M/S. K.C.P. LTD.versusGOVERNMENT OF A.P. & ORS.

                         [2015] 10S.C.R. 70


A                          M/S. K.C.P. LTD.
                                   v.
                  GOVERNMENT OF A.P. & ORS.
                   (Civil Appeal No. 5020 of 2005)
B
                         AUGUST 12, 2015
        [VIKRAMAJIT SEN AND SHIVA KIRTI SINGH, JJ.]
          Andhra Pradesh Rectified Spirits Rules, 1971 - rr.4,
C   13, 15- Rules (pertaining to rectified spirit (industrial grade)
    - Constitutional validity of - Requirement of obtaining a
    licence and payment of excise duty and pass fee for export
    of rectified spirit - Challenge to - Held: While State
    Governments are not competent to impose taxes/levies on
D   industrial alcohol, fee charged for services rendered to
    prevent the diversion and conversion of industrial alcohol
    for human consumption is permissible and legal - Such fee
    need not be charged strictly on quid pro quo basis and It will
    pass legal muster so long as it is not excessive - Thus, 1971
E   Rules themselves are not illegal- They are within the purview
    of the constitutional powers of the State Government- r. 4 on
    the administrative fee are essential to defray expenses
    incurred by State Governments to prevent the illegal
    conversion of industrial alcohol to potable alcohol - However,
F   r 15 dealing with the export of rectified spirit is struck down,
    since it imposes a tax, not a fee, on appellants and is outside
    the State's legislative competence - The purpose is not to
    prevent industrial alcohol from being diverted and converted
    to potable alcohol; their purpose is to regulate, control and
G   discourage the export of industrial alcohol - It has not been
    conclusively shown by State that it has been constrained to
    monitor or superintend that industrial alcohol is not illegally
    diverted to other uses within the State - If industrial alcohol
H   is exported outside the State as industrial alcohol, these
                                  70
   M/S. K.C.P. LTD. v. GOVERNMENTOFA.P. &ORS.                     71


impositions partake of a totally different character; transfening A
it into a tax.
     Synthetics & Chemicals Limited vs. State of U.P.
     1989 (1) Suppl. scR 623: (1990) 1 sec 109 -
     referred to.
                                                                  B
                   Case Law Reference

1989 (1) Suppl. SCR 623        referred to.       Para4

     CIVIL APPELLATE JURISDICTION : Civil Appeal No.              C
5020 of2005

      From the Judgment and Order dated 25. 04.2002 of the
High Court of Judicature of Andhra Pradesh at Hyderabad in ·
Writ Petition No. 10874of1996
                                                                  D
                            WITH
     C. A. Nos. 5021-5022 of 2005

      Sanjay Parikh, Challa Guna Ranjan, Y. Rajagopala Rao,
Y. Vismai Rao, Hitender Nath Ratnam, Y. Raja Gopala Rao for       E
the Appellant.

     Prerna Singh, Guntur Prabhakar for the Respondents.

     The Judgment of the Court was delivered by
                                                                  F
       VIKRAMAJIT SEN, J. 1. The Appellants before us
assail the impugned Judgment of the High Court of Andhra
Pradesh, which had upheld the legality of Andhra Pradesh
Rectified Spirits Rules, 1971 (1971 Rules for brevity) and had G
found the requirement of obtaining a licence and the payment
of Excise duty and Pass fee for exporting rectified spirit to be
legal.

     2. The Appellants have distilleries which produce various
grades of industrial alcohol from molasses, also known as ethyl   H
72         SUPREME COURT REPORTS                   [2015] 10 S.C.R.


A    alcohol or ethanol. In exercise of powers conferred under
     Section 72 of the Andhra Pradesh Excise Act, 1968, the
     Respondent State enacted the 1971 Rules. Rules 4, 13 and
     15 are laid out herein for the facility of reference; although in
     these Appeals it is Rule 15 which is in focus-.
B
           Rule 4: Rectified spirit shall not be issued from a
           distillery or a warehouse without pre-payment of
          ·administrative fee meant for industrial purposes. In case
           of potable purposes, rectified spirit shall not be issued
c          from a distillery or a warehouse without pre-payment of
           Excise Duty except when rectified spirit is moved in bound
           or when payment of Excise Duty has been exempted.

