Geeta Enterprises v. State of Rajasthan — 1993 DIGILAW 337 (RAJ)

Honble MEENA, J.—By this writ petition filed under Art. 226 of the Constitution,the petitioner has prayed that a writ of mandamus or any other appropriate writ, order or direction be issued to the respondents striking down a part of s. 3(4)(1) of the Rajasthan Excise Act, 1950(for short the Act) to the extent it includes denatured spirit and denatured spirituous preparation within the definition of excisable articles being ultravires of the Constitution and being beyond the legislative competence of the State Legislature and further striking down that part of the provisions of ss. 41 and 42 of the Act to the extent it purport to enact any provision conferring any powers on any of the respondents with respect to denatured spirit or denatured spirituous preparation whether it be imposing restrictions or regulating import, export, transport or possession or prescribe any fees for any licence, permit fees or pass etc. The petitioners further claim striking down a part of the provisions of s. 28 of the Act to the extent it purports to authorises the State Govt. to impose on levy any Excise Duty or countervailing duty on denatured spirit or denatured spirituous preparation and striking down any notification that may have been issued by any of the respondents imposing any such Excise Duty or countervailing duty on denatured spirit or denatured spirituous preparation. The petitioners have also prayed for striking down the provisions of r. 69-B of the Rajasthan Excise Rules, 1956 (hereinafter referred to as the Rules") to the extent it purports to levy or prescribe any permit fee on import or export or transport of any denatured spirit or denatured spirituous preparation. It was prayed that the Gazette Notification (Annexure-2) dated 16.3.1987, the permit (Annexure -3) dated 13.3.1989 and the letter (Annexure-4) dated 10.4.1989 be quashed and the respondents be restrained from enforcing any levy or recovery of any amount from the petitioners in the name of excise duty or countervailing duty or permit fees for import or export with respect to any denatured spirit or Thinner or denatured spirituous preparation. (2) The facts necessary for the disposal of this writ petition briefly stated are: that petitioner No. 1 M/s Geeta Enterprises is a partnership firm and petitioner No.2 Shri Mukesh Rahlan is its Manager. (2) The facts necessary for the disposal of this writ petition briefly stated are: that petitioner No. 1 M/s Geeta Enterprises is a partnership firm and petitioner No.2 Shri Mukesh Rahlan is its Manager. The petitioner firm was established in the year 1988 at Bhiwadi for the manufacture and sale of Thinner after obtaining a licence from the District Excise Officer, Bharatpur. It is alleged that in the manufacture of Thinner, the denatured spirit is used as a raw material and, therefore, the petitioner has to import denatured spirit from the surplus State like U.P. and after the manufacture of the Thinner, it has to sell it outside Rajasthan i.e. in Delhi and U.P. The respondents by virtue of s. 28 of the Act claimed that they have the power to impose or levy excise duty or countervailing duty on import and possession of industrial alcohol i.e. denatured spirit. They have further claimed that they have the power to recover excise duty and countervailing duty as also permit fee etc. not only on the import of the denatured spirit but also on the export of the Thinner because denatured spirit has been included in the definition of the excisable article as per s. 3(4)(1) of the Act. (3) According to the petitioners, the State Govt. has imposed excise duty and countervailing on the denatured spirit and denatured spirituous preparation @ Rs. 1.40 P. per litre when consumed in the State and at Rs. 0.65 P. per litre when exported out of the State. It has also imposed permit fee of Rs. 2/- per litre on denatured spirit and for its import and Rs. 2/- per litre for the export of the denatured spirituous preparation. It was, therefore, submitted by the petitioners that the petitioner firm, which produces Thinner with the denatured spirit as a raw material, has to pay an additional cost- of Rs. 6.05 P. per litre as excise duty and countervailing duty as also permit fee (Rs. 2/-pcr litre as permit fee for the export and Rs. 2/- per litre as permit fee for the import and Rs. 1.40 P. per litre as excise duty for the consumption of the" denatured spirit in the State for the manufacture of the Thinner and Rs. 0.65 P. per litre as Excise duty for the export of the denatured spirituous preparation). 2/- per litre as permit fee for the import and Rs. 1.40 P. per litre as excise duty for the consumption of the" denatured spirit in the State for the manufacture of the Thinner and Rs. 0.65 P. per litre as Excise duty for the export of the denatured spirituous preparation). (4) It was submitted that the denatured spirit being an industrial alcohol, the State Govt. or for that matter, the Excise Commissioner has no powers to impose any fee or duty on it in exercise of the powers conferred upon them under ss. 41 and 42 read with s. 28 of the Act keeping in view the definition of excisable articles as mentioned in s. 3(4) of the Act. It has also no such powers to prescribe any pernit fee under r. 69-B of the Rules as amended from time to time. It was further, submitted that Entry 84 of List I of Schedule VII of the Constitution as also Entry 51 of the Slate List authorises that State Govt. to levy excise duly on alcoholic liquors for human consumption only. According to the petitioners, the denatured spirit is being consumed by it for the manufacture of the Thinner and as such, the* State Govt. has no authority to levy any duty or fees on it, for its industrial use. (5) According to the petitioner-firm, it obtained the permit. Annexure-3 for importing 9,000 litres of denatured spirit for the manufacture of the Thinner and on that denatured spirit, the aforesaid excise and countervailing duty as also permit fees are being charged. In this connection, the petitioners have placed reliance on a decision of this Court in Shri Mahalaxmi Paints Industries vs. State of Rajasthan & Ors. (S.B. Civil Writ petition. No. 1688 of 1976, decided on 17.3.1979), wherein such a recovery of duty and fee has been held to be unconstitutional: It is alleged that against that decision, a special appeal has been filed by the State Govt. and (hat too bearing D.B. Civil Special Appeal? No. 116 of 1979 came to be decided by a Division Bench of this Court vide its Judgment dated 21.3.1986 and it was held that: such a levy is illegal and unconstitutional. That decision has been upheld by their lordships of the Supreme Court. and (hat too bearing D.B. Civil Special Appeal? No. 116 of 1979 came to be decided by a Division Bench of this Court vide its Judgment dated 21.3.1986 and it was held that: such a levy is illegal and unconstitutional. That decision has been upheld by their lordships of the Supreme Court. It was, therefore, submitted that the respondents are not entitled to make any recovery from the amount of the guarantee. furnished by them as regards payment of fee and excise and countervailing duly. (6) Reference has also been made to S.B. Civil Writ Petition Nog. 344 of 1983 and 2804 of 1986 filed by one Shatish Kumar Sethi and the decisions rendered thereon. According to the petitioners, they have also filed one writ petition bearing No. S.B. Civil Writ Petition No. 4088 of 1989, M/s. Geeta Enterprises vs." State, which came to be- decided by a learned single Judge of. this Court vide his Judgment dated 5.5.1992 whereby the levy of excise duty has not been challenged and, therefore-, without going into that question, it was held that the levy of permit fee is not unconstitutional and the writ petition was dismissed. A special appeal was filed against that decision, which was registered as D.B. Civil Special. Appeal No. 432 of 1992. This appeal was filed on 13.7.1992. On 19ill.l992, learned counsel