Madhya Pradesh High Court
M/S Pernod Ricard India Pvt. Ltd Thr vs The State Of Madhya Pradesh Thr on 2 July, 2018
1
THE HIGH COURT OF MADHYA PRADESH
W.P. No. 3244/2016, W.P. No. 3300/2016, W.P. No. 3301/2016
M/s Pernod Ricard India Pvt. Ltd. Vs. State of M.P. and others
Gwalior, 02/07/2018
Shri Puneet Agrawal, Ms. Purvi Sinha, Ms. Sonal
Mittal, learned counsel for the petitioner.
Shri Praveen Newaskar, learned Government
Advocate for the respondents/State.
At the outset it is submitted by learned counsel for the petitioner that the issue raised in batch of these writ petitions is as to the competency of the State and its functionaries to impose Commercial Tax/ Value Added Tax by virtue of Entry No. 18 to Schedule-I of the Madhya Pradesh Commercial Tax Act, 1994 or Entry No. 47 to Schedule-I of the Madhya Pradesh Value Added Tax Act, 2002 on Indian Made Foreign Liquor / Rectified Spirit, an excisable article under Madhya Pradesh Excise Act, 1915, has been answered against the Revenue and in favour of the petitioner by Co-ordinate Bench of this Court in Writ Petition No. 2366/2016 [Gwalior Alcobrew Pvt. Ltd. State of Madhya Pradesh], wherein it is held:-
2THE HIGH COURT OF MADHYA PRADESH W.P. No. 3244/2016, W.P. No. 3300/2016, W.P. No. 3301/2016 M/s Pernod Ricard India Pvt. Ltd. Vs. State of M.P. and others "21. In the case of Lilasons Breweries Pvt.
Ltd. (supra), a Division Bench of this Court took note of Section 25 of the M.P. Excise Act and held that there cannot be any dispute to the effect that the State is not entitled to charge duty of customs including export duty which falls under Entry 83 of the list I of the Constitution. In the case of Lilasons Breweries Pvt. Ltd. (supra) export fee was being charged on Indian Made Foreign Liquor (Beer) and this levy of export fee/ export duty was challenged by saying that export duty cannot be levied by a State in exercise of its power under Entry 51 of list -2 as it is only the Union Government which can impose customs or excise duty under Entry 83 of list 1. The Court, in the aforesaid case took note of the meaning of the word "export", "import" as appearing in the M.P. Excise Act and held that the duty payable by the petitioner with regard to Foreign Liquor exported out of M.P. namely, Beer in the said case, and payment of duty for such export which is collected as export duty, in real and 3 THE HIGH COURT OF MADHYA PRADESH W.P. No. 3244/2016, W.P. No. 3300/2016, W.P. No. 3301/2016 M/s Pernod Ricard India Pvt. Ltd. Vs. State of M.P. and others infact is a duty of excise which is levied at the point of export of beer from M.P. to another State. It has been held in the aforesaid case after taking note of the provisions of Section 25 sub section (1)
(b) and 1(e) of the M.P. Excise Act that when an excisable good manufactured within the State is subjected to duty at the point of its export outside M.P. the real nature of duty is not export duty but only excise duty and for upholding this preposition, reliance has been placed on the judgment of Supreme Court in the case of R. C. Jall Parsi (supra). We find that in the matter of export of liquor from the State of M.P. also certain export fees are paid and if we take note of Rule 12 of the M.P. Foreign Liquor Rule, we find that a detailed procedure laid down for export of foreign liquor. Under this Rule the exporter is required to deposit the prescribed duty leviable on the full quantity of foreign liquor or in alternate furnish a bank guarantee for an equal amount from a local branch of a Nationalized Bank or execute a bond in Form FL23. It is only after payment of 4 THE HIGH COURT OF MADHYA PRADESH W.P. No. 3244/2016, W.P. No. 3300/2016, W.P. No. 3301/2016 M/s Pernod Ricard India Pvt. Ltd. Vs. State of M.P. and others this duty or guarantee for payment of duty by way of security that export is permitted and after the export is affected and duty paid in the State where the material is exported, refund can be claimed by producing a verification report with regard to consignment having paid duty in the exported State. It is therefore, clear from a complete reading of the statutory provisions and the Rules made under the Excise Act that Foreign Liquor manufactured in Madhya Pradesh is a excisable good, duty is leviable on such good under the Excise Act, when a IMFL manufactured in Madhya Pradesh is sold in Madhya Pradesh duty is charged but when it is exported out of Madhya Pradesh, the manufacturer and the exporter has to either deposit the duty in full or furnish certain security or guarantee equal to the amount of duty payable, then export the goods, pay duty in the exported State and then claim refund as contemplated under the provisions of Rule 12 and 13 of the M.P. Foreign Liquor Rules and if the 5 THE HIGH COURT OF MADHYA PRADESH W.P. No. 3244/2016, W.P. No. 3300/2016, W.P. No. 3301/2016 M/s Pernod