the bolder construction based on the view that Parliament would legislate only for the purpose of bringing about an effective result.‟ ***"
7.10. It has been observed in Debasish Paul Vrs. Amal Boral, (2023) 4 SCR 511 as follows:
W.P.(C) No.6233 of 2025 Page 25 of 72"15. It is relevant to note that the case of Bijay Kumar Singh Vrs. Amit Kumar Chamariya, (2019) 10 SCC 660 in turn, referred to the observations made in Nasiruddin and Ors Vrs. Sita Ram Agarwal, (2003) 1 SCR 634 in the following terms:
„37. *** It is well settled that the real intention of the legislation must be gathered from the language used. It may be true that use of the expression "shall or may" is not decisive for arriving at a finding as to whether the statute is directory or mandatory. But the intention of the legislature must be found out from the scheme of the Act. It is also equally well settled that when negative words are used the courts will presume that the intention of the legislature was that the provisions are mandatory in character.
38. *** if an act is required to be performed by a private person within a specified time, the same would ordinarily be mandatory but when a public functionary is required to perform a public function within a time-frame, the same will be held to be directory unless the consequences therefor are specified.‟ ***"
7.11. In Union of India Vrs. A.K. Pandey, (2009) 10 SCC 552 the observation of Hon'ble Supreme Court of India runs as follows:
"9. In his classic work, Principles of Statutory Interpretation (7th Edn.), Justice G.P. Singh has quoted a passage of Lord Campbell in Liverpool W.P.(C) No.6233 of 2025 Page 26 of 72 Borough Bank Vrs. Turner, (1860) 30 LJ Ch 379 that reads:
„No universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory whether implied nullification for disobedience. It is the duty of courts of justice to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be considered.‟
10. In Crawford‟s Statutory Construction (1989 reprint), the following excerpt from People Vrs. Sutcliffe, 7 NYS (2) 431 is quoted:
„It is a rule of statutory construction that where a statute is framed in terms of command, and there is no indication from the nature or wording of the act or the surrounding circumstances that it is to receive a permissive interpretation, it will be construed as pre- emptory‟.
In his discussion on the subject, "Mandatory and Directory or Permissive Words" Crawford in the aforenoticed treatise says:
„Ordinarily the words „shall‟ and „must‟ are mandatory, and the work „may‟ is directory, although they are often used inter-changeably in legislation. This use without regard to their literal meaning generally makes it necessary for the courts to resort to construction in order to discover the real intention of the legislature. Nevertheless, it will always be presumed by the court that the legislature intended to use the words in their usual and natural meaning. If such a meaning, however, W.P.(C) No.6233 of 2025 Page 27 of 72 leads to absurdity, or great inconvenience, or for some other reason is clearly contrary to the obvious intention of the legislature, then words which ordinarily are mandatory in their nature will be construed as directory, or vice versa. In other words, if the language of the statute, considered as a whole and with due regard to its nature and object, reveals that the legislature intended the words „shall‟ and „must‟ to be directory, they should be given that meaning. Similarly, under the same circumstances, the word „may‟ should be given a mandatory meaning, and especially where the statute concerns the rights and interests of the public, or where third persons have a claim de jure that a power shall be exercised, or whenever something is directed to be done for the sake of justice or the public good, or is necessary to sustain the statute‟s constitutionality.
Yet the construction of mandatory words as directory and directory words as mandatory should not be lightly adopted. The opposite meaning should be unequivocally evidenced before it is accepted as the true meaning; otherwise, there is considerable danger that the legislative intent will be wholly or partially defeated.‟ Crawford further says in his treatise that prohibitive or negative words can rarely, if ever, be directory. *** Negative, prohibitory and exclusive words or terms are indicative of the legislative intent that the statute is to be mandatory.
11. In Thompson Vrs. Stimpson, (1961) 1 QB 195 = (1960) 3 WLR 818 = (1960) 3 All ER 500, Lord W.P.(C) No.6233 of 2025 Page 28 of 72 Parker, C.J. (Queen‟s Bench Division) while dealing with the wording of Section 16 of the Rent Act, 1957 which provided that no notice by a landlord or a tenant to quit any premises let (whether before or after the commencement of the Act) as a dwelling shall be valid unless it is given not less than four weeks before the date of which it is to take effect held that four weeks‟ notice contemplated in Section 16 should be construed as four clear weeks. This is what Lord Parker, C.J. observed: (QB p. 200) „Parliament here, however, has gone further and used [the] words which ... have been interpreted in the past as providing for four clear weeks. Like Bennett, J., Hector Whaling Ltd., In re, 1936 Ch 208 = 1935 All ER Rep 302, I think that there ought to be certainty on this matter, and I prefer the view that the word should be construed as four clear weeks.‟
12. A Constitution Bench of this Court in M. Pentiah Vrs.
Muddala Veeramallappa, AIR 1961 SC 1107 construed the expression, "not less than two-third of the whole number of members" in Section 77 of the Hyderabad District Municipalities Act, 1956 as follows:
„15. *** This section confers on the Committee an express power couched in a negative form. Negative words are clearly prohibitory and are ordinarily used as a legislative device to make a statute imperative. If the section is recast in an affirmative form, it reads to the effect that the Committee shall have power to transfer any immovable property, if the conditions laid down under the section are complied with.‟ W.P.(C) No.6233 of 2025 Page 29 of 72
13. In Lachmi Narain Vrs. Union of India, (1976) 2 SCC 953 this Court construed the expression, "not less than three months‟ notice" in Section 6(2) of the Delhi Laws Act and held:
„64. Section 6(2), as it stood immediately before the impugned notification, requires the State Government to give by notification in the Official Gazette „not less than 3 months‟ notice' of its intention to add to or omit from or otherwise amend the Second Schedule. The primary key to the problem whether a statutory provision is mandatory or directory, is the intention of the law- maker as expressed in the law, itself. The reason behind the provision may be a further aid to the ascertainment of that intention. If the legislative intent is expressed clearly and strongly in imperative words, such as the use of „must‟ instead of „shall‟, that will itself be sufficient to hold the provision to be mandatory, and it will not be necessary to pursue the enquiry further. If the provision is couched in prohibitive or negative language, it can rarely be directory, the use of peremptory language in a negative form is per se indicative of the intent that the provision is to be mandatory. (Crawford, The Construction of Statutes, pp. 523-24.) Here the language of sub-section (2) of Section 6 is emphatically prohibitive, it commands the Government in unambiguous negative terms that the period of the requisite notice must not be less than three months.W.P.(C) No.6233 of 2025 Page 30 of 72
65. In fixing this period of notice in mandatory terms, the legislature had, it seems taken into consideration several factors. According to the scheme of the Bengal Act, the tax is quantified and assessed on the quarterly turnover. The period of not less than three months‟ notice conforms to that scheme and is intended to ensure that imposition of a new burden or exemption from tax causes least dislocation and inconvenience to the dealer in collecting the tax for the Government, keeping accounts and filing a proper return, and to the Revenue in assessing and collecting the same. Another object of this provision is that the public at large and the purchasers on whom the incidence of the tax really falls, should have adequate notice of taxable items. The third object seems to be that the dealers and others likely to be affected by an amendment of the Second Schedule may get sufficient time and opportunity for making representations, objections or suggestions in respect of the intended amendment. The dealers have also been ensured adequate time to arrange their sales, adjust their affairs and to get themselves registered or get their licences amended and brought in accord with the new imposition or exemption.
