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Whether distilleries manufacturing rectified spirit can be asked to pay excise duty under the Andhra Pradesh State Excise Act. Analysis: The judgment revolves around the question of whether distilleries producing rectified spirit can be subjected to excise duty by authorities under the Andhra Pradesh State Excise Act. The appellants, distilleries manufacturing rectified spirit, received show-cause notices alleging non-compliance with manufacturing norms, leading to the computation of excise duties by the Commissioner of Excise, Andhra Pradesh State. The appellants challenged these orders through writ petitions in the High Court, which were ultimately dismissed. The appeals were then filed before the Supreme Court under Article 136 of the Constitution of India. The primary contention raised by the appellants was based on legal precedents, including a Constitution Bench judgment in Synthetics and Chemicals Ltd. v. State of U.P. and a three-Judge Bench decision in State of U.P. v. Modi Distillery. The argument centered on whether the State authorities had the power to levy excise duty on rectified spirit, which was considered industrial alcohol unfit for human consumption. Additionally, the appellants cited the Bihar Distillery case, which discussed the cancellation of distillery licenses but did not directly address the issue of excise duty on rectified spirit for potable liquor production. The Court noted that the observations in the Bihar Distillery case seemed to conflict with the legislative competence outlined in previous judgments. As a result, the Court determined that the matters required reconsideration by a larger Bench of three learned Judges to address the conflicting interpretations and scheme of legislative competence regarding the levy of excise duty on manufactured rectified spirit used for potable liquor production. The Registry was directed to place the appeals before the larger Bench for prompt resolution. The Court also acknowledged challenges to the High Court decision on merits, indicating that all relevant issues, including the Commissioner's order consistency with the show-cause notices, would be reviewed by the larger Bench during the reconsideration process.
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