          Rule 13: (1) No person shall be granted license for
D         possession and use of rectified spirit for industrial
          purposes unless the applicant:

          (a) deposits as security for the fulfillment of all the
          conditions of his license such sum as may be fixed by
E         the Government from time to time which shall not be less
          than Rs. 15,000 in cash in the Government treasury; and

          (b) executes an agreement in Form R.S.-Vforpayment
          of the costs, charges and expenses including salaries
          and allowances of such· Excise staff as may be
F
          determined by the Commissioner or his nominee to be
          posted at the manufactory of the licensee in connection
          with the supervision to ensure compliance with the
          provisions of the Act, the rules and terms of the license.
G         The staff shall be under the supervision and control of
          the Commissioner or the Authorised Officer.

          Rule 15: (1) No rectified spirit shall be exported save
          under an export permit and in accordance with these
          rules.
H
   MIS. K.C.P. LTD. v. GOVERNMENTOFA.P. &ORS.                     73
                  [VIKRAMAJIT SEN, J.]

     (2) Any person manufacturing or possessing rectified A
     spirit desires to export (herein-after referred to as the
     exporter) it for the purpose of its exportation to any area
     outside the State, shall apply in Form ARS-V to the
     Commissioner for export permit in that behalf. No such
     application shall be entertained unless rectified spirit is B
     in surplus in the State. The application shall be
     accompanied by an import permit, or a no objection
     certificate or an import license issued by a competent
     authority of the place to which the rectified spirit is to be
     exported.                                                     C

       (3) (i) on receipt of the application for permit to export,
     the Commissioner shall make such enquiry as he
     considers necessary and may grant in accordance with
     these rules as export permit, on payment of the export D
     permit fee of Rupees Ten per bulk litre in Form RS. VII
     in triplicate.

     (ii) Such permit shall not be granted unless an Indemnity
     Bond shall be submitted by the Exporter total quantity of E
     Proof litres permitted to export, binding himself severally
     to pay the full duty at Rs. 15-40 per Proof litre on all
     losses, by way of drainage, short delivery, non-delivery
     of rectified spirit or otherwise over and above the
     admissible loss limit of 0.5% towards transit wastage F
     with interest on all losses in transit.

      3. The Appellants before the High Court contended that
they had previously supplied to the Government a major portion
of the rectified spirit which they had produced, which was G
thereafter used by the latter as raw material for manufacturing
potable alcohol and Indian Made Foreign Liquor (IMFL). As a
consequence of the imposition of prohibition, this demand
within the State of Andhra Pradesh was drastically reduced;
and the Appellants were left with no alternative but to export H
74        SUPREME COURT REPORTS                     (2015] 1OS.C.R.


A the said rectified spirit to other States. However, due to the
  higher power tariffs, licence fees, duties, etc. in Andhra
  Pradesh, the Appellants could not compete with the prices of
  rectified spirit produced in some of the other States, further
  leaving them with no alternative but to explore the possibility
B of exporting their said product to other countries. In this factual
  matrix, the Appellants filed writ petitions before the High Court
  with the following prayer:

          "For the reasons stated above it is prayed that this
c         Hon'ble Court may be pleased to issue a writ or order or
          direction declaring theA.P.R.S. Rules, 1971 in so far as
          they pertain to Rectified Spirit (Industrial Grade) as illegal,
          ultra vires the Constitution, null and void; (2) declare the
          action of the respondents in insisting upon the petitioner
D         to obtain licence, pay excise duty and pass fee for
          exporting Rectified Spirit (Industrial Grade) as illegal, ultra
          vi res, unconstitutional and violative of the petitioner rights
          guaranteed under Art. 14, 19(1)(g), 265 and 301 of the
          Constitution of India and consequently issue a writ of
E         Mandamus directing the respondents not to interfere with
          the export of R.S. by the petitioners and pass such order
          or orders as this Hon'ble Court deems fit and proper."

