TRADE LINKS LIMITED Vs. STATE OF UTTAR PRADESH
SUPREME COURT OF INDIA
TRADE LINKS LIMITED
STATE OF UTTAR PRADESH
Click here to view full judgement.
(1.) THERE is no substance in this group of writ petitions filed under Art 32 of the Constitution whereby the petitioners, who carry on business inter alia, of the wholesale vend of beer and Indian Made Foreign Liquor at various places in the State of U. P. on the strength of licences granted to them in Form FL-2 under the U. P., Excise Act, 1910, have challenged the constitutional validity of Ss. 1 (2), 3 and 5 of U. P. Excise (Amendment) Ordinance No. 4 of 1979 as also the constitutional validity of Ss. 1 (2), 3 and 5 of U. P. Excise (Amendment) Act No, 13 of 1979 (which replaced the said Ordinance No. 4 of 1979) as being violative of their fundamental rights under Arts. 14, 19 and 31 of the Constitution; the petitioners have also sought a declaration that S. 30 (2), Proviso to cl. (c) of S. 41. and Explanations I and II to cl. (c) of Sec. 41 of the U. P. Excise Act 1910 as amended by Ss. 3 and 5 of the said Ordinance No. 4 of 1979 as well as by Ss. 9 and 5 of the said Act No. 13 of 1979 and the provisions of sub-sec. (2) of S. 1 of the said Ordinance (No. 4 of 1979) as well as of the said Act (No. 13 of 1979) are ultra vires the Constitution and have prayed for the issuance of an appropriate writ, order or direction restraining the respondents (the State of U. P., the Excise Commissioner and other officers) either directly or through their agents, servants or otherwise from giving effect to the amended provision.
(2.) IT may be stated that the aforesaid challenge to the U. P. Ordinance No. 4 of 1979, the U. P. Act No. 13 of 1979 and the concerned amended provisions of the U. P. Excise Act, 1910 has been made solely with a view to avoid the payment of the "assessed fee" which the respondents are seeking to recover from the petitioners in addition to the "fixed fee" (auction money) as and by way of consideration for the grant of licences in Form FL-2 for the wholesale vend of beer and Indian Made Foreign Liquor. However, as it became clear during the hearing that even without the amendments effected in the U. P. Excise Act, 1910 (being the Principal Act) by the said Ordinance No. 4 of 1979 and by said Act No. 13 of 1979 the "assessed fee" in addition to the "fixed fee" (auction money) could be and was being recovered under the Principal Act of 1910 as amended by the U. P. Amending (Reenactment and Validation) Act 5 of 1976 and the Rules framed thereunder, the aforesaid challenge was given up and no arguments in support thereof were at all advanced by any of the counsel for the petitioners and the contentions centred round the question whether such "assessed fee" in addition to the "fixed fee" (auction money) could be levied and recovered under the Principal Act of 1910 as amended by Act 5 of 1976.
It was not disputed before us that the grant of exclusive privilege of manufacture, supply or sale by wholesale or by retail of liquor was always governed by the provisions of the Principal Act of 1910 and the Rules framed thereunder and that licences for wholesale vend of beer and Indian Made Foreign Liquor were granted in Form FL-2 which contained the terms and conditions on which sales by wholesale of the said commodities could be effected by the grantees thereof. It appears that prior to April 1976 these FL-2 licences were not settled under any auction system but were renewable from year to year and the licence fee was based on the quantity of beer and Indian Made Foreign Liquor actually sold from the concerned shop and was assessed and charged at the rate of Rs. 5.00 per quart bottle on spirits and 60 p. per quart bottle on beers. But from April 1976 auction system was introduced whereunder FL-2 licences were auctioned under the provisions of paragraph 373 of the U. P. Excise Manual Vol. I and "fixed fee" being the highest bid (auction money) accepted at such auction came to be charged for the grant of FL-2 licences and this system was introduced on the strength of the amendments that were made in the Principal Act of 1910 by the Amending (Re-enactment and Validation) Act .5 of 1976. Three or four amendments made by Act 5 of 1976 are material and we shall refer to these presently :
A new S. 24A dealing with the grant of exclusive or other privilege in respect of foreign liquor was introduced in the Principal Act, which reads as under :-
"24-A. Grant of exclusive or other privilege in respect of foreign liquor. - (1) Subject to the provisions of S. 31, the Excise Commissioner may grant to any person a licence or licences for the exclusive or other privilege,-
(a) of manufacturing or of supply by wholesale, or of both; or
(b) of manufacturing or of supplying by wholesale, or of both and selling by retail; or
(c) of selling by wholesale (to wholesale or retail vendors); or
(d) of selling by retail at shops (for consumption 'off' the premises); any foreign liquor in any locality.
(2) The grant of licence or licences under clause (d) of sub-sec. (1) in relation to any locality shall be without prejudice to the grant of licences for the retail sale of foreign liquor in the same locality in hotels and restaurants for consumption in their premises.
(3) Where more licences than one are proposed be granted under clause (d) of sub-sec. (1) in relation to any locality for the same period, advance intimation of the proposal shall be given to the prospective applicants for every such licence.
(4) The provisions of S. 25, and proviso to S. 39 shall apply in relation to grant of a licence for an exclusive or other privilege under this section as they apply in respect of the grant of a licence for an exclusive privilege under S. 24." Section 24-B which was also introduced by Act 5 of 1976 in the Principal Act reads thus :
"24-B. Removal of doubts.-. For the removal of doubts, it is hereby declared -
(a) that the State Government has an exclusive right or privilege of manufacture and sale of country liquor and foreign liquor.
(b) that the amount described as licence fee in clause (c) of S. 41 is in its essence the rental or consideration for the grant of such right or privilege by the State Government;
(c) that the Excise Commissioner as the head of the Excise Department of the State shall be deemed, while determining or realising such fee, to act for and on behalf of the State Government."
(3.) BY the same Act S. 30 of the Principal Act was amended and the amended S. 30 read thus :
"30. (1) Instead of or in addition to any duty leviable under the Chapter the State Government or on its behalf the Excise Commissioner may accept payment of a sum in consideration of the grant of licence for any exclusive or other privilege under S. 24 or. S. 24-A.
(2) The sum payable under sub-sec. (1) may be determined either by auction or by calling tenders or otherwise."
Sec. 41 of the Principal Act which confers power on the Excise Commissioner to make Rules subject to the previous sanction of the State Government touching the matters or topics specified therein was amended by Act 5 of 1976 by substituting cl. (c) thereby conferring power on the Excise Commissioner to frame Rules on the substituted matter or topic and the amended cl. (c) runs thus :
"(c) Prescribing the scale of fees or manner of fixing the fees payable for any licence, permit or pass including any consideration for the grant of any exclusive or other privilege granted under S. 24 or S. 24-A or for storing of any intoxicant."
Copyright © Regent Computronics Pvt.Ltd.