BABOOLAL AND BALGOVIND CO Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THIS application under Article 226 of the Constitution is by a person doing business in the sale of country liquor under the name and style of 'baboolal and balgovind Company' and who obtained a licence for the year 1967-68 for sale of country liquor by retail at some shops in Mhow. The respondent No. 3, Ganesh prasad, also secured a licence for the sale of country liquor by retail at sixteen shops for Indore City and Pargana, and Sanwer Pargana The petitioner paid Rs. 1,82,000 for obtaining licence in respect of Mhow shops, and the respondent No. 3 paid Rupees 14,11,111 in respect of shops at Indore and Sanwer. He has also averred that the price of Masala, Dabara and Rasi liquor sold at his shops is respectively at Rs. 6, Rs. 4 and Rs. 3 per bottle; and that the respondent No. 3 charges for each bottle of Masala, Dabara and Rasi Rs. 10, Rs. 7. 50 P. , and Rs. 6 respectively. The statement given by the applicant with regard to the price of liquor at his shops is disputed by the respondents Nos. 1 and 2 in their return. But it is not denied that the prices charged by the petitioner for different kinds of liquor are lower than those charged by the respondent No. 3.

(2.) THE petitioner's case is that on account of the low prices at which he sells country liquor, persons residing in Mhow and in villages nearabout Indore purchase liquor from his shops and consume it either at their residence or carry the liquor bottles along with them to the place in Indore where they work or carry on trade; that they do not prefer to purchase liquor from the respondent No. 3's shops in Indore as he charges exorbitant rates for the same; and that this has resulted in large sales of country liquor from his shops and affected adversely the sale of liquor at the shops in Indore run by the respondent No. 3. In order to check this fall in his sales, the respondent No. 3, Ganeshprasad, moved the government to declare the area of the sixteen shops run by him as high-duty area so that no country liquor could be transported at all from Mhow area of the petitioner's shops to Indore area. The petitioner says that at the time when excise licences were obtained by him and third respondent, the excise-duty payable in respect of Mhow and Indore shops was the same, but the Government, yielding to the pressure of the respondent No. 3, declared the Indore areas to be a high-duty area and increased the excise duty payable in Indore area in respect of Masala and plain country liquor; and that after the enhancement of this duty the liquor sold at the shops of the respondent No. 3 is differently coloured so as to distinguish it from the liquor sold by the petitioner in the low-duty area. The applicant contends that the declaration of the Indore area as high-duty area by the Government is mala fide arbitrary and altogether illegal, and prays that the declaration and the enhancement of duty in Indore area be struck down as illegal.

(3.) IN the return filed by the State, it has been denied that the declaration of high-duty area and the enhancement of duty is mala fide and illegal. In justification of the declaration and the enhancement of duty, it has been stated in paragraph 5 of the return that:--