Commissioner Of State Excise And ... vs Maharashtra Retail Liquor ...
2003 Latest Caselaw 327 Bom

JUDGMENT

C.K. Thakker, C.J.

1. Rule. Mrs. Veena Thadani, Mr. Mohan Pungaliya, Mr. J.F. Pochkhanwala, and Mr. A.K. Abhyankar, learned counsel, appear and waive service of notice of rule on behalf of original petitioners in all Applications. In the facts and circumstances, we have taken tall these Civil Applications/Notice of Motion for hearing.

2. These Civil Applications and Notice of Motion have been filed for vacating interim order passed by this Court on April 4, 2002 in the writ petitions.

3. To appreciate the contentions raised by the Special Counsel for the Applicants, it may be necessary to state that petitioner of Writ Petition No. 2012 of 2002 (Maharashtra Retail Liquor Dealers Association) and several other petitioners, approached this Court by filing substantive petitioners. The case of the petitioners was that in contravention of the provisions of the Bombay Prohibition Act, 1949 and the Maharashtra Potable Liquor (Periodicity and fees for grant, renewal or continuance of Licence) Rules, 1996 (hereinafter referred to as "the Rules"), the Commissioner of State Excise had increased licence fee to the extent of about 400 per cent. The said action was illegal, ultra vires, without authority of law, arbitrary and unreasonable. The petitioners, therefore, prayed for quashing and setting aside the decision and all consequential actions of demand of licence fees.

4. Initially the matter came up before a Division Bench on March 27, 2002. Rule was issued and the following order was passed.

"Rule, returnable in two weeks.

To be finally heard peremptorily on 17th April, 2002 with all other connected petitions pending in this Court including those filed in 1996, 1997, 1998 and 1999.

Heard the counsel for interim relief. In so far as the Petitioners claiming violation of their right of five years licence are concerned,t he State shall not require them to pay the enhanced fees till the decision of this Court. In so far as the other Petitions are concerned, the State shall grant extended time to pay licence fees by 6th April, 2002. However, the renewal shall be at the fee levied by the Government now and impugned by the Petitioners in these Petitioners.

It is made abundantly clear that the fees under challenge today shall be liable to the refunded in the event of the Petitioners succeeding in this Court.

The State Government shall not close the shops till 6th April, 2002.

Parties to act on the authenticated copy of this order.

From the above order, it is clear that the Court was prima facie satisfied that the matters required consideration. Hence, rule was issued. On interim relief, the Court was of the opinion that so far as the petitioners claiming violation of the right of "five years licence" were concerned, interim relief deserved to be granted. In respect of other petitioners, they were not entitled to such interim relief. Extension of time was, however, granted to pay licence fees by 6th April, 2002. It was also clarified that renewal was to be at the fee levied by the Government and impugned in the petitioners.

5. The Court further observed that the fees under challenge would be liable to be refunded in the event of petitioners succeeding in the petitions.

6. On 4th April, 2002, few more matters came up for admission before the Division Bench. Rule was issued in those petitions also. The Court observed that a bunch of petitions had been admitted earlier and interim order was granted staying increase in licence fees in favour of persons holding licences for five years. In relation to annual licence holders, however, a limited relief was granted by giving breathing time till April 6, 2002. Within that period, they were asked to pay the amount.

7. It was then observed that after the said order was passed (on 27th March, 2002), the matter had been reconsidered by the State Government and a Resolution was issued on April 3, 2002, a copy of which was tendered in the Court.

8. In paragraph 4, therefore, the Court stated:

"4. From perusal of the Government Resolution, it is apparent that the Government is likely to reconsider the entire increase in the matter of fees that the Government may finally decide to recover as a licence fees. Taking into consideration these peculiar circumstances, we pass the following interim order. This shall be strictly an interim arrangement to tide over the difficult period for the petitioners.

(a) The petitioners and all members of the Association and all licence vendors shall pay the licence fee at the rate of ten per cent more than the licence fees paid for the year 2001-2002. They shall have a week's time ending with 17th April, 2002 to deposit the necessary licence fees and seek renewal of their licences."

9. It is, therefore, clear that on 4th April, 2002, this Court granted interim relief keeping in view the fact that the Government was likely to reconsider the entire increase in the matter of fees. Taking into account those "peculiar circumstances", interim order was passed.

10. The Applicants have filed the present applications/Notice of motion for vacating the order dated April 4, 2002, stating that the Government of Maharashtra has now taken a final decision and passed an order on 7th September, 2002, reiterating its earlier decision dated January 10, 2002 that the licence fee fixed will remain in force and be effective and operative. In view of the said decision, interim order dated April, 4, 2002 deserves to be vacated. It is also the stand of the State Government that a Cabinet Sub-Committee was appointed by the Government of Maharashtra to study and consider the representations received from the Dealers in respect of increase in licence fees and was requested to submit its report to the Government. The Committee considered the question and submitted its report which was placed before the State Cabinet and the State Cabinet took a decision to implement the earlier decision of January 10, 2002. The Government Resolution dated September 7, 2002 was accordingly issued. In the light of subsequent development and decision of the State Government, interim relief deserves to be vacated.

11. The learned counsel for the respondents (original petitioners), on the other hand, submitted that the prayer for vacating interim relief cannot be granted. Grant of such relief would virtually result in dismissing the petitioners. It was also submitted that the action taken by the authorities is contrary to the Rules. Drawing our attention to Rule 4, it was submitted that no such increase in fees was permissible. Reliance was placed in this connection to definition of the term "fee" in Clause (i) of Rule 2 which reads as under:

"fee" means respective fees payable for grant or renewal or continuance of a licence in 1996-97 as in force immediately preceding the date of coming into force of these rules and fee for any subsequent year means the fee increased by 10 per cent or more on previous years' fees to be rounded off to the nearest rupees hundred as noticed by the Commissioner before the commencement of a licensing year."