66. Taking into consideration all these matters, the legislature has, in its judgment solemnly incorporated in the statute, fixed the period of the requisite notice as „not less than three months‟ and willed this obligation to be absolute. The span of notice was thus the W.P.(C) No.6233 of 2025 Page 31 of 72 essence of the legislative mandate. The necessity of notice and the span of notice both are integral to the scheme of the provision. The sub-section cannot therefore be split up into essential and non-essential components, the whole of it being mandatory. The rule in Raza Buland Sugar Co. case, AIR 1965 SC 895 = (1965) 1 SCR 970 has therefore no application.‟
14. In Mannalal Khetan Vrs. Kedar Nath Khetan, (1977) 2 SCC 424 while dealing with Section 108 of the Companies Act, 1956 a three-Judge Bench of this Court held:
„17. In Raza Buland Sugar Co. Ltd. Vrs. Municipal Board, Rampur, AIR 1965 SC 895 = (1965) 1 SCR 970 this Court referred to various tests for finding out when a provision is mandatory or directory. The purpose for which the provision has been made, its nature, the intention of the legislature in making the provision, the general inconvenience or injustice which may result to the person from reading the provision one way or the other, the relation of the particular provision to other provisions dealing with the same subject and the language of the provision are all to be considered. Prohibition and negative words can rarely be directory. It has been aptly stated that there is one way to obey the command and that is completely to refrain from doing the forbidden act. Therefore, negative, prohibitory and exclusive words are indicative of the legislative intent when W.P.(C) No.6233 of 2025 Page 32 of 72 the statute is mandatory. (See Maxwell on Interpretation of Statutes, 11th Edn., pp. 362 et seq.; Crawford: Statutory Construction, Interpretation of Laws, p. 523 and Bhikraj Jaipuria Vrs. Union of India, AIR 1962 SC 113 = (1962) 2 SCR 880.)
18. The High Court said that the provisions contained in Section 108 of the Act are directory because non-compliance with Section 108 of the Act is not declared an offence. The reason given by the High Court is that when the law does not prescribe the consequences or does not lay down penalty for non-compliance with the provision contained in Section 108 of the Act the provision is to be considered as directory. The High Court failed to consider the provision contained in Section 629(a) of the Act.
Section 629(a) of the Act prescribes the penalty where no specific penalty is provided elsewhere in the Act. It is a question of construction in each case whether the legislature intended to prohibit the doing of the act altogether, or merely to make the person who did it liable to pay the penalty.
19. Where a contract, express or implied, is expressly or by implication forbidden by statute, no court will lend its assistance to give it effect. (See Melliss Vrs. Shirley Local Board, (1885) 16 QBD 446). A contract is void if prohibited by a statute under a penalty, even without express declaration that the contract is void, because such a penalty W.P.(C) No.6233 of 2025 Page 33 of 72 implies a prohibition. The penalty may be imposed with intent merely to deter persons from entering into the contract or for the purposes of revenue or that the contract shall not be entered into so as to be valid at law. A distinction is sometimes made between contracts entered into with the object of committing an illegal act and contracts expressly or impliedly prohibited by statute. The distinction is that in the former class one has only to look and see what acts the statute prohibits; it does not matter whether or not it prohibits a contract: if a contract is made to do a prohibited act, that contract will be unenforceable. In the latter class, one has to consider not what act the statute prohibits, but what contracts it prohibits. One is not concerned at all with the intent of the parties, if the parties enter into a prohibited contract, that contract is unenforceable. (See St. John Shipping Corpn. Vrs. Joseph Rank Ltd., (1957) 1 QB 267 = (1956) 3 WLR 870 = (1956) 3 All ER 683) (See also Halsbury‟s Laws of England, 3rd Edn., Vol. 8, p. 141.)
20. It is well established that a contract which involves in its fulfilment the doing of an act prohibited by statute is void. The legal maxim a pactis privatorum publico juri non derogatur means that private agreements cannot alter the general law. Where a contract, express or implied, is expressly or by implication forbidden by statute, no court can lend its assistance to give it effect. (See Melliss Vrs. Shirley Local Board, (1885) 16 QBD 446.) What W.P.(C) No.6233 of 2025 Page 34 of 72 is done in contravention of the provisions of an Act of the legislature cannot be made the subject of an action.
21. If anything is against law though it is not prohibited in the statute but only a penalty is annexed the agreement is void. In every case where a statute inflicts a penalty for doing an act, though the act be not prohibited, yet the thing is unlawful, because it is not intended that a statute would inflict a penalty for a lawful act.
22. Penalties are imposed by statute for two distinct purposes:
(1) for the protection of the public against fraud, or for some other object of public policy;
(2) for the purpose of securing certain sources of revenue either to the State or to certain public bodies. If it is clear that a penalty is imposed by statute for the purpose of preventing something from being done on some ground of public policy, the thing prohibited, if done, will be treated as void, even though the penalty if imposed is not enforceable.
23. The provisions contained in Section 108 of the Act are for the reasons indicated earlier mandatory. The High Court erred in holding that the provisions are directory."
15. The principle seems to be fairly well settled that prohibitive or negative words are W.P.(C) No.6233 of 2025 Page 35 of 72 ordinarily indicative of mandatory nature of the provision; although not conclusive. The Court has to examine carefully the purpose of such provision and the consequences that may follow from non-observance thereof. If the context does not show nor demands otherwise, the text of a statutory provision couched in a negative form ordinarily has to be read in the form of command. When the word "shall" is followed by prohibitive or negative words, the legislative intention of making the provision absolute, peremptory and imperative becomes loud and clear and ordinarily has to be inferred as such. There being nothing in the context otherwise, in our judgment, there has to be clear ninety-six hours' interval between the accused being charged for which he is to be tried and his arraignment and interval time in Rule 34 must be read as absolute. There is a purpose behind this provision: that purpose is that before the accused is called upon for trial, he must be given adequate time to give a cool thought to the charge or charges for which he is to be tried, decide about his defence and ask the authorities, if necessary, to take reasonable steps in procuring the attendance of his witnesses. He may even decide not to defend the charge(s) but before he decides his line of action, he must be given clear ninety-six hours."
7.12. In CST Vrs. Prabhudayal Prem Narain, 1988 Supp SCC 729 in the context of claim of exemption and fulfilment of condition for allowing exemption, it has been laid down as follows:
W.P.(C) No.6233 of 2025 Page 36 of 72"5. Under the said section, declaration forms have been prescribed by Rule 12-B. It appears that this question stands concluded so far as the State of U.P. is concerned, by a Bench decision of the said High Court in the case of Govind Ram Tansukh Rai & Co. Vrs. CST, 1985 UPTC 1060. There, after considering the aforesaid two decisions of the learned Single Judges, the Division Bench held that if the assessee had not furnished the required declaration forms in order to be entitled for exemption, the assessee could not file any other evidence which was required to be considered by the Taxing Authorities.
