1 2025:CGHC:56676-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WA No. 842 of 2025 Satvinder Singh Bhatia S/o Mahinder Singh, Proprietor Adishakati Associate, R/o Dayalband, Bilaspur C.G. (Now) Satvinder Singh Bhatia, S/o Mahinder Singh, Proprietor Adishakati Associates, R/o Barpali Chowk Bhatia Gali Champa District Janjgir Champa C.G. 495671. ... Appellant versus 1. State of Chhattisgarh Through Secretary, Department of Excise (Separate Revenue), D.K.S. Bhawan Raipur (C.G.) 2. The Excise Commissioner, Government of Chhattisgarh, D.K.S. Bhawan Raipur (C.G.) 3. Assistant Commissioner (Excise), District Bilaspur (C.G.) ... Respondents For Appellant : Mr. Chandresh Shrivastava and Mr.Shailendra Shukla, Advocates For Respondents : Mr.Shashank Thakur, Dy.A.G. Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Bibhu Datta Guru, Judge Judgment on Board Per Ramesh Sinha , Chief Justice 21.11.2025 1. Learned counsel for the appellant submits that defaults pointed out by the Registry have already been cured. 2. Heard Mr.Chandresh Shrivastava, learned counsel for the appellant as well as Mr.Shashank Thakur, learned Deputy Advocate General BABLU RAJENDRA BHANARKAR Digitally signed by BABLU RAJENDRA BHANARKAR 2 appearing for the respondents on I.A. No.02/2025, which is an application for condonation of delay of 23 days in <ling the present writ appeal. 3. For the reasons assigned in the application (I.A. No. 02/2025), the same is allowed. Delay in <ling the instant appeal is hereby condoned. 4. With the consent of learned counsel for the parties, the writ appeal is heard <nally. 5. The present writ appeal is preferred against the order dated 01.08.2025 passed by learned Single Judge in Writ Petition No. 1707 of 2001 whereby the writ petition <led by the writ petitioner / appellant herein was dismissed. 6. Brief facts of the case are that the appellant was holding a manufacturing and distribution license under Clause-K of sub-rule (1) of Rule 8 of the Madhya Pradesh Foreign Liquor Rules, 1996 (hereinafter referred to as the “Liquor Rules, 1996”) for the period commencing from 01.04.2000 and ending on 31.03.2001. It was a license permitting the appellant to sell foreign liquor in wholesale from the licensed premises described in Schedule-I enclosed with Form FL-10 and situated in Bilaspur town. A copy of the license issued to the appellant has been <led as Annexure- P/1 with the petition. According to the terms and conditions of the license, the licensee was permitted to import and transport foreign liquor after paying the prescribed fee or transport fee, as the case may be. Pursuant to the license, the appellant transported spirit and malt (which constitute foreign liquor and beer) to various places within the erstwhile State of Madhya Pradesh and also outside the State during the validity of the license. It is further submitted that, as per the provisions of the Madhya Pradesh Liquor Rules, 1996, the appellant was required to 3 obtain a No Objection Certi<cate (NOC) in the prescribed Form FL-21, which is issued only after payment of import duty on the spirit and malt transported by him outside the State. However, there was no provision for payment of duty on the spirit and malt transported within the territory of the undivided State of Madhya Pradesh except for Rs. 25/-, which was paid as transport fee by way of Treasury Challan with eCect from the date of commencement of the license. It is not in dispute that when spirit and malt are transported outside the then State of Madhya Pradesh, import duty is leviable; however, no excise duty is leviable if the transportation of spirit and malt is within the territory of the State of Madhya Pradesh. 7. It is further case of the appellant that the Excise Authorities of the then State of Madhya Pradesh issued No Objection Certi<cates in Form FL-21, which are <led collectively as Annexure-P/2 with the petition. It is further submitted that the said NOCs were issued by the competent authority after conducting the required enquiry in Form FL-21. It is further submitted that no import duty was leviable upon the appellant for bringing spirit to Bilaspur. 8. It is respectfully submitted that the FL-10 license issued by the competent authority before the formation of the State of Chhattisgarh expired on 31.03.2001. After expiry of the license, a demand notice was issued by the Assistant Commissioner (Excise) on 13.08.2001 demanding import duty to the tune of Rs. 8,62,161/- on the quantity of liquor transported by the appellant on the basis of the NOCs mentioned in Annexure-P/2. Subsequently, the appellant submitted a representation raising grievances against the demand notice; however, the said representation was rejected and no appropriate action was taken by the respondent authorities. Thereafter, the appellant 4 approached this Court by way of a writ petition under Article 226 of the Constitution of India, which has been decided by the impugned order. 9. Learned Single Judge dismissed the writ petition of the writ petitioner / appellant herein holding that after commencement of the Madhya Pradesh Reorganisation Act, 2000 (hereinafter referred to as the “Reorganisation Act”) with eCect from 01.11.2000, the State of Chhattisgarh became a separate territory and, therefore, the import of spirit and malt from the State of Madhya Pradesh to the State of Chhattisgarh could not be deemed intrastate transportation. Hence, this writ appeal. 