STATE OF M.P. & ORS. versus LALIT JAGGI

Citation: [2008] 13 S.C.R. 611 · Decided: 17-09-2008 · Supreme Court of India · Bench: S.H. KAPADIA, B. SUDERSHAN REDDY · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2008] 13 S.C.R. 611 
STATE OF M.P. & ORS. 
A 
v. 
LAUT JAGGI 
(Civil Appeal No. 5751 of 2008) 
SEPTEMBER 17, 2008 
B 
[S.H. KAPADIA AND 8. SUDERSHAN REDDY, JJ] 
Excise: 
Liquor vend - Licence fee - Nature of- Liquor Policy for c 
the year 2005-2006 framed by State of M.P. - Clauses 13.3 
and 13. 4 and Circular of Excise Commissioner dated 9. 8. 2005 
- Revocation of licence on failure to deposit fortnightly instal-
ment of licence fee by retail seller - Supply of liquor to such 
seller on deposit of licence fee - High Court declaring clauses 
.. 't-
13. 3 and 13.4 as ultra virus Article 14 of the Constitution and 0 
' 
s.25 of M.P. Excise Act, 1915 - HELD: The licence fee, pay-
able in advance in 24 equal instalments, is in essence rent 
charged for parting with State's privilege for manufacturing and 
vending liquor and it is not a consideration for sale of liquor -
It is different from Issue Price - Rental is the consideration for E 
,, 
the privilege granted by the Government for manufacturing 
"i . 
and vending liquor- There is no levy of excise duty in enforc-
ing payment of a stipulated sum mentioned in the licence -
-i 
The concepts of advance licence fee and excise duty are en-
tirely different - Despite exhaustive exposition of law by the 
F 
Supreme Court on the nature of the payment of licence fee by 
the auction purchaser, the High Court in the impugned judg-
ment has not considered any of the judgments while striking 
down the relevant clauses of the Policy and the Circular-Judg·· 
ment of High Court set aside - Administrative Law - Policy G 
decision as regards liquor - Judicial review of - Contract -
"" 
Constitution of India - Articles 14 and 226 - Madya Pradesh 
Excise Act, 1915- s.25. [para 7,9, 13] [614 G; 615 D; 619 G] 
611 
1-1 
612 
SUPREME COURT REPORTS 
[2008] 13 S.C.R. 
A 
State of Orissa & Ors. Vs. Narain Prasad & Ors. (1996) 5 
8 
sec 740 - relied on. 
State of Madhya Pradesh Vs. Firm Gappulal & Ors., 
[1976] 1 SCC 791; Bimal Chandra Banerjee Vs. State of MP 
etc. AIR 1971 SC 517 - held inapplicable. 
JUDGMENT/ORDER.' 
Judgment of High Court striking down Policy/Circular -
HELD: When the High Court strikes down a Policy/Circular as 
ultra vires, it is expected to give detailed reasons for saying 
c so - In the instant case, no reasons are given in the impugned 
iudgment. [para 13] [619 G-H] 
CONTRACT.' 
Liquor vend -Auction Purchaser- Failure to deposit fort-
D nightly instalment of licence fee - Liquor Policy challenged -
., ..., 
High Court in writ petition striking down clauses of liquor policy 
- HELD: The entire controversy arises in the contractual field 
- The Sale Memo signed by the auction purchaser is nothing 
but the contract - The High Court has not even considered 
the General Licence Conditions stipulated in the Rules under 
E the 1915 Act which stand incorporated in the Sale Memo and 
which, inter alia, deal with payment of annual licnece fee in 
instalments - Constitution of India, 1950 - Article 226 -
Madhya Pradesh Excise Act, 1915. [para 14] {620 A-BJ 
Asstt. Excise Commissioner & Ors. Vs. Issac Peter & 
r -
F 
Ors. (1994) 4 sec 104 - relied on. 
G 
H 
Case Law Reference: 
[1976] 1 sec 791 
held inapplicable 
para 8 
AIR 1971 SC 517 
held inapplicable 
para 8 
(1996) s sec 740 
relied on 
para 10 
(1994) 4 sec 104 
relied on 
para 12 
CIVILAPPELLATE JURISDCTION: Civil Appeal No. 5751 
of 2008 
-\ 
i 
STATE OF M.P. & ORS. v. LAUT JAGGI 
613 
From the final Judgment and Order dated 17.1.2006 of A 
the High Court of Judicature of Madhya Pradesh, Jabalpur in 
W.P. No. 9310/2005 
WITH 
Civil Appeal Nos. 5752-5756/2008 
B 
S.K. Dubey, B.S. Banthia, Nandita Dubey and Yogesh 
Tiwari for the Appellants. 
Viviek Tankha, T.G. Narayanan Nair, Himanshu Gupta and 
Shivaji M. Jadhav for the Respondent. 
c 
The following Order of the Court was delivered 
-1 
1. Leave granted. 
2. This Civil Appeal (arising out of S.L.P.(C) No.14286/ 
. )' 
2006) is filed by the State of Madhya Pradesh against the judg-
D 
' 
ment of the High Court dated 17th January, 2006 in Writ Petition 
No.9310/2005. This judgment has been followed in all conjoint 
matters, namely, Civil Appeals arising out of S.L.P.(C) 
Nos.14287, 14288, 14290, 14291/2006 and 3788/2007. 
~ 
3. By a Notification dated 21 •1 February, 2005, the State E 
~ 
Government framed a Liquor Policy for the year 2005-2006. 
Clause 13 of that Policy prescribed the procedure for deposit-
ing the licence fee by a retailer of liquor. Sub-clause (1)
Excerpt shown. Read the full judgment & AI analysis in Lexace.