for the petitioner sought to. withdraw the original writ petition itself with liberty to file a fresh writ petition and, therefore, the writ petition was dismissed as withdrawn and since the writ petition has been withdrawn, the special appeal filed against the decision passed in the writ petition was also disposed of accordingly. On 19ill.l992, learned counsel for the petitioner sought to. withdraw the original writ petition itself with liberty to file a fresh writ petition and, therefore, the writ petition was dismissed as withdrawn and since the writ petition has been withdrawn, the special appeal filed against the decision passed in the writ petition was also disposed of accordingly. (7) It was contended that since the writ petition bearing No. S.B. Civil Writ Petition No. 4088 of 1989 only comprehended the controversy regarding denatured spirit as referred to in Annexure-4 and since the demand of permit fee and excise duty was also raised on Thinner on the ground of its being denatured spirituous preparation and as during the pendency of that writ petition, the petitioner was advised to file another writ petition being Writ Petition No. 5416 of 1991 M/s. Geeta Enterprises & Another vs. State inter alia, seeking a direction restraining the respondents from realising or recovering any excise duty on denatured spirit and Thinner as also seeking to restrain them from realising and recovering permit fees on denatured spirit or Thinner on import or export, so also seeking a direction for the refund of Rs. 18,000/- with interest. It is alleged that in both these writ petitions, the validity of the provisions of Ss. 28,41, and 42 of the Act as also the provisions R. 69-B of the Rules were not challenged. The writ petition bearing No. S.B. Civil Writ Petition No. 5416 of 1991 was also withdrawn with liberty to file a fresh writ petition on 19.11.1992 whereas the present writ petition has been filed on 28.10.1992, although show cause notices were ordered to be issued to the respondents on 19.11.1992. (8) The case of the petitioners is that industrial alcohol is a central subject and after the 1956 amendment to the IDR Act, bringing alcohol industries (under fermentation industries) as item No. 26 of the First Schedule to FOR Act, the control of this industry has been vested exclusively in the Union. The State can neither rely on Entry 8 of List II nor Entry 33 of List III as a basis for such a claim. The State cannot claim that under Entry 33 of List III, it can regulate industrial alcohol as a product of the scheduled industry, because the Union, under S. 18-G of the IDR Act, has evinced clear intention to occupy the whole field. The State cannot claim that under Entry 33 of List III, it can regulate industrial alcohol as a product of the scheduled industry, because the Union, under S. 18-G of the IDR Act, has evinced clear intention to occupy the whole field. It was, therefore, claimed that all these provisions, which authorise the State Govt. to prescribe or levy excise duty or countervailing duty or any fee on the industrial alcohol either under S. 28 of the Act or under S. 41 of the Act arc ultra varies of the Constitution. Even the Excise Commissioner in exercise of his powers under S. 42 of the Act cannot prescribe such a levy of duty or fee. The provisions of R. 69-B of the Rules cannot be used for prescribing or levying such a duty or fee because it is beyond the legislative competence of the State Govt. and, therefore, it has been prayed that all these provisions be struck down to that extent and Annexures 2 and 4 be quashed. (9) A reply to the writ petition has been filed on behalf of the respondents, in which, it has been contended that in the writ petition, reference has been made to two earlier writ petitions filed by the petitioners bearing No 4088 of 1989 and 5416 of 1991. The writ petition bearing No. 4088 of 1989 was dismissed by a learned single Judge of this Court vide his order dated 5.5.1992 holding that the permit fee can be charged. Against that decision, a special appeal bearing D.B. Civil Special Appeal No. 432 of 1992 was filed and prayed for a stay but that prayer for the grant of stay was rejected by this Court vide its order dated 27.8.1992. According to the respondents, detailed reasons have been mentioned in the Judgment of this Court dated 5.5.1992 about rejection of the writ petition and, therefore, the present writ petition is not maintainable. According to the respondents, the other challenges which have now been made by the petitioner in this writ petition were not raised in the earlier writ petitions and, therefore, now, the petitioners cannot be permitted to raise these questions on the basis of the principle of constructive res-judicata. According to the respondents, the other challenges which have now been made by the petitioner in this writ petition were not raised in the earlier writ petitions and, therefore, now, the petitioners cannot be permitted to raise these questions on the basis of the principle of constructive res-judicata. (10) As regards the decision of this Court in Mahalaxmi Paints case (supra), it has been contended that Honble the Supreme Court has declared the imposition of excise duty and countervailing duty to be ultra vires prospectively and not retrospective in Synthetics & Chemicals Ltd. vs. State of U.P. (1), which was followed while deciding the appeal filed by the State against the Division Bench decision of this Court in Mahalaxmi Paints case (supra) in Civil Appeal Nos. 1744-48 of 1987, decided on 25.10.1990. In State of Rajasthan & Ors. vs. M/s Shri Mahalaxmi Paints Industry, Ajmer and Others (Civil Appeals Nos. 1744-48 of 1987, decided on 25.10.1990), their lordships of the Supreme Court have held that the issue in these appeals is now concluded by the decision of this Court in Synthetics & Chemicals Ltd. & Or. vs. State of U.P. & Ors. (supra), wherein this Court (Honble Supreme Court) has taken the same view that the State Legislature has no authority to impose levy of excise duty on denatured spirit and denatured spirituous preparations, which are not used for human consumption as that could only be levied by the Central Govt. Thus, it was submitted that those decisions have no bearing to the present controversy. (11) It was submitted that now, after this decision in Synthetics & Chemicals Ltd.s case (supra), a somewhat similar matter came up for consideration before this Court in Jaipur Minerals and Chemicals vs. State of Raj. & ors. (S.B. Civil Writ Petition No. 2092 of 1990, decided on 25.3.1991 and in M/s Pesticides India vs. The State of Raj. (S.B.C.W.No. 1628 of 1980, decided on 04.10.1991) and in both these cases, the imposition of excise duty or the countervailing duty has been held to be unconstitutional and void in terms of the Judgment in Synthetics & Chemicals Ltd.s case (supra) with effect from 25.10.1989. It was further submitted that after 25.10.1989, when the Judgment in Synthetics and Chemicals Ltd. case (supra) was pronounced, the State Govt. has unilaterally stopped the levy & realisation of excise duty or countervailing duty on industrial alcohol or denatured spirit. It was further submitted that after 25.10.1989, when the Judgment in Synthetics and Chemicals Ltd. case (supra) was pronounced, the State Govt. has unilaterally stopped the levy & realisation of excise duty or countervailing duty on industrial alcohol or denatured spirit. (12) It was further submitted that so far as the permit fee is concerned, it is being charged as a part of the regulatory measures and that is not in any way contrary to any of the provisions of the Constitution or of any law. According to respondents so far as regulatory measures are concerned, their lordships of the Supreme Court have observed in Synthetics & Chemicals Ltd. case (supra). "We must accept the position that States have the power to regulate the use of alcohol and that power must include power to make provisions to prevent and/or check industrial alcohol often being used