6. In that view of the matter the decision of the Division Bench must prevail. This also follows logically from the decision of this Court in Kedar Nath Jute Mfg. Co. Ltd. Vrs. CTO, (1965) 3 SCR 626 = AIR 1966 SC 12 where this Court while dealing with similar provisions under the Bengal Finance Sales Tax Act, held that the dealer could claim exemption on the sales to the registered dealer by furnishing the declaration form and unless such declaration forms are furnished, the dealer was not entitled to any exemption. This Court further reiterated that the provisions of this nature should be construed as mandatory. In that view of the matter there is no scope for taking any contrary view. In the premises, the High Court in the impugned order was in error in directing the Tribunal to consider the matter on other evidence. The assessee is entitled to exemption only on furnishing declaration forms. Since the assessee did not do so, he was not entitled to exemption."
7.13. A well settled rule of interpretation of the statutes is that the use of the word "shall" in a statute, does not W.P.(C) No.6233 of 2025 Page 37 of 72 necessarily mean that in every case it is mandatory that unless the words of the statute are literally followed, the proceeding or the outcome of the proceeding, would be invalid. It is not always correct to say that if the word "may" has been used, the statute is only permissive or directory in the sense that non-compliance with those provisions will not render the proceeding invalid [State of U.P. Vrs. Manbodhan Lal Srivastava, AIR 1957 SC 912] and that when a statute uses the word "shall", prima facie, it is mandatory, but the Court may ascertain the real intention of the legislature by carefully attending to the whole scope of the statute [State of U.P. Vrs. Babu Ram Upadhya, AIR 1961 SC 751]. The principle of literal construction of the statute alone in all circumstances without examining the context and scheme of the statute may not serve the purpose of the statute [Reserve Bank of India Vrs. Peerless General Finance and Investment Co. Ltd., (1987) 1 SCC 424]. Vide, C. Bright Vrs. Collector, (2020) 7 SCR 997.
7.14. As confirmed by chemical test that the goods carried in the vehicle in question is "molasses" having potential of content of alcohol, non-availability of the invoice and the permit at the time of search would lend indication that there was motive for evasion and violation of sine qua non condition for transportation of such goods into the State of Odisha from outside.
W.P.(C) No.6233 of 2025 Page 38 of 727.15. In order to ensure that the goods entering into the State of Odisha are not possessed, stored, used or sold within the State by adopting evasive and dubious devices the system of permit is introduced by way of Section 7 and Section 17 read of the OE Act read with Rules famed. It is to safeguard not only the interest of the State exchequer (taxes) but also citizens from suffering health hazards.
7.16. To fortify the view that the provisions are mandatory in nature and required to be strictly complied with can be perceived from the background material for introduction of "molasses" to be construed as "intoxicant" with its restriction on movement from outside the State to this State.
7.17. In the case of State of West Bengal Vrs. Sujit Kumar Rana, (2004) 1 SCR 870 it has further been observed as follows:
"7. Taking into consideration the object of the Forest Act and other relevant considerations, this Court in the above said case of State of Karnataka Vrs. K. Krishnan, (2000) 7 SCC 80 while allowing the said appeal held:
„The courts cannot shut their eyes and ignore their obligations indicated in the Act enacted for the purpose of protecting and safeguarding both the forests and their produce. The forests are not only the natural wealth of the country but also protector W.P.(C) No.6233 of 2025 Page 39 of 72 of human life by providing a clean and unpolluted atmosphere. We are of the considered view that when any vehicle is seized on the allegation that it was used for committing a forest offence, the same shall not normally be returned to a party till the culmination of all the proceedings in respect of such offence, including confiscatory proceedings, if any. Nonetheless, if for any exceptional reasons a court is inclined to release the vehicle during such pendency, furnishing a bank guarantee should be the minimum condition. No party shall be under the impression that release of vehicle would be possible on easier terms, when such vehicle is alleged to have been involved in commission of a forest offence. Any such easy release would tempt the forest offenders to repeat commission of such offences. Its casualty will be the forests as the same cannot be replenished for years to come.‟
8. From the above dictum of this Court, we find when a vehicle is involved in a forest offence the same is not to be released to the offender or the claimant as a matter of routine till the culmination of the proceedings which may include confiscation of such vehicle.‟ ***"
7.18. In the same breath as above in connection with vehicles used in commission of forest offence, this Court may observe that molasses, rectified spirit, denatured spirit or denatured spirituous preparations like French polish, varnish, thinner, etc., are available at low price because of less or no excise duty, and therefore there is always a W.P.(C) No.6233 of 2025 Page 40 of 72 propensity of its misuse by diverting it surreptitiously and using it illegally for making potable alcohol, commonly known as illicit liquor, which many a times account for the unfortunate hooch tragedies that result in death or blindness of the persons consuming the adulterated spirit. The State Government therefore is faced with an unenviable task and required to keep a constant vigil and supervise the manufacture, import, export, transport, storage, sale, purchase, use, etc. of the molasses, mohua flower, rectified spirit, denatured spirit or denatured spirituous preparations through the prohibition and the Excise Authorities or staff of Police establishment so as to ensure that the same are not diverted illegally and clandestinely for potable use and also to ensure that excise duty is not evaded. It must however be also mentioned that notwithstanding what is stated above, as well as Article 47 of the Constitution, though in the State of Odisha there is prohibition for all persons to manufacture, possess, use, store, sale, purchase, transport, etc., of potable liquors, the State Government parts with this privilege and permits the same by issuing licences/permits/passes under various Rules framed under the OE Act, 2017, in view of the extensive revenues it earns on the excise duty levied on potable liquors.4 4 Reference may be made to Sahakar Maharshi Shankarrao Mohite Patil Sahakari W.P.(C) No.6233 of 2025 Page 41 of 72 7.19. Such regulatory measures have been put in place in the State Excise statute by way of restriction and prohibition with "permit raj". Therefore, the provisions containing prohibition/restriction are required to be construed strictly and movement of molasses having potential of alcohol cannot be allowed from one State to this State without valid permit. For obvious reasons the State Government has put such embargo which can very well be understood from the observations made in Uma Enterprises Vrs. State of Odisha, 2012 (II) ILR-CUT 211. This Court made elaborate discussions with respect to inclusion of "molasses" to be treated as "intoxicant" in the Odisha Excise Act, 2008 (repealing the Bihar and Orissa Excise Act, 1915 in its application to the State of Orissa), which came into force with effect from 01.04.2017. To have better conspectus of "molasses"
being so introduced in the State Excise statute has been enunciated by way of following pertinent observations in the said case:
"7. Further, it is stated that Molasses is a by-product of sugar and it is mainly used as raw material for manufacturing of spirit including alcohol for human consumption. It was found that most of the molasses produced were diverted for preparation of potable liquor as a result of which many unscrupulous liquor mafia got scope for using molasses which are supplied for being used in industries for preparation Sakhar Karkhana Ltd. Vrs. State of Maharashtra, 2011 SCC OnLine Bom 616.W.P.(C) No.6233 of 2025 Page 42 of 72
of illicit liquor as a result of which not only State suffers huge revenue but also several liquor tragedies are taking place.