10. Mr.Chandresh Shrivastava, learned counsel for the appellant submits that learned Single Judge committed an error in ignoring the fact that after the commencement of the Madhya Pradesh Reorganisation Act, 2000 with eCect from 01.11.2000, the license issued under Form FL-10 lost its territorial validity with reference to the area falling within the State of Chhattisgarh, and the transportation of spirit and malt from the State of Madhya Pradesh to the State of Chhattisgarh pursuant to the license issued by the excise authorities took place prior to the formation of the State of Chhattisgarh. He further submits that learned Single Judge committed an error in ignoring the fact that Annexure-P/2, No Objection Certi<cates issued by the excise authorities located in the State of Chhattisgarh pursuant to the license issued in favour of the appellant by the excise authorities of the State of Madhya Pradesh, were issued prior to bifurcation. This clearly means that the license remained eCective and valid in the territory of the State of Chhattisgarh after 01.11.2000 until its expiry, and therefore all the terms and conditions which are statutory in nature continued to apply by virtue of the Excise Act, 1915 and the 5 Madhya Pradesh Foreign Liquor Rules, 1996, as the said terms and conditions were accepted by the authorities of the State of Chhattisgarh. He also submits that learned Single Judge misconstrued and misinterpreted Sections 78, 79 and 80 of the Reorganisation Act, 2000. It is respectfully submitted that the scheme of the Reorganisation Act is based on the doctrine of continuity of law. All enactments in force in the erstwhile State of Madhya Pradesh remained eCective in the State of Chhattisgarh until modi<ed. Since the excise license is statutory in nature, and until the State Government nulli<ed or modi<ed the terms and conditions of the FL-10 license, the license continued with all its consequences in letter and spirit in the State of Chhattisgarh as if the State of Chhattisgarh were merely an extended territory for the purposes of application of law. Learned Single Judge dismissed the petition by relying on the judgment in M/s Jit Ram Shiv Kumar & Ors. v. State of Haryana & Anr., (1981) 1 SCC 11. It is respectfully submitted that the said judgment is not applicable to the present case. The Supreme Court held therein that promissory estoppel was not applicable because the Municipal Committee lacked legal competence to exempt the market from octroi duty. The Supreme Court observed that when a public authority acts beyond its powers, the plea of estoppel cannot prevent it from acting according to law. It is respectfully submitted that the facts of the present case are entirely diCerent, as explained below: (i) The FL-10 license (Annexure-P/1) was issued by the competent authority, which is not disputed by the respondents. (ii) The FL-10 license was issued strictly in accordance with the Madhya Pradesh Excise Act, 1915 and the Madhya Pradesh Foreign Liquor Rules, 1996. 6 (iii) The excise authorities acted upon the provisions of the license both before and after the bifurcation of the State of Madhya Pradesh into two States. (iv) After commencement of the Reorganisation Act, 2000, the excise authorities of the State of Chhattisgarh also recognised and acted upon the FL-10 license issued by the Excise Commissioner of the State of Madhya Pradesh. 11. It is respectfully submitted that by raising the demand of import duty, the appellant is being unjustly penalised. Import duty is an indirect tax and is included in the price component recovered from the ultimate consumer. Since the liquor was sold without including any such component of import duty and since the appellant was never informed of any change in the excise duty structure at the time of formation of the State of Chhattisgarh, the act of the respondent authorities in issuing the impugned demand notice is arbitrary and unsustainable in law. As such, the writ appeal deserves to be allowed and the impugned order passed by learned Single Judge deserves to be set aside by allowing the writ petition <led by the writ petitioner / appellant herein. 12. On the other hand, learned Deputy Government Advocate appearing for the respondents/State opposes the writ appeal and submits that learned Single Judge after considering all the aspects of the matter has dismissed the writ petition, which warrants no interference by this Court. 13. We have heard learned counsel for the parties, perused the impugned order and other documents appended with writ appeal. 14. From perusal of the impugned order, it transpires that learned Single Judge observed that the petitioners have imported spirit and malt as de<ned in CG Excise Act, 1915. The malt is nothing but fermented liquor. 7 The spirit as de<ned in the Excise Act, 1915 means any liquor containing alcohol obtained by distillation. Section 2(11) de<nes import which means to bring in the State. From the plain reading of the provisions of the Act, 2000 it is quite vivid that by virtue of Section 3 the new state of Chhattisgarh has been formed with its territories as speci<ed in the section. By virtue of Section 5 <rst Schedule of the Constitution has been amended from the appointed day i.e. 01.11.2000, entry 26 has been inserted and in the list of State Chhattigarh has been inserted with speci<ed territories as speci<ed in Section 3 of the Act. This supports the submission of the State that the State of Chhattisgarh being new State, any substances which is brought in the State from the State of Madhya Pradesh will be imported. Thus, it will not be intra-State trade but it is inter State trade. Learned Single Judge also observed that entry in the State of Chhattisgarh from the State of Madhya Pradesh even if NOC was given prior to reorganisation of the State, it will not save the petitioners from paying the import duty as these circumstances have been caused due to operation of law and no principle of estoppel is applicable. Similarly where demand has been made on account of change of law and by operation of law only and dismissed the writ petition <led by the appellant herein. 15. Considering the submissions advanced by learned counsel for the parties, perusing the documents appended with writ petition as also with writ appeal and also considering the <ndings recorded by learned Single Judge while dismissing the writ petition <led by the writ petitioner / appellant herein, we are of the considered opinion that learned Single Judge has not committed any illegality or irregularity warranting interference by this Court. 8 16. Accordingly, the writ appeal being devoid of merit is liable to be and is hereby dismissed. No cost(s). Sd/- Sd/- Sd/- (Bibhu Datta Guru ) (Ramesh Sinha) Judge Chief Justice Bablu