  The major premise of the Appellants is that rectified spiriU
F ~ndustrial alcohol is outside the purview of the Excise Act; that
  the State can only legislate with regard to alcohol which is fit
  for human consumption; and that since rectified spirit is not
  potable, it is only the Union Government, which is competent
  tc legislate this activity.
G
         4. The High Court, upon a detailed examination of the
  existing case law, found that the State cannot charge Excise
  duty on alcohol that is not fit for human consumption but it is
  entitled to charge a fee on a quid pro quo basis in case it
H renders any monitoring serviee. Upon considering Synthetics
   MIS. K.C.P. LTD. v. GOVERNMENTOFA.P. &ORS.                      75
                  [VIKRAMAJIT SEN, J.]

& Chemicals Limited vs. State of U.P. (1990) 1 SCC 109,            A
the High Court held that where rectified spirit is removed or
cleared for industrial purposes, the levy of Excise duty and all
other controls are to be with the Union, but where the use of
rectified spirit is intended for the manufacture of potable
alcohol, Ste<te Governments are competent to impose any            B
levies. This calls for joint control, supervision and monitoring
over the process of manufacture, use and disposal of rectified
alcohol, which was in fact being carried out by the Excise
Department of the State Government. It was thus well within
the powers of the State Government to impose a fee to cover        C
its expenses. The High Court noted that adding water to
rectified spirit would make it fit for human consumption, so the
responsibility on the State was tremendous and onerous even
with regard to liquor meant for industrial purposes. The State
                                                                   0
Government was held to be entitled to post its staff at
distilleries and to levy a reasonable regulatory fee to defray
the expenses of such staff. No data was laid down by either
party based on which the Court could come to a conclusion on
whether the fee levied was reasonable or not. It was held that     E
the amount levied from the Appellants was in the nature of a
fee for services rendered, and not by way of tax. The writ
petitions were therefore dismissed.

      5. The Appellants have now filed these Appeals before F
us, challenging once again the Constitutional validity of the
1971 Rules insofar as they are applicable to industrial alcohol,
and in the alternative, contending that the fee ch·arged does
not satisfy the test of quid pro quo. We have
contemporaneously considered the circumstances in which G
administrative and service charges can be recovered by a
State Government along with the relevant case law in detail in
our Judgment of even date in the Appeal titled as State of Tamil
Nadu vs. Tvl. South Indian Sugar Mills, and shall therefore not
repeat our reasoning herein in interest of avoiding prolixity. H
76        SUPREME COURT REPORTS                  [2015] 1OS.C.R.


A We merely reiterate that while State Governments are not
  competent to impose taxes/levies on industrial alcohol, fee
  charged for services rendered to prevent the diversion and
  conversion of industrial alcohol for human consumption is
  permissible and legal; such fee need not be charged strictly
B on quid pro quo basis and it will pass legal muster so long as
  it is not excessive. We therefore find that the 1971 Rules
  themselves are not illegal, but rather are well within the purview
  of the Constitutional powers of the State Government. Rules
  such as the administrative fee postulated in Rule 4 (supra) are
C essential  to defray expenses incurred by State Governments
  to prevent the illegal conversion of industrial alcohol to potable
  alcohol. The quantum of fee levied has not been challenged
  either before us or before the High Court and no empirical
  evidence in this regard is available in the Appeal records. We
0
  shall accordingly desist from commenting on whether the
  various heads of fee are excessive, thereby metamorphosing
  them from a fee to a tax. The fact that the export permit fee
  was reduced from Rs. 10 to Rs. 3 and finally to Re. 1 per bulk
E litre indicates that there has been due application of mind by
  the Respondent State .in deciding the quantum offee.