as intoxicating or drinkable alcohol". According to the respondents, again in Bileshwar Khand Udhyogkhedut Sahakari Mandali Ltd. vs. State of Guj. (2) and in M/s Gujchem Distillers India Ltd. vs. State of Gujarat & Anr. (3), their lordships of the Supreme Court have held that regulatory fee can be imposed or recovered by the State Govt. even as regards the industrial alcohol. It was, therefore, claimed that such a regulatory measures permit the State Govt. to charge fee. The inclusion of the industrial alcohol in the definition of excisable articles contained in s. 3(4) of the Act is not against the Constitution. No Excise duty or countervailing duty under s. 28 of the Act is now being charged after the pronouncement of the Judgment by their lordships of the Supreme Court in Synthetics & Chemicals Ltd. case (supra) and, therefore, when no duty of any sort is being charged, the provisions of s. 28 of the Act cannot now be declared as unconstitutional. The imposition of excise duty or countervailing duty on the industrial alcohol or denatured spirit has already been declared by their lordships of the Supreme Court to be invalid prospectively. The challenge to the validity of the provisions of ss. 41 and 42 of the Act is liable to fail because the State Govt. has power to regulate; and to prevent and or check the industrial alcohol from being put to misuse. The provisions of r. 69-B of the Rules are also not invalid for the reasons aforesaid. The challenge to the validity of the provisions of ss. 41 and 42 of the Act is liable to fail because the State Govt. has power to regulate; and to prevent and or check the industrial alcohol from being put to misuse. The provisions of r. 69-B of the Rules are also not invalid for the reasons aforesaid. It Was submitted that the writ petition filed by the petitioners may be dismissed as not maintainable: (13) Alongwith reply to the writ petition filed by the respondents, replies filed in earlier two writ petitions bearing No. 4088 of 1989 and 5416 of 1991 have also been filed. (14) We have heard Mr. N.P. Gupta, the learned counsel appearing for the petitioners, Mr. S.M. Mehta, learned Advocate General appearing for the State and Mr. R.C. Maheshwari,the learned counsel for respondents No. 2 and 3 and have carefully gone through the record of the case. (15) Mr. S.M. Mehta, the learned Advocate General appearing for the State had raised a preliminary objection that this writ petition is barred by application of the principle of constructive res-judicata. He has submitted that the earlier writ petition bearing S.B. Civil Writ Petition No. 4088 of 1988, which came to be decided by this Court vide its Judgment dated 5.5.1990 and the special appeal filed against that Judgment bearing D.B. Civil Special Appeal no. 432 of 1992 were got dismissed as withdrawn on 19.11.1992 with an opportunity to file a fresh writ petition. Similarly, the writ petition bearing S.B. Civil Writ Petition No. 5416 of 1991 was also got dismissed as withdrawn with an opportunity to file a fresh writ petition, on 19.11.1992. According to Mr. Mehta, this writ petition was filed on 28.10.1992 i.e. prior to 19.11.1992. It is true that notices were ordered to be issued by this Court on 19.11.1992 in this writ petition by the same Bench but it cannot be said that this writ petition has been filed in pursuance of any order that has been passed by this Court whereby the earlier writ petitions were got dismissed with an opportunity to file fresh writ petition. It may be stated here that after 19.11.1992, when the earlier writ petitions were got dismissed as withdrawn with an opportunity to file fresh writ petition, no fresh writ petition has been filed and the present writ petition was filed earlier to the passing of that order and, therefore, it cannot be said that this writ petition has been filed in pursuance of that order and as such, the contention that the earlier writ petitions have been dismissed with an opportunity to file fresh writ petition and so, the principle of constructive res-judicata will not be applicable to this case cannot be sustained so far as this writ petition is concerned. (16) In S.B.Civil Writ Petition No. 4088 of 1989, not only the levy of permit fee was challenged but in paras 11 and 19 of that writ petition, imposition of excise duty and countervailing duty on the import of the denatured spirit was also challenged and in S.B.Civil Writ Petition No. 5416 of 1991, the imposition of excise duty and countervailing duty on the denatured spirit as also permit fee on the export or sale of Thinner which is a denatured spirituous preparation was also challenged. Thus, the imposition of duty and fee both were challenged in both these writ petitions and in preferring that challenge, the validity of the definition of excisable article contained in S. 3(4) (i) of the Act, the powers of the State Govt. to levy tax and fee under s. 28 of the Act and the validity of the orders that have been passed by the State Govt. in exercise of the powers conferred upon it under S.41 of the Act and in exercise of the powers conferred upon the Excise Commissioner to impose such a duty or fee under s. 42 of the Act and the validity of r. 69-B of the Rules were not challenged. When imposition of excise duty and countervailing duty as also imposition of permit fee or enhancement of permit fee were under challenge in those writ petitions then all grounds which were available for striking down the imposition or levy of such a duty or fee should have been raised in those writ petitions and if they have not been raised in those earlier writ petitions, they are barred by the principle of constructive res-judicata. (17) Mr. (17) Mr. S.M. Mehta, the learned Advocate General appearing for the State has drawn our attention to a decision of their lordships of the Supreme Court in T.G. Mudaliar vs. State of T.N. (4). In that case, the validity of Chapter IV-A of the Motor Vehicles Act was under challenge. The question regarding validity of Chapter IV-A on the ground of infringement of Art. 19(1)(f) of the Constitution which though open was not raised in the earlier writ petitions and on those facts, their lordships of the Supreme Court have held that this question cannot be allowed to be raised in the subsequent writ petitions. In para 10 of the Judgment, it has been observed by their lordships of the Supreme Court that it was open to those affected by the provisions of Chapter IV-A to have agitated before this Court,the question which is being raised now based on the guarantee embodied in Art. 19(1)(f) of the Constitution which was never done. It is apparently too late in the day now to pursue this line of arguments. In this respect, their lordships placed reliance on certain observations made by them in Md. Ayub Khan vs. Commr. of Police, Madras (5), wherein it has been observed that even if certain aspects of a question were not brought to the notice of the Court, it would decline to enter upon re-examination of the question since the decision had been followed in other cases. Thus, the plea to raise constitutional validity of Chapter IV- A of the Motor Vehicles Act was not allowed to be raised on the ground that it is violative of Art. 19(1) (f) of the Constitution. (18) Mr. Mehta had next drawn our attention to another decision of their lordships of the Supreme Court in Forward Construction Co. vs. Prabhat Mandal (Regd.), Andheri (6), it was a case,in which a writ petition was filed challenging commercial use of a plot reserved for bus depot and that writ petition was dismissed. In subsequent writ petition filed for the same purpose i.e. to debar the authorities from making commercial use of the bus stand on other grounds which were absent in the earlier writ petition, their lordships felt that the earlier writ petition would operate as res judicata. In subsequent writ petition filed for the same purpose i.e. to debar the authorities from making commercial use of the bus stand on other grounds which were absent in the