8. Further, he placed strong reliance upon the Report of the Justice B.K. Behera, wherein suggestion was given to amend the Excise Laws by inserting the Molasses within the purview of „intoxicant‟ as it is the principal raw material used for manufacture of alcohol. Therefore, it is contended by the learned Government Advocate that there is no illegality whatsoever in bringing such amendment incorporating Section 2(12-a) of the Bihar and Orissa Excise Act. It is also contended that Molasses has also been defined as „intoxicant‟ by other States like Bihar, U.P., Maharastra etc. and the vires of such inclusion were challenged and have been upheld by the Apex Court in State of Bihar Vrs. Industrial Corporation Pvt. Ltd., AIR 2004 SC 1151. He also placed reliance upon the report of Justice Behera Commission, wherein it is observed as follows:
„Molasses have been the main raw material for manufacture of alcohol which traditionally has also been the source of organic chemicals in India. 60% of alcohol goes for potable liquor manufacturer and 40% towards industrial use, resulting in low capacity utilization of alcohol based industries. Compulsions of better revenues, recourse crunch and its easy availability forced the existing distilleries to go in for manufacture of potable alcohol despite specific recommendations of Expert Committees (Swaminathan Commission in 1977) to the effect that Molasses based alcohol be totally reserved for industrial purpose or in the alternative to freeze the W.P.(C) No.6233 of 2025 Page 43 of 72 alcohol allocation to potable liquor or in the alternative freeze the alcohol allocation to potable liquor at the pre-1977 levels but such a situation did not materialized and the industry continued in bondage to the drinking fraternity. No sobering thoughts prevailed upon the policy on the industries requiring alcohol. Alternative to meet the gap of about 2000 lakh liters of alcohol had to be evolved and in the process, appearance of cheaper intermediates like Naphtha and other Hydrocarbon substances in the liquor world, tempted the unscrupulous traders to divert a part of such cheaper substitutes to potable alcohol without caring for a while into the positive harmful effects of the alternate food stock like petroleum Naphtha and gases including methanol (based on gas) as a cheaper route for production of acetic acid. There is also demand for utilization of alternate food stock like Mahua Flowers and best root for manufacture of potable alcohol thereby saving alcohol from Molasses for being used as feed stock for alcohol based industries. Such a strategy would have saved the liquor consuming public from the dreadful tragedies that are reported in almost every part of the country.‟
9. Therefore, learned Government Advocate requested to dismiss the writ petition.
10. In the counter affidavit at paragraph-7, it is contended that Molasses Control Order, 1961 issued by the Government of India under Section 18(g) of the Industries (Development & Regulation) Act, 1951 was holding the field of control and regulation of Molasses. This order has been repealed by the W.P.(C) No.6233 of 2025 Page 44 of 72 Government of India on 10.06.1993. While decontrolling the molasses, the Government of India advised all the Sate Government to exercise strict vigilance on the undue diversion of molasses for manufacture of potable alcohol. At the time of withdrawal of Molasses Control Order, 1961, the Government of India, Ministry of Chemicals and Fertilizers, Department of Chemicals and Petro Chemicals have in their letter No.15021 dated 11.06.1993 advised the State Government in the following manner:
„While taking the decision to decontrol molasses and alcohol, the need to ensure that there is no undue diversion of molasses to the potable alcohol section has been emphasized by the Government fears have been expressed that molasses in a decontrolled situation may be diverted for potable alcohol production. It has also been alleged that the potable alcohol sector, with its ability to pay higher prices for molasses, may corner a major part of the molasses in the country. This would have a serious impact on the availability of molasses for industrial alcohol. It is therefore particularly important that strict vigilance is exercise in this regard. It hardly needs to be emphasized that even after the decontrol of molasses and alcohol the power of the State Governments/Union Territories Administration to regulate the potable alcohol section under their excise regulations and other laws would remain intact.
*** In Orissa Act 2 of 1999, molasses has been included as an „intoxicant‟ in Section 2 (12-a) of the Bihar and W.P.(C) No.6233 of 2025 Page 45 of 72 Orissa Excise Act, 1915. The import, transport, storage and use of molasses in the State is being regulated and controlled by issue of executive instructions in order to safe guard the interest of the Govt. and public at large and to ensure that molasses is not diverted for production of illegal potable liquor.‟ ***
13. With reference to the above rival legal contentions, we have carefully examined as to:
(i) Whether the petitioner is entitled to the relief striking out inclusion of the Molasses as one of the intoxicants as defined under Section 2 (12-
a) of the Act?
(ii) What order ?
14. Our answer to the aforesaid points is in negative for the following reasons.
Inclusion of Molasses to the definition of „intoxicant‟ is from Entry No.8 inter-related to Entry nos.6 and 51 and in the backdrop of the said inclusion it must be considered de-controlling of the molasses the Government of India Molasses order, 1961, which was framed under Section 18(g) of the Industries (Development & Regulation) Act, 1951. Further, the Government of India at the time of withdrawal of Molasses Order, 1961 the Government of India, Ministry of Chemicals and Fertilizers, Department of Chemicals and Petro Chemicals have in their letter dated 11.6.1993 advised the State Governments in the manner stated supra. The said relevant factor was taken into consideration and further the W.P.(C) No.6233 of 2025 Page 46 of 72 State Legislature keeping in view the Orissa Act 2 of 1999 has rightly incorporated the Molasses as an intoxicant taking into consideration the suggestions given by Justice B.K. Behera who was appointed as one-man Commission to enquire into the aforesaid liquor Tragedy in the State. In his report, he has also referred to the percentage of the Molasses that 60% alcohol goes for manufacture of potable liquor and 40% towards industrial use resulting in low capacity utilization of the alcohol based industries. Further, lot of material is collected with regard to use of Molasses manufactured liquor and selling the same is not brought under control of the Excise Act and Rules thereby the tragedies which have taken away the lives of poor and socially and economically backward class people by consuming the same. On account of deregulated Molasses being used for manufacture of illicit liquor periodical tragedy are taken place in the State of Orissa is the reason for brining the said Molasses under the definition of Section 2 (12-a) of the Act. It is also rightly placed reliance upon the decision of the Supreme Court in State of Bihar Vrs. Industrial Corporation Pvt. Ltd., AIR 2004 SC 1151, wherein, Molasses has been defined as „intoxicant‟ in other States like Bihar, U.P. and Maharashtra the vires were challenged that have been extensively dealt with and answered in the aforesaid judgment. The aforesaid decision with all fours is applicable to the present case.
15. In view of the aforesaid decision and the reasons which have been assigned by the State Government in support of the inculcation of Molasses as W.P.(C) No.6233 of 2025 Page 47 of 72 „intoxicant‟ to the definition of Section 2(12-a) of the Excise Act, we do not find any good ground to interfere with the same. The writ petition is devoid of merit and is dismissed as such."
