- (1.) THIS appeal and 107 other appeals detailed in Annexure A' and the 10 writ petitions detailed in Annexure! 'B' to this judgment, raise common questions of law relating to the Rajasthan Excise Act, 1950 (hereinafter railed 'the Act') and can be conveniently disposed of together. The respondents in these appeals were the petitioners before the learned Single Judge who had licences from the Excise Department for the retail sale of country liquor and we shall call them for the sake of convenience 'liquor contractor'. They challenged by their petitions under Article 226 of the Constitution that the State of Rajasthan was unjustified in law in demanding from them moneys which amounted to the excise duty in respect of the liquor which they had not drawn. The State of Rajasthan filed no written answer but it was contended on their behalf that the liquor contractors had to pay certain guarantee amount of money and if they failed to perform their obligations in terms of their licences the State was entitled to recover that amount. It was contended by Mr. Kasliwal, former Advocate General, appearing before the learned Single Judge, that what was being collected from the liquor con - tractors had a component of excise duty but what was being realised from the liquor contractors was the licence -fee. Accepting the reasoning, given in Kanniya Lal Bhatia and Co. v. The State of Haryana and Ors. Writ Petition No. 343 of 1969 - -decided on 23rd July, 1969 by the High Court of Punjab and other cases, the learned Single judge came to the conclusion that the State was not entitled to raise demands against the liquor contractors under the guarantee system because, in essence, it was realising excise duty on undrawn liquor. He accordingly quashed the demands made by the State and allowed the writ petitions The leading judgment is in the case of Balmukand v. The State of Rajasthan and Ors. S.B Civil Writ Petition No. 1596 of 1969 -decided on July 27, 1971. The reasoning in Balmukand's case was accepted in other cases decided on various dated. Dis -satisfied against those judgments, the State of Rajasthan has come up in appeal.
(2.) CERTAIN liquor contractors filed revisions before the Board of Revenue for Rajasthan at Ajmer who had failed to draw the requisite quantity of liquor during the year 1962 -63 against the demands made by the State. It was submitted before the Board of Revenue that as Chapter VIIA was introduced in the Rules on February 2,1963. the guarantee system envisaged thereby could not govern the contracts prior to it. It was also submitted that forcing the liquor contractors to lift the minimum supply of liquor amounted to their being compelled to sell a minimum quantity and such a compulsion was hit by Article 19(1)(6) of the Constitution of India. Lastly, it was urged that any system which encouraged the increased consumption of liquor, was contrary to the directive principles of the State policy contained in Article 47 of the Constitution of India The Board of Revenue rejected all the three contentions and dis -satisfied, the petitioners have filed the writ petitions detailed in Annexure 'B'. The seven writ petitioners in these petitions formed a firm jointly and bad taken lice - aces for the nine snaps at Ajmer for the retail sale of country liquor for the financial year 1962 63 There were certain negotiations and eventually, they were governed by guarantee system and demands were raised against them regarding the unlifted country liquor which they challenged by means of an appeal before the Excise Commissioner and then by a revision before the Board of Revenue raising the points we have already noticed above The challenge before us is that the liquor contractors are required to pay fixed amount by purchase of liquor from the warehouse the major part whereof is excise duty and where they failed to lift even then they were required to pay excise duty on the short fall which was illegal because it was calling upon a party to pay the tax without the event. Further, the system encouraged alcoholic habit and was hit by Article 47 of the Constitution of India. The 108 appeals and the 10 writ petitions can be divided into three convenient compartments in the light of the arguments urged before us: - (A) Those pertaining to country liquor licences for years 1962 -63 and 1963 -64 (B) Those relating to the licences for the sale of country liquor for the year 1967 -68 (C) Those relating to country liquor licences for the years 1968 -69 and 1969 -70 and 1970 71
(3.) PRIOR to the financial year 1962 63 the system which obtained broadly speaking was 'auction system' We are not concerned with it. By an order No. F. 1 (47) E and T/61 dated March 31,1962 the Government introduced the following system which they have labelled as 'guarantee system' namely: 1. An offer shall be made to every person holding licence for retail sale of country liquor as on 1st April, 1962 that he shall guarantee in respect of the year 1962 63 income to Government on account of the issue price of country liquor issued for sale at his shop during the year J 962 -63 at the issue price applicable on 31 3.62 of the amount worked out in the following manner, namely: (i) that to the highest yearly issue price paid for the liquor issued to the shop during any of the three years 1959 -60, 1960 61 and 1961 -62 shall be added, the highest licence money offered for shop for any of the three years 1960 -61, 196162 and 1962 -63, and the total of the two shall be increased by 10%; (ii) that if this guarantee is fulfilled no licence money shall be payable by the licensee; (iii) that for the sales upto the limits needed to make up the guar' anteed amount the licensee shall be paid commission at the following rates: Kesar Kastoori 0.77 np per litreOrange 0.47 ' -do -Plain 0.44 ' -do -Plain (lightcaramel colour)COUP. 0.16, -do - (iv) tha if issue price of the liquor issued to the shop worked out as in (i) above exceeds the guaranteed amount, commission for the excess quantity of liquor sold by him shall be paid to the licensee at double the rate mentioned above; (v) that in case the amount of issue price for liquor issued in 1962 - 63 worked out at the rates prevalent on 31st March, 1962 falls short of the guaranteed amount, the licensee shall make good the difference between the price calculated at the issue price prevalent on 31st March, 1962, and the guaranteed amount; (vi) that to secure fulfilment of the guarantee the licensee shall de - posit with the Government by way of security an amount equal to 1/10th of the amount of guarantee. In addition to this deposit, he shall furnish a personal security to the satisfaction of the Assistant Commissioner equal to double the amount of security. 2. If the licensee accepts the offer as above a fresh licence shall be granted to him on the condition agreed to, such conditions being incorporated in an agreement. 3. If the licensee does not accept the offer, the licence held by him shall be cancelled and the licence shall be auctioned to the person bidding for the highest guarantee. ;