earlier writ petition, their lordships felt that the earlier writ petition would operate as res judicata. It was further held that in view of S. 11, Explanation IV, it could not be said that the earlier judgment would not operate as res judicata as one of the grounds taken in the subsequent petition was conspicuous by its absence in the earlier petition. An adjudication is conclusive and final not only as to the actual matter determined but as to every other matter which the parties might and ought to have litigated and have had decided as incidental to or essentially connected with the subject matter of the litigation and every matter coming within the legitimate purview of the original action both in respect of the matters of claim or defence. (19) In the writ petition bearing S.B. Civil Writ Petition no. 4088 of 1989, the imposition of permit fee on denatured spirit and denatured spirituous preparation i.e. Thinner as also the imposition of excise duty and countervailing duly on both of them were under challenge. Even the increase of permit fee was also under challenge. These challenges were also made in S.B.Civil Writ Petition no. 5416 of 1991. However, no such challenge was raised as regards the authority of the State Govt. to impose excise duty and countervailing duty as also levy of permit fee on the ground that it is beyond the legislative competence of the State Govt. and is against the provisions of the Constitution then this writ petition must fail on this preliminary objection that this challenge is now barred by the principle of constructive res judicata. (20) While deciding S.B. Civil Writ Petition No. 4088 of 1989, the learned single Judge has already held that the State Govt. has voluntarily stopped realisation of excise duty and countervailing duty on the denatured spirit or the denatured spirituous preparation after 25.10.1989, the date on which the Judgment was pronounced by their lordships of the Supreme Court in Synthetics & Chemicals Ltd. case (supra). has voluntarily stopped realisation of excise duty and countervailing duty on the denatured spirit or the denatured spirituous preparation after 25.10.1989, the date on which the Judgment was pronounced by their lordships of the Supreme Court in Synthetics & Chemicals Ltd. case (supra). Certain arguments as regards levy of permit fee were also raised and they were dealt with by the learned single Judge and it has been held that in order to regulate the grant of a permit of spirit and to supervise the misuse of spirit (meant for industrial purpose), proper staff is required for supervision and regulation and, therefore, this kind of fee is more of regulatory in nature. More so, the concept of quid pro quo had recently undergone a considerable change and it is not possible to co-relate the services with the market fee in a mathematical manner. The market fee had to be seen in the context it is levied. The market fee under the Agricultural Market Produce Act has a different concept from the fee collected under permit fee, in excise matters. Under the Agricultural Market Produce Act, certain facilities are required to be given to the licensees but under the Excise Rules, it is more of a regulatory nature. The learned single Judge has further observed: — "It is (he duly of the checking staff to see that the industrial alcohol is not spirited - away for any other purpose except for being used in the industrial requirement. Therefore, for this purpose, extra staff has to be provided to keep proper check on the use of the spirit. More so, regulation of excise is a sovereign function of the State and therefore, the levy of this kind of permit fee cannot be said to be bad. In order to exercise the sovereign power for regulating the use of denatured spirit, a proper staff has to be maintained, therefore, charging of permit fee is more of a regulatory in nature and the Slate is entitled to levy the same". The learned single Judge has also held that the ratio laid down by their lordships of the Supreme Court in the case of Kewal Krishan Puri & Anr. vs. State of Punjab & Anr. (7) has undergone a considerable change and their lordships of the Supreme Court in Sreenivasa General Traders and others etc. The learned single Judge has also held that the ratio laid down by their lordships of the Supreme Court in the case of Kewal Krishan Puri & Anr. vs. State of Punjab & Anr. (7) has undergone a considerable change and their lordships of the Supreme Court in Sreenivasa General Traders and others etc. vs. State of Andhra Pradesh & Others (8) have observed that it is also increasingly realized that the element of quid pro quo in the strict sense is not a sine qua non for a fee. (21) The learned single Judge has also referred to a decision of their lordships of the Supreme Court in Kishanlal vs. State of Raj. (9), in which the aforesaid observations were also quoted with approval. Consequently,the learned single Judge has dismissed that writ petition and has held the levy of permit fee to be valid and within the legislative competence of the State Govt. (22) Thus, when on the basis of the decision of their lordships of the Supreme Court in Synthetics & Chemicals Ltd. Case (supra) the State Govt. itself has stopped the realisation of the excise duty and countervailing duty on the industrial alcohol with effect from 25.10.1989 and when levy of permit fee has been held to be valid, nothing survives in this writ petition on the basis of the aforesaid decisions of their lordships of the Supreme Court in Md. Ayub Khans case (supra) and Forward Construction Co.s case (supra) on the principle of constructive res judicata. (23) However, the learned counsel appearing for the parties have submitted elaborate arguments as regards the merits of the case also. (24) Mr. N.P. Gupta, the learned counsel appearing for the petitioners has laid great stress on the decision of this Court in Shri Mahalaxmi Paints Industries case (S.B. Civil Writ Petition No. 1688 of 1976, decided on 17.3.1979), wherein it has been held that the Notification dated 9.3.1970 whereby the levy of excise duty on denatured spirit and denatured spirituous preparation was imposed is unconstitutional and void being violative of Entry No. 51 of List II of Schedule VII of the Constitution. Against that Judgment, an appeal was filed and that came to be dismissed by a Division Bench of this Court. Against that Judgment, an appeal was filed and that came to be dismissed by a Division Bench of this Court. The State of Rajasthan preferred special leave petition before their lordships of the Supreme Court and that petition came to be decided by their lordships of the Supreme Court vide Judgment dated 25.10.1990 (The State of Rajasthan and others vs. M/s Shri Mahalaxmi Paints Industry, Ajmer and Others, Civil Appeals Nos. 1744-48 of 1987). This decision has no bearing regarding imposition of any fee. (25) It may be stated here that before Civil Appeals Nos. 1744-48 of 1987 were decided by their lordships of the Supreme Court on 25.10.1990, Synthetics & Chemicals Ltd. case (supra) was decided on 25.10.1989 and prior to that, a decision was rendered by their lordships of the Supreme Court in State U.P. vs. Synthetics & Chemical Ltd. (10), wherein it was held that the definition of alcohol under r. 12 of the U.P. Excise Rules includes both ordinary as well as denatured spirit. In that case, their lordships have held that the power to legislate under Sch. 7, List 2, Entry 8 of the Constitution relating to intoxicating liquor comprises of liquor which obtains alcohol whether it is potable or not. Thus, the State has the exclusive right of manufacture or sale of intoxicating liquor which include liquor containing alcohol. The levy is for parting with the exclusive right or privilege of the State with regard to intoxicating liquor and the levy is for the purpose of conferring a right on the licensees. Their lordships further observed as follows: "Entry 52 in List I and the Entry 24 in List II, Parliament would have had exclusive