7.20. Noteworthy here to have regard to following observations made in Sitaram and Bros. Vrs. State of Rajasthan, (1995) 1 SCC 257:
"4. Thereby, it would appear that the Legislature intended to regulate the import, export, transport or possession of molasses. The question is whether the Amendment Act is repugnant to the provisions of the Industries Development Regulation Act or the Molasses Control Order, 1961 made by the Central Government exercising the power under Section 18-G of the Industries (Development and Regulation) Act, 65 of 1951. Clause (17-A) inserted by the Amendment Act is in pari materia is the definition given in clause 2(a) of the Molasses Control Order, 1961 which came into effect for the State of Rajasthan with effect from 01.11.1975. The question, therefore, is whether Section 4 of the Amendment Act introducing molasses in clause (d) of sub-section (2) of Section 41 of the Rajasthan Excise Act, 1950, is repugnant to the provisions of the Molasses Control Order or any other relevant order occupied under Act 65 of 1951. The Molasses Control Order, 1961 regulate restriction on sale, clause (3), restriction on removal, clause (4), storage of molasses, clause (5), grading of molasses, clause (6) and pricing maximum for the sale regulated by clause (7). As seen the operation of the Molasses Control Order and the operation of the W.P.(C) No.6233 of 2025 Page 48 of 72 Amendment Act have not occupied the same field nor run into collision course. It is seen that the Amendment Act was made by the State Legislature exercising the power under Entry 33(a) of the Concurrent List read with Entry 24 of State List as molasses is a by-product of a sugar industry covered by the Industries Development Regulation Act. The Amendment Act does not enter into the occupied field of the Molasses Control Order. There is no inconsistency in their operation and that therefore both the Amendment Act and the Molasses Control Order would harmoniously co-exist and operate in their respective fields. The State Legislature had thereby made the Amendment Act regulating the import, export, transport or possession of molasses within the State of Rajasthan. Thus, we find that the Amendment Act is within the legislative competence under Article 246(3) of the Constitution. The appeals are dismissed accordingly but without costs."
7.21. In the light of the above perspective of "molasses" being treated as "intoxicant" and by virtue of definitions of these terms in Section 2 of the OE Act, there is no doubt in mind that the provisions imposing restrictions on movement of molasses from one State to the other is to be strictly construed and any sort of liberal construction may cause another tragedy which occurred in this State decades ago.
7.22. Having regard to aforesaid conspectus of treatment of molasses as intoxicant, considering that non-availability W.P.(C) No.6233 of 2025 Page 49 of 72 or non-production of documents like invoice and permit at the time of search of the vehicle while moving with taral gur/"molasses" (confirmed in the chemical test) from the State of West Bengal to the State of Odisha there can be no two opinions than that the vehicle bearing Registration No.OD-01-AD-1005 (Tata-407) being used for commission of offence under the OE Act and rules framed thereunder, the confiscation order of the AO has been affirmed by the Appellate Authority with justified reason.
7.23. The application in Form XLVI (ML-5) for grant of permit requires following information to be divulged to the authority as required under Rule 241:
"Form XLVI (ML-5) [see Rules 241, 243 and 245] Application for import/export/transport of molasses To The Collector, District_____
1. Name of the applicant (in Block letters):
2. Father‟s Name :
3. Permanent Address :
4. Occupation :
5. Details of licence held by the Applicant (nature of licence, its No. & date):
6. Quantity of molasses required to be imported/exported/transport:W.P.(C) No.6233 of 2025 Page 50 of 72
7. Place from which the import/export/ transport shall be made:
8. Place to which the import/export shall be made:
9. Mode of conveyance & route :
10. Name and address of the person from whom the import is to be made/ to whom the export is to be made/ from whom or to whom the transport is to be made:
11. Period within which the import/export/ transport intended to be made:
Place:
Date: Signature of the Applicant"
7.24. Such information for grant of permit is required to be submitted before the authority concerned in order to safeguard against possible evasion of transactions or misuse of goods after entry into the State of Odisha, for in that event the authority can follow up and satisfy themselves that there is no evasion in respect of goods so transported. In the case at hand, the petitioner has neither submitted invoice at the spot nor could he furnish the permit. As it appears in the garb of tarala gur the petitioner was carrying molasses in the vehicle without necessary documents. The AO is, therefore, justified in not accepting the invoice sought to be submitted at a later date.W.P.(C) No.6233 of 2025 Page 51 of 72
7.25. In the case of Aruna Sugars Limited Vrs. State of Tamil Nadu, 2002 SCC OnLine Mad 1267 it has been made clear that, "27. In Razakbhai Issakbhai Mansuri Vrs. State of Gujarat, 1993 Supp (2) SCC 659 the petitioners argued that even a bona fide trader in Gur may land in the hands of unscrupulous officer who is armed with the vague definition of "rotten gur". Similar apprehension is voiced by the petitioners here on the ground that molasses is an industrial by-product of sugar manufacture and the authorities do not know technical details regarding automatic combustion etc. and therefore, the State Act will result in gagging the Sugar Industry. In the above case, the Supreme Court answered a similar question:
„9. While considering the argument, addressed on behalf of the petitioners, it should be kept in mind that the impugned provisions do not place absolute restriction or prohibition either against the possession of "rotten gur" or the manufacture, use or consumption thereof. The law requires only a permit to be taken in advance and admittedly there is no hurdle in obtaining such a permit, which is readily available on the payment of a nominal fee. The purpose of the permit is to make available information to the authorities concerned as to the persons dealing in "rotten gur" to facilitate vigilance against misuse of "rotten gur" for preparation of intoxicating liquors. There is absolutely no difficulty in obtaining such a permit in advance which will be a complete W.P.(C) No.6233 of 2025 Page 52 of 72 remedy for all the hardships highlighted on behalf of the petitioners. The grievance of the petitioner is that the requirement to obtain permit is violative of the freedom to carry on any trade and business of one‟s choice guaranteed by Article 19(1)(g). We do not find any substance in the argument that the restriction complained against can be considered to be such a hindrance as to infringe sub-clause (g). The freedom is not uncontrolled and clause (6) of Article 19 authorises legislation which imposes reasonable restrictions on this right in the interests of the general public. The question, therefore, is whether the restriction placed by the impugned amendment is in the interests of the general public and can be considered reasonable.‟ ***
32. In Synthetics and Chemicals Ltd. Vrs. State of UP, (1990) 1 SCC 109, the manner in which molasses gets transformed into alcohol was described. When mixed with yeast, molasses ferment and alcohol is produced. Fermentation stops when the alcohol strength reaches 10-12% since at that percentage it is toxic to yeast. For higher strength, fermented alcohol is distilled and by distillation 96% strength of alcohol is produced. This is known as ethyl alcohol and it can be used both for consumable and industrial purposes. Therefore, to say that the Central Order would occupy the field in a manner that the State cannot exercise its area of legislation W.P.(C) No.6233 of 2025 Page 53 of 72 under Entry 8, which deals with intoxicating liquor cannot be accepted.
***
37. In Dwarka Prasad Laxmi Narain Vrs. The State of Uttar Pradesh, AIR 1954 SC 224 the Supreme Court held that the power of granting or withholding licenses has to be vested in certain public offices or bodies and they would certainly have to be left with some amount of discretion in these matters. It was held:
„So far no exception can be taken; but the mischief arises when the power conferred on such officers is an arbitrary power unregulated by any rule or principle and it is left entirely to the discretion of particular persons to do anything they like without any check or control by any higher authority. A law or order which confers arbitrary and uncontrolled power upon the executive in the matter of regulating trade or business in normally available commodities cannot but be held to be unreasonable.‟
38. This was referred to in Ch. Tika Ramji Vrs. State of U.P., 1956 SCC OnLine SC 9 = 1956 SCR 393 = AIR 1956 SC 676 and it was also held that it is permissible to impose reasonable restrictions in public interest.
