State's Obligation To Realize Excise Duty Illegally Collected By Wine Manufacturers: Bombay High Court Disposes PIL On Non-Realization Of Dues

A division bench of Chief Justice Devendra Kumar Upadhyay and Justice Amit Borkar took note of the affidavit filed by the Joint Commissioner of State Excise (Molasses & Alcohol), State of Maharashtra.

The affidavit stated that adequate steps had been taken to realize the excise duty and that demand notices were issued to various mine manufacturers that had collected excise duty from the consumers.

The High Court noted that the Supreme Court, while disposing of an appeal against an order of the Aurangabad bench, had issued certain directions to the State to realize the excise duty collected by the wine manufacturers. The Supreme Court had observed that if notices were issued to manufacturers to deposit excise duty, it was their responsibility to reply to the authorities that they had not collected the excise duty. It had stated that if such a reply was filed, the authorities should consider it and pass a reasoned order.

The High Court observed that the State has an obligation to realize any excise duty illegally collected by the wine manufacturers.

“Thus, the State is under legal obligation and mandate of the Hon'ble Supreme Court to realize the excise duty said to have been illegally collected by the wine manufacturers and there cannot be any doubt about such a duty cast upon the State.”

In view of the Joint Commissioner's affidavit, the Court disposed of the petition and directed the authorities in the excise department to finalize the proceedings initiated on issuance of the show-cause/demand notices to the wine manufacturers within two months.

“In the aforesaid circumstances, we dispose of this public interest litigation with a direction to the authorities in the excise department to finalize the proceedings initiated on issuance of the show-cause/demand notices to the wine manufacturers in respect of excise duty which is said to have been collected by such manufacturers from the consumers though they, under State Government's policy, were exempted from paying the excise duty. The proceedings of these demand notices shall be finalized within two months from today and recovery pursuant to such determination shall be completed within next one month.”

It remarked that the officers not finalizing the proceedings may be held personally liable.

“We further direct that any deviation from the directions being issued in this order may be viewed very seriously by the Court, and officers of the authorities concerned may be held personally liable for not completing the proceedings initiated by way of issuing demand notices and for non-realization of any amount which is due against the wine manufacturers.”

With these directions, the Court disposed of the PIL.

Case title: Jaiprakash Bawiskar The State of Maharashtra & Anr (Public Interest Litigation (L) No.36 of 2018)