The Counsel submitted that increase of fee as contemplated by the Rules would be 10 per cent or more of the previous year's fee to be rounded off to the nearest rupees on hundred. By no stretch of imagination, such increase would be 200, 300 or 400 per cent as has been done. The said action is thus without authority of law. It is also contended that the Commissioner has no power, authority or jurisdiction to increase such fees. The action is arbitrary, unreasonable and violative of the doctrine of legitimate expectation.

12. The counsel also submitted that, on the one hand, the State Government has prescribed Maximum Retail Price (MRP), and on the other hand, it has increased licence fee substantially. The natural consequence would be that all the dealers/retailers will have to wind up their business. It would also result in illegal and illicit business in liquor which would neither be in the interest of State authorities nor in the interest of larger public. Since MRP is fixe, it is not possible for the dealers/retailers to pass the burden on consumers. Moreover, there would be disparity and discrimination between the licensees who are protected by an earlier order dated March 27, 2002 and dealers who got their licences renewed thereafter. There is total non-application on the part of the Government in not considering the report submitted by the Committee. According to the counsel, the Committee was of the view that there should be increase to the extent of 10 per cent approximately as per 1996 Rules. Even if it is assumed that the State Government has power to take final decision, it was incumbent on the Government to consider the report of the Committee and to inform the dealers/retailers as to why such action was taken in substantially increasing licence fee. Since nothing has been said by the Government, the action is unreasonable and interim order does not require to be vacated and/or modified.

13. Having heard the learned counsel for the parties, in our opinion, interim relief granted on April 4, 2002 deserves to be vacated. Reading two orders of March 27, 2002 and April 4, 2002, it is amply clear that when some petitioners approached this Court by filing petitions which came up for admission hearing on March 27, 2002, one of the grievances made by them was that though they were holding licences for a period of five years and the said period was not over, they were asked to pay increased licence fees. Such an action, according to them, was illegal and arbitrary. The court was satisfied that in view of unexpired period of licence, there should not be substantial increase in licence fee contrary to the provisions of 1996 Rules. When the Rules provided for increase of fees to the extent of 10 per cent or more to be rounded off to the nearest rupees hundred, increase to the extent of 200, 300 or 400 per cent could not have made by the Government. Ad-interim relief was, therefore, granted in favour of the petitioners, who were granted licence for five years.

14. The position of other licence holders, however, was totally different. Their licence period has come to an end. It was required to be renewed. Meanwhile, a decision was taken by the Government to increase licence fees. The Court, therefore, felt that they were required to pay enhanced fees but with a view to give some time, the Court ordered that they should pay such fees by 6th April, 2002. Those persons, therefore, were not granted interim relief so far as payment of fees was concerned. It was in view of subsequent development which took place viz. sending the matter to a Committee that on April 4, 2002, second order was passed. In the second order it was observed by the court that the matter was likely to be reconsidered by the Government and taking into account that 'peculiar' fact, interim order was passed. A Sub-Committee was thereafter appointed. It considered the matter, submitted its report which was placed before the Cabinet and a decision was taken by the Cabinet reiterating its earlier decision regarding imposition of fees.

15. Now, whether such a decision is legal and valid and in consonance with law or not has to be decided at the time of final hearing of the matters. But the fact remains that interim order was passed by the Court in the light of the circumstance brought before the Court that the Government was reconsidering the question. Till a decision had been arrived at by the Government, interim relief should be granted in favour of the petitioners. In our opinion, therefore, once a decision has been taken and earlier order was approved and reiterated, interim relief granted in favour of the petitioners deserves to be vacated.

16. The Special Counsel also submitted that the Division Bench was not right in observing in the order dated March 27, 2002 that in case the petitioners would succeed, they would be entitled to refund of the amount and the State would be liable to pay the same to dealers and retailers. It was submitted that it would amount to "unjust enrichment" by the petitioners who would have recovered such amount from the consumers. The contention of the petitioners of those petitions, on the other hand, is that there is no question of unjust enrichment since the State has fixed Maximum Retail Price (MRP). It was, therefore, not open to the retailers to charge anything more, and hence they would be entitled to refund of such amount.

17. In our opinion, at this stage, it is premature to express final opinion one way or the other. Whether MRP had been increased or not in the light of increase in licence fee, whether dealers/retailers have passed off such burden on consumers and whether or not they have recovered any additional amount and whether there was unjust enrichment by dealers/retailers would be decided on the basis of the facts before the Court and/or appropriate authority. We may only observe that such orders are interim/interlocutory orders. As and when matters have been taken up for final hearing, appropriate orders will be passed, keeping in view the facts and circumstances in their entirety. Hence, no further observations are necessary at this stage on the observations made by the Division Bench on March 27, 2002.

18. It may also be observed that ordinarily in such matters, interim orders staying payment of taxes, fees, revenues, etc. should not be made. (Vide Assistant Collector of Central Excise, Chandan Nagar, West Bengal v. Dunlop India Ltd., ).

19. For the foregoing reasons, in our opinion, all these Civil Application/Notice of Motion deserve to be allowed and are accordingly allowed. Interim order dated April 4, 2002 is hereby vacated. Rule/Notice of Motion is made absolute. In the facts and circumstances, however, there shall be no order as to costs.

20. The prayer in Civil Application No. 393 of 2003 cannot be granted. It is, however, open to the applicant to file substantive petition.

Parties be given copies of this order duly authenticated by the Sheristedar/Private Secretary.