39. The rules, which are attacked in these writ petitions cannot be said to impose a total restriction. As has been seen already, it is not as if there is an absolute restriction on possession, sale or transportation of molasses, it is only that such possession, sale or transportation shall be within the parameters of the W.P.(C) No.6233 of 2025 Page 54 of 72 rules. The authorities cannot exercise the power of granting, suspending, cancelling or refusing to grant license as they please, because they have to give reasons for doing so. Each rule specifically mentions the duty to give reasons. There was no check or control on this power by higher authorities until 1983, when the Tamil Nadu Prohibition Appeal and Revision Rules were enacted. Therefore, subsequent to the filing of the writ petitions, the appellate and revisional safeguards have been introduced to check irregular exercise of power. So while the vice of uncontrolled power may have existed at the time these petitions were filed, now the powers given to the original authority to grant, suspend or refuse licence is subject to the check and control of the higher authorities.
40. We are also informed that the Central Order was repealed in 1993. As far as molasses is concerned, only the State Rules are in force today."
7.26. As it emanates from the Order dated 08.01.2025 of the Excise Commissioner it is fact that the vehicle, of which the petitioner is the registered owner, has been seized by the Officer-in-Charge of Deuli Excise Station, Mayurbhanj in connection with PR Case No.31/2024-25, dated 18.05.2024 and 2(a) CC No.187/2024 before the learned Judicial Magistrate First Class-I, Baripada for transportation of 5000 kilograms of molasses with necessary documents-- invoice and permit.
W.P.(C) No.6233 of 2025 Page 55 of 727.27. The Appellate Authority-the Excise Commissioner, Odisha, Mayurbhanj vide Order dated 08.01.2025 has recorded the following fact:
"Shree Niranjan Sahoo, Ex-OIC of Deuli Excise Station & IO of the said case stated that he had seized 5000 Kilograms of molasses from the said vehicle and the appellant was present in the vehicle during the detection. The appellant had neither produced any online bill nor any pass/permit regarding transportation of molasses from Shree Subham Enterprise, Raghunathpur, Jhargram, West Bengal to Sai Marketing Agency, Balasore, Odisha. He was also arrested in the said case."
7.28. Under the aforesaid premise since chemical test confirms that the goods imported from outside the State is "molasses", transportation of the same requires permit under Section 7 and Section 17 of the OE Act read with concerned rules framed thereunder. In absence of production of necessary documents before the officer on demand at the time of search would entail action under Section 71 of the OE Act, provisions of which empowers the Collector, or any officer of the Excise, Police, Customs or Revenue Department to seize inter alia intoxicant and vehicles used for commission of offence under the Act.
7.29. Whereas Section 62 envisages imposition of penalty for possession of intoxicant in respect of which an offence W.P.(C) No.6233 of 2025 Page 56 of 72 has been committed, Section 65 contemplates treatment a person importing, exporting, transporting, manufacturing, selling or possessing on account of another to be deemed to have been doing the same on behalf of such other person and provisions of Section 71 of the OE Act indicate that the power of confiscation is independent of any proceeding and confiscation envisages a civil liability.
7.30. Provisions of Section 62, Section 65 and Section 71 stand thus:
"62. Penalty for possession of intoxicant in respect of which an offence has been committed.--
(1) lf any person, without lawful authority, has in his possession any quantity of any intoxicant knowing, or having reason to believe the same to have been unlawfully imported, transported or manufactured' or knowing or having reason to believe that the prescribed duty has not been paid thereon, he shall be liable to imprisonment for a term which may extend to three years or to fine which may extend to ten thousand rupees, or both.
(2) Any owner or occupant of a place, if found to have stored or caused to be stored any intoxicant for which an offence has been committed under this Act, shall be liable to pay fine which shall not be less than rupees ten thousand but may extend to rupees five lakhs.W.P.(C) No.6233 of 2025 Page 57 of 72
65. Import, export, transport, manufacture, sale or possession by one person on account of another.--
(1) When any intoxicant has been imported, exported, transported, manufactured or sold or is possessed by any person on account of any other person, and such other person knows or has reason to believe that such import, export, transport, manufacture or sale was, or that such possession is on his account the article shall, for the purposes of this Act, be deemed to have been imported, exported, transported, manufactured or sold by or to be in possession of, such other person.
(2) Nothing in sub-section (1) shall absolve any person, who imports, exports, transports, manufactures, sells or has possession of an intoxicant on account of another person, from liability to any punishment under this Act for unlawful import, export, transport, manufacture, sale or possession of such article.
71. Seizure of property liable to confiscation.--
(1) (a) When there is reason to believe that any offence under this Act has been committed, the intoxicant, materials, stills, utensils, implements, apparatus, receptacles, package, coverings, animals, carts, vessels, rafts, vehicles, or any other conveyances or articles or materials used in committing any such offence may be seized by the Collector or any Officer of the Excise Police, Customs or Revenue Departments.
(b) any intoxicant lawfully imported, transported, manufactured in possession or sold alongwith, W.P.(C) No.6233 of 2025 Page 58 of 72 or in addition to, any intoxicant which is liable to seizure under clause (a) and the receptacles, packages and coverings in which any such intoxicants as aforesaid, or any such materials, stills, utensil, implement or apparatus as aforesaid, is found and the other contents, if any, of such receptacles or packages, and the animals, carts, vessels, rafts, vehicles or other conveyances used in carrying the same, shall likewise be liable to seizure.
(2) Every officer seizing any property under this section shall, except where the offender agrees in writing to get the offence compounded under Section 75, produce the property seized before the Collector, or an officer, not below the rank of a Superintendent of Excise, authorized by the State Government in this behalf by notification (hereinafter referred to as „Authorized Officer‟).
(3) Where the Collector or the Authorized Officer seized any property under sub-section (1) or where the property seized is produced before him under sub- section (2) and he is satisfied that an offence under this Act has been committed in respect thereof, he shall, without prejudice to any other punishment to which the offender is liable under this Act, order confiscation of the property so seized or produced together with all other materials, articles, vehicles or conveyances used in committing such offence, whether or not a prosecution is instituted for the commission of such an offence.
(4) No order confiscating .any property shall be made under sub-section (3) unless the person from whom the property is seized is given:
W.P.(C) No.6233 of 2025 Page 59 of 72(a) a notice in writing informing him of the grounds on which it is proposed to confiscate such property;
(b) an opportunity of making a representation in writing within such reasonable time as may be specified in the notice; and
(c) a reasonable opportunity of being heard in the matter.
(5) Without prejudice to the provisions of sub-section (4), no order of confiscation under sub-section (3) of any articles, materials, vehicles or conveyances shall be made if the owner thereof proves to the satisfaction of the Collector or the Authorized Officer, as the, case may be, that it was used without his knowledge or connivance or the knowledge or connivance of his agent, if any, or the person in charge of such property, in committing the offence and that each of them had taken all reasonable and necessary precautions against such use.
