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The Delhi Government has defended the imposition of 70% Special Corona fee on liquor on the ground that the levy is the price towards grant of privilege to sell/consume liquor. (Short Affidavit GNCTD - Praveen Gulati)
Submitting that citizens have no fundamental right to do trade, business in liquor or to consume liquor, the Delhi Government has contended that it has the authority and jurisdiction to regulate the trade, commerce and consumption of liquor by imposing a “regulatory and supervisory fee” which need not be in the form of either a tax, fee or excise duty.
The averments have been made by the Delhi Government in the counter affidavit filed in a batch of petitions challenging the “Special Corona Fees”, which is being levied on the purchase of liquor in Delhi.
In response to Petitions, the Delhi Government referred to the provisions of the Delhi Excise Act and its Rules to state that it was empowered "to, inter alia, accord the privilege of a peculiar nature" and also to regulate/supervise the sale, purchase and consumption of liquor in Delhi, particularly in view of the directives and measures announced by the Central Government to contain COVID-19 pandemic.
“..in exercise of power vested under Section 4, Section 11(1) and Section 77 read with Section 81(1) and/or Section 81(2)(f)/(g), that Rule 154(4) of the Rules has been amended and the impugned levy has been imposed; which is nothing but a combination of price towards grant of privilege and the cost of regulation/supervision.”, it is stated.
It is further contended that the principles applicable to fiscal levy, in general, were not necessarily applicable in case of liquor.
“.. the very object of State Excise Levy in liquor..is (that it is) dangerous and injurious to health and is therefore an article which is res extra commercium.”
It thus stated that Sections 26 and 28 of the Delhi Excise Act on the collection of "excise revenues" in the nature of duty, license fee, label registration fee and import or export fees, ex facie had no application and they did not prohibit the levy of Special Corona fee.
The Delhi Government also brought to the Court's attention the loss of revenue that the Government was facing due to the lockdown.
"During the clampdown on all economic activities, the revenue of Delhi Government shrunk by almost 90% in the month of April 2020 and the total collection dwindled to a mere Rs 300 crore as opposed to approximately Rs 4,000 crore in the corresponding month in the preceding year.", it said.
The Court was also informed that apart from Delhi, ten other States such a Assam, West Bengal, Uttar Pradesh, etc have also imposed a similar levy.
The matter would be heard on May 29.
Read the Affidavit: