In Brief
The State of Jharkhand issued a notification imposing an "import fee" on rectified spirit imported for manufacturing Indian Made Foreign Liquor (IMFL). The High Court quashed the notification, holding that the State lacked competence to levy charges on non-potable rectified spirit. The Supreme Court reversed, interpreting the Rule 106(Tha) as authorizing a charge on the final potable product (IMFL) manufactured from imported rectified spirit, not the raw input itself. Since the levy applies to potable liquor within State legislative competence (Entry 8, List II), and is a regulatory charge for parting with State privileges over intoxicants, no quid pro quo is required. The appeal was allowed and the High Court's order quashed.
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