         6. In deciding the vires of Rule 15, the discussion must
  consider the distinguishing features between a fee and a tax.
F An analysis of the Judgments of this Court will reveal that, inter
  alia, a tax is levied as part of a common exaction, whereas a
  fee is payment towards services rendered. Thus a "fee"
  ostensibly collected to prevent nefarious activities such as
  smuggling and countryside brewing, which have no causal
G connection with the production of industrial alcohol, would thus
  metamorphose into a tax. It appears to us that that the State
  Government has not undertaken any supervisory activity which
  would constitute a quid pro quo for the imposition of the "export
  permit fee" charged under Rule 15(3)(i). Any expenses incurred
H on such supervisory or administrative activity has perforce
   MIS. K.C.P. LTD. v. GOVERNMENTOFA.P. &ORS.                    77
                  [VIKRAMAJIT SEN, J.]

already been recovered or reimbursed from fees on account A
of storage or sale transactions on industrial alcohol. These
dues paid by the Appellants are channelled towards preventing
the illegal activities of unrelated third parties for which the.
Appellants are in no way responsible. It is evident that the
intention behind this "fee" is to prevent manufacturers from B
exporting industrial alcohol to breweries of potable alcohol in
other States tliat would fetch them a better price than producers
of other products within their own State. It is thus clearly, in
reality, a tax. Rule 15(2), which holds that export will only be C
allowed if there is a surplus in the State evidences the
apprehension of the State Government that it may run short of
industrial alcohol. This sub-Rule, as well others such as Rule
15(1) which imposes the requirement of an export permit and
Rule 15(3)(ii) which adds the requirement of an indemnity bond,
                                                                  0
are also outside the jurisdiction and powers of State
Governments, as their purpose is clearly not to prevent
industrial alcohol from being diverted and converted to potable
alcohol; their purpose is to regulate, control and discourage
the export of industrial alcohol. The imposition of a tax to . E
regulate export under its own head is entirely feasible, if
introduced by the competent authority, i.e. the Union ·
Government as held in Synthetics & Chemicals Limited.
However, this is not the scenario before us, both for the want
of vires and for the ambiguity behind the intention of this Rule. F
The Respondent State has given no explanation to justify this
Rule, and has not shown any service rendered in return.

       7. We uphold the 1971 Rules and find that the
Re$pondent State had the power to enact these Rules. G
However, we strike down Rule 15 dealing with the export of
rectified spirit, finding that it imposes a tax, not a fee, on the
Appellants and is outside the Respondent State's legislative
competence. It has not been conclusively shown by the
Respondent State that it has been constrained to monitor or H
78           SUPREME COURT REPORTS                 [2015] 10 S.C.R.


A superintend that industrial alcohol is not illegally diverted to
  other uses within the State. If industrial alcohol is exported
  outside the State as industrial alcohol, these impositions
  partake of a totally different character, transferring it into a tax.
  These Appeals are disposed of in these terms.
B
     Nidhi Jain                                     Appeals disposed of.
                     [2015] 10 S.C.R. 79


                     SUNIL KHERGADE                                A
                               v.
                STATE OF MAHARASHTRA
              Criminal Appeal No. 812 of2008
                                                                   B
                     AUGUST 13, 2015
 [KURIAN JOSEPH AND ADARSH KUMAR GOEL, JJ.)
       Penal Code, 1860 - s. 302 rlw s.34 - Murder -
Conviction and sentence uls. 302134 - Interference with -          c
Quarrel between the parties - Prosecution case that co-
accused armed with crowbar, held the deceased and made
him lie on the ground and appellant fetched a knife and
inflicted fatal injury on the deceased - Trial court convicted
the appellant and his younger brother uls. 302134 and              D
imposed imprisonment for life - Upheld by High Court- On
appeal, held: As regards the submission that in the FIR only
one injury was mentioned and with that it cannot be held that
appellant committed murder, FIR was prepared on the basis
of the statement given by the father of the deceased and what      E
mattered to him was that death resulted from stab injury and
not the number of injuries - There is evidence to the effect
that deceased was inflicted with three injuries by the appellant
and fatal injury was the one which pierced the heart of the
deceased - Further, it is established in evidence that             F
deceased and other members of the family were wholly
unarmed - Deceased had come to the village only in the
morning of the fatal day and the appellant and his younger
brother-co-accused both were in possession of arms -
Appellant took undue advantage of the situation- Thus, not         G
a fit case to alter the sentence from s. 302 to s. 304 II.

     Patai alias Krishna Kumar v. State of Uttar
     Pradesh 2010 (3) SCR 1135: (2010) 4 SCC 429;
                                                                   H
                              79
80        SUPREME COURT REPORTS              • [2015] 10 S.C.R.