power to legislate in respect of industries notified by Parliament. The power of the State under Entry 24, List II is subject to the provisions of Entry 52 in List I. But the Courts have to take into account Entry 26 in List II and Entry 33 in List III for determining the scope of legislative power of the Parliament and the State. A fair scrutiny of the relevant entries, makes it clear that the power to regulate the notified industries is not exclusively within the jurisdiction of Parliament as List II Entry 33 in the Concurrent List enables a law to be made regarding production, supply, distribution of products of a notified industry. A fair scrutiny of the relevant entries, makes it clear that the power to regulate the notified industries is not exclusively within the jurisdiction of Parliament as List II Entry 33 in the Concurrent List enables a law to be made regarding production, supply, distribution of products of a notified industry. The various Ethyl Alcohol (Price Control) Orders passed by the Govt. from time to time under s.l8(b)(l) of Industries (Development and Regulation) Act, permitted the adding of the expenses incurred for transportation, payment of octroi duty etc. to the price fixed. The Ethyl Alcohol (Price Control) Orders do not explicitly or impliedly take away the power of the State to regulate the distribution of intoxicating liquor by collecting a levy for parting away with its exclusive rights." (26) In that case, their lordships of the Supreme Court have further observed as under: — "that under the regulatory power the State had power to auction the right to vend by retail or wholesale foreign liquor and thus, the vend fee imposed by the State Govt. is held to be valid." (27) Against this Judgment in State of U.P. vs. Synthetics & Chemicals Ltd. (supra) a review petition was filed for its reconsideration and that came to be decided in Synthetics & Chemicals Ltd. case (supra) wherein their lordships of the Supreme Court have observed in paras 74,75 and 76 of the Judgment as under : — "74. Only in two cases, the question of industrial alcohol had come up for consideration before this Court. One is present decision which is under challenge and the other is the decision in Indian Mica and Micanite Industries case ( AIR 1971 SC 1182 ). In the latter case, in spite of the earlier judgments including Bharuchas case (AIR 1954 SC-220), denatured spirit required for the manufacture of micanite was not regarded as being within the exclusive privilege of the State. It appears that in that decision at p. 321 of the report, it was specifically held that the power of taxation with regard to alcoholic liquor not fit for human consumption, was within the legislative competence of central legislature. The impost by the State was held to be justifiable only if it was a fee thereby impliedly and clearly denying any consideration or price for any privilege. The impost by the State was held to be justifiable only if it was a fee thereby impliedly and clearly denying any consideration or price for any privilege. For the first time, in the Synthetics & Chemicals Ltd.s case ( AIR 1980 SC 614 ) (supra), the concept of exclusive privilege was introduced into the area of industrial alcohol not fit for human consumption. 75. Balsaras case ( AIR 1951 SC 318 ) dealt with the question of reasonable restriction on medicinal and toilet preparations. In fact, it can safely be said that it impliedly and sub-silentio clearly held that medicinal and toilet preparations would not fall within the exclusive privilege of the State. If they did there was no question of striking down of s. 12(c)&(d) and s. 13(b) of the Bombay Prohibition Act, 1949 as unreasonable under Art. 19(l)(f) of the Constitution because total prohibition of the same would be permissible. In K.K. Narulas case (1967) 3 SCR-50; AIR 1967 SC 1368 ), it was held that there was right to do business even in potable liquor. It is not necessary to say whether it is good law or not. But this must be held that the reasoning therein would apply with greater force to industrial alcohol. 76. Article 47 of the Constitution imposes upon the State the duty to endeavour to bring about prohibition of the consumption except for medicinal purpose of intoxicating drinks and products which are injurious to health. If the meaning of the expression intoxicating liquor is taken in the wide sense adopted in Balsaras case ( AIR 1951 SC 318 ), it would lead to an anomalous result. Does Art. 47 oblige the State to prohibit even such industries as are licensed under IDR Act but which manufacture industrial alcohol? This was never intended by the above judgment or the Constitution. It appears to us that the decision in Synthetics & Chemicals Ltd.s case (AIR 1980 SC-614)(supra) was not correct on this aspect". (28) It was also observed in paras 81,82,83,84,85,87,88 and 89 of the Judgment in Synthetics & Chemicals Ltd. vs. State of U.P. (supra) as follows: — "81. This was never intended by the above judgment or the Constitution. It appears to us that the decision in Synthetics & Chemicals Ltd.s case (AIR 1980 SC-614)(supra) was not correct on this aspect". (28) It was also observed in paras 81,82,83,84,85,87,88 and 89 of the Judgment in Synthetics & Chemicals Ltd. vs. State of U.P. (supra) as follows: — "81. In that view of the matter, it appears to us that the relevant provisions of the U.P. Act, A.P. Act, Tamil Nadu Act, Bombay Prohibition Act, as mentioned hereinbefore, are unconstitutional,in so far as these purport to levy a tax or charges imposts upon industrial alcohol namely alcohol used and usable for industrial purposes. . 82. Having regard to the principles of interpretation and the constitutional provisions, in the light of the language used and having considered the impost and the composition of industrial alcohol and the legislative practice of this country, we are of the opinion that the impost in question cannot be justified as State imposts as those have been done. We have examined the different provisions. These are not merely regulatory. These are much more than that. These seek to levy imposition in their pith and substance not as incidental or as. merely disincentives but as attempts to raise revenue for States purposes. There is no taxing provision permitting these in the lists in the field of industrial alcohol for ihe State to legislate. 83. Furthermore, in view of the occupation of the field by the IDR Act, it was not possible to levy this impost: 84. After 1956 amendment to the IDR Act bringing alcohol industries (under fermentation industries) as item 26 of the First Schedule to IDR Act, the control of this industry has vested exclusively in the Union. Thereafter, licences to manufacture both potable„and non-potable alcohol is vested in the Central Govt. Distilleries are manufacturing alcohol under the central licences under IDR Act. No privilege for manufacture even if one existed has been transferred to the distilleries by the State. The State cannot itself manufacture industrial alcohol without the permission of the Central Govt. The States cannot claim to pass a right which these do not possess. Nor can the States claim exclusive right to produce arid Manufacture industrial alcohol which are manufactured under the grant of licence from the Central Govt. The State cannot itself manufacture industrial alcohol without the permission of the Central Govt. The States cannot claim to pass a right which these do not possess. Nor can the States claim exclusive right to produce arid Manufacture industrial alcohol which are manufactured under the grant of licence from the Central Govt. Industrial cannot upon Coming in to existence under such grant be amenable to Slates claim of exclusive possession of privilege. The State Cart neither rely on Entry 8 of List II nor Entry 33 of List III as a basis for such a claim. The State cannot claim that under Entry 33 of List III, it can regulate industrial alcohol as a product of the scheduled industry, because the Union