BIMAL CHANDRA BANERJEE versus STATE OF MADHYA PRADESH

Citation: [1971] 1 S.C.R. 844 · Decided: 19-08-1970 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed

Cited by 5 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

844 
BIMAL CHANDRA BANERJEE 
v. 
STATE OF MADHYA PRADESH 
August 19, 1970 
(J. C. SHAH, K. S. HEGDE AND A. N. GROVER, JJ.] 
Madhya Pradesh Excise Act (M.P. 2 of 1915), ss. 25, 26. 27, 62(1) 
and 62(2) ds. (d) and (h)-Condition in licence prescribing minimum 
liquor to be purchased from the Government and payn1ent of excise duty 
on liquor not taken delivery of-Validity. 
A 
B 
The appellants were excise contractors. 
In purported exercise of its 
powers under els. (d) •nd (h) of s.62(2) of the Madhya Pradesh Exciso 
C 
Act, 1915, which confers pO\\•er on the State Government to make rules, 
the State Government introduced a condition· in the licences of 
th~ 
appellants prescribing the minimum quantity of liquor v.:hich the appellants. 
should purchase from the Governmcnt and the compulsory pay111ent uf 
£'Xcise duty on the quantity of liquor H'hich they jailed to take de!fi·c1-_i· of. 
The State Government issL~ed notices dcman-ding the duty. 
On the question of their validity, 
D 
HELD : Assuming the po\ver to tax can be delegated to the execu-
tive, no tax can be imposed by any bye-law or rule or regulation unle:s'i 
the statute under which the suborCiinate legislation is 111ade specially 
authorises its imposition. [850 C-D] 
In the present case, the Legislature has levied excise duty or coun-
tervaillini: duty only on the excisable articles \lihich have been either in1-
ported, exported, transported. n1anufacturcd, cultivated or collected under 
E 
any licence granted under s.13, or n1anU:factured in 
any 
distillery 
or 
brewery established or licensed under the Act; and the State Governn1ent 
has not been empowered to levy anv duty on liquor which the contractors 
failed to lift. 
Therefore, the State Governn1ent was exercising a po\ver 
which it did not possess and hence the rule in1posing the condition in 
the licences and the demand notices a·re invalid. f8-+9 H; A-Cl 
CIVIL APPELLATE Ju;:rsDICTION: Civil Appeals Ncs. 2214 
F 
of 1969 and 308 of 1970. 
Appeals from the judgments and orders dated April 9. 1965 
of the Madhya Pradesh High Court in Misc. Petitions Nos. 426 
and 524 of 1964 respectively. 
M. C. Chagla, R. A. Roman and S. S. Klwnduja, for the 
appellant (in C.A. No. 2214 of 1969). 
R. A. Roman. S .. S. Khanduja and N. K. Shejwa/kar, for the 
appellants (in C.A. No. 308 of 1970). 
I, N. Shroff, for the respondents (in both appeals). 
The Judgment of the Court was delivered by 
Hegde, J. 
These appeals by certificates granted by the High 
Conrt of Madhya Pradesh raise common questions of law. 
Hence 
we propose to dispose them of by a common order. 
G 
H 
A 
B 
c 
D 
E 
F 
G 
H 
B. c. BANERJEE V. M.P. STATE (Hegde, J.) 
S45 
The appellants herein are excise contractors. 
They are the 
rnccessful bidders for some of the shops in Madhya Pradesh for 
the financial year i 964-65. 
The sale memorandum on the 
>trength of which auction was held intimated that the successful 
bidders will have to sell a prescribed minimum quantity of liquor 
in their shops and if they fail to take delivery of the prescribed 
minimum quantity of Jiquvr, they will have to pay excise duty on 
the quantity of liquor which they failed to 
take delivery. 
On 
~1arch 20. 1 %.+. the Government in the purported exercise of its 
powers unc.kr els. I dJ and (h) of s. 62 of the Madhya Pradesh 
Excise Act. 1915 I Act II of 1915) (to be hereinafter referred to 
'" the Act) issued the notification No. 144401089/V-SR amend-
ing the rules published on January 7. 
1960. 
This notification 
prescribed that the conditions mentioned therein should be insert-
ed in the licences to be issued to the successful bidders. 
At pre-
sent we are only concerned with cl. 2(C) thereof. 
That clause 
reads : 
"The minimym quantity for taking issues from the 
Warehouse for sale is fixed at 3213 p. litres spiced spirit 
and 25940 p. litres plain spirit. 
You shall be liable to 
make good every month the deficit of monthly average of 
the total minimum duty on or before the 10th day of 
each month following the month to which the deficit 
duty relates." 
The appellants are challenging the validity of this notification. 
An excise licensee in Madhya t'radesh as in other places has 
to meet three charges namely ( 1) he has to pay the prescribed 
licence fee for obtaining the privilege of vending liquor in a shop 
I 2 ! he has to pay the price of the liquor purchased by him-
generally the Government has a monopoly of liquor manufacture 
and ( 3) he has to pay 

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