(6) Any person aggrieved by an order passed under sub-section (3) may, within thirty days from the date of such order, appeal to the Excise Commissioner, who shall after giving an opportunity to the parties to be heard, pass such order as he may think fit.
(7) The property seized under this Section shall be kept in the custody of the Collector, the Authorized Officer or the other officer seizing such property or with any third party, until the amount for compounding the offence or the sum equal to the prevailing market value of the W.P.(C) No.6233 of 2025 Page 60 of 72 seized property or both are paid or until it is confiscated as the case may be:
Provided that the seized property shall not be released during pendency of the confiscation proceedings even on the application of the owner of the property for such release.
(8) Whenever property seized is liable to confiscation under this section and the offender or the person entitled to possession is not known or cannot be found, the case shall be inquired into and determined by the Collector or the Authorized Officer, who may order confiscation : Provided that no such order shall be made until the expiration of one month from the date of seizing of the property to be confiscated, or without hearing any person who may claim any right within the said period and the evidence if any, which he produces in support of his claim.
(9) If the property seized is liable to speedy and natural decay, or if the Collector or the Authorized Officer, as the case may be, is of the opinion that sale would be for the benefit of its owner, such officer may, at any time, direct it to be sold and the provisions of this section shall, as nearly may be practicable, apply to the net proceeds of the sale.
(10) Subject to the rules as may be made by the State Government under Section 90, the Collector or the Authorized Officer, while making an order of confiscation, may also order that such of the properties to which the order of confiscation relates, which in his opinion to be recorded in writing cannot W.P.(C) No.6233 of 2025 Page 61 of 72 be preserved or not fit for human consumption, may be destroyed.
(11) Where the Collector or the Authorized Officer after passing an order confiscation under sub-section (3) is the opinion that, it is expedient in the public interest so to do, he may order the confiscated property or any part thereof to be sold by public auction or dispose of departmentally.
(12) The Collector or the Authorized Officer shall submit a full report of all particulars of confiscation to the Excise Commissioner within twenty-four hours of such confiscation.
(13) The Collector or the Authorized Officer shall, for the purposes of this Act, have the same powers as are vested in the Civil Court under the Code of Civil Procedure, 5 of 1908, while making inquiries under this section in respect of the following matters namely:
(a) receiving evidence on affidavit;
(b) summoning and enforcing the attendance of any person and examining him on oath; and
(c) compelling the production of documents."
7.31. As has already been discerned from the affidavits claimed to have been furnished before the AO to consider the online tax invoice dated 18.05.2024, which was stated to have been printed later on, that they are not genuine, but tainted, invoice was found not furnished at the spot when search of vehicle was W.P.(C) No.6233 of 2025 Page 62 of 72 undertaken before the Investigating Officer. For such non-production of any permit and/or invoice, adverse inference could be taken that the molasses (confirmed by the chemical test) of 5,000 kilograms was being carried in the vehicle without valid permit and necessary document.
7.32. The fiction contained in Section 65 of the OE Act envisages to treat the transporter in the same footing as if he is the importer, who transported or sold the subject-goods. Where a statute creates a legal fiction the Court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to.
7.33. If any person wants to enjoy the benefit granted under a deeming provision he must adhere to the conditions which are to be followed in order to bring him under the beneficial provision of the deeming clause. When the law requires that an imaginary state of affairs should be treated as real, then unless prohibited from doing so, one must also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. [Regard be had to State of Travancore- Cochin Vrs. Shanmugha Vilas Cashewnut Factory, AIR 1953 SC 333; State of Bombay Vrs. Pandurang Vinayak, AIR 1953 SC 244; Bengal Immunity Co. Ltd. Vrs. State of W.P.(C) No.6233 of 2025 Page 63 of 72 Bihar, AIR 1955 SC 661; CCT Vrs. Swarn Rekha Cokes & Coals Pvt. Ltd., (2004) 136 STC 57 (SC); Z Engineers Construction Pvt. Ltd. Vrs. BDA, 2006 (II) OLR 277 (Ori).
7.34. In Rishabh Agro Industries Ltd Vrs. P.N.B. Capital Services Ltd, (2000) 5 SCC 515, in the context of Section 441 of the Companies Act, 1956, the following meaning is attributed to deeming fiction:
"The word "deemed" as used in Section 441 of the Act means "supposed", "considered", "construed", "thought", "taken to be" or "presumed"."
7.35. In Bhuwalka Steel Industries Ltd. Vrs. Union of India, (2017) 5 SCC 598 reference of St. Aubyn Vrs. Attorney General, 1952 AC 15 = (1951 2 All ER 473 (HL) was made and the relevant portion is quoted hereunder from said Judgment:
"The word „deemed‟ is used a great deal in modern legislation. Sometimes it is used to impose for the purposes of a statute an artificial construction of a word or phrase that would not otherwise prevail. Sometimes it is used to put beyond doubt a particular construction that might otherwise be uncertain. Sometimes it is used to give a comprehensive description that includes what is obvious, what is uncertain and what is, in the ordinary sense, impossible."
7.36. Since the documents like tax invoice and valid permit as required under Section 7 and Section 17 of the OE Act read with Rule 240 of the OE Rules being not furnished W.P.(C) No.6233 of 2025 Page 64 of 72 at the time of search of the vehicle, this Court does not find any scope to interfere with the factual finding recorded by the Appellate Authority.
8. Another significant provision which is required to be noticed is Section 53 of the OE Act, which reads thus:
"53. Presumption as to possession of intoxicant by the accused.--
In an offence under, Section 52 of this Act, if it is established by chemical analysis or by adducing evidence of trained Excise Officer or otherwise that the seized liquid, materials or other things are:
(a) intoxicant; or
(b) still, utensil, implement or apparatus whatsoever for
the manufacture of any intoxicant other than tari; or
(c) any material, which has undergone any process towards the manufacture of any intoxicant or from which an intoxicant has been manufactured;
the Court shall presume that the seized liquid or materials or other things are recovered from the conscious possessin of the accused unless and until the contrary is proved.
Explanation.-- TRAINED EXCISE OFFICER shall mean an Officer who has undergone distillery training and obtained a certificate from the concerned Superintendent of Excise."
8.1. With respect to presumption and rebuttable presumption reference to the following dicta of the Hon'ble Supreme Court of India Sodhi Transport Co. Vrs.
W.P.(C) No.6233 of 2025 Page 65 of 72State of U.P., (1986) 1 SCR 939 = (1986) 62 STC 381 (SC), would suffice:
"A presumption is not in itself evidence but only makes a prima facie case for party in whose favour it exists. It is a rule concerning evidence. It indicates the person on whom the burden of proof lies. When presumption is conclusive, it obviates the production of any other evidence to dislodge the conclusion to be drawn on proof of certain facts. But when it is rebuttable it only points out the party on whom lies the duty of going forward with evidence on the fact presumed, and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed the purpose of presumption is over. Then the evidence will determine the true nature of the fact to be established. The rules of presumption are deduced from enlightened human knowledge and experience and are drawn from the connection, relation and coincidence of facts, and circumstances."