under s. 18G of the IDR Act has evinced clear intention to Occupy the whole field. Even, otherwise sections like S.24-A and 24-B of the UP Act do not constitute any regulation in respect of the industrial alcohol as product of the scheduled industry. On the contrary, these purport to deal with the so-called transfer of privilege regarding manufacturing and sale. This power, admittedly has been exercised by the State purporting to act under Entry-8 of List II arid not under Entry-33 of List III. 85. The position with regard to the control of alcohol industry has undergone "material and significant change after the amendment of 1956 to the IDR Act. After the amendment, the State is left with only the following powers to legislate in respect of alcohol: a) it may pass any legislation in the nature of prohibition of potable liquor referable to Entry 6 of List II and regulating powers; b) it may lay down regulations to ensure that non-potable alcohol is not diverted and misused as a substitute for potable alcohol; c) the State may charge excise duty on potable alcohol and sales tax under Entry 52 of List II. However, sales tax cannot be charged on industrial alcohol in the present case, because under the Ethyl Alcohol (Price Control) Order, sales tax cannot be charged by the State on industrial alcohol, d) however, in case State is rendering any service, as distinct from its claim of so called grant of privilege, it may charge fees based on quid pro quo. Sec in this connection, the observations of India Micas case ( AIR 1971 SC 1182 ) (supra). 87. Sec in this connection, the observations of India Micas case ( AIR 1971 SC 1182 ) (supra). 87. On an analysis of the aforesaid decisions and practice, we arc clearly of the opinion that in respect of industrial alcohol, the States are not authorised to impose the imposed they have purported to do. In that view of the matter, the contentions of the petitioners must succeed and such impositions and imposts must go as being invalid in law so far as industrial alcohol is concerned. We make it clear that this will not affect any impost so far as potable alcohol as commonly understood is concerned. It will also not affect any imposition of levy on industrial alcohol fee where there are circumstances to establish that there was quid pro quo for the fee sought to be imposed. This will not affect any regulating measure as such. 88.We must, however, state that these imposts and levies have been imposed by virtue of the decision of this Court in Synthetics & Chemicals Ltd. case ( AIR 1980 SC 614 (supra). The States as well as the petitioners and manufacturers have adjusted their rights and their position on that basis except in the case of State of Tamil Nadu. In that view of the matter, it would be necessary to state that these provisions arc declared to be illegal prospectively. In other words, the respondents States are restrained from enforcing, the said levy any further but the respondents will not be liable for any refund and the tax already collected and paid will not be refunded. We prospectively declare these imposts to be illegal and invalid but do not affect any realisations already made. The writ petitions and the appeals are disposed of accordingly. The review petitions accordingly succeed though strictly no grounds as such have been made out but in the view we have taken, the decision in the view we have taken, the decision in Synthetics and Chemicals Ltd. case (supra) cannot be upheld. In the view we have taken also, it is not necessary to decide or to adjudicate if the levy is valid as to who would be liable, that is to say, the manufacturer or the producer or the dealer. 89 .....It is, therefore, necessary to declare that in future no further realisation will be made in respect of this by the State Govt. from the petitioners. 89 .....It is, therefore, necessary to declare that in future no further realisation will be made in respect of this by the State Govt. from the petitioners. So far as the past realisations made are concerned, we direct that this application for that part of the direction should be in accordance with our decision herein be placed before a Division Bench for disposal upon notice both to the State Govt. and the Central Govt." It is, therefore, clear from the aforesaid authority in Synthetics & Chemicals Ltd. case (supra) that the State Govt. has no power to impose or levy any duty or tax on industrial alcohol till it is not diverted to make it an alcohol for human consumption but regulatory functions impose a duty on the State Govt. to see that no attempt is made by the users of the industrial alcohol to divert the use of industrial alcohol to that of potable alcohol. S.56 of the Act provides that whoever renders or attempts to render fit for human consumption any spirit (wherever manufactured) or has in his possession any denatured spirit or any denatured spirituous preparation which has been denatured or any denatured spirituous preparation which has been rendered fit for human consumption or in respect of which any attempt or in which any alteration has been made to render it so fit, shall be punished with imprisonment for a term which shall not be less than six months and may extend to three years and also with fine which shall not be less than rupees two hundred and may extend to one thousand rupees. Thus, a duty is cast on the State Govt. to see that any person who is in possession of industrial alcohol or denatured spirit or denatured spirituous preparation or for that matter, ethyl alcohol may render or attempt to render it fit for human consumption is to be punished with imprisonment for a term which shall not be less than six months and may extend to three years and also with fine which shall not be less than rupees two hundred any may extend to one thousand rupees. (29) S.66-A of the Act deals with security for abstaining from commission of offences and s.66 of the Act deals with enhanced punishment after conviction. Thus, it is clear that certain regulatory functions have to be performed by the State Govt. (29) S.66-A of the Act deals with security for abstaining from commission of offences and s.66 of the Act deals with enhanced punishment after conviction. Thus, it is clear that certain regulatory functions have to be performed by the State Govt. and for that, proper staff has to be kept to see that the persons who are permitted to import denatured spirit or industrial alcohol or ethyl alcohol may not utilise it or attempt to utilise it for the purposes other than industrial purposes and may not render it fit for human consumption. When such regulatory functions are entrusted to the State Govt., it can certainly impose fee and imposition of such a fee on account of such regulatory functions has not been prohibited by their lordships of the Supreme Court in Synthetics & Chemicals Ltd. case (supra) (see paras 85 and 87 of the Judgment). (30) A somewhat similar view has been expressed by this Court in M/s Pesticides Indias case (supra) (S.B. Civil Writ Petition No. 1628 of 1980, decided on October 4, 1991) as also in the earlier writ petition bearing S.B. Civil Writ Petition No. 4088/89, filed by the petitioners which has been decided vide Judgment dated 5.5.1992 by this Court. (31) Our attention has also been drawn on a decision of their lordships of the Supreme Court in Bileshwar Khand Udhyog Khedut Sahakari Mandali Ltd. vs. State of Gujarat & Another (supra), wherein it has been observed as under : — "The power to levy tax or duty on industrial alcohol no doubt vests in the Central Govt. It is also true that the competency of the State Govt. to frame any legislation to levy any tax or duty on industrial alcohol is excluded. But by that a provision enacted by the State for supervision which is squarely covered under Entry 33 of the Concurrent List which deals with production, supply and distribution, which includes regulation cannot be assailed. Principle of occupied field precluded State Govt. from trenching on any power which was