GOVERNMENT OF MAHARASHTRA versus M/S. DEOKARS DISTILLERY

Citation: [2003] 2 S.C.R. 852 · Decided: 10-03-2003 · Supreme Court of India · Bench: V.N. KHARE · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
GOVERNMENT OF MAHARASHTRA 
-~ 
v. 
MIS. DEOKAR'S DISTILLERY 
MARCH I 0, 2003 
B 
[V.N. KHARE, CJ., S.B. SINHA AND DR. AR. LAKSHMANAN, JJ.] 
Bombay Prohibition Act, 1949-Sections 58A, 49, 114 and 143(2)(4): 
Maharashtra Distillation of Spirit and Manufacture of Potable Liquor 
c Rules, [966- Sections 17(12), 17(43): 
Maharashtra Country Liquor Rules, 1973-Sections 6(12), 6(36): 
Maharashtra Civil Services (Revised Pay) Rules, 1998: 
D 
Constitution of India, 1950-Seventh Schedule, List Il, Entry 8, Article 
309 proviso thereto and Article 162: 
Excise supervision of manufacturer of potable and country liquor-
Supervision charges-Paid in advance-Revision of pay scale of the 
supervising staff with retrospective effect-Demand of differential amount-
E Whether permissible-At the time of obtaining licence undertaking by 
manufacturers to abide by all the Rules made under the Act-Held: The 
demand of supervision charges is permissible under Section 58A even 
retrospectively as the Section has no /imitation to the effect that costs are to 
be recovered only in advance-Right to deal in liquor not being afiindamental 
F right, State has exclusive right/privilege in respect of potable liquor and can 
charge any reasonable expenses or consideration for permitting such activity 
by grant of licence-Licensee having undertaken to abide by all reasonable 
orders under the Act, cannot wriggle out of the contractual liability voluntarily 
incurred-Del!land notice also not liable to be challenged in absence of 
challenge to notification revising the pay scale and the administrative 
G instruction to carry out the executive fanction under Section 58A-Maharashtra 
Foreign Liquor (Storage in Bond) Rules, 1964-Rule 7. 
Respondent-companies were holding licence in Form PLL for 
manufacture of Indian made foreign liquor prescribed under the 
H 
provisions of the Maharashtra Distillation of Spirit and manufacture of 
852 
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• 
GOVT. OF MAHARASHTRA v. DEOKAR'S DISTILLERY 
853 
Potable Liquor Rules, 1966 and also licence in Form CLL prescribed under A 
the provisions of Maharashtra Country Liquor Rules, 1973 for 
manufacture oi Country liquor made under Bombay Prohibition Act, 
1949. Under Section 58-A of the Act State Government is empowered to 
permit the manufacture and other related activities in respect of any 
intoxicant under the supervision of excise staff and cost of such staff is to 
be made to the State Government by the manufacturers. The cost of such B 
staff is required to be paid to the State Government by the licensee in 
advance as per Rule 17(12) of 1966 Rules and Rule 6(12) of 1973 Rules. 
The pay scales and other allowances of Government employees are fixed 
by the State Government. The Commissioner as empowered by the State 
Government, issues circulars for levy and recovery of supervision charges C 
based on the pay scales and other allowances of the Government employees 
fixed by the State Government under the Rules and Government 
Resolutions made under proviso to Article 309 of the Constitution of India, 
in respect of the excise staff posted for supervision. 
State Government by notification dated 10.12.1998 promulgated D 
Maharashtra Civil Services (Revised Pay) Rules, 1998 under its power 
vested by Article 309 of the Constitution whereby the pay scales of 
Government employees were revised and fixed with retrospective effect. 
Thereafter by circular dated 30.7.1999 orders were issued for carrying 
out executive function under Section 58-A of the Act and Article 162 of E 
the Constitution. Pursuant thereto demand notices were issued by 
appellant No.4 to the respondent-companies to pay the differential amounts 
of cost of supervision on account of revision of pay scales with retrospective 
effect. 
Respondent-companies informed appellant No.4 that they had p 
already paid the supervision charges in advance and hence were not liable 
to pay the differential amount as they would not be able to pass on the 
burden of the same to the purchasers. Appellant No.4 rejected the reply 
and directed to pay the differential amount. 
Writ Petition was filed challenging the demand on the ground that G 
the challenge sought to be raised by them to the impugned demand notices 
had already been concluded in their favour in the case of JE Bilimoria and 
Sons v. State of Maharashtra and Ors., (1999) Mh. LJ (II) 1079, and the 
same was confirmed in Polychem Ltd. and Anr. v. State of Maharashtra and 
Ors., (1998] 6 sec 196. State
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