A         Salim Sahab v. State of M.P. 2006 (1,0) Suppl.
          SCR 51: (2007) 1 SCC 699; Mohd. Ismail alias
          Haji Abdul Kadar Sheikh v. State of Gujarat (2007)
          3 SCC 118; Mohd. Sha keel v. State ofA. P. (2007)
          3 SCC 119; Babula/ Bhagwan Khandare and
B         another v. State of Maharashtra 2004 (6) Suppl.
          SCR 633: (2005) 10 SCC 404- referred to.

                        Case Law Reference

c 2010 (3) SCR 1135               referred to.      Para 9

     2006 (10) Suppl. SCR 51      referred to.      Para 10

     (2007) 3 sec 118             referred to.      Para 10

D    (2001) 3 sec 119             referred to.      Para 10

     2004 (6) Suppl. SCR 633 referred to.           Para 10

         CRIMINAL APPELLATE JURISDICTION : Criminal
     Appeal No. 812 of2008
E
           From the Judgment and Order dated 22.03.2005 of the
     High Court of Judicature at Bombay Nagpur Bench at Nagpur
     in Criminal Appeal No. 284 of 2000

F        · Yuvraj B. Gaikwad, Kishor Ram Lambat, S. Rajappa for
     the Appellant.

           Aniruddha Rajput, Nishant Ramakantrao Katneshwarkar
     for the Respondent.
G         The Judgment of the Court was delivered by

        KURIAN, J.: 1. The appellant along with his younger
  brother-was convicted under Section 302 read with Section
  34 of the Indian Penal Code (45of1860) (hereinafter referred
H to as 'IPC') and sentenced to undergo life imprisonment by
    SUNIL KHERGADE v. STATE OF MAHARASHTRA                             81
                  [KURIAN, J.]

the Court of 2"d Additional Sessions Judge, Nagpur. They were A
also sentenced to pay a fine of Rs.300/- each, a default
sentence of two months..

     2. In appeal before the High Court of Judicature Bombay,
Nagpur Bench, the High Court declined to interfere with the            B
conviction and sentence, and hence, the present appeal.

      3. The appellant's younger brother-Sanjay had also filed
a Special Leave Petition before this Court as Special Leave
Petition (Criminal) No. 7667 of 2007. Since he had not                 c
surrendered, as required under the Rules, the Special Leave
Petition filed by him was dismissed by Order dated
02.05.2008.

      4. The incident took place on 12.02.1999 between 07.00
                                                                       0
AM. and 08.00A.M. The deceased had returned to the village
only in the morning of that day, around the time of the incident.
There was a quarrel between the families. who were sharing
common open space. The genesis of the quarrel was with
regard to the conduct of wife of the deceased who allegedly            E
threw night soil in the open space. They had picked up such
quarrel earlier also. It has come in evidence that the co-accused
was armed with crowbar and he had held the hands of the
deceased and made him lie on the ground, at which time the
appellant fetched a knife and inflicted the fatal injury on the left   F
side of the chest. The following are the injuries:

      "1.   Stab wound in left mammary area medial to nipple
            2 cm x 1cm x 5" directed upward forward and
            medially.                                        G

      2.    Abrasion on chest wall left side above the stab
            wound 4 x Y.. cm.

      3.    Incised wound on back left sides 5 cm x ~cm and
             akin deep tapering laterally."                            H
82         SUPREME COURT REPORTS                [2015] 1OS.C.R.


A        5. The trial court mainly relied on the evidence of PW-1-
  father of the deceased, PW-2-wife of the deceased and PW-
  7-mother of the deceased. There was no evidence for the
  defense. In the Stc.tement under Section 313 of The Code of
  Criminal Procedure, 1973, the appellant explained the injury
B as having been caused when the deceased fell on the bamboo
  fences amidst the scuffle. However, it was contended before
  the trial court that appellant inflicted the injury on the deceased
  in exercise of his private defence and the protection under
  Section 97 of IPC was canvassed. That contention was turned
C down in view of the overwhelming evidence that the deceased
  was wholly unarmed and the other members of the family were
  also unarmed. It was then contended that the act of stabbing
  was on account of grave and sudden p~ovocation and that the
  act was done without any intention to cause death or to cause
0
  such bodily injury as is likely to cause death and hence ·
  canvassed for the benefit of Section 304 Part II of IPC.