already covered by central legislation. But by that a provision enacted by the State for supervision which is squarely covered under Entry 33 of the Concurrent List which deals with production, supply and distribution, which includes regulation cannot be assailed. Principle of occupied field precluded State Govt. from trenching on any power which was already covered by central legislation. But in absence of any provision in Industries (Development & Regulation) Act touching upon regulation or ensuring that industrial alcohol was not diverted, the State was competent to legislate on it under Entry 33 of List III of VIIth Schedule of the Constitution." (32) Thus, it has been categorically held by their lordships of the Supreme Court that Entry 33 of List III of VIIth Schedule of the Constitution authorises the State Govt. to regulate production, supply and distribution of the industrial alcohol and regulation of production, supply and distribu-tion of the industrial alcohol is a supervisory function. (33) A similar view has been taken by their lordships of the Supreme Court in M/s Gujchem Distillers India Ltd. vs. State of Gujarat & Anr. (supra), wherein it has been observed as under : — "In countering the submissions, it is argued on behalf of the State that Synthetics and Chemicals Ltd. etc. (Supra) dealt merely with the vend fees. That is not the case here. The maintenance of the staff contemplated under s. 58 (A)of the Act is primarily for the purpose of ensuring that while dealing with industrial alcohol, no attempt shall be made to divert non-potable alcohol. Therefore, by regulatory measures, the State sees to it that industrial alcohol is not diverted for the use as potable alcohol. Such a regulatory measure is perfectly valid as seen from Southern Pharmaceuticals & Chemicals vs. State of Kerala, ( AIR 1981 SC 1863 ). This decision was noted with approval in Synthetics a Chemicals Ltd. etc. (supra). However, such a power was sustained though not on police power but as a regulatory measure." In that case, their lordships of the Supreme Court have also quoted with approval para 85 of the Judgment in Synthetics & Chemicals Ltd. etc. (supra), which has been quoted hereinabove in extenso. (34) In para 14 of the Judgment in M/s Gujchem Distillers India Ltd. case (supra), it has been further observed as under: — "14. (supra), which has been quoted hereinabove in extenso. (34) In para 14 of the Judgment in M/s Gujchem Distillers India Ltd. case (supra), it has been further observed as under: — "14. In dealing with U. Synthetics Chemicals U (supra) case, the following observations were made: ..........He referred to the observations of this Court in Cooverjee B. Bharucha vs. The Excise Commissioner and the Chief Commissioner, Ajmer & Others (1954) SCR-873, which quoted the passage from Crowley v. Christensen, (1890)34 Lawyers Edn. 620. Reference was also made to Hari Shankers case (supra) where this Court quoted Vol. 38 of the American Jurisprudence where it was stated that the higher the fee is imposed for a licence, better is the regulation. Reliance was also placed on P.N. Kaushals case (supra). It was contended that it has been accepted by this Court that the police power is exercisable for regulation of an activity of a legislature within the permissible field or impost as regulatory measure. It may be valid though it may neither be fee nor a tax in the limited sense of the term. See the observations of this Court in Southern Pharmaceuticals & Chemicals, Trichur & Ors. etc. vs. State of Kerala & Ors. etc. (1982)1 SCR 519 at 537. ........We must accept the position that the States have the powers to regulate the use of alcohol and that power must include power to make provisions to prevent and/or check industrial alcohol being used as intoxicating or drinkable alcohol." (35) Mr. N.P. Gupta, the learned counsel appearing for the petitioners has contended that while levying the fee, the element of quid pro quo must exist and in this respect, he has placed reliance on certain observations made by their lordships of the Supreme Court in Indian Mica and Micanite Industries case (11), wherein in para 17 of the Judgment, it has been observed that the correlation-ship between the services rendered and the fee levied is essentially a question of fact. Prima facie, the levy appears to be excessive even if the State can be said to be rendering some service to the licenses. The State ought to be in possession of the material from which the correlationship between the levy and the services rendered can be established at least in a general way. But the State has not chosen to place those materials before the Court. The State ought to be in possession of the material from which the correlationship between the levy and the services rendered can be established at least in a general way. But the State has not chosen to place those materials before the Court. Therefore, the levy under the impugned Rules cannot be justified. (36) The concept of quid pro quo has undergone a definite change in Sreenivasa General Traders vs. State of A.P. (supra), wherein it has been observed as under : — "The traditional view that there must be actual quid pro quo for a fee has undergone a sea of change subsequent to decision in AIR 1980 SC 1008 . Correlation between the levy and the services rendered/expected is one of general character and not of mathematical exactitude. All that is necessary is that there should be a reasonable relationship between the levy of the fee and the services rendered. Moreover, this is not generic difference between a tax and a fee. Both are compulsory exactions of money by public authorities. Compulsion lies in the fact that payment is enforceable by law against a person in spite of his unwillingness or want of consent. A levy in the nature of a fee does not cease to be of that character merely because there is an element of compulsion or coerciveness present in it, nor is it a postulate of a fee that it must have direct relation to the actual service rendered by the authority to each individual who obtains the benefit of the service. It is now increasingly realized that merely because the collection for the services rendered or grant of a privilege of licence are taken to the consolidated fund of the State and not separately appropriated towards the expenditure for rendering the service is not by itself decisive." Our attention was next drawn to a decision of their lordships of the Supreme Court in Commissioner and Secretary to the Govt. Commercial Taxes & Religious Endowments Department and Ors. vs. Sree Murugan Financing Corporation, Coim-batore and Ors. (12), wherein in para 14 of the judgment, certain decisions as regards the concept of quid pro quo and difference between tax and fee were noticed. In Municipal Corporation of Delhi vs. Mohd. Yasin (13), their lordships of the Supreme Court have observed: — "What do we learn from these precedents? vs. Sree Murugan Financing Corporation, Coim-batore and Ors. (12), wherein in para 14 of the judgment, certain decisions as regards the concept of quid pro quo and difference between tax and fee were noticed. In Municipal Corporation of Delhi vs. Mohd. Yasin (13), their lordships of the Supreme Court have observed: — "What do we learn from these precedents? We learn that their is no generic difference between a tax and a fee, though broadly a tax is a compulsory exaction as part of a common burden, without promise of any special advantages to classes of tax payers whereas a fee is a payment for services rendered, benefit provided or privilege conferred. Compulsion is not the hallmark of the distinction between a tax and a fee. That the money collected does not go into a separate fund but goes into the consolidated fund does not also necessarily make a levy of a tax. Though, a fee must have relation to the services rendered, or the advantages conferred, such relation need not be direct, a mere casual relation may be enough. Further, neither the incidence of the fee nor