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Judgment
K.S. Jhaveri, CJ
Heard learned counsel for the parties.
By way of these writ petitions, the petitioner, in the respective cases, has challenged the circular dated 3rd January, 1990 which has been issued by
the State Government, particularly by the office of the I.G.R.-cum-Excise Commissioner, Odisha, Cuttack in exercise of power under Rule 34(2) of
the Board’s Excise Rules, 1965.
By the aforesaid circular, the State Government has directed as under:
“I am directed to draw your attention to this Office Circular No.1062 (13) dated 21.2.84 wherein instructions were conveyed for recovery of cost
of establishment of the Excise Staff from the I.M.F.L. Warehouse licensees of the State. Some Bottling units of I.M.F.L. have now come into
operation in the State to which the Excise staff have been posted to supervise the operations carried on by such units. In pursuance of rule 34(2) of
the Board’s Excise Rules, 1965, and in supersession of the instructions contained in the office Circular under reference, the Excise Commissioner
has been pleased to order that steps for recovery of cost of establishment from the concerned I.M.F.L. Manufacturing and Bottling units in the matter
indicated below may be taken immediately.
(a) The actual amount disbursed as pay, dearness allowance, additional dearness allowance and house rent allowance disbursed to Excise personnel
posted whole time to Warehouses and manufacturing/bottling units should be recovered.
(b) The amount paid as F.T.A./T.A. except FT.A. paid to Excise Constables, shall not be recovered,
(c) Where personnel are posted part-time, or in addition to their other duties, minimum days of attendance should be fixed by the Superintendent of
Excise and so much of the amount referred to under (a) and (b) above as bears the same proportion the minimum days of attendance bear to a month
shall be recovered.
 (d) Where the staff have to attend to more than one I.M.F.L. Warehouse and do not have any other duties, the cost of staff calculated in pursuance
of (a) and (b) above shall be pooled and equally apportioned among all Warehouses.
As far as the current month (January, 1990) is concerned, recovery from Warehouses should be made in accordance with the instructions
contained in the Office Circular referred to above and recovery in the manner indicated above should be made with effect from 1.2.90. As regards
Manufacturing/Bottling units, recovery in the current month should be limited to 50 (fifty) percent of the amount due in accordance with the present
instructions; from 1.2.90, however, recovery should be made at full rates.
A statement showing the amount assessed and realized unit wise may be sent to the Excise Commissioner every month for information. “
The main contention of the petitioner is that Rule 34(2) of the Board’s Excise Rules, 1965 does not empower the authority under the
Board’s Excise Rules to issue such a circular and the same is ultra vires of Rule 34(2) of the Board’s Excise Rules, 1965. Petitioner
contended that Rule 34(2) empowers the Government of Odisha to prescribe fees for maintaining a warehouse and for conducting the operations in
consonance with Sub-rule (1) of Rule 34 of the said Rules. It also empowers the Commissioner to determine fees to meet with the cost of excise staff
employed for the purpose of discharging functions under the said rule. However, it does not confer any power either on the State Government or
Commissioner of Excise to determine fees to be paid by the licensee for maintenance of the staff employed by the Excise Department for a distillery.
For ready reference, Rule 34(2) reads as under:
“34. Appointment of staff for supervision and payment of fees.- (1) xx xx xx
(2) The licensee shall pay to the State Government the fees for maintaining a warehouse and for conducting the operations referred to in Sub-rule (1)
at the rates prescribed for each in Chapter VIII of these rules, at the time of obtaining the licence and at the end of each calendar month pay such
fees as may be determined from time to time by the Commissioner, which shall not exceed in amount the whole of the cost of the excise staff
employed for the purpose of this rule.â€
Having heard learned counsel for the parties and considering the materials available on record, we are of the view that the Government has power
to impose or recover the fees for the staff for supervision of the operation carried on in each warehouse and store room mentioned in Rule 33(3) of
the Board’s Excise Rules, 1965. Sub-rule (1) of Rule 34, also reads as under:
“34. Appointment of staff for supervision and payment of fees.- (1) The Commissioner shall determine and appoint the Excise Officer and
staff necessary for the proper supervision of the operations carried on in each warehouse or store-room mentioned in Sub-rule (3) of Rule 33.
[Provided that if any Unit will function with the prior approval of the Excise Commissioner for more than one shift [i.e. 8 (eight) hours], additional staff
shall be posted as would be determined by the Excise Commissioner and the cost of establishment of the officer and staff including the additional staff,
as prescribed in Sub-rule (2), shall be borne by the Unit.â€] 6. Taking into consideration that the petitioner has no warehouse and the fees has been
imposed on the distillery for which he has paid license fees, no such fees as envisaged under the impugned circular is leviable.
Rule 34 (2) of Board’s Excise Rules, 1965 has been wrongly exercised qua distillery. In the case at hand, as circular dated 03.01.1990 runs
contrary to statutory provision and there is no power conferred to impose or collect fees or charges for the staffs appointed by the Commissioner of
Excise in respect of distillery pursuant to the impugned circular.
Learned Government Advocate for the State-opposite parties have supported the circular and contended that in view of Rule 34 (2) of the Rules,
1965, warehouse and store room being part of the distillery, the same is amenable to rigour of the said rule.
However, we are unable to accept such submission of learned Government Advocate. In our considered opinion, the circular issued by the Excise
Department is beyond the scope of Rule 34(2) of the Board’s Excise Rules, 1965. However, if the warehouse is a part of any distillery, in that
event, the State Government shall issue notice to the licensee and taking into consideration the reply to the said notice and survey report as well as
taking a decision after hearing the petitioner, can pass an order in respect of warehouse or store room. However, no recovery can be made in terms
of the impugned circular. Therefore, the circular dated 03.01.1990 is required to be quashed and set aside. Accordingly, the said circular is quashed
and set aside.
Any recovery, if already made from the petitioner(s), will be refunded to it, within four months from today or the same will be adjusted against future
dues.
The writ petitions are allowed to the extent indicated above. All the connected Misc. Cases/I.As, in the respective writ petitions, are also disposed
of.