B. P. JEEVAN REDDY, J. - (1.) LEAVE granted.
(2.) THE distribution and sale of country liquor in the State of Bihar is regulated by the Bihar Excise Act, 1915 and the rules made thereunder. It was a two-tier system. THE wholesale dealers (contractors) were lifting the liquor from the distilleries and supplying it to the retailers. Both the wholesale dealers and retailers were selected on the basis of auction/tender process. THE price at which the wholesaler supplied the country liquor from the warehouse to the retailer was fixed by the Government either statutorily or on the basis of negotiations between the wholesalers (contractors) and the Government. THE price so determined was known as the cost price of country liquor which was payable by the retailer at the time of taking delivery from the concerned warehouse. THE maintenance of warehouse was the responsibility of the wholesale supplier (Contractor). In the year 1989, a batch of writ petitions, C. W. J. C. No. 4722 of 1989 and others, were filed in the Patna High Court. The High Court made interim order in those writ petitions directing that till the contract is settled and until further orders from the Court, the supply of country liquor to the retailers shall be made directly by the State through its officers. In view of the said orders the Government was obliged to undertake the supply of country liquor from the warehouses maintained by it to the retailers. Even after said batch of writ petitions were disposed of, the practice of the Government undertaking wholesale supply of country liquor to retailers continued for some time. This happened during the period commencing on 1/07/1989, and ending with 31/03/1992. (These facts are taken from the preamble to the impugned Amendment Act being Bihar Act 9 of 1995.) On 15/12/1989, a meeting was held between the Excise Officers of the State and the representatives of the distilleries to determine the cost price of country spirit/liquor. The representatives of the distilleries pleaded that since the cost of price of rectified spirit has been increased by the Government of India under Ethy1 Alcohol (Price Control) Order, the cost price of country liquor should also be increased. Thay also pleaded that in view of the levy of sales tax at the rate of 16% on the rectified spirit earmarked for country spirit/liquir, with effect from 1/12/1989, and the rise in price index over the years, the cost price of country liquor should be enhanced. The Member, Board of Revenue who was representing the Government side at the said meeting agreed that in view of the enhancement of the price of ethy1 alcohol and levy of sales tax on rectified spirit and other incidentals, the price of country-liquor deserves to be enhanced. The last para of the minutes of the meeting reads thus: "As per discussion between representatives of the Distillers and Departmental representatives, the Member, Board of Revenue suggested certain components for proper consideration and fixation of cost price of spirit by following ways:... ... ...."
(3.) ON 19/02/1990 the Excise Commissioner, Bihar addressed a letter to all the distilleries fixting the cost price of country liquor. Having regard to the crucial relevance of this letter it would be appropriate to extract the letter in full. "Patna, dated 19/02/1990 Sub : Meeting between Excise Officers and representatives of Distilleries on 15-12-1989 presided by Member, Board of Revenue: regarding refixation of cost price of country spirit/liquor. Sir, Your attention is drawn towards the subject noted above, and to state that the Government has taken a decision to fix the cost price of rectified spirit to be supplied as country spirit/liquor from the country spirit warehouses with immediate effect @ Rs. 3.42 (Rupees three and paise fortytwo only) for L. P. Litre by following components:- JUDGEMENT_453_2_1997Html1.htm 2. If you are ready to supply the rectified spirit to the country spirit/liquor Warehouses from your distilleries, then please give your written consent at once accordingly. Thereafter necessary orders will be issued, so that the payment be made after recovery from the retail vendors. Yours faithfully. Sd/- Illegible (Mehesh Prasad) Excise Commissioner, Bihar, Patna" (The break-up of the cost price of Rs. 3.42 paise per L. P. L. mentioned in the above letter is the very break-up which is said to have been mentioned at the end of the Minutes of the Meeting dated 15-12-1989.) This letter shows that pursuant to the discussion and negotiations held at the meeting held on 15/12/1989, the Government fixed the cost price of "rectified spirit to be supplied as country spirit/liquor from the country spirit warehouses" at Rs. 3.42 paise per L. P. L. The break-up of the said price was also mentioned in the letter which includes, "maintenance charge of spirit/liquor warehouses (expenses on coolies wages/house-rent/electric charges/expenses on communication/water taxes, etc.)" at Rs. 0.70 paise per L. P. L.;