Case Note & Summary
The case involves two criminal applications filed under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) by Dayal Marumal Bhojwani (accused no.14) and Meghnath Dwarkanath Arora (accused no.12) challenging the order dated 26.11.1999 passed by the learned Chief Judicial Magistrate, Thane, rejecting their applications for discharge under Section 239 CrPC in C.C.No.3248 of 1998. The case was filed under Sections 66(1)(b), 65, 81, 83, 98, and 108 of the Bombay Prohibition Act. The applicants had purchased imported liquor upon making payment by cheque under valid bill and transport pass. They contended that the first purchaser who transported the liquor from Goa to Maharashtra was liable to pay excise duty, and they, being subsequent purchasers who only transported the liquor within the State, were not liable. They claimed they followed the procedure meticulously and there was no prima facie material against them. The learned Magistrate dismissed the discharge applications on the ground that the excise department had seized huge contraband from the godown of R.T.Traders, Bhiwandi, which was imported without paying excise duty and transported using forged transport passes in connivance with a serving excise officer (A15). The Magistrate held that the applicants, being conspirators, passed the goods without paying duty, and thus there was prima facie material to proceed. Aggrieved, the applicants invoked the High Court's jurisdiction under Section 482 CrPC. The High Court examined the submissions and the record. It noted that the applicants had purchased the liquor from R.T.Traders, who had imported it from Goa. The court held that under the Bombay Prohibition Act, the liability to pay excise duty on imported liquor is on the first purchaser who imports it into the State. The applicants, being subsequent purchasers who transported the liquor within the State, were not liable to pay the duty. The court found no material to show that the applicants were part of any conspiracy to evade duty or that they knew the liquor was imported without payment of duty. The court quashed the proceedings against the applicants, holding that the continuation of the prosecution would be an abuse of process.
Headnote
A) Criminal Procedure Code - Discharge under Section 239 - Prima Facie Case - The court examined whether there was sufficient material to proceed against the applicants for offences under the Bombay Prohibition Act. The applicants had purchased imported liquor with valid bills and transport passes and argued they were not liable for excise duty. The court held that the liability to pay excise duty on imported liquor is on the first purchaser who imports it into the State, and subsequent purchasers who transport within the State cannot be held liable. Since there was no prima facie material showing the applicants' involvement in the conspiracy to evade duty, the proceedings against them were quashed. (Paras 1-8) B) Bombay Prohibition Act - Sections 66(1)(b), 65, 81, 83, 98, 108 - Liability for Excise Duty - The court interpreted the provisions of the Bombay Prohibition Act and held that the duty is payable on import of liquor into the State. The applicants, who purchased the liquor after it had already been imported, were not the importers and thus not liable to pay the duty. The fact that the liquor was imported without payment of duty by the first purchaser does not make the subsequent purchasers liable. (Paras 2-8) C) Criminal Procedure Code - Section 482 - Inherent Powers - The court exercised its inherent powers to quash the proceedings against the applicants as the continuation of the prosecution would be an abuse of process of law. The court found that the applicants had followed the procedure and there was no material to connect them with the alleged conspiracy. (Paras 1, 8)
Issue of Consideration
Whether the applicants, being subsequent purchasers of imported liquor who transported it within the State of Maharashtra, can be prosecuted for offences under the Bombay Prohibition Act for non-payment of excise duty, when the duty was payable by the first purchaser who imported the liquor from Goa.
Final Decision
The High Court allowed the applications and quashed the proceedings against the applicants in C.C.No.3248 of 1998. The court held that the liability to pay excise duty on imported liquor is on the first purchaser who imports it into the State, and the applicants, being subsequent purchasers, were not liable. There was no prima facie material to show their involvement in the conspiracy.
Law Points
- Liability for excise duty on imported liquor rests with first purchaser importing into State
- subsequent purchasers not liable
- Section 482 CrPC quashing of proceedings when no prima facie case
- discharge under Section 239 CrPC
- Bombay Prohibition Act Sections 66(1)(b)
- 65
- 81
- 83
- 98
- 108