the service rendered need be uniform. The others besides those paying the fees are also benefited does not detract from the character of the fee. In fact, the special benefit or advantage to the payers of the fees may even be secondary as compared with the primary motive of regulation in the public interest. Nor is the Court to assume the role of a cost accountant. It is neither necessary nor expedient to weigh too meticulously the cost of the services rendered etc. against the amount of fees collected so as to evenly balance the two. A broad correlationship is all that is necessary. Quid pro quo in the strict sense is not the one and only true index of a fee; nor is it necessarily absent in at tax." That was a case in which the Municipal Corporation of Delhi enhanced the slaughtering fee in respect of two categories of animals by eightfold and that was sustained. (37) Thus, keeping in view these authorities, it can safely be said that the State Govt. (37) Thus, keeping in view these authorities, it can safely be said that the State Govt. under its regulatory functions may levy the fee in pursuance of Entry 33 of List III of Schedule VII of the Constitution and if the permit fee which has been enhanced from Rs.l/- per litre which was imposed in the year 1962 to Rs. 2/- per litre vide its Notification dated 26.3.1987, that cannot be said to be exorbitant keeping in view the price rise in the intervening period. Thus, the levy of permit fee can neither be said to be unjust or unreasonable nor it can be said to be excessive. (38) When the State Govt. has power to regulate and monitor the misuse of the industrial alcohol and converting it to that of potable alcohol, the inclusion of the denatured spirit or the denatured spirituous preparation in the provisions of s.3 (4) (i) of the Act, whereby the excisable articles have been defined cannot be held to be ultra vires, of the Constitution. (39) The provisions of ss. 41 and 42 of the Act only provide for rule making powers, conferring certain powers on the State Govt. as also on the Excise Commissioner to frame the Rules. Mr. N.P. Gupta, the learned counsel appearing for the petitioners has drawn our attention to the provisions of s. 41 (2) (d) and (g) of the Act, which read as under:- "S. 41 (2) — In particular and without prejudice to generality of the foregoing provisions, the State Govt. may make rules: — (d) regulating the import, export, transport or possession of any excisable article (or molasses or lanced poppy heads). (g) for the prohibition of the sale of any excisable article to any person or class of persons." Regulating the import, export, transport and possession of the excisable articles cannot be said to be ultravires because in this case, framing of the Rules is within the legislative competence of the State. Likewise, prohibition of sale of any excisable article to any person or class of persons cannot be said to be a power, which is against Entry 84, of List II of Schedule VII of the Constitution or against the provisions of Arts. 245 and 246 of the Constitution. (40) Our attention was also drawn to the provisions of s. 42 (a), (b) and (c) of the Act. 245 and 246 of the Constitution. (40) Our attention was also drawn to the provisions of s. 42 (a), (b) and (c) of the Act. S. 42 (a) of the Act authorises the Commissioner to make the Rules regulating the manufacture, supply, storage or sale of any excisable article. Regulatory functions are covered by Entry 33 of List III of Schedule VII of the Constitution. S. 42 (b) also authorises the Commissioner to make the Rules regulating the deposit of any excisable article in a ware house and the removal thereof from any such warehouse or from any distillery pot still or brewery and s.42 (c) empowers the Excise Commissioner to make the Rules prescribing the scale of fees or the manner of fixing the fees payable in respect of any licence, permit or pass or the storing of any excisable article. These powers are within the legislative competence of the State Govt. and therefore, the provisions of ss.41 and 42 of the Act are neither ultra vires to the Constitution nor they are against the provisions of Entry 84 of List I of Schedule VII of the Constitution. R. 69-B of the Rules pertains to the fees for certain permits. We have already held that the prescription of fee for obtaining permits is also within the legislative competence of the State Govt. and, therefore, the provisions of r. 69-B of the Rules are not ultra vires to the provisions of the Constitution. (41) So far as the provisions of s. 28 of the Act are concerned, it provides for duty on excisable articles. Of course, the State Govt. has no power to impose any duty on industrial alcohol and as per the decision of their lordships of the Supreme Court in Synthetics and Chemicals Ltd. case (supra), such a power does not vest in the State Govt. to levy and excise duty on industrial alcohol but that invalidity has been declared to be prospective and not retrospective and so to that extent, now the State Govt. has no power to impose any tax or duty under s. 28 of the Act on the industrial alcohol. The State Govt. has voluntarily stopped the levy of excise duty or countervailing duty on the industrial alcohol. However, the levy of excise duty on the alcohol other than industrial alcohol is concerned, the State Govt. has no power to impose any tax or duty under s. 28 of the Act on the industrial alcohol. The State Govt. has voluntarily stopped the levy of excise duty or countervailing duty on the industrial alcohol. However, the levy of excise duty on the alcohol other than industrial alcohol is concerned, the State Govt. has full power to do so and, therefore, the provisions of s. 28 of the Act as such cannot be declared as ultra vires to the provisions of the Constitution. (42). In the result, this writ petition is allowed in part. The imposition of excise duty or countervailing duty on the denatured spirit or the denatured spirituous preparation is declared to be illegal with effect from 25.10.1989, when the State Govt. itself has voluntarily stopped its levy after the pronouncement of the Judgment by their lordships of the Supreme Court in Synthetics & Chemicals Ltd. vs. State of U.P. (supra). In other words, the respondents are restrained from enforcing the levy of octroi duty or countervailing duty on the denatured spirit or the denatured spirituous preparation with effect from 25.10.1989 any further but the petitioners will not be liable for any refund of the octroi duty or the countervailing duty which has been recovered or has become recoverable prior to 25.10.1989. However, it is declared that the State Govt. is free to levy permit fee on the industrial alcohol including denatured spirit or the denatured spirituous preparation as regards its import and export in exercise of its regulatory functions, keeping in view the provisions of Entry 33, of List HI of Schedule VII of the Constitution. (43) Consequently, it is declared that the provisions of s.28 of the Act are ultra vires of the Constitution only to the extent they authorise the State Govt. to levy excise duty and countervailing duty on the industrial alcohol, otherwise the section as such is not ultra vires of the Constitution. The provisions of ss. 3 (4) (i), 41 and 42 of the Act are intra vires of the Constitution and therefore, they need not be declared to be invalid. The same position exists as far as the provisions of r.69-B of the Rules are concerned. However, in view of the discussion made hereinabove, the Annexures-2 and 4 do not deserve to be quashed. 3 (4) (i), 41 and 42 of the Act are intra vires of the Constitution and therefore, they need not be declared to be invalid. The same position exists as far as the provisions of r.69-B of the Rules are concerned. However, in view of the discussion made hereinabove, the Annexures-2 and 4 do not deserve to be quashed. (44) In the facts and circumstances of this case, the parties are left to bear their own costs of this writ petition.