Ricard India Pvt. Ltd. Vs. State of M.P. and others verification report as contemplated under Rule 13 is not produced within a reasonable time, the amount paid gets forfeited. The aforesaid factual aspect, if analyzed in the backdrop of various legal provisions as are detailed herein above, clearly shows that IMFL manufactured in Madhya Pradesh and sold outside the State, is an excisable artcle on which duty may or can be levied by the State but instead of levying duty the State has granted certain benefits or exemption on fulfillment of certain conditions and therefore, we have no hesitation to say that the provisions of entry 18 and 47 of Schedule I of the Commercial Tax Act and the VAT Act has to be interpreted by holding that the words used, namely, duty may be levied under the M.P. Excise Act clearly contemplates that Indian Made Foreign Liquor exported out of Madhya Pradesh is leviable to duty under the Excise Act, merely because the State Government is not levying any duty or is granting certain exemption or concession it cannot be said that it is 6 THE HIGH COURT OF MADHYA PRADESH W.P. No. 3244/2016, W.P. No. 3300/2016, W.P. No. 3301/2016 M/s Pernod Ricard India Pvt. Ltd. Vs. State of M.P. and others not a excisable good on which duty is not levied. It is a good on which duty is leviable and once it becomes a excisable good on which duty is leviable, it comes within the category of tax free good as provided under Section 15 and 16 of the Commercial Tax Act and the VAT Act and imposition of duty under the Commercial Tax Act and VAT Act is clearly impermissible."
And in Writ Petition No. 2367/2016 [M/s Gwalior Alcobrew Pvt. Ltd. Vs. State of M.P. & Others] and batch of petitions decided on 26/08/2016, wherein it is held:-
"2. .......... We find that in all these petitions be it IMFL or Rectified Spirit till amendment brought about in Entry No.47 to Schedule-I of the VAT Act vide notification issued on 1.4.2013, the principles laid down by us in the case of Gwalior Alcobrew Pvt. Ltd. (supra) will apply. After 1.4.2013 the question of imposition of duty/ tax with regard to Rectified Spirit may be different. But in all these cases as the assessment year 7 THE HIGH COURT OF MADHYA PRADESH W.P. No. 3244/2016, W.P. No. 3300/2016, W.P. No. 3301/2016 M/s Pernod Ricard India Pvt. Ltd. Vs. State of M.P. and others is prior to 1.4.2013, the principles laid down in the case of Gwalior Alcobrew Pvt. Ltd. (supra) will squarely apply and therefore, on this ground alone, all these petitions are required to be allowed and the impugned orders be it the orders of assessment, order passed by the Revisional Authority or proceeding initiated on show cause notices are liable to be quashed and we have no hesitation in doing so. However, apart from these questions, various other questions have been raised in the matters particularly with reference to Rectified Spirit. However, for the period in question as the goods are found to be not taxable in view of the law laid down in the case of Gwalior Alcobrew Pvt. Ltd. (supra), we are not inclined to go into all other questions canvassed in the writ petition. They are left open to be considered, if required on a future date in an appropriate case. As all these petitions are liable to be allowed in view of issues decided by us in the case of Gwalior Alcobrew Pvt. Ltd. (supra), we allow all these petitions. The impugned 8 THE HIGH COURT OF MADHYA PRADESH W.P. No. 3244/2016, W.P. No. 3300/2016, W.P. No. 3301/2016 M/s Pernod Ricard India Pvt. Ltd. Vs. State of M.P. and others action in the form of assessment order, order passed by the Revisional Authority, Appellate Authority or the Show cause notices and proceeding initiated thereto are quashed."
Learned Government Advocate initially had some hesitation in fairly admitting as to the issue being raised in these batch of petitions settled by the Co-ordinate Bench of this Court, however, after going through respective decisions, learned Government Advocate does not dispute the fact that the issue raised in present petitions has been answered in Gwalior Alcobrew Pvt. Ltd. (supra).
Since the present batch of writ petitions relates to assessment year 2011-12 & 2012-13, they are allowed in the same terms as Writ Petition No. 2366/2016 & Writ Petition No. 2367/2016 (supra).
Consequently, the impugned action in the form of assessment order, order passed by the Revisional Authority, Appellate Authority or the show cause notice and proceedings initiated thereon are 9 THE HIGH COURT OF MADHYA PRADESH W.P. No. 3244/2016, W.P. No. 3300/2016, W.P. No. 3301/2016 M/s Pernod Ricard India Pvt. Ltd. Vs. State of M.P. and others quashed.
Petitions are allowed to the extent above.
There shall be no order as to costs.
(Sanjay Yadav) (Ashok Kumar Joshi)
Judge Judge
shubh*
Digitally signed by
SHUBHANKAR MISHRA
Date: 2018.07.05 14:49:22
+05'30'