POLYCHEM LTD. AND ANOTHER versus STATE OF MAHRASHTRA AND OTHER

Citation: [1998] 3 S.C.R. 972 · Decided: 04-08-1998 · Supreme Court of India · Bench: M.M. PUNCHHI · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
POL YCHEM LTD. AND ANOTHER 
~ -
v. 
ST A TE OF MAHRASHTRA AND OTHER 
AUGUST 4, 1998 
B 
[M.M. PUNCHHI, CJ. AND K. VENKATASWAMI, J.] 
Bombay Prohibition Act, 1949-Section 58-A-Supervision charges -
Retrospective enhancement-Licensee-Company paying supervision charges 
c 
in advance at the beginning of every quarter in accordance with Act-Wages 
and dearness allowance of Govt. staff deputed for supervision revised upward 
with retrospective effect-Upward revision of the supervision charges thereof 
and making demand of differential amount of the charges retrospectively on 
account of such retrospectively revision of salary-Held, illegal and beyond 
the power of the State Government. 
D 
The appellant is engaged in the manufacture of alcohol potable liquor, 
country liquor and alcohol based chemicals. As required under Sec. 58-A of 
the Bombay Prohibition Act, 1949 the appellant used to pay in advance the 
supervision charges at the beginning of every quarter towards the cost of the 
staff deputed for the purpose of supervising operation of manufacture, storage 
E and issue of the spirit. The wages and dearness allowance of the said the staff/ 
Government servants were increase retrospectively and on account of that 
supervision charges were revised upward retrospectively and a demand notice 
was issued to the appellant to pay the differential amount of supervision 
charges. 
F 
Aggrieved by the said demand, the appellant filed a writ petition before 
the High Court. The Division Bench of the High Court upheld the impugned 
demand. Hence, this appeal by special leave. 
Allowing the appeal, this Court 
G 
HELD : 1.1. In pursuance of the provision of Section 58--A of the 
Bombay prohibition Act, the rules and conditions of the license, the duty 
of the Licensee, who stores articles in the bonded warehouse would be only 
...,. 
to pay the amount which has been ascertained and had to be paid in advance 
at the beginning of ev,ery quarter and without payment of those charges, the 
H article could be removed from the bonded warehouse for sale. Neither of these 
972 
POL YCHEM LTD. v. STA TE 
973 
• 
I. 
provisions clothes the State government or the Commissi11ner with authority A 
to charge the supervision charges with retrospective effect. The words of Sec. 
58-A, "the cost of such a staff shall be paid to the State government", that 
would have reference to the cost of the staff as obtaining for the period during 
which the goods are stored iu the bonded warehouse and not the incidence 
which the State would have to bear by reason of such a remote circumstances B 
as the upward revision of the pay scales of its own employees at a later date. 
(976-B-D) 
Mis Bi/omoria & Sons v. The State of Maharshtra & Ors., (1990) 2 
Bombay C.R. 108 (Nagpur Bench), approved. 
Mis Mc Dowell & Co. 's case, AIR (1977) SC 1459 and Income Tax 
Officer v. I.MC Penncose, AIR (1970) SC 385, referred to. 
2. It does not appear that Section 58-A of the Act permitted the government 
c 
to rise the quantum of costsretrospectively, nor is there any warrant to infer 
that there was delegation to the rule making authority to charge the amount D 
of ~osts on the basis of the events which could not have been anticipated at 
,_ 
the time the cost was assessed. The courts will not ascribe retrospectively the 
new laws affecting rights unless by express Wl)rds or necessary implications, 
it appears that such was the intention of the legislature. (977-C] 
3. The appellants entitled to know in advance the costs payable by them 
E 
so as to enable them to fix the price of goods, and the respondents, having 
acted in the manner and permitted the appellants to sell the goods on the 
effective representation that cost of supervision charges for incoming quarter 
was fixed for the said quarter, cannot now be permitted to go back on their p 
said representation and demand additional amount because such a situation 
had never been anticipated by the appellants, and by the unilateral action of 
the respondents, no additional liability can be imposed on the appellants. So, 
the impugned demand of differential supervision charges retrospectively cannot 
be sustained. [977-D-E) 
G 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3494 of 
1991. 
From the Judgment and Order dated 12.9.90 of the Bombay High Court 
in W.P. No. 1672of1983. 
H 
974 
SUPREME COURT REPORTS 
[1998] 3 S.C.R. 
A 
Rajiv Tyagi, (U.A. Rana) for Mis. Gagrat & Co., for the Appellants. 
D.M. Nargolkar
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