8.2. Taking cue from such provision read with the proposition of law enunciated in the above reported decision of the Hon'ble Supreme Court, when the purport of Section 71 of the OE Act is examined, it is unequivocal that for non-availability or non-furnishing of necessary documents including permit for carrying molasses, the vehicle and the goods could be seized by the authority. As is apparent from Order dated 27.08.2024 of AO the vehicle, after being seized upon due notice to the petitioner, has been confiscated to Government under Section 71(3). Such order being W.P.(C) No.6233 of 2025 Page 66 of 72 appealed against got affirmed by the Excise Commissioner vide Order dated 08.01.2025. In view of sub-section (7) of Section 71, the seized vehicle is required to be kept in the custody of the authority until the amount of compounding the offence or sum equal to the prevailing market value of the seized vehicle or both are paid or until it is confiscated. However, proviso appended thereto, clearly lays down that such seized vehicle shall not be released during pendency of the confiscation proceedings even on the application of the owner of the vehicle for such release. The petitioner has not put forth any plea that the amount of compounding of offence or sum equal to the prevailing market value of the vehicle or both had been paid. Therefore, the Appellate Authority having confirmed the Order of confiscation passed by the AO, there is no warrant for this Court to show indulgence.
Conclusion:
9. There is no cavil about power to search the vehicle as the source of power is envisaged under Section 79 of the OE Act, which reads thus:
"Power to search.--
(1) The Collector or Sub-Divisional Magistrate, or Judicial Magistrate of the first class, or any Special Court constituted under this Act, having jurisdiction to try offences punishable under this Act upon W.P.(C) No.6233 of 2025 Page 67 of 72 information, received and after such inquiry, if any, as he or it thinks necessary, if he or it has reason to believe that any offence punishable under Section 52, 54, 55, 58, 62, or 63 has been or is likely to be committed or abetted, may by warrant authorize, any Police or Excise Officer above the rank of a Police or Excise Constable, as the case may be, to enter, with such assistance as may be required, any place and search, for any intoxicant, material, stills, utensil, implement or apparatus in respect of which the alleged offence has been, or is likely to be, committed or abetted, or any document which throws or is likely to throw any light on the alleged offence.
(2) Whenever an Excise Officer not below such rank as the State Government may, by notification, specify, has reason to believe that an offence punishable under Section 52, 54, 55, 58, 59, 62 or 63 has been or is being, or is likely to be, committed or abetted, and that a search warrant cannot be obtained without affording the offender an opportunity of escaping or of concealing evidence of the offence, he may, after recording the grounds of his belief, at any time by day or night, enter and search any place and may seize anything found therein which he has reason to believe to be liable to seizure under this Act, and may detain and search and if he thinks proper, arrest any person found in such place whom he has reason to believe to have committed or abetted any such offence as aforesaid."
9.1. In addition thereto, conferring power to search of vehicle and seizure of vehicle along with the subject-goods can be traced in Section 71.
W.P.(C) No.6233 of 2025 Page 68 of 729.2. With the discussed background material fact in the foregoing paragraphs that the seized goods, "cane molasses", bearing potential of alcohol, established by the chemical analysis/test, which remained unimpeached, and the commodity being "intoxicant" as comprehended in the definition vide Clauses (t) and (x) of Section 2 of the OE Act, import and transportation of the said commodity required to be accompanied by invoice and permit as envisaged under Section 7 and Section 17 read with Rules 234 and 240, which fact on record, the petitioner could not demonstrate to be false by proffering plausible explanation supported by evidence, for the discussion made supra and reasons assigned, this Court does not find any flaw in arriving at the conclusion by the Appellate Authority-Excise Commissioner, Odisha, Mayurbhanj vide Order dated 08.01.2025 sustaining the Order dated 27.08.2024 of the Authorised Officer-cum- Superintendent of Excise, Mayurbhanj.
10. For exercise of power of judicial review as has been succinctly laid down in Sarvepalli Ramaiah Vrs. The District Collector, Chittoor District, (2019) 5 SCR 372 is given hereunder:
"23. Administrative decisions are subject to judicial review under Article 226 of the Constitution, only on grounds of perversity, patent illegality, irrationality, want of power to take the decision and procedural irregularity. Except on these grounds administrative W.P.(C) No.6233 of 2025 Page 69 of 72 decisions are not interfered with, in exercise of the extra ordinary power of judicial review.
24. In this case, the impugned decision, taken pursuant to orders of Court, was based on some materials. It cannot be said to be perverse, to warrant interference in exercise of the High Court‟s extra ordinary power of judicial review. A decision is vitiated by irrationality if the decision is so outrageous, that it is in defiance of all logic; when no person acting reasonably could possibly have taken the decision, having regard to the materials on record. The decision in this case is not irrational.
25. A decision may sometimes be set aside and quashed under Article 226 on the ground of illegality. This is when there is an apparent error of law on the face of the decision, which goes to the root of the decision and/or in other words an apparent error, but for which the decision would have been otherwise.
26. Judicial review under Article 226 is directed, not against the decision, but the decision making process. Of course, a patent illegality and/or error apparent on the face of the decision, which goes to the root of the decision, may vitiate the decision making process. In this case there is no such patent illegality or apparent error. In exercise of power under Article 226, the Court does not sit in appeal over the decision impugned, nor does it adjudicate hotly disputed questions of fact."
10.1. Reference can be had to State of West Bengal Vrs. Sujit Kumar Rana, (2004) 1 SCR 870 wherein the following W.P.(C) No.6233 of 2025 Page 70 of 72 observations have been made by the Hon'ble Supreme Court in the context of forest offence:
"Against an order of confiscation, an appeal is provided and only an order of the appellate court, who is a judicial officer becomes final and binding but attaching finality to an order of the appellate court would not preclude a person aggrieved to move the High Court in judicial review.
Sufficient safeguards both substantive and procedural have, thus, been made against an arbitrary exercise of power."
10.2. In the present case, the petitioner failed to substantiate its claim that the goods carried in the vehicle were not "molasses", but gur simpliciter. By leading evidence he could not demolish the authenticity of chemical test analysing that the goods were molasses having potential of alcohol. In absence of necessary documents including the permit being accompanied while carrying goods like intoxicant/molasses, in view of provisions of the OE Act and the rules framed thereunder as referred to above and on the touchstone of ratio of the decision of the Hon'ble Supreme Court of India in Sodhi Transport Co. Vrs. State of U.P., (1986) 1 SCR 939 = (1986) 62 STC 381 (SC), it is but corollary that the opposite parties were justified in directing for confiscation of vehicle used for carrying molasses from the State of West Bengal to the State of Odisha without valid permit.
W.P.(C) No.6233 of 2025 Page 71 of 7211. Ergo, the writ petition is dismissed being devoid of merit, but in the circumstances, there shall be no order as to costs.
12. As a result of disposal of the writ petition, all pending interlocutory applications, if any, shall stand disposed of.
I agree (HARISH TANDON) (MURAHARI SRI RAMAN) CHIEF JUSTICE JUDGE Signature Not Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-Charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 12-May-2025 11:25:06 High Court of Orissa, Cuttack The 09th May, 2025//Aswini/Laxmikant/Suchitra W.P.(C) No.6233 of 2025 Page 72 of 72