         6. The trial court, however, having regard to the evidence
  of PWs-1, 2 and 7, who were also injured witnesses, and taking
E note of the nature and manner of the commission of the crime,
  convicted the appellant and his brother under Section 302 read
  with Section 34 of IPC. However, on evidence, taking note of
  the young age of the accused and on reaching the conclusion
F that it is not a case of rarest of the rare cases, the appellant
  was sentenced to suffer imprisonment for life. The trial court
  found that accused no.1-Sanjay (younger brother of the
  appellant) had caught hold of the deceased, made him lie on
  the ground and the appellant brought knife from the house and
G inflicted a stab injury on the chest of the deceased.

          7. In appeal, having analysed the evidence at length, the
     High Court was not inclined to take a different view.

        8. Learned Counsel for the appellant mainly stressed for
H the conviction to be altered to Section 304 Part II of IPC. Even
    SUNIL KHERGADE v. STATE OF MAHARASHTRA                        83
                  [KURIAN, J.]

otherwise, private defence under Section 97 of IPC and the A
benefit under exception to Section 300 of IPC will not go
together.

       9. It is submitted that there was only one injury that is
mentioned in the First Information Report, and with that, it B
cannot be held that the appellant committed murder. The First
Information Report need not necessarily contain each and
every particular injury s.ustained by the deceased. It needs to
contain only some information about the crime and some
information about the manner in which the offence has been C
committed. It is not required to contain the minute details of
the whole crime. (See Patai alias Krishna Kumar v. State
of Uttar Pradesh 1). In the instant case, the First Information
Report was prepared on the basis of the statement given by
PW-1-father of the deceased. To him, it is not the number of D
injuries sustained what mattered but the death resulting from
the stab injury. It has also come in evidence that the deceased
had been inflicted with three injuries by the appellant and the
fatal injury is the one which pierced the heart of the deceased.
                                                                  E
     10. Learned Counsel forthe appellant, placing reliance
on Salim Sahab v. State of M.P.2 , prayed for alteration of the
conviction from Section 302 of IPC to Section 304 Part II of
IPC. Reference is also invited to Mohd. Ismail alias Haji
Abdul Kadar Sheikh v. State of Gujarat3. Salim Sahab              F
(supra) is a case where the Court, having discussed the factual
scenario, came to the conclusion that" ... during a quarrel
between the deceased and the accused, they were grappling
and during that quarrel, the accused attacked the deceased
with a pair of scissors. It was not a very big-sized weapon G
though it was certainly having a sharp-edged poinf'. In that
' c2010) 4 sec 429
' (2007) 1 sec 699
'(2007) 3 sec 11a                                                 H
84          SUPREME COURT REPORTS                   (2015] 10 S.C.R.


A view of the matter, the conviction was altered to Section 304
  Part-II of IPC. Mohd. Shakeel v. State of A.P. 4 is also one
  where the conviction is altered from Section 302 of IPC to
  Section 304 Part II of IPC. It is a case of only one injury and
  the accused also suffering injury during the scuffle. The situation
B in the case of the appellant is totally different. It has been
  established in evidence that the deceased and the other
  members of the family were wholly unarmed, the deceased
  had come to his village only in the morning of the fatal day, the
  appellant and his younger brother, who is the co-accused, both
C were in possession of arms, the appellant had fetched the knife
  (Article-15) which had a wooden handle and 17 centimeter
  long blade portion with which the fatal injury was caused on
  the left side of the chest of the deceased. It is a situation where
  the appellant has taken undue advantage of the situation as
0
  held by this Court in Babulal Bhagwan Khandare and
  another v. State of Maharashtra5 . Therefore, it is not a case
  where the appellant is entitled to alteration of sentence from
  Section 302 of IPC to Section 304 Part II of IPC.
E           11. There is no merit in the appeal, hence, it is dismissed.
     Nidhi Jain                                         Appeal dismissed.




     • (2007) 3 sec 119
     • (2005) 1o sec 404