Excise duty can not be levied through executive order: SC

New Delhi, May 19 (UNI) The Supreme Court has held that excise duty can not be levied through an executive order and the state must enact a law through legislation to impose such levy on the distilleries.

The ruling was handed down by a bench comprising Mr. Justices S.B.

Sinha and P.P. Naolekar on May 12 vide which appeal of the state of Uttar Pradesh was dismissed.

The state of UP had come in appeal against Allahabad high court judgment allowing the writ petitions filed by the respondents Saraya Industries Ltd. Mc Dowell&Co.,DCM Shriram Industries,National Industrial Corporation, Radico Khaitan and others challenging the order of the Excise Commissioner of the state dated March 24,2001 directing the distilleries would be held responsible for the wasted holograms issued to them by the department to be affixed on their products and the holograms would be destroyed under the orders of the excise commissioner. Security holograms were to be issued to prevent evasion of excise duty.

Further clarification issued by the commissioner said that distilleries would be liable to compensate the government for the loss of alleged duty on the quantity of liquor, which could have been issued under the lost security holograms.

The respondents were directed to deposit the excise duty on the quantities mentioned in the said holograms.

The Supreme Court, upholding the high court judgment, observed,"We are therefore of the opinion that in the absence of the requisite statutory backing , the impugned levy by the state can not be held to be justified in law. We therefore do not find any merit in these appeals. They are accordingly dismissed." "By reason of an executive instruction the provisions of the law can not be effaced," the court further said while making it clear that the court had not gone into the question as regard the applicability of the rules vis-a-vis the new conditions imposed in the licence , in the instant case.

